The Denver municipal election is set for May 7, 2019, and
City Council District 5 promises to be a close race with incumbent Mary Beth
Susman vulnerable to defeat or perhaps a run-off election which would be slated
for June 4, 2019. A run-off would occur if no candidate receives more than 50%
of the vote. In that case, the top two vote getters would go head-to-head in
the June 4th election.
Leading Contender: Amanda Sawyer, who many feel has the best chance of defeating the incumbent, has gained ground with a campaign that speaks about common sense and a rational approach to development within the city.
Incumbent Susman has a reputation in Denver for being a
proponent of high-density development even in quiet residential neighborhoods.
As a result of her negative reputation she has garnered three opponents for the
District 5 seat. District 5 includes the neighborhoods of Hilltop, Crestmoor,
Mayfair, Lowry, Windsor, Washington Virginia Vale, Hale and Montclair.
One candidate who is apparently gaining ground and hoping to
defeat Susman on May 7 or at least June 4, is Amanda Sawyer. Sawyer’s message
is resonating with voters and experts say she has a legitimate shot to upset
the incumbent Susman. Susman has $106,000 in her war chest while Sawyer has
approximately $75,000.
Also in the hunt for the District 5 seat are Michele Fry and
Steve Replin. Fry, a lifelong Mayfair resident, also has attracted supporters
with her experience in government and close ties to the community. She has
raised $24,000 to date.
Dark Horse: Steve Replin is running for city council in District 5 and has proposed a moratorium on all building projects for two years. Replin is seen as a dark horse candidate but Denver residents remember that John Hickenlooper was considered a long shot when he ran for Mayor in 2003.
Hopeful Opponent: Michele Fry, a lifelong Mayfair resident, hopes to defeat Mary Beth Susman in the upcoming May 7 election.
Replin, although a dark horse candidate, has proposed a
two-year moratorium on building anything within the city. To date, Replin has
not yet reported any outside contributions to his campaign.
District 5 is known for activists fighting inappropriate
development and, in at least one case, they were victorious. The proposed Green
Flats project on Holly Street, which this newspaper covered extensively, was
defeated by neighborhood groups even though Councilperson Susman tried to force
the development on the neighborhood.
The Green Flats project is what prompted Sawyer’s interest
to run for the District 5 seat. She has been vocal about development in her
district and is unafraid to ask the tough questions of developers. She
recognizes that development will happen in Denver, but she wants a more
thoughtful approach and protection of the character of the neighborhoods.
As Denver voters are grappling with this decision in
District 5, a candidate forum is scheduled to help them make an informed
decision. The Cranmer Park/Hilltop Civic Association and Bellevue-Hale
Neighborhood Association will co-host a forum on Tuesday, April 16, 2019, at
6:30 p.m. for the candidates seeking the District 5 Denver City Council seat:
Michele Fry, Steve Replin, Amanda Sawyer and Mary Beth Susman.
Additionally, there will be information and presentations on
ballot initiatives. Specifically, they have invited the supporting and opposing
organizations for Initiative 300, The Right To Survive, to present their
positions an take questions.
Unpopular Incumbent: Mary Beth Susman, whose popularity has plummeted, is fighting for her political life and faces three strong candidates in the municipal election set for May 7, 2019.
On March 16, 2019, Two Parts hosted the 6th Annual
Collaboration Beer Fest at the Hyatt Regency in Denver. This creative beer
festival featured 100+ beer projects with over 200 participating breweries. How
does a beer project happen? Two or more breweries come together to brew
something special with one or both being a member of the Colorado Brewers
Guild. The result? Some of the most exciting, rare, and delicious beer tappings
you’ll find anywhere.
Comrade Brewing: Benjamin Housman, left, and Andrew Lester from Comrade Brewing were among the breweries that collaborated with other breweries to make unique beers. Comrade, located at 7667 E. Iliff Avenue in Denver, worked with Pelican Brewing and Epic Brewing.
