EBay Sues Craigslist over 'diluted' investment

"The recent actions by the craigslist directors have disadvantaged eBay and its investment in Craigslist," said Mike Jacobson, eBay Senior Vice President and General Counsel.

EBay said in a statement that it wants to protect the 28.4 percent ownership of craigslist it bought in 2004 after negotiations with the company's board of directors. Craigslist founder Craig Newmark and CEO Jim Buckmaster sit on the board.

Details of the suit were not released due to confidentiality restrictions eBay said. The auction site said it filed the suit under seal.

EBay alleges that in January 2008, Newmark and Buckmaster took unilateral steps, among other things, which "unfairly diluted" eBay's economic interest in Craigslist by more than 10 percent.

EBay says both directors breached their fiduciary duties in violation of Delaware corporate law.