eBay published a copy of its corporate governance lawsuit against Craigslist, its founder Craig Newmark, and CEO Jim Buckmaster. Things apparently came to a head when eBay launched its classifieds site Kijiji in the US in 2007.

The lawsuit, with certain confidential information redacted, states that when eBay entered into a Shareholders' Agreement in 2004, it provided that if eBay engaged in competitive activity, certain rights and obligations would terminate, including rights of first refusal to purchase each other shares if any of the parties attempted to sell their shares.

eBay said Buckmaster gave eBay notice of competitive activity after Kijiji's US launch.

At that point, eBay's Josh Silverman stepped down from Craigslist 3-person Board "as a matter of good corporate governance," according to eBay, since he had been associated with Kijiji. (On his LinkedIn profile, Silverman states, "From scratch we built a leading position in European Classifieds within one year, and have over-performed vs eBay's ambitious expectations on all key operating metrics (traffic, revenue, profits, etc)."

eBay claims it was still allowed to elect one director to the Board, but that Craigslist never responded to eBay's request to replace Silverman with Thomas Jeon, eBay's competition counsel.

eBay goes on to say that Buckmaster sent a letter to then CEO Meg Whitman stating Craigslist was no longer comfortable with eBay as a shareholder (July 2007), and that Whitman responded by saying eBay would welcome the opportunity to acquire the remainder of Craigslist it did not already own - whenever Buckmaster and Newmark felt it would be appropriate.

The spat between the two companies is detailed in the lawsuit, available on eBay's website. The section that outlines eBay's claim of Craigslist's attempt to dilute its shares begins on page 12 (section 40).