1 00:00:00,080 --> 00:00:02,880 Speaker 1: It's only getting uglier in the boardroom at Uber. A 2 00:00:02,920 --> 00:00:06,160 Speaker 1: new lawsuit seeks to oust former chief executive Officer Travis 3 00:00:06,280 --> 00:00:09,600 Speaker 1: Kalanik from the board, saying he duped a major investor 4 00:00:09,640 --> 00:00:12,600 Speaker 1: into letting him fill three new seats. The suit was 5 00:00:12,640 --> 00:00:16,800 Speaker 1: filed Thursday in Delaware Chancery Court by Benchmark Capital, which 6 00:00:16,800 --> 00:00:21,400 Speaker 1: ownstent of Uber. Earlier this year, Benchmark led the revolt 7 00:00:21,400 --> 00:00:25,120 Speaker 1: that caused Kalanick to lose his job as CEO. With 8 00:00:25,160 --> 00:00:27,680 Speaker 1: me to talk about this new lawsuit is Bloomberg News 9 00:00:27,720 --> 00:00:32,160 Speaker 1: is Delaware Courthouse reporter Jeff Feely. Jeff, thanks for joining 10 00:00:32,200 --> 00:00:35,000 Speaker 1: me here. UM walk us through. Just give us kind 11 00:00:35,000 --> 00:00:38,080 Speaker 1: of the brief version of the history. How did these 12 00:00:38,360 --> 00:00:41,319 Speaker 1: board seats get created in the first place, and what 13 00:00:41,400 --> 00:00:46,919 Speaker 1: was Benchmark's involvement at the time. Mr Kalinak has been 14 00:00:47,040 --> 00:00:52,040 Speaker 1: with The longtime CEO and founder of Uber. Approached Benchmark 15 00:00:52,720 --> 00:00:55,720 Speaker 1: last year saying that he needed to expand the board 16 00:00:55,840 --> 00:00:59,040 Speaker 1: to help, you know, I think it easier to run 17 00:00:59,040 --> 00:01:03,520 Speaker 1: the company attract outside vests. Benchmark agreed to allow him 18 00:01:03,560 --> 00:01:06,240 Speaker 1: to expand the board from eight to eleven and give 19 00:01:06,319 --> 00:01:11,520 Speaker 1: him the authority to fill those three new seats. Um 20 00:01:11,920 --> 00:01:17,360 Speaker 1: come this year, Benchmark has learned about some problems that 21 00:01:17,440 --> 00:01:20,600 Speaker 1: Mr Kounick ran into at Uber, including a fight with 22 00:01:20,640 --> 00:01:26,000 Speaker 1: a rider, a trade secrets lawsuit filed by a unit 23 00:01:26,040 --> 00:01:30,399 Speaker 1: of alphabet and some other problems, and they basically have 24 00:01:30,480 --> 00:01:35,200 Speaker 1: sued now saying that they were misled. He misled them 25 00:01:35,240 --> 00:01:39,319 Speaker 1: about his management skills, and they would have never allowed 26 00:01:39,400 --> 00:01:42,479 Speaker 1: him the power to expand the board and fill these 27 00:01:42,480 --> 00:01:45,640 Speaker 1: three seats had they known how badly things were going 28 00:01:45,640 --> 00:01:49,880 Speaker 1: at the company. The suit is against Klink or Uber 29 00:01:50,440 --> 00:01:53,320 Speaker 1: are both of them? Uber suit is a nominal defendant, 30 00:01:53,360 --> 00:01:57,240 Speaker 1: that the suit is really against Klink. He's the actor here. Okay, So, 31 00:01:57,320 --> 00:01:59,880 Speaker 1: so tell us a little more about about these allergy 32 00:02:00,000 --> 00:02:05,040 Speaker 1: Stan's um uh pick whichever one uh strikes you as 33 00:02:05,080 --> 00:02:08,320 Speaker 1: being the most worthy of discussion. But but but how 34 00:02:08,400 --> 00:02:11,639 Speaker 1: is it that that Benchmark says that they were deceived 35 00:02:11,680 --> 00:02:14,679 Speaker 1: so badly that that they ought to be able to 36 00:02:14,680 --> 00:02:17,919 Speaker 1: win this lawsuit? Well, I think the I think that 37 00:02:18,600 --> 00:02:21,919 Speaker 1: one of the tougher issues from Mr Kalinak is this 38 00:02:22,040 --> 00:02:26,280 Speaker 1: trade secrets case. Uh, the secrets that are involved our 39 00:02:26,360 --> 00:02:30,560 Speaker 1: technology governing self driving cars. The folks at Alphabets say 40 00:02:30,560 --> 00:02:33,200 Speaker 1: that some of their former employees that went to work 41 00:02:33,440 --> 00:02:39,760 Speaker 1: for UM. Uber's self driving unit took the ideas and 42 00:02:39,800 --> 00:02:43,400 Speaker 1: some of the technology with them. They sued the company. 