More Woes for Uber: Exec Resigns, Investor Sues Ousted CEO

Uber shareholders revolt against venture firm after surprise lawsuit

Uber toils to shake off former chief as part of clean-up effort

A group of Uber investors has now come to the defense of ousted CEO Travis Kalanick after one of its largest investors, Benchmark, sued the former CEO for allegedly rigging the company's board seats to eventually return as its CEO.

The suit revolves around a decision previous year to increase Uber's board from eight seats to 11, with those additional three seats in the sole control of Kalanick. That revelation's impact was somewhat lessened by the fact that Graves would remain as a member of the board.

While asked to comment on the statement, Benchmark Capital and Uber declined.

"It has been publicly reported that Kalanick's behaviour has already interfered with Uber's CEO search: various potential candidates have withdrawn from consideration because of Kalanick's continued participation in the search and his efforts to re-assert influence over the company", Benchmark said in its complaint.

Nevertheless, it is Gurley's resignation from the board that the trio of dissenting shareholders demanded Friday, likewise asking that Benchmark sell off at least three-quarters of its 13 percent stake in the company, estimated to be worth more than $8 billion. Gurley had acted as Kalanick's close confidant and mentor.

"The lawsuit is completely without merit and riddled with lies and false allegations". Benchmark alleged in its suit that pertinent information was hidden from investors and that Uber's own CEO had known beforehand that Waymo might sue. He also agreed to relinquish control of the other two new seats, but Benchmark alleges that he's not yet signed the document that would make that official.

Early this week, Uber Chairman and co-founder Garret Camp confirmed to the employees that Kalanick was not coming back as CEO.

Axios' Dan Primack was first to report the news on the lawsuit Thursday. To this end, at this point, in light of your suit against the Company, we believe it would be best, and hereby request, that Benchmark remove its representative from the Company's Board and move promptly to divest itself of enough shares in the Company so as to cease to have Board appointment rights.

"To date, Kalanick's only response has been an email (sent on or around June 30, 2017) that he is "not ready to sign" the amended Voting Agreement", Benchmark said in the suit.

While including Uber, the company, in the lawsuit seems a mere formality, the claims stated therein will undoubtedly hurt Uber too and not just Kalanick because it details past actions performed while Kalanick was still the CEO. The investor indicated that some of the top CEOs are scared to take up the job.

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