Many good beers filled the exhibit hall of the Hyatt
Regency. Some standouts were Comrade Brewing and Epic Brewing (Denver) who
combined to make a Dry-Hopped California Common. Comrade Brewing also
collaborated with Pelican Brewing (Pacific City, OR) to brew an IPA with Orange
Peel and Citrusy Hops.
The longest lines were at the booth reserved for Cerebral
Brewing (Denver) and WeldWerks Brewing Company (Greeley) who collaborated to
make a New England-style Double IPA Brewed with Nelson Sauvin, Sabro, and Citra
Hops.
New Terrain Brewing Company (Golden) and Molly’s Spirits
(Lakeside) also had a crowd for their Desert Berliner Weisse with Yogurt. It
was one of the most unusual beers found at the fest and was a hit among
attendees. Stop by Molly’s Spirits in Lakeside for this and other collaboration
beers while supplies last.
Milkshake IPAs were at a few booths and one collaboration
that stood out was from Launch Pad Brewery (Aurora) and Bent Barley Brewing
(Aurora). This beer was brewed with fresh carrots, walnuts, lactose, vanilla
beans, and spices.
Fiction Beer (Denver) and Calicraft Brewing (Walnut Creek,
CA) brought a single malt grain bill to set the stage for the combination of
yeast, hops, and fruit. Peaches and Viognier Grapes made up 25% of this beer. A
custom blend of bretttanomyces and champagne yeast were used to ferment this
beer dry with almost no residual sugar. Only whirlpool hops and huge dry hops
add to the complexity. The bright aroma of citrus, tropical and stone fruit
from the hops are the perfect complement to the sweet nectar and herbal aroma
from the fruit and our blend of yeast. The flavor is enhanced by the incredibly
dry finish. Crisp, bright, and complex.
Collaboration Fest: The 6th Annual Collaboration Fest was held on March 16, 2019, at the Hyatt Regency in Denver.
Visit www.collaborationfest.com for more information and a full list of all collaborations. Stay tuned for next year’s event as Two Parts always puts on a high quality and well-organized event.
Planned 2019 Test Flight To Hit Speeds Of 1,688 MPH;
Denver Co-Founders Raise $150 Million For Start-Up Firm
Future Boom Operator: Japan Airlines has invested $10 million in Boom and was given a special tour of the Denver headquarters. The airline has pre-ordered 20 aircraft and got a peek at the XB-1.
The XB-1 aircraft dubbed Baby Boom — a one-third-scale
supersonic demonstrator — being built by Denver-based Boom Supersonic plans its
first test flight later this year. Designed to reach speeds of up to 1,688
miles per hour or twice the speed of sound, it is the prototype for a
commercial 55-passenger plane with a range of 5,180 miles to be introduced by
2023.
Co-founded by Denverites Blake Scholl and Josh Krall in
2014, the firm had raised $151 million by January of this year. Among the
startup investors were several venture funds that kicked in $33 million in
March 2017. In December 2017 Japan Airlines invested another $10 million,
enough to build the XB-1 “Baby Boom.” Then in January Boom Supersonic was given
another $100 million by Apple founder Steve Jobs’ widow Laurene Powell Jobs.
Supersonic Building Boom: Co-founded by Denverites Blake Scholl and Josh Krall in 2014, Boom Supersonic plans a test flight of the XB-1 aircraft dubbed Baby Boom this year.
Comfortably Close: The 55-seat plane named the Boom Overture will be able to fly from New York to London, Paris to Montreal, and Madrid to Boston in under four hours or less than half the time of conventional jets.
Boom says its aircraft — with a price estimate of $200
million — will produce a sonic boom at least 30 times quieter than the
Concorde, which was also dogged by high operating costs and fuel consumption
plus low capacity utilization. Boom estimates that fares for its aircraft will
be 75% lower than the Concorde and comparable to current business class
tickets, due to better fuel efficiency.
