Denver Ventures says ‘far-fetched’ lawsuit ‘nothing more than a smear campaign’

Denver Ventures, the investing firm previously known as Denver Angels, is asking a judge to reject a lawsuit by Angels co-founder Paul Foley, calling it “far-fetched,” “untethered to the facts or the law,” and “an imaginary and elaborate conspiracy theory” designed to harm it.

“Despite its salacious accusations and egregious claims,” it says, “(Foley)’s complaint amounts to nothing more than a disgruntled minority member who is unwilling to accept his lone objection was insufficient to unwind a business deal he originally approved but now regrets.”

Foley, a Boulder-area startup founder and investor, was one of the four managers of Denver Angels between 2019 and 2022 and is still a 20% owner of that firm alongside fellow co-founders Kenneth Monfort of Monfort Cos., David Prichard and Zachary May.

In a March lawsuit, he accused his business partners of conspiring with Jackson Killion, in-house lawyer for Denver Angels, “to siphon all of the value and success of Denver Angels for their personal benefit” by moving its assets to Denver Ventures, which he does not co-own.

In a series of motions to dismiss last week, the nine defendants in the case all asked Denver District Judge Sarah Wallace to end that high-dollar lawsuit in its entirety.

“Contrary to (Foley)’s allegations, the license agreement did not siphon all value from Denver Angels or otherwise convey Denver Angels’ assets to Denver Ventures. Nor did the license agreement somehow divert funds from Denver Angels,” their motions claimed.

“The license agreement merely permitted Denver Ventures to use Denver Angels’ brand and assets to promote its new investment fund in exchange for monetary compensation.”

Paul Foley  (LinkedIn)

The company took on the Denver Ventures branding around this time last year.

“Despite agreeing that a new investment fund was in Denver Angels’ best interests and being involved in that process, Foley at some later point became displeased,” Denver Ventures says.

Foley’s lawsuit, which seeks eight figures in damages, accuses the many defendants of theft, securities fraud, racketeering and more. Foley claims that the once-thriving Denver Angels is about worthless, meaning his 20% stake in the firm is, too.

“The record here is extensive, and I’m confident the documents and agreements support my claims,” Foley said in a statement to BusinessDen on Friday. “Not only did I not approve the fund and structure, but they also removed me as manager because I wouldn’t approve.

“The motions to dismiss were an anticipated litigation tactic meant to delay and distract, and I look forward to moving on to demonstrate the merits of the complaint in court.”

The individual defendants — Monfort, Prichard and May — say they cannot be sued because their entities, not themselves as individuals, own Angels and made the decisions that Foley disapproves of. Denver Ventures similarly argues that it cannot be sued because it only signed a licensing agreement with Denver Angels and there is nothing improper about that.

Foley “lumps (all) defendants … into a wild conspiracy theory alleging all defendants have attempted to steal Denver Angels’ assets and profits,” last week’s motions complain.

Denver Ventures and its owners are represented by four lawyers from Garnett Powell Maximon Barlow & Farbes in Denver: The father-son duo of Stan and Andrew Garnett, plus Nicholas Eaton and Kate Leisner. Denver Ventures’ lawyer, Killion, and his firm Caddis Consulting are represented by Derek Anderson at Winget Spadafora and Schwartzberg in Boulder.

“We look forward to the complete facts coming to light and are confident they will show that (Foley’s) claims are unfounded,” Andrew Garnett said on behalf of his clients Friday.

“We feel strongly about these motions (to dismiss) and even stronger that at the conclusion of this full legal process, defendants will be fully vindicated, and it will be shown that the defendants acted appropriately, in good faith, and consistent with their obligations,” he added.

Foley’s lawyers are Lauren Thompson and Elliot Fladen of Foster Graham Milstein & Calisher.