GM acquisition of 'driverless car' startup caught on legal snag

General Motors' much touted acquisition of Cruise Automation has hit a stumbling block, with the startup and its founder filing a lawsuit against an engineer who has allegedly delayed the deal by demanding an equity stake in the company.

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Cruise Automation and its founder and CEO, Kyle Vogt, have reportedly filed a lawsuit against engineer Jeremy Guillory, who they claim has stalled a planned $1bn acquisition of the startup by giant General Motors by demanding an 'opportunistic' equity stake in Cruise to which, they insist, he is not entitled.

No code, no stock 

The lawsuit states that Mr Vogt consulted briefly with Mr Guillory in the months after Cruise was founded in 2013, but that the pair decided to go their separate ways soon after. Though Mr Guillory's name was listed on their application to startup incubator Y Combinator in 2013, Mr Vogt reportedly attended interviews with the Y Combinator partners on his own. Cruise and Mr Vogt insist that Mr Guillory never wrote any code or deigned any technologies for Cruise, and was never issued any stock options in the company.

Co-founders?

Mr Guillory's countersuit, filed Thursday, argues that the engineer had been working on developing driverless car technologies long before meeting Mr Vogt in 2013, and that the pair had applied to Y Combinator together. He contends that he and Mr Vogt agreed in writing to split Cruise evenly as co-founders, adding that his own expertise in the area of driverless technologies is 'vastly greater' than that of Cruise's CEO.

Deal delay

General Motors' planned acquisition of Cruise—which develops software that enables cars to operate driver-free in cities—has been a hot topic of discussion since the $1bn cash and scrip deal was announced earlier this year. The lawsuit argues that Mr Guillory's play for a stake in Cruise has delayed the two companies in closing the deal, with potential detriment to the deal's value.

'Time is truly of the essence in the highly competitive and frenetic race in the development of autonomous technology. Any continued delay damages Plaintiffs,' it reads.

A spokesperson for General Motors confirmed that the company is aware of Cruise's legal battle, but remains confident that the deal will close on schedule in the second quarter.

Source: The Wall Street Journal; Silicone Beat; Fortune

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