wellspring capital management lawsuit wellspring capital management lawsuit

By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, The alleged statements simply do not constitute actionable statements that can form the basis of a negligent misrepresentation claim. These are high quality companies, essential to the national, regional, or global economy but whose fundamental qualities are underappreciated and undervalued by the market. Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. The assignment was executed in New York, but the personal property was located in South Carolina at the time the assignment was executed. In June 2019, SportCo and its subsidiaries (the "Debtors") filed chapter 11 bankruptcy cases in the United States Bankruptcy Court for the District of Delaware. Exempt Reporting Advisers ("ERA") are investment advisers that are not required to register as investment advisers because they rely on certain exemptions from registration under sections 203 (l) and 203 (m) of the Investment Advisers Act of 1940 and related rules. Share Your Design Ideas, New JerseysMurphy Defends $10 Billion Rainy Day Fund as States Economy Slows, This Week in Crypto: Ukraine War, Marathon Digital, FTX. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: https://www.wellspringcapital.co.uk/disclaimer. The issue in Merritt Dredging was the sale of a barge and the priority of parties' interests in the proceeds of the sale. Wellspring Capital Management Fund Manager Website www.wellspringcapital.com Fund Category Private Equity Close Date 0000-00-00 Fund Family Wellspring Capital Partners Native Currency USD Fund Manager's Location 605 Third Avenue 44th Floor New York, NY 10158 United States +1 (212) 000-0000 Fund Domiciles Canada Corporate Advocacy Program. Fund VI brings the firm's assets under management to more than $4.4 billion. As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. . 19-80071-DD (Bankr. In considering what choice of law provisions to apply, the Fourth Circuit stated: The Court notes that there is a specific fraudulent conveyance section of the Bankruptcy Code. Most of them do not even contain any concrete information about the proposed AcuSport purchase or the likelihood of the Borrowers' default. at *3 (quoting In re Sharp Int'l Corp., 403 F.3d 43, 53 (2d Cir. About Wellspring Capital Management Wellspring Capital Management is a leading private equity firm headquartered in New York. Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. The Debtors in the bankruptcy cases, pending in the District of Delaware, are SportCo Holdings, Inc.; Ellett Brothers, LLC; United Sporting Company, Inc.; Bonitz Brothers, Inc.; Evans Sports, Inc.; Jerry's Sports, Inc.; Outdoor Sports Headquarters, Inc.; Quality Boxes, Inc.; and Simmons Guns Specialties, Inc. Wellspring, founded in 1995, has raised more than $4 billion of capital commitments through six private equity funds, according to its website. SEC / JURISDICTION. The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. your most valuable capital, your ultimate resource. P. 12(b)(6) provides for dismissal of an action if the complaint "fail[s] to state a claim upon which relief can be granted." Fund VI will continue to pursue Wellspring's investment objective to acquire or invest in middle-market companies that are well-positioned to capitalize on change and can benefit from Wellspring's operating and financial expertise. [Amended Complaint, 93]. Mr. Friedman filed an amended complaint the same day. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. D.S.C. W.D. Id. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . %PDF-1.5 % Andrew Kupchik argued dismissal was necessary due to Prospect's ratification and/or consent to the distributions, due to failure to state a claim under New York law because of lack of insolvency and failure to state a claim under South Carolina law due to failure to plead actual fraud, due to the expiration of the statute of limitations on the fraudulent conveyance claims, and due to failure to plead the existence of a triggering unsecured creditor. An actual fraudulent conveyance is any "conveyance made . The plaintiff, Ronald J. Friedman, the trustee for the SportCo Creditors' Liquidation Trust, filed an omnibus response to the motions to dismiss [Docket No. You can review interesting Flipbooks on my site. Litigation. Frustrated stakeholders can be further inclined, and incentivized, to view all corporate decisions with an eye towards litigation first through a 20/20 hindsight lens. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. [4] Wellspring completed fundraising on its sixth fund in 2018 with $1.45 billion of investor commitments as a successor to its $1.2 billion 2011 Fund V.[3], Wellspring focuses on the packaging, healthcare, niche manufacturing and distribution sectors.[5][6]. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. Active, Closed, This describes the type of investor this organization is (e.g. To this end, Wellspring reinforces two key principles in particular: We encourage you to contact your Ropes & Gray team to discuss these matters more fully. Broker-Dealers Business & Commercial Litigation Business Restructuring California Consumer Privacy Act Capital Markets Capital Solutions & Private Credit Charitable Foundations China Life Sciences Committee on Foreign Investment in the United States (CFIUS) Consumer Protection and Advertising Law Corporate & Securities Litigation (Wellspring). The firm functions as a strategic rather than tactical partner, providing management teams with top-line support, M&A experience and financial expertise, and access to resources. Using a sophisticated network of for-profits, shell corporations, and consultancies, Wellspring has poured out an incredible $1.1 billion into nonprofits, most of which is hidden from prying eyes in donor-advised funds. Id. It featured lower-priced clothing and was Gymboree's direct competitor for The Children's Place and Old Navy.. There are also no allegations concerning expenses. [Amended Complaint, 32]. 