Pre-Orders Booming
Boom has 76 pre-orders for the 55-seat plane. The first
commercial airline to back the venture with investments was British airline
Virgin Atlantic that has options for 10 of the new aircraft. They made the deal
14 years after the final flight of the Concorde. In addition Japan Airlines has
the option to purchase up to 20 Boom aircraft and will assist efforts to hone
the aircraft’s design and passenger experience, according to the companies.
Called the Boom Overture, the 55-seat plane will be able to
fly from New York to London, Paris to Montreal, and Madrid to Boston in under
four hours — less than half the time of conventional jets. Although the plane will
have fewer than half the seats of a Concorde, company officials say it will
have a much better range — a staggering 5,180 miles.
The supersonic jet will also be more economical, and its
sonic boom will be “at least 30 times quieter” than Concorde, the company
claims. They also say that when it comes to landing and take-off: “Overture
will be as quiet as the subsonic aircraft flying similar routes today.”
Mach 2.2 Speed
The firm says its jetliner — expected to enter service by
the mid 2020s — will fly at speeds of Mach 2.2, 10% faster than the
British-French joint venture Concorde, which popularized supersonic jet travel
in the 1970s.
With 500 viable routes, there could be a market for 1,000
supersonic airliners with business class fares. It expects to keep the delta
wing configuration of the Concorde but would be built with composite materials.
It would be powered by three dry 15,000 20,000 lbf (67-89 kN) turbofans; a
derivative or a clean sheet design will be selected in 2019.
General Electric Co., Honeywell International Inc. and
Netherlands-based TenCate Advanced Composites are among suppliers for the
Denver firm’s supersonic jets.
Accessible Planet
The Denver-based company was founded for the express purpose
of making our planet dramatically more accessible. “We are taking proven
science and engineering and using it to build a Mach-2.2 airliner that will
kick off the supersonic era. And we are making the company a place where the
best people on the planet can be inspired and enabled to do the best and most
meaningful work of their careers,” says Founder-CEO Blake Scholl.
Blake’s Baby: Making high-speed travel mainstream is why Blake Scholl, who lives in Denver and is the father of three, founded Boom Supersonic.
Speed isn’t about going really fast Scholl says, “It’s about
closeness. It’s about making far-away places feel like they’re right around the
corner.” His point: Some people say that speed makes the world smaller. But at
Mach 2.2, the planet is as big as ever. Life is bigger when it is experienced
in person — with supersonic speeds, we’ll all experience a bigger world than
ever before.
Over long distances people don’t think in miles and kilometers.
They think in hours,” the CEO clarifies. He explains it this way: Crossing the
U.S. takes about five hours. Going from New York to Dubai takes about 14. Speed
isn’t about going really fast. It’s about closeness. It’s about making far away
places feel like they’re right around the corner. If we can fly twice as fast,
the world becomes twice as small, turning far off lands into familiar
neighbors.
Founding Trio
Making high-speed travel mainstream is exactly why Scholl
who lives in Denver and is the father of three founded Boom Supersonic. With a
BS in Computer Science from Carnegie Mellon, he has held leadership roles at
Amazon and Groupon and co-founded mobile technology startup Kima Labs that was
acquired by Groupon in 2012.
Engineering Change: The first go of Boom Supersonic’s XB-1 engines on a U.S. Air Force Academy test cell ran to 95% of power.
Sitting at the intersection of engineering, design, and marketing, Josh Krall — who also lives here — co-founded Boom with Scholl. He also attended Carnegie Mellon and has an MBA-MPP from Chicago Booth. Co-founder of two startups, his technical work includes owning multidisciplinary design automation software used for conceptual and preliminary aircraft design. He is leading Boom’s efforts to re-imagine the experience of flying and to craft the company’s brand.
Andy Cipra is the third member of the Boom team. He served
as head of marketing at Denver’s Dish Network where he created partnerships
with Southwest Airlines, Apple and Netflix. Most recently he was Chief
Marketing-Commercial Officer for several start-ups in the healthcare and
technology space. He holds a Mechanical Engineering degree from Purdue and an
MBA from the University of Chicago’s Booth School of Business.
