This is interesting, as the YC Application does require breakdown. ["If you have not formed the company yet, describe the planned equity ownership breakdown among the founders, employees and any other proposed stockholders. (This question is as much for you as us.)"]
"According to Kyle, Jeremy did not write any code or build any hardware during this exploratory period. He did help find an office for the company. At the point of Jeremy’s departure, neither he nor Kyle had signed employment agreements, stock agreements, or any documents of any sort with the company. Even if Jeremy had signed a stock agreement, he wouldn’t have reached the standard 1-year cliff for founders to vest any equity."
It sounds like there's documentation that this was the original agreed upon split. If there's no documentation of some sort of "vesting" or "minimum effort required", I don't see the legal argument for this person to not have this split.
Contracts are documentation of agreements, but the agreements themselves are what hold legal strength. The contracts just help when there's a dispute over the facts.
edit: (I'm not saying anything as to whether Jeremy did so).
Edit: reading further I guess they are arguing that none of his IP is in what GM is buying. So I guess that will be the real point of contention.
In any event, breach of contract isn't the only claim being made.
So while 1 month probably shouldn't be worth 50% of the company, you also can't just decide that you don't want your co-founder to have a stake in your company any more, and push them out.
At the end of that 1 month, they had both done equal work (about a month's worth) and had equal share (50% each). It sounds like (according to Jeremy's story) he still owns that because no one agreed to a formal change in ownership.
From this paragraph, it sounds like Jeremy could have been any dork off the street who can find some office space. The question then is why Kyle worked with Jeremy at all, and in particular, why he proposed to Ycombinator to found a self-driving car company with Jeremy as an equal partner.
That's all just plainly in the YC application video.
That doesn't seem compatible with what Sam Altman says, so either the video does not depict Jeremy's contributions up to that point in time, or else Sam is incorrect and has omitted many contributions from Jeremy. Those contributions may or may not justify Jeremy's claim, but they certainly complicate the issue and present a very legitimate position for Jeremy to at least make the claim.
Jeremy's claim may ultimately not be considered or may not be upheld, but either way the degree to which Altman seems to think it should be categorically ignored does not seem to match the facts regarding the initial formation of Cruise at all.
"You see, your honor, I meant to pay my bill at the restaurant, but they threw me out on the sidewalk before I had a chance to pay it."
As in, one of the two parties might have been genuinely interested in signing such documents, and one of the two parties might have had reasons to want to avoid letting the other one sign those documents.
The question is whether having explored (and subsequently abandoned) a potential co-founder relationship constitutes sufficient basis for an equity claim.