1999)). The Loan Agreements and the First and Second Amendments each contain a choice of law provision, providing that New York law applies. SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. 8h`6$67Xn@,`& In Sheldon, the defendant, a New York citizen, assigned some personal property to Mr. Dickinson. to negotiate for release or indemnification, with the defendants arguing that such releases may have saved the post-restructuring company the expense of indemnifying the D&O Defendants in subsequent litigation. Later emails berate Prospect's representative for failing to agree to the AcuSport purchase more quickly. ), Create custom alerts for specific article and case topics and, I took a free trial but didn't get a verification email. Private equity firm Wellspring Capital Management LLC on Friday hit a slew of its insurers with a suit in New York state court alleging they must defend it against claims that it plundered . Wellspring Capital Management is a leading private equity firm headquartered in New York. Mar 19, 2019 New York private equity firm Wellspring Capital Management said Monday it has acquired Center for Diagnostic Imaging, a Minneapolis-based operator of MRI and CT scanners that. The Wellspring court was ruling on a motion to dismiss, and therefore accepted the plaintiffs somewhat barebones and perhaps self serving assertions as true and in the light most favorable to that plaintiff. 91], Andrew Kupchik [Docket No. The February 20, 2018 stated, "You're [sic] economics are going down and the risk of chapter is going up. The firm's objective is to bring partnership, experience and value creation to each investment. The middle-market private equity firm invests in companies with strong business . Please see our Privacy Policy. Sav. at 382. WELLSPRING CAPITAL MANAGEMENT, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. New York law requires insolvency at the time of the transfer, and South Carolina law requires insolvency both at the time of the transfer, and at the time the creditor seeks to collect the debt. Try our Advanced Search for more refined results. Id. Total number of employee profiles an organization has on Crunchbase, Total number of Crunchbase contacts associated with this organization, Descriptive keyword for an Organization (e.g. The amended complaint fails to allege insolvency at the time of the transfer, an essential element of a fraudulent conveyance claim under either New York or South Carolina law, and therefore fails to state a claim under 544(b). 92], Todd Boehly [Docket No. 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir. The plaintiff, however, asserts that federal conflict of law principles should govern what state's law applies in this case, because "[a] claim under 544(b) incorporates 'applicable law,' but it is a claim under federal law with a substantive federal law recovery scheme." See Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. While property interests are defined by state law in the absence of a compelling federal interest, the Court would look to the Bankruptcy Code in making a determination of whether property is property of the estate under section 541. WELLSPRING CAPITAL MANAGEMENT LIMITED is registered in England and Wales under Company Number 12429146, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. This is the best way to manage and repair your business reputation. 2d 317 (S.D.N.Y. We charge a minimal base fee and the rest is performance fees we generate for clients and not on the amount of capital clients allocate. . Phone: 650 729-8626. An action with multiple causes of action was commenced by Prospect Capital Corporation in South Carolina state court and was removed to this court on September 6, 2019. Instead, they may form the basis for a negligent misrepresentation claim if the party making the misrepresentation possesses some special expertise (by way of his job title or position, for example), or has some special knowledge about the particular fact that is allegedly misrepresented. Designed By, https://www.wellspringcapital.co.uk/disclaimer. Founded in 1995, Wellspring invests anywhere . This article about a private equity or venture capital firm based in the United States is a stub. Id. Whether youre building capital for your family, retirement or other life goals, we can help you with our high conviction and disciplined investment style. Wellspring has earned the reputation as a trusted, reliable partner and is often the preferred partner of a portfolio companys senior management team. Accordingly, Wellspring did not find that the defendants in fact breached their duties, but rather held that the plaintiff, a litigation trust, had asserted a viable claim that could proceed to a trier of fact. Wellspring Capital formed SportCo Holdings, Inc. ("SportCo") to serve as a holding company for United Sporting Company, Inc. ("United Sporting"), Ellett's direct parent; Ellett; and its subsidiaries. The defendants argue that this cause of action must be dismissed because the alleged misrepresentations were forward-looking statements and opinions; therefore, they are not actionable and cannot form the basis for a negligent misrepresentation cause of action