Summary of the Article:
TLDR:
Key Points:
- Venture capital fund DEMI sues Denver over alleged breach of contract regarding promised funds for disadvantaged businesses.
- Denver pledged $15 million in tax revenues from marijuana sales to invest in minority and women entrepreneurs through the Herman Malone Fund.
The Domestic Emerging Market Investments (DEMI) Fund filed a lawsuit against Denver, claiming the city failed to provide the promised $15 million in funding. The DEMI Fund was tasked with overseeing investments in minority and women-owned businesses but alleged that it was left with $800,000 in unreimbursed expenses. Denver only fulfilled $6.9 million of the $15 million promised, stating that the Malone Fund had run out of money.
Named after a prominent Black Colorado executive, the fund aimed to assist 1,000 disadvantaged businesses with capital investments. However, the program faced challenges, leading to DEMI suing Denver in District Court. The DEMI Fund’s managing director, Danielle Shoots, highlighted the city’s failure to meet its obligations, resulting in a loss of $6.5 million in additional investments.
Denver’s economic development office hired DEMI to manage the funds, with Shoots raising additional investments from various sources. Despite ongoing marijuana tax revenues, Denver halted reimbursements and new funds, causing a financial strain on the DEMI Fund. Shoots criticized the city’s contracting practices, citing unnecessary contractors and insufficient documentation claims.
The lawsuit seeks to recoup outstanding invoices, damages, attorney fees, and expenses. Shoots also called for a public apology from the city and an investigation into the economic development office’s practices. The article emphasizes the financial and operational challenges faced by the DEMI Fund due to Denver’s alleged breach of contract.
