General Motors announced in March that it was buying Cruise, a self-driving car startup, at a reported price tag of $1 billion – that’s one of the largest tech acquisitions of 2016 and the largest ever in Y Combinator’s history.
But the acquisition hasn’t closed because of an unresolved dispute with a person claiming to be a cofounder of the company.
Y Combinator President Sam Altman wrote in a blog post today that Jeremy Guillory has come forward to claim shares of equity. In private negotiations, Cruise’s CEO Kyle Vogt offered to pay money to settle it privately, but Guillory refused, Altman said in his post.
“There is a long and sordid history of people coming out of the woodwork with bogus claims when huge amounts of money are on the line,” Altman wrote.
After Vogt offered to settle, Guillory allegedly let the deal expire.
Now the startup has taken the drastic step of asking a court to declare that Guillory has no right to equity or any partnership with Cruise.
“It’s an incredible bummer these situations have to happen in the first place,” Altman said. “This is one of the least sensible professional situations I’ve ever been involved with, but unfortunately these situations are not uncommon.”
In the suit, Cruise claims that Guillory “emerged from the shadows with his hand out within days” of the GM acquisition news. “As explained below, Mr. Guillory should put his hand back into his pocket; he does not have any stake in the company,” the claim says.
According to the filing, the startup argues that Guillory never had equity, wrote code, nor invested in the company, although he was listed on the application to Y Combinator. Now, Cruise wants a declaration that no part of the company belongs so the merger can move ahead “because Defendant frustrated Cruise’s acquisition by GM”.
“Time is truly of the essence in the highly competitive and frenetic race in the development of autonomous technology. Any continued delay damages Plaintiffs [Cruise and Vogt],” the claim reads.
Despite the concerns about delay, a General Motors spokesperson said they expect it to close on schedule.
“We are aware of the complaint filed by Cruise Automation and support their efforts to bring the matter to a prompt conclusion. We expect our acquisition to close on schedule in the second quarter,” General Motors said.
The full complaint is embedded below. Vogt had no comment, and Guillory and Altman didn’t respond to a request for comment.