The Fight Leads Back To Brownstein Farber Law Firm by Julie Hayden
It is the fight and the lawsuit that all the rich and powerful in Denver are obsessively talking about, but is being kept out of the news by the efforts of the all powerful Brownstein Hyatt Farber and Schreck LLP law firm (Brownstein Farber) its principals and/or persons on their behalf. It has been dubbed the “Black Tie Society Civil War” as many of the litigants are featured on webpages of “Blacktie Colorado” attending high society and major charitable soirées. The lawsuit accuses Cherry Creek multi-millionaire James Lustig of “masterminding” the scheme, using friends and family, tied by blood and marriage as “straw purchasers” to reap millions of dollars in stock manipulations. If you think the stock market is rigged for the benefit of the rich, the lawsuit appears to be proof positive of that fact.
Powerful Sisterhood: Sisters Cindy Farber, left, and Debbie Lustig, right, and their husbands Steve Farber, center, and James Lustig (not pictured) are at the center of the Black Tie Society Civil War and accompanying lawsuit in Federal District Court in Denver.
Berlin Claims
David Berlin, a Denver securities mogul, through two
investment companies he controls (Detroit Street Partners, Inc. and Birchwood
Resources, Inc.) filed two lawsuits in late 2017 and early 2018 which were
later consolidated into a single suit (the Lawsuit) in Federal District Court
in Colorado. His companies are suing 20-odd individuals and companies who are a
veritable “Who’s Who” of Denver society, alleging securities fraud and
racketeering.
In the lawsuits Berlin alleged that the parties masterminded
by James A. Lustig, another major Denver securities mogul, participated in a
market manipulation scheme to fraudulently obtain allocation of initial public
offering (IPO) shares from J.P. Morgan Securities LLC and eight other banks
which include such other financial titans as Goldman Sachs & Co., Deutsche
Bank Securities Inc., and Citigroup Markets Inc. (the Banks). He alleges they
engaged in “countless instances of market manipulation, wire fraud, securities
fraud and other racketeering activities” that cost Berlin entities “to the tune
of tens of millions of dollars.” Lustig’s wife, Debbie, is the sister of Cindy
Farber, who is the wife of Steve Farber, a co-founder of the all-powerful
Brownstein Farber law firm. Steve Farber is in turn accused of heading one of
the key defendants CLFS Equities, LLLP (CLFS).
The Mastermind: Securities mogul James A. Lustig is accused in a lawsuit by companies controlled by fellow mogul David Berlin to have masterminded a fraudulent securities and racketeering scheme to reap millions from IPOs allocated by major international banks.
Brownstein Farber Drafts Key Documents
Berlin claims Brownstein Farber drafted contractual
provisions among the defendants that “would purport to keep [the scheme]
confidential and “and were used in, “racketeering activity” as defined by
Colorado statutes “and that Brownstein Farber’s actions could be construed as
“having participated in racketeering enterprise” under Colorado law.
It goes on to specifically allege that “upon information and
belief, Brownstein Farber co-founder Steven W. Farber is the ‘F” in CLFS.”
IPOs
The consolidated Lawsuit revolves around the fact that major
banks act as underwriters for the initial offering to the public of shares in a
company (IPO shares). The banks cannot simply reserve the IPO shares for
themselves but must offer them to independent entities or individuals. The initial
price of the IPO is set by the banks in consultation with company going public
with the banks having the major say. If the initial offering price is set low
enough it is almost guaranteed that the IPO shares can immediately be resold
for a profit with little or no risk in the secondary market.
The holders of the IPO shares, unlike average investors,
will make millions off the initial offering even if the shares later tank. Over
the years the banks have indirectly tried to figure out various schemes to take
as much of the profits on the immediate resale of IPO shares as possible for
themselves which may have dubious legality, but they have gotten away with it
for many a decade. The consolidated Lawsuit goes to extreme lengths not to
allege any wrongful actions by the Banks and even refers to them as the
“Innocent Banks” as Berlin clearly does not wish to offend some of the the most
powerful financial institutions in the world.
