Uber's Board Doesn’t Have to Face Lawsuit Over Buyout

(Bloomberg) -- Uber Technologies Inc. directors don’t have to face a lawsuit accusing them of failing to properly review the ride-sharing company’s acquisition of a self-driving-technology firm that wound up being accused of stealing trade secrets from a unit of Google parent Alphabet Inc.

Delaware Chancery Court Judge Sam Glasscock III found the majority of the Uber board that weighed the $680 million deal weren’t beholden to former CEO Travis Kalanick, who pushed for the acquisition. Kalanick was ousted as the company’s top executive in 2017 but still serves as a director.

Uber investor Lenza McElrath III argued the Kalanick-dominated board recklessly approved the purchase of a company owned by former Google engineer Anthony Levandowski, who has been accused of stealing seven years of research material about self-driving cars from his former employer.

“I find that there is no reasonable doubt that at least seven out of the eleven members’’ of Uber’s board that considered the buyout were “disinterested and independent,’’ Glasscock wrote. That means directors properly used their business judgment in evaluating the acquisition of Levandowski’s company.

Uber fired Levandowski in 2017 and handed over $245 million in stock of the closely held company to settle a suit filed by Alphabet’s Waymo unit over the allegedly pilfered self-driving technology.

Waymo accused Uber of hiring Levandowski to get access to a laser-scanner system, known as LiDAR. That system uses laser-beam reflections to sense a vehicle’s surroundings so the car can avoid pedestrians, obstacles and other vehicles. The technology is key for Waymo, Uber and other companies looking to move into the autonomous-vehicle market.

The case is McElrath v. Kalanick, 2017-0888, Delaware Chancery Court (Georgetown).

To contact the reporter on this story: Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Peter Jeffrey, Joe Schneider

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