In what is rapidly devolving into an all round brawl on the plank of the worlds highest-valued personal company, a group of Uber shareholders have asked the venture capital firm Benchmark to step down in the board of supervisors.
This move comes just a day after Benchmark took the aggressive step of filing suit against Ubers former CEO Travis Kalanick, asserting that the creator had violated his fiduciary responsibility to the company and had committed fraud by trying to boost his power within Uber for his own selfish ends. Their suit is trying to eliminate Kalanick in the board and reduce his job at the company.
First discovered by Axios,weve also confirmed that an email, signed byShervin Pishervar of Sherpa Capital, Ron Burkle of Yucaipa Companies and Adam Leber of Maverick, criticizes the way Benchmark required Kalanicks resignation and their subsequent lawsuit against him.
We don’t believe it was either wise or necessary from the standpoint of customer value, to hold the company hostage into a public relations catastrophe by demanding Mr. Kalanicks resignation, along with other concessions, ” the letter says in part. Accordingly, we would request that Benchmark assist the Company realize its entire potential by enabling the necessary work to be done from the Board Room rather than the Courtroom.
The group further asks which Benchmark divests enough in their Uber shares (currently valued at $8.4 billion) to lose their board appointment rights.TechCrunch has achieved to Benchmark and Sherpa Capital for more details.
Uber declined to comment on the report.
Ubers board of supervisors will allegedly be meeting later today. Below is the full text of the email, which was sent this afternoon:
As a set of shareholders of Uber Technologies, Inc. (the Company) people were amazed and distressed to learn through the media of the lawsuit brought on by your company against the Company, and its founder and former Chief Executive Officer Travis Kalanick.
Naturally, we share your concerns about the problems that the Company has confronted lately, but we are greatly concerned about the tactics employed by Benchmark to address them, which attack us as ethically dubious and, critically, value-destructive rather than value improving.
Especially, we don’t believe it was either wise or necessary from the standpoint of customer value, to hold the company hostage into a public relations catastrophe by demanding Mr. Kalanicks resignation, in addition to other concessions, on a few hours notice and within weeks of a private catastrophe, under threat of public scandal. Less so your escalation of this fratricidal course considers Mr. Kalanicks resignation through your latest lawsuit, and that we fear will cost the company public goodwill, hinder fundraising and impede the crucial search for a brand new, world-class Chief Executive Officer. Benchmark has utilized false allegations from suits such as Waymo as an issue of fact and this and lots of activities has spanned the fiduciary line.
Benchmarks investment of $27M is worth $8.4 billion now and you are suing the creator, the company and the workers who worked so tough to make such unprecedented value. We request you to please consider the lives of those employees and let them continue to develop this company in peace and make it thrive. These activities do exactly the opposite. Accordingly, we would request that Benchmark assist the Company realize its entire potential by enabling the necessary work to be done from the Board Room rather than the Courtroom. To this conclusion, at this point, in light of your suit against the Company, we believe it would be best, and hereby request, that Benchmark eliminate its representative by the Companys Board and move immediately to divest itself of sufficient shares from the Company so as to cease to own Board appointment rights. We’ve got investors ready to acquire these shares as soon as we receive communication from Benchmark that they are willing to withdraw their lawsuit and market no less than 75 percent of their holdings.
We’re also asking for a symbolic Board of Directors vote on this particular issue at todays Board meeting to show how the Board of Directors stands with this lawsuit brought against the company, its creator as well as the 15,000 workers of Uber who’ve all worked so hard in concert to make the fastest growing company in history. A number of different shareholders share our views and will be incorporating their titles in the days beforehand. Any shareholders who wish to combine this letter and petition may email one of the signatories of this letter so that we could submit a final list of shareholders who support this request.
Benchmarks move is very controversial in Silicon Valley. Things have really gone off the rails, said Kate Mitchell, co-founder and partner in Scale Venture Partners, on TechCrunchs Equity podcast. Uber has had enormous value destruction and Benchmarks team obviously believes that there needs to be a huge wakeup call.
One Uber investor, who asked not to be named, told us that Benchmark made a shocking mistake when it granted Kalanick control of additional board seats last year. He said it was not great for shareholders, but thought Benchmark was allowing Kalanick do anything he wanted because they thought of him as the next Zuckerberg.
And there might be a long-term impact on Benchmarks deal leak. Investors cultivate a creator friendly image and some founders are talking out against Benchmarks conclusion.
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