The Allocation Scam
Berlin’s companies were for many years allocated IPO shares
due to the fact they were deemed preferred customers with ten million dollars
or more deposited with the bank. In order to rake in more of the profits the
Banks began in 2011 to demand that the customer provide a minimum of $600,000
per year in commissions from trading through the bank rather than simply $10
million on deposit. In order to spread the wealth around the Banks adopted a
rule that a group of clients with $600,000 or more would be given a greater
number of IPOs than a single customer with the same amount of total
commissions. Thus five customers with $600,000 in commissions each would
collectively garner more IPO shares than a single customer who generated $3
million in commissions.
Denver Super Lawyer: Attorney Steve Farber and the law firm he co-founded are alleged in a federal lawsuit brought by companies controlled by David Berlin to be central to a purported securities fraud and racketeering scheme involving IPOs.
Berlin alleges that Lustig, with the help and connivance of
Brownstein Farber, devised a racketeering scheme to take advantage of the new
allocation rules to the detriment of the Berlin companies. Lustig set up a
scheme whereby Lustig and other entities including CLFS would advance to straw
companies he set up for relatives and friends $600,000 plus. The straw
companies were then directed to buy shares of identified companies that would
be quickly sold that afternoon. The sole purpose of the trades was to generate
commissions for the banks so that the straw company would be allocated IPO
shares. Berlin claimed the quick purchases and sale of stock with no purpose to
profit on the sale were illegal “churning” and “wash sales.” The $600,000 plus
would be repaid with interest by the straw companies. Forty percent of the
profits from the immediate sale of IPO shares would then be paid to Lustig or
Lustig entities under the guise of accounting and administrative services.
What is amazing is that even after paying the Banks huge
sums of money in worthless commissions there was so much money in the reselling
of the IPO shares that Lustig and the other Defendants still netted millions in
profits.
Defendants’ Defenses
A principal defense by many of the Defendants to the
purported illegal activity appears to the participation of Brownstein Farber in
drawing up the documents regarding the purported scheme including
non-disclosure agreements alleged to hide the illegal scheme from federal and
state regulators. As stated in the Motion to Dismiss by Jeremy and Mia Abelson
(son-in-law and daughter of James A. Lustig):
Brownstein U.S. Attorney: The present U.S. Attorney is Jason Dunn, is a former Brownstein partner.
In fact, there would be no reason for anyone, especially the
Abelson Defendants, to think there was anything untoward in actively and
deliberately maximizing their eligibility for IPO allocation because the
lawyers involved in the effort had raised no concerns or warnings.
Specifically, according to Plaintiffs, the “highly sophisticated” Brownstein
Hyatt Farber Schreck, LLP (“Brownstein”) was retained to draft non-disclosure
agreements (“NDAs”) to be signed by the entities with which the Lustig
Defendants are alleged to have engaged. Brownstein participation reassured the
Abelson Defendants that engaging with the Lustig Defendants — and even entering
into confidentiality agreements in connection with such engagement — was not
unlawful or even problematic in any way . . . It is also evidence of good faith
on the part of the Abelson Defendants (and negation of intent to defraud . . .)
that they understood that highly reputable lawyers were involved and raised no
red flags.
At the time of the filing, Bob Troyer was a U.S. Attorney, and a former Brownstein partner.
It is not clear how much of the defense that Brownstein
Farber was involved doing legal work for the project (and therefore nothing
could possibly be illegal) will stand up in court. Berlin alleges that the
straw companies necessarily engaged in fraud on the Banks in order to get the
IPO shares including that the funds used were from personal or family wealth,
and (2) that Lustig did not have a beneficial interest in the profits from the
IPO shares. Various of the Defendants seem to indicate they signed whatever
Lustig and/or Brownstein Farber told them to sign without obtaining their own
separate legal counsel.