43 00:02:43,919 --> 00:02:47,240 Speaker 1: The self driving unit had been one of the you know, 44 00:02:47,280 --> 00:02:51,160 Speaker 1: the crown jewels of the company UM and that came 45 00:02:51,200 --> 00:02:54,320 Speaker 1: to light, you know, after Mr Kalnik made the request 46 00:02:54,400 --> 00:02:57,800 Speaker 1: to span the board. UM that is going to be 47 00:02:57,880 --> 00:03:00,920 Speaker 1: a major issue in the case aces whether or not 48 00:03:01,720 --> 00:03:04,680 Speaker 1: you know that was hidden and you know, whether he 49 00:03:05,800 --> 00:03:08,720 Speaker 1: used that self driving unit as one of the things 50 00:03:08,760 --> 00:03:11,560 Speaker 1: to show how he was gonna make Cooper you know, 51 00:03:11,600 --> 00:03:14,760 Speaker 1: the best things to slice bread and uh so it'll 52 00:03:14,800 --> 00:03:19,480 Speaker 1: be very interesting. So how how unusual is it for 53 00:03:19,880 --> 00:03:25,280 Speaker 1: an investor like this, a major investor to file a 54 00:03:25,360 --> 00:03:30,240 Speaker 1: lawsuit over the composition of a board. It's unusual. We've 55 00:03:30,240 --> 00:03:33,720 Speaker 1: had suits where major investors would sue companies like Fairness, 56 00:03:34,360 --> 00:03:38,520 Speaker 1: seeking to recoup investments in companies, saying they were duped 57 00:03:38,520 --> 00:03:42,520 Speaker 1: into making the investment. Fairness is well known um as 58 00:03:42,520 --> 00:03:49,440 Speaker 1: having problems over touting its blood testing capabilities. UM It's uh, 59 00:03:49,600 --> 00:03:55,320 Speaker 1: it's it's not common. Let's say that some some people 60 00:03:55,360 --> 00:03:58,920 Speaker 1: have made the comparison you and I were discussing earlier 61 00:03:58,960 --> 00:04:03,400 Speaker 1: with Viacom in sum to Redstone. Is that an apt comparison. 62 00:04:03,400 --> 00:04:08,440 Speaker 1: That's really not an apt um um example, because Mr 63 00:04:08,520 --> 00:04:10,720 Speaker 1: Ridstone was the founder of the company and he was 64 00:04:10,760 --> 00:04:14,480 Speaker 1: the one who removed uh some board folks in a 65 00:04:14,520 --> 00:04:19,280 Speaker 1: fight for control. Here we have the board removing the 66 00:04:19,279 --> 00:04:22,760 Speaker 1: CEO and founder. This may be more like the situation 67 00:04:23,400 --> 00:04:27,039 Speaker 1: with the former CEO of American Apparel, Dug Charne, who 68 00:04:27,200 --> 00:04:31,440 Speaker 1: was shown the door over some personal misconduct issues at 69 00:04:31,480 --> 00:04:34,920 Speaker 1: his company. So this that may be more analogy has 70 00:04:34,960 --> 00:04:42,719 Speaker 1: given Mr Kuni's history of um volcanic eruptions. Jeff, you 71 00:04:42,760 --> 00:04:44,960 Speaker 1: spent a lot of time covering that that courthouse there. 72 00:04:45,000 --> 00:04:47,240 Speaker 1: How how quickly do lawsuits moved there? Do you have 73 00:04:47,240 --> 00:04:52,280 Speaker 1: any or of sense about a time frame for well? 74 00:04:52,480 --> 00:04:56,720 Speaker 1: Chance of court was set up to provide speedy decisions, 75 00:04:56,760 --> 00:05:00,440 Speaker 1: and these corporate matters, these particular cases where someone is 76 00:05:00,520 --> 00:05:04,360 Speaker 1: challenging the appointment or election of a director, are by 77 00:05:04,360 --> 00:05:08,920 Speaker 1: statute put on a fast track basis. So some commentators 78 00:05:08,920 --> 00:05:10,640 Speaker 1: have said, this could be we could have a decision 79 00:05:10,640 --> 00:05:13,840 Speaker 1: in this case within two months. Fantastic. I hope you'll 80 00:05:13,880 --> 00:05:15,440 Speaker 1: be around for two months, Jeff, because we have you 81 00:05:15,480 --> 00:05:19,000 Speaker 1: back on to talk about it. Um what hope springs 82 00:05:19,000 --> 00:05:22,800 Speaker 1: eternal on that score. Greig all right, um, And and briefly, 83 00:05:22,800 --> 00:05:25,800 Speaker 1: Travis kalin Nick, Uh, what have you heard from him 84 00:05:25,800 --> 00:05:31,560 Speaker 1: about the lawsuit? His representatives have said that the lawsuits, 85 00:05:32,400 --> 00:05:36,440 Speaker 1: the lawsuit is filled with inaccuracies and personal innuendos, and 86 00:05:37,240 --> 00:05:40,880 Speaker 1: he will he wants to have his day in court. Okay. 87 00:05:40,920 --> 00:05:44,800 Speaker 1: That was Bloomberg's Jeff Feely talking about new lawsuit filed 88 00:05:44,839 --> 00:05:49,120 Speaker 1: against former Uber CEO Travis kal Nick, saying that he 89 00:05:49,200 --> 00:05:53,120 Speaker 1: duped a major investor into letting him fill three new seats, 90 00:05:53,400 --> 00:05:55,880 Speaker 1: create three new seats and fill them on the board 91 00:05:55,920 --> 00:05:58,040 Speaker 1: of Uber. Jeff, Well, look forward to talking to you 92 00:05:58,080 --> 00:06:01,520 Speaker 1: again about this in the future. Coming up on Bloomberg Law, 93 00:06:01,520 --> 00:06:04,040 Speaker 1: we're going to talk about the big business of litigation 94 00:06:04,080 --> 00:06:07,080 Speaker 1: finance with the managing director of the biggest company in 95 00:06:07,080 --> 00:06:07,560 Speaker 1: the business.