Get All Access for $5/mo

Founder of GM's Acquired Company Facing Legal Battle Cruise founder and CEO Kyle Vogt has filed a complaint in San Fracisco Superior Court against a man he says is falsely claiming a stake in the company.

By Kia Kokalitcheva

This story originally appeared on Fortune Magazine

Paul Sancya — AP

General Motors' $1 billion acquisition of autonomous driving startup Cruise might not all be smooth driving.

Cruise founder and CEO Kyle Vogt has filed a complaint in San Francisco Superior Court against Jeremy Guillory, who he says is unjustly claiming a stake in the company. The lawsuit asks that Guillory be barred from making those claims.

According to the complaint, the two men met just after Vogt founded his then new startup, Cruise, which develops technology that turns traditional cars into ones capable of autonomous driving. The two discussed potentially working together on the company.

However, after about a month, the two parted ways after deciding that their visions and personalities didn't match, according to the lawsuit. Though Guillory was listed on the startup's application for Y Combinator, a prestigious accelerator program for startups, Vogt said he interviewed with the program's partners alone after the two men had already decided against working together.

Vogt claims in the lawsuit that Guillory didn't write any code or build any products for the startup.

Guillory, who couldn't be reached for comment, is allegedly asking for a stake in Cruise that he says he's entitled to. According to Vogt's complaint, he made his claim just five days after GM announced it would acquire Cruise last month.

The dispute creates a new complication for GM's acquisition, which is intended to help the auto giant compete in what many believe will be a future filled with self-driving cars. Ownership battles, although fairly common, can delay major deals or, at minimum, add to the headaches involved.

"Defendant's shocking and opportunistic claim is an attempt to thwart, interfere or otherwise delay GM's merger acquisition of Cruise for his own pecuniary benefit," the lawsuit says. "Knowing that this claim could interfere with the GM transaction, Mr. Guillory hopes to leverage his extortionist claims to achieve a pay-off from the Company."

Sam Altman, Y Combinator's president, said in a blog post that Vogt tried to settle the dispute by offering to pay an undisclosed amount to Guillory from his personal funds. But the offer was not accepted by last Friday's deadline.

"Kyle has worked incredibly hard to settle this claim amicably, despite what I consider to be the obvious ridiculousness of it, and has done far more than I would have personally done under these circumstances," Altman wrote.

The acquisition of Cruise is still expected to close by the end of June, according to Altman's blog post.

Kia Kokalitcheva is a reporter at Fortune.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

Wells Fargo Reportedly Fired More Than a Dozen Employees for Faking Keyboard Activity

The bank told Bloomberg that it "does not tolerate unethical behavior."

Business News

'We Pulled Off An SEO Heist': Entrepreneur Stole 3.6 Million Pageviews From Competitors — And Your Business Could Be Next.

This has huge implications for businesses that rely on Google's organic traffic for revenue.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Starting a Business

Spend Less Time Worrying About Your Company's Runway — And More Time Rethinking Your Strategy. Here's How.

Perceived short runways leave founders in angst. It does not have to be this way; the best way to extend the runway is the right strategy.

Innovation

The Key to Real Innovation Is Cross-Pollination — Here Are 10 Ways to Implement It in Your Business

Transform your business with this unique approach to sparking innovation.