The text of eBay's complaint filed in a Delaware court [PDF] has made its way online, and in it, eBay "seeks equitable and legal relief" from Craigslist CEO Jim Buckmaster and founder Craig Newmark for:
[B]reaching their fiduciary duties of care, loyalty, and good faith by implementing certain self-dealing transactions challenged herein which were designed specifically to benefit themselves to the detriment of eBay.Allegedly Buckmaster and Newmark attempted to issue themselves new shares in order to keep more of the profits to themselves, instead of sharing the 28.4 percent eBay can demand for their stake in the company, as Valleywag predicted. After the jump, the blow-by-blow account as detailed by the Wall Street Journal.
- In 2005, Buckmaster complained that eBay's unfortunately-named classified service Kijiji competed directly with Craigslist, telling then CEO Meg Whitman "we are no longer comfortable having eBay as a shareholder."
- Whitman responded that eBay loved Craigslist, and that "we would welcome the opportunity to acquire the remainder" of the company.
- In October of 2007, Buckmaster and Newmark met with lawyer Edward Wes, and issued themselves "reorganization shares" which diluted eBay's stake under the 25 percent threshold that gave eBay special rights in the election of board members.
- They further tried to poison the share well through right of first refusal clauses that eBay alleges would "make Newmark, Buckmaster, or the Company they control the only possible acquirers of eBay's shares."
- Newmark and Buckmaster didn't bother to tell eBay about these moves, as well as changes to the corporate charter, until January 3rd of 2008. Now eBay wants the moves overturned in the courts.
As for Craigslist's response, Buckmaster writes on the official blog that "every measure we have taken has been for the sake of protecting the long term well-being of the craigslist community." By "community" we assume he means "our pecuniary self-interest."