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Diamond Ventures Settlement Agreement

Release Date: 
Wednesday, November 24, 2010

Settlement Agreement

  1. Recitals

    1. Diamond Ventures, LLC ("Diamond") is the Plaintiff and the U.S. Small Business Administration ("SBA") is the Defendant in Diamond Ventures v. Karen Mills, No. 03-1449 (OK) (D.D.C. tiled June 30, 2003), and they now' hereby agree to settle and resolve this litigation by entering into this Settlement Agreement.

    2. In 2003, Diamond sought preliminary approval to pursue a license from the SBA to operate as a Small Business Investment Company ("SBIC"), by filing a Management Assessment Questionnaire ("MAQ"). Under the SBA's procedures, if the SBA approved the MAQ it would issue a "Go Forth letter" to the applicant, and the applicant would then have a specified time to raise the necessary minimum capital commitments and prepare and file with the SBA a formal licensing application. In this case, the SBA rejected Diamond's MAQ and declined to issue a Go Forth letter, effectively denying Diamond's application at the preliminary stage.

    3. Diamond sued the SBA under the Equal Credit Opportunily Act C'ECOA"), claiming that it was qualified to receive a Go Forth letter and that the SBA discriminated against Diamond on the basis of the race of its principal owners in denying Diamond a Go Forth letter. The SBA avers that it denied the Go Forth letter because the MAQ not support the statutorily required assessment that Diamond was likely to succeed and profit if licensed as an SBIC. SBA moved for summary judgment but in March 2010 the District Court denied the motion and found sufficient evidence that the case could proceed to trial. The District Court later set the case for trial to begin on February 17, 2011.

    4. Diamond recently submitted to the SBA a Revised Business Plan, modifying its business strategies and proposing ownership and management teams consisting of [text blacked out]. The SBA now refers to Go Forth letters as "Green Light" letters.

In settlement of this litigation, Diamond and the SBA agree to the following terms.

For full details of this agreement see attached file below.

Related State: 
District of Columbia
Georgia
AttachmentsSize
Diamond Ventures Settlement Agreement6.19 MB