More details emerge about the not so friendly dispute between Craigslist and its minority shareholder eBay.

In a lawsuit filed under seal in Delaware Chancery Court last week, eBay alleged that Craigslist held “clandestine” directors’ meetings in recent months to dilute eBay’s 28.4 percent stake to 24.85, or less than a quarter of the company.

A redacted version of the suit was released on Wednesday.

“We are no longer comfortable having eBay as a shareholder and wish to explore options for our repurchase, or for otherwise finding a new home for these shares,” Craigslist Chief Executive Jim Buckmaster was quoted in the court papers as telling eBay’s then-CEO Meg Whitman last summer.

Meg Whitman, then eBay’s chief executive, responded via e-mail last July with an offer to buy out Craigslist. “We would welcome the opportunity to acquire the remainder of [the company] we do not already own whenever you … feel it would be appropriate,” she wrote to Craigslist CEO Jim Buckmaster.
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Reached by telephone late on Wednesday, Craigslist founder Craig Newmark said he would not be interested in a sale, even for billions of dollars. “Well, we have been saying consistently we are not interested in selling,” he said. [Reuters/InternetNews.com]

Who would have thought these two would end up not getting along?

LOS ANGELES — EBay (NASDAQ: EBAY), the world’s largest online auctioneer, sued Craigslist, a competitor in which it holds an ownership stake, in a dispute over whether the Internet bulletin board tried to blunt eBay’s control.

EBay alleged in the lawsuit that the board of directors of Craigslist, the Web’s dominant classifieds listing service, took “unilateral actions” to dilute eBay’s 28.4 percent stake by more than 10 percent, eBay said in a statement.

The suit, filed on Tuesday under seal, asked a Delaware Chancery Court to rescind the unspecified actions to protect eBay’s stockholders and preserve its stake in Craigslist.

The suit names as defendants Craigslist founder, Craig Newmark, who runs the company in a famously open-minded style, and Chief Executive Jim Buckmaster. Newmark and Buckmaster are the only members of Craigslist’s board of directors. [Reuters/InternetNews]