Sep 25, 2017

Zoom battles venture capital investor over cash, governance

Zoom, led by CEO Dave Sanders, is at odds with its venture capital investor. Photo: Zoom

Venture capital firm Endeavour Capital is asking a court in Oregon to appoint a receiver for Zoom, the health care startup that operates clinics and has been under investigation by the FBI for allegedly falsifying medical claims. Endeavour, which has poured $61 million into Zoom, says an independent third party overseeing Zoom would "clear the way for a significant, badly needed cash infusion."

Between the lines: The two sides say they are "deadlocked," but asking for a court-appointed receiver usually indicates a much deeper rift. And in this case, Zoom's finances appear to be on the line. Zoom did not immediately respond to questions.

The gritty details: Zoom has a four-person board: CEO and co-founder Dave Sanders, the other co-founder Albert DiPiero and two representatives from Endeavour. Since March, the two sides have been at odds over vague "company governance issues" as well as new money that needs to be injected into Zoom, which has laid off several people and had shut down its health insurance company.

Oregon law allows for a court-appointed receiver "in the event of a corporate deadlock or prospective insolvency," and Endeavour is asking for an expedited hearing.

What we're hearing: Sources familiar with Zoom's operations have said the company's finances have been in trouble since last year, when Sanders realized an Affordable Care Act program called risk adjustment would cost Zoom a lot of money. Risk adjustment is at the heart of the FBI's investigation into Zoom.

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Trump's clemency spree

Rod Blagojevich in 2010. Photo: Scott Olson/Getty Images

President Trump announced Tuesday that he commuted former Illinois Gov. Rod Blagojevich's 14-year prison sentence for extortion, bribery and corruption — as well as issuing full pardons for former San Francisco 49ers owner Edward DeBartolo Jr., former NYPD Commissioner Bernie Kerik and financier Michael Milken.

The big picture: The president's clemency spree largely benefitted white-collar criminals convicted of crimes like corruption, gambling fraud and racketeering, undercutting his message of "draining the swamp."

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Trump's improbable moonshot

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NASA is unlikely to meet its deadline of sending astronauts to the surface of the Moon by 2024, even with a large influx of funding.

Why it matters: The Artemis mission to send people back to the Moon is the Trump administration's flagship space policy, and its aggressive, politically-motivated timeline is its hallmark.

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Justice Department says U.S. attorneys are reviewing Ukraine information

Rudy Giuliani. Photo: Roy Rochlin/Getty Images

Assistant Attorney General Stephen Boyd sent a letter to House Judiciary Chairman Jerry Nadler (D-N.Y.) Tuesday informing him that the U.S. attorneys for the Eastern District of New York and the Western District of Pennsylvania are reviewing "unsolicited" information from the public related to matters involving Ukraine.

Why it matters: Nadler had requested an explanation for the "intake process" that Attorney General Bill Barr stated had been set up in order to receive information that Rudy Giuliani had obtained about the Bidens in Ukraine.