eBay files governance lawsuit against Craigslist

Company accuses Craigslist CEO Jim Buckmaster, founder Craig Newmark of entering into transactions that have 'unfairly diluted eBay's economic interest in Craigslist'

eBay has filed a lawsuit alleging that some changes made by Craigslist's board of directors have diluted eBay's investment in the online classified site.

eBay filed the lawsuit on Tuesday in the Court of Chancery of the State of Delaware, the company said. The complaint was filed under seal because some of the information about Craigslist is governed by confidentiality restrictions, eBay said.

eBay, which acquired a 28.4 percent interest in Craigslist in 2004, didn't provide details about the actions taken by Craigslist's board, but it said that Craigslist CEO Jim Buckmaster and founder Craig Newmark have entered into transactions that have "unfairly diluted eBay's economic interest in Craigslist by more than 10 percent."

Buckmaster and Newmark have breached their fiduciary duties, eBay alleged. An eBay spokeswoman wasn't immediately available for comment.

A Craigslist spokeswoman declined to comment, saying the company would likely issue a statement on its blog later in the day.

"The recent actions by the Craigslist directors have disadvantaged eBay and its investment in Craigslist," Mike Jacobson, eBay senior vice president and general counsel, said in a statement. "Since negotiating our investment with Craigslist's board in 2004, we have acted openly and in good faith as a minority shareholder, so we were surprised by these recent unilateral actions."

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