A corporate governance lawsuit against Craigslist by eBay seems "unethical" and is unfounded, Craigslist has said.
EBay, a minority shareholder in Craigslist, filed the lawsuit in Delaware's Court of Chancery Tuesday, alleging that Craigslist's board of directors has entered into transactions that have "unfairly diluted eBay's economic interest in Craigslist by more than 10 percent."
EBay didn't release details of the lawsuit. The complaint was filed under seal because some of the information about Craigslist is governed by confidentiality restrictions, eBay said in a news release. But eBay, which has owned a 28.4 percent stake in Craigslist since 2004, alleged that Craigslist CEO Jim Buckmaster and founder Craig Newmark have breached their fiduciary duties.
Craigslist fired back in a blog post. "We are surprised and disappointed by Ebay's unfounded allegations, which came to us out of the blue, without any attempt to engage in a dialogue with us," the blog post said. "Coming from a shareholder that views craigslist as a prime competitor, filing suit without so much as mentioning these assertions beforehand seems unethical, and hints at ulterior motives."
Craigslist has treated eBay fairly as a minority shareholder and will continue to do so, the blog post said. "Ebay has absolutely no reason to feel threatened here -- unless of course they're contemplating a hostile takeover of craigslist, or the sale of Ebay's stake in craigslist to an unfriendly party," it said.
EBay described the unnamed actions of Buckmaster and Newmark as "unilateral." The Craigslist board has "disadvantaged eBay and its investment in Craigslist," a company official said in the eBay news release.