Once valued at $4 billion, Olive AI Inc. sold off the shrunken core of its business for $10 million as it shut down, according to a regulatory filing.
And JobsOhio still wants a piece of that. The organization won a default judgment on Nov. 20 in a lawsuit seeking to claw back $598,000 in economic incentives – too late, because Olive had liquidated. Meanwhile, JobsOhio filed a second complaint adding the companies that bought Olive's parts.
The new complaint and attached exhibits reveal for the first time that Olive had been negotiating a "merger" with a "buyer" as early as mid-September.
Columbus-based Olive announced its shutdown and asset sale on Oct. 31, just over two years after raising the largest venture capital round at the highest valuation in Ohio history.
The erstwhile unicorn sold its remaining business lines to two buyers, according to its announcement.
Waystar Holding Corp. acquired the assets of the "clearinghouse and patient access businesses for total cash consideration of $10 million," the Louisville company said in a recent update to its registration for a proposed IPO. Olive's former website now redirects to Waystar. The price had not previously been disclosed.
Those product lines include an electronic data clearinghouse for hospital billing departments and digital determination of insurance eligibility. Olive had acquired the clearinghouse business, Healthcare IP, for an undisclosed sum shortly after raising $400 million in 2021.
The other buyer, a new company called Humata Health, was started by the co-founder of a prior authorization startup that Olive acquired to essentially buy that business back. It now has a website welcoming Olive customers and employees, but no other content other than the ability to register for updates.
Related story: Olive CEO Sean Lane reveals his new startup
"The company had hoped to complete one or more transactions and secure funds and business to prevent the closing of the business, but was unable to do so," Olive said in its Oct. 31 notice to the state detailing its closure and termination of 115 employees.
JobsOhio's settlement talks with Olive
The asset sale and shutdown came five days after JobsOhio asked a Franklin County judge to enter a default judgment in its favor in its August lawsuit. Olive had never filed a response.
A private nonprofit, JobsOhio seeks to attract and expand businesses in the state using a variety of programs funded by liquor profits. It's seeking to claw back the $598,000 it spent helping Olive recruit and train employees, such as a coding boot camp. The organization said Olive missed the goals for 2022 employment and payroll, although it exceeded job targets before then.
On Nov. 15, JobsOhio filed the separate complaint in Franklin County Common Pleas Court against Olive and its former legal chief by name, accusing them of fraud in settlement talks. It added Waystar and Humata as defendants, seeking to force them to turn over $598,000 of the assets they acquired.
"I'm very surprised I was named in this lawsuit and confident the matter will be resolved quickly," said a statement from Brock Wanless, Olive's former chief legal officer. He is not currently employed, according to his LinkedIn profile.
Settlement talks started shortly after JobsOhio first sued, JobsOhio's new complaint said. The parties "aligned" after a September teleconference on a $400,000 cash payment, but went back and forth over email on the formal agreement's wording and terms.
JobsOhio accuses Olive and its legal chief of dragging on the correspondence to delay the threatened default motion until it was too late – and it worked.
"These purported settlement negotiations were a ruse and a sham," the complaint said. "Olive had been planning to shut down during the entire time."
Olive expected a "planned merger" by the end of September with a confidential buyer, which would provide the cash to pay JobsOhio, according to a Sept. 15 email attached to the complaint. That date was pushed back to Oct. 27 or the week after.
As Oct. 27 drew near, JobsOhio sent more emails asking for the signed agreement, then set an Oct. 25 deadline before seeking default.
"We would like to resolve this amicably," =Evan Kellett, JobsOhio's associate general counsel, said in his final communication.
The shutdown took the form of an asset purchase, which means buyers don't take on liabilities, according to the complaint. The never-signed agreement would have assured payment anyway.
"Olive failed to pay or to cause payment to JobsOhio at the closing of the sale," the organization said in its filing.
JobsOhio declines to comment on specific cases outside of court filings. In an August statement, the organization said its fiduciary duty is to claw back aid when recipients don't meet deal terms, so the money can go to more economic development.
It has filed five more such lawsuits since late October, according to court records.
