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Trouble emerges in Cruise Automation’s sale to GM

Michael Martinez
The Detroit News

Cruise Automation, the Silicon Valley startup that General Motors Co. is buying to help it develop autonomous cars, has filed a lawsuit to stop a former business partner it claims is unjustly trying to cash in on the acquisition.

CEO Kyle Vogt, in a lawsuit dated April 8 with a San Francisco court, says Jeremy Guillory, a person he consulted with in the early stages of founding the company, has “emerged from the shadows with his hand out” in an “opportunistic and brazen attempt to extort money.” Vogt is seeking a court judgment that Guillory doesn’t have any ownership stake in the company.

In a cross-complaint filed late Thursday, Guillory says he agreed in writing to be a 50-50 partner in the company and Vogt is trying to “write him out of the Cruise story.”

When the truth comes out, as it will, the label of extortionist will land somewhere other than on Guillory in this case,” the complaint says.

Vogt says Guillory’s allegations have caused an “unnecessary and damaging delay” in Cruise’s sale to GM, although the Detroit automaker said in a statement it still expects the acquisition to close on schedule in the second quarter.

Terms of the deal have not been disclosed, although Guillory’s cross-complaint says the deal is worth $1 billion.

Vogt, in the lawsuit, says he talked briefly with Guillory but the two ended up parting ways shortly after Cruise was founded in 2013. It says Guillory’s name did appear on an application to investor Y Combinator, but he has never owned stock, invested or otherwise had a hand in the company.

Still, three days after the March announcement that GM would buy Cruise, Guillory “for the first time asserted that he had an equity ownership stake in Cruise.”

Even if he did have an ownership stake, the lawsuit says, he would need to be employed at Cruise for at least a year before any ownership interest vests.

GM’s acquisition of Cruise comes as the automaker accelerates its push to develop driverless cars.

The 3-year-old technology company will act as an independent unit within GM’s newly created Autonomous Vehicle Development Team led by Doug Parks, GM vice president of autonomous technology and vehicle execution, and will be based in San Francisco.

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