Speaker 1: It's only getting uglier in the boardroom at Uber. A
Speaker 1: new lawsuit seeks to oust former chief executive Officer Travis
Speaker 1: Kalanik from the board, saying he duped a major investor
Speaker 1: into letting him fill three new seats. The suit was
Speaker 1: filed Thursday in Delaware Chancery Court by Benchmark Capital, which
Speaker 1: ownstent of Uber. Earlier this year, Benchmark led the revolt
Speaker 1: that caused Kalanick to lose his job as CEO. With
Speaker 1: me to talk about this new lawsuit is Bloomberg News
Speaker 1: is Delaware Courthouse reporter Jeff Feely. Jeff, thanks for joining
Speaker 1: me here. UM walk us through. Just give us kind
Speaker 1: of the brief version of the history. How did these
Speaker 1: board seats get created in the first place, and what
Speaker 1: was Benchmark's involvement at the time. Mr Kalinak has been
Speaker 1: with The longtime CEO and founder of Uber. Approached Benchmark
Speaker 1: last year saying that he needed to expand the board
Speaker 1: to help, you know, I think it easier to run
Speaker 1: the company attract outside vests. Benchmark agreed to allow him
Speaker 1: to expand the board from eight to eleven and give
Speaker 1: him the authority to fill those three new seats. Um
Speaker 1: come this year, Benchmark has learned about some problems that
Speaker 1: Mr Kounick ran into at Uber, including a fight with
Speaker 1: a rider, a trade secrets lawsuit filed by a unit
Speaker 1: of alphabet and some other problems, and they basically have
Speaker 1: sued now saying that they were misled. He misled them
Speaker 1: about his management skills, and they would have never allowed
Speaker 1: him the power to expand the board and fill these
Speaker 1: three seats had they known how badly things were going
Speaker 1: at the company. The suit is against Klink or Uber
Speaker 1: are both of them? Uber suit is a nominal defendant,
Speaker 1: that the suit is really against Klink. He's the actor here. Okay, So,
Speaker 1: so tell us a little more about about these allergy
Speaker 1: Stan's um uh pick whichever one uh strikes you as
Speaker 1: being the most worthy of discussion. But but but how
Speaker 1: is it that that Benchmark says that they were deceived
Speaker 1: so badly that that they ought to be able to
Speaker 1: win this lawsuit? Well, I think the I think that
Speaker 1: one of the tougher issues from Mr Kalinak is this
Speaker 1: trade secrets case. Uh, the secrets that are involved our
Speaker 1: technology governing self driving cars. The folks at Alphabets say
Speaker 1: that some of their former employees that went to work
Speaker 1: for UM. Uber's self driving unit took the ideas and
Speaker 1: some of the technology with them. They sued the company.
Speaker 1: The self driving unit had been one of the you know,
Speaker 1: the crown jewels of the company UM and that came
Speaker 1: to light, you know, after Mr Kalnik made the request
Speaker 1: to span the board. UM that is going to be
Speaker 1: a major issue in the case aces whether or not
Speaker 1: you know that was hidden and you know, whether he
Speaker 1: used that self driving unit as one of the things
Speaker 1: to show how he was gonna make Cooper you know,
Speaker 1: the best things to slice bread and uh so it'll
Speaker 1: be very interesting. So how how unusual is it for
Speaker 1: an investor like this, a major investor to file a
Speaker 1: lawsuit over the composition of a board. It's unusual. We've
Speaker 1: had suits where major investors would sue companies like Fairness,
Speaker 1: seeking to recoup investments in companies, saying they were duped
Speaker 1: into making the investment. Fairness is well known um as
Speaker 1: having problems over touting its blood testing capabilities. UM It's uh,
Speaker 1: it's it's not common. Let's say that some some people
Speaker 1: have made the comparison you and I were discussing earlier
Speaker 1: with Viacom in sum to Redstone. Is that an apt comparison.
Speaker 1: That's really not an apt um um example, because Mr
Speaker 1: Ridstone was the founder of the company and he was
Speaker 1: the one who removed uh some board folks in a
Speaker 1: fight for control. Here we have the board removing the
Speaker 1: CEO and founder. This may be more like the situation
Speaker 1: with the former CEO of American Apparel, Dug Charne, who
Speaker 1: was shown the door over some personal misconduct issues at
Speaker 1: his company. So this that may be more analogy has
Speaker 1: given Mr Kuni's history of um volcanic eruptions. Jeff, you
Speaker 1: spent a lot of time covering that that courthouse there.
Speaker 1: How how quickly do lawsuits moved there? Do you have
Speaker 1: any or of sense about a time frame for well?
Speaker 1: Chance of court was set up to provide speedy decisions,
Speaker 1: and these corporate matters, these particular cases where someone is
Speaker 1: challenging the appointment or election of a director, are by
Speaker 1: statute put on a fast track basis. So some commentators
Speaker 1: have said, this could be we could have a decision
Speaker 1: in this case within two months. Fantastic. I hope you'll
Speaker 1: be around for two months, Jeff, because we have you
Speaker 1: back on to talk about it. Um what hope springs
Speaker 1: eternal on that score. Greig all right, um, And and briefly,
Speaker 1: Travis kalin Nick, Uh, what have you heard from him
Speaker 1: about the lawsuit? His representatives have said that the lawsuits,
Speaker 1: the lawsuit is filled with inaccuracies and personal innuendos, and
Speaker 1: he will he wants to have his day in court. Okay.
Speaker 1: That was Bloomberg's Jeff Feely talking about new lawsuit filed
Speaker 1: against former Uber CEO Travis kal Nick, saying that he
Speaker 1: duped a major investor into letting him fill three new seats,
Speaker 1: create three new seats and fill them on the board
Speaker 1: of Uber. Jeff, Well, look forward to talking to you
Speaker 1: again about this in the future. Coming up on Bloomberg Law,
Speaker 1: we're going to talk about the big business of litigation
Speaker 1: finance with the managing director of the biggest company in
Speaker 1: the business.