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This is Uber’s first comment on the suit. All members except Kalanick and Benchmark signed the statement.
Uber’s board — facing a deep and divisive legal war between the car-hailing company’s biggest investor, Benchmark Capital, and its co-founder and ousted CEO Travis Kalanick — said in a statement that it was “disappointed” in the lawsuit Benchmark filed Friday.
The board’s statement, emailed to Uber staff on Friday, effectively declined to endorse Benchmark’s explosive lawsuit and sidesteps the merits of the case all together. The statement, signed by all board members who are not Kalanick and Benchmark’s Matt Cohler, said the board “has urged both parties to resolve the matter cooperatively and quickly.”
Here’s the full statement, which is the other six board member’s first comments on the litigation:
The Board of Directors is disappointed that a disagreement between shareholders has resulted in litigation. The Board has urged both parties to resolve the matter cooperatively and quickly, and the Board is taking steps to facilitate that process. At a time when thousands of employees around the world are working hard to serve our drivers and riders and continue to innovate, our priority remains to select Uber’s new CEO as expeditiously as possible. We are fortunate to have several outstanding candidates who share our belief in Uber’s great future.
Benchmark is suing the company and Kalanick for fraud, breach of fiduciary duty and breach of contract, claiming Kalanick was attempting to control the board for his own “selfish needs.”
Kalanick has disputedf Benchmark’s claims.
The suit comes weeks after Kalanick was forced to resign by a handful of major investors including Benchmark, Fidelity and Menlo Ventures.
But even after his ouster, Kalanick remained on the board and has been involved in the company’s search for a new CEO, as Recode reported. The notoriously combative founder is attempting to reclaim his former position, Benchmark alleges in the complaint.
“Kalanick’s overarching objective is to pack Uber’s Board with loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO — all to the detriment of Uber’s stockholders, employees, driver-partners, and customers,” the complaint reads.
Kalanick’s supposed return has indeed had an impact on employees, some of whom have voiced their concerns. Uber co-founder and fellow board member Garrett Camp sent an all-staff email earlier this week to quell some of those apprehensions, as Recode first reported.
In it, Camp said simply: Travis is not coming back.
“Our CEO search is the board’s top priority,” Camp said in the email. “It’s time for a new chapter and the right leader for our next phase of growth. Despite rumors I’m sure you’ve seen in the news, Travis is not returning as CEO. We are committed to hiring a new world-class CEO to lead Uber.”
The complaint will likely have a resounding impact on the company. For one, Benchmark’s suit seeks to remove Kalanick from the board entirely.
Part of that will require reversing a number of decisions that led to Kalanick’s “fraudulently procured control” of the board, as Benchmark claims. That includes reversing a vote that added three additional seats and asking a court to prevent him from participating in board meetings.
But it will likely also impact Uber’s legal saga with Alphabet. Benchmark partner Bill Gurley is scheduled to be deposed by Alphabet at the end of the month.
On top of that, Benchmark’s suit also contains material that could help Alphabet obtain key documents related to former Uber executive Anthony Levandowski, whom Alphabet accuses of having stolen trade secrets.
Outside of Uber, there have already been reverberations as a result of the complaint. Some startup founders now say they’re nervous about working with Benchmark.
Even other investors worry this lawsuit might have a chilling effect on the next generation of startups.
“Any entrepreneur would naturally feel nervous about working with Benchmark, at least for the time being,” Hazem Awad, a Qatari investor, told Recode. “Because in the back of their mind (mine included) will always be the question of, ‘What will happen if things get that bad?’”