If this letter's claims are true, Kalanick agreed, in writing, "to modify the company’s voting agreement to ensure that the board was composed of independent, diverse, and well qualified directors." He then defaulted on that written agreement with Uber's Board.
That's a pretty serious mistake.
Disclaimer: I am not a lawyer. This is not legal nor investment advice.
Perhaps the mistake here is Benchmark's. If Kalanick agreed to do this in writing, and then didn't do it, that makes him look bad but it's unclear to me that Benchmark can do much about it. Maybe Travis has the last laugh.
It's unclear from the letter if this agreement was a contract or e.g. an email. If a contract, the answer is clear.
If something less formal, note that American courts tend to treat written communications between sophisticated parties as legally binding, particularly if it occurs around negotiating a contract [1].
There's the further distinction that these are written communications between a CEO and his Board. At the very least, Kalanick made untrue statements to his investors. If he did it intentionally, it could constitute fraud.
[1] https://www.law360.com/articles/950866/bank-bound-by-unsigne...
Disclaimer: I am not a lawyer. This is not legal nor investment advice.
Even verbal agreements are binding in the US especially when dealing with parties such as these. If TK hopes to have any credibility moving forward, with the Board or in the courts, it would be in his best interest to keep commitments or he will be stuck in the "did you lie then or is this version a lie" mess.
If he wants to argue that he made the agreement under duress then he can argue that in court and the court may find the the agreement is not enforceable but duress can be a steep hill to climb without physical, or threat of physical, harm.
And what I mean by that is this: they gave Uber money for shares. But they have not yet sold the shares to anybody, b/c no acquisition or IPO. Other investors buy more shares, but that's not a liquidity event, is it?
Benchmark has a whole boatload of paper profits that they can't return to their LPs, not yet at least.
Or am I crossed up here? Could they, or have they, done some kind of private sale? I kind of doubt it but could easily be wrong here. Is there some kind of financial instrument to cash out early I'm ignorant of?
In order to liquidate their investment, Uber needs to IPO or Benchmark needs to find another investor to buy them out.
Travis is a staunch opponent to an IPO. And, replacing Travis as CEO is a likely pre-condition to finding another investor who will buy Benchmark out. Either way, discrediting and removing Travis and protecting their money is more or less one in the same.