Bo Brownstein To Jail And Close Connections
The Defendants were, however, undoubtedly aware that Drew
“Bo” Brownstein (the son of the co-founder of Brownstein Farber, Norm
Brownstein), was sentenced in 2012 to federal prison for a year and a day and
fined $2.44 million for illegal insider securities trades. But in that case no
one alleged that Brownstein Farber firm had set up the illegal insider trades.
The willingness to rely simply on Brownstein Farber was
perhaps due to the close connections of all of the Defendants to each other. In
addition, some of the Defendants may have employed Brownstein Farber in other
unrelated legal matters. The Defendants are a dizzying montage of relatives and
friends, including James Lustig’s close acquaintance William Sander and
Sander’s step-son Jonathan Marsico, the nephew of mutual fund giant Tom
Marsico; brothers Brandon and Brett Perry, in addition to their mother, Ricki
Rest; Buzz Alterman and his ex-brother-in-law, Andrew Harrison; real estate
titan Skip Miller, and Miller’s son-in-law and work colleague Steve Shoflick,
who is married to Lustig’s niece; Lustig’s brother-in-law, and work colleague.
Local investors Samuel Zaitz and William Hall are also Defendants along with
Jake Cohen, Todd Eberstein and Jan Falber.
One of the other defendants, Jeremy Abelson typifies the
close connections between the alleged “straw purchasers”: he is married to
Lustig’s niece Mia Abelson who is Skip Miller’s daughter, is Schoflick’s
brother-in-law and brother-in-law to Mia’s sister Melissa Mackiernan, another
Defendant.
Other Defendants listed in the lawsuit include Denny Pepper,
Ronald Vlosich, Kenneth Ricek, Aaron Wolk, John Goldenberg and Jonathon Vinnik.
David Berlin himself was very much part of that close-knit
group of high society friends and relatives that he is now suing. As stated in
Lustig’s Motion to Dismiss:
Demonstrating that David Berlin, the owner of both
Plaintiffs, previously worked alongside many of the defendants and engaged in
the conduct he now labels racketeering. Plaintiffs all allege they ‘previously
had access to a database’ controlled by the Lustig defendants which contains
information about IPO share distribution practices.
The Defendants, along with the defense that the documents
were drawn up by Brownstein Farber and therefore must be legal, also state that
the fraudulent misstatements were made to the Banks and not to Berlin and
Berlin did not rely on them to his detriment. Moreover, they claim that the
sale and immediate reselling of the stocks were not illegal “churning” or “wash
sales” as those terms are defined. They also state that if Berlin has any cause
of action it is against the Banks who drew up any and all new IPO allocation
criteria that he is now complaining about.
Out Of The Public Eye
Why Brownstein Farber or people on their behalf have tried,
heretofore highly successfully, to keep the lawsuits out of public purview is
that in the lawsuits appear possible alleged criminal activities by Brownstein
Farber and as well as each of the Defendants. Insiders indicate that at least
in Colorado Brownstein Farber is almost bulletproof. The U.S. Attorney for the
District of Colorado at the time of the filings was Bob Troyer, who was a
former Brownstein Farber partner. The new U.S. Attorney for Colorado is Jason
Dunn who was, at the time of his appointment, a Brownstein Farber partner.
Any claim of violation of Colorado securities or
racketeering law would be brought by Colorado Attorney General Phil Weiser, who
was elected in no small part because of money contributed or raised by
Brownstein Farber. Insiders also note that most federal and state judges in
Colorado have gotten their positions due in large part to the influence of
Brownstein Farber, making any criminal legal action difficult.
The only real concern to the law firm is if authorities
outside of Colorado take notice. Insiders note that the charges against Bo
Brownstein were brought by the U.S. Attorney for Southern District of New York
in a federal court in New York City.
The Denver federal court docket indicates that next action to be taken in the lawsuit is scheduled for May for a Status Conference with all the parties. More people may start to pay attention to the Black Tie Society Civil War as public awareness of its existence and implications grows and grows.
The above article cites Jeremy & Mia Abelson and Jonathan Marsico & Sam Zaitzas defendants in the Berlin litigation matter. They were all dismissed from the matter and are no longer defendants in this action.
