TLDR:
- The city of Denver is seeking dismissal of a lawsuit from venture capital firm DEMI Fund over tax dollars meant for women and minority-owned businesses.
- Denver argues the case should be dismissed on technical grounds, citing a separate out-of-court dispute resolution process outlined in the contract signed by both parties.
The city of Denver is facing a lawsuit from venture capital firm DEMI Fund regarding tax dollars allocated to support women and minority-owned businesses. Denver filed a motion to dismiss the lawsuit, stating that it disagrees with DEMI Fund’s claim that they are owed money and that the firm did not provide sufficient documentation of how the funds were spent. The dispute centers around a contract signed in 2022, where Denver agreed to allocate 1 percent of the city’s tax on marijuana sales to the “Herman Malone Fund,” which DEMI Fund was chosen to administer. DEMI Fund alleged that Denver stopped transferring the tax dollars after sending $6.9 million by August and claimed to be owed nearly $800,000 for expenses. Denver argues that the contract mandates disputes to be resolved through an administrative hearing procedure outlined in a specific city ordinance. Despite DEMI Fund initiating the dispute resolution process, they also filed a lawsuit against the city. The city refutes DEMI Fund’s core claims and stated that they vehemently disagree with the allegations made in the lawsuit. Former DEMI Managing Director Danielle Shoots resigned from the firm, and her successor, Mark Goodman, did not comment on the matter. DEMI Fund used Denver tax dollars to make direct investments in various companies, with some not meeting the requirement of being physically located within the city’s limits as specified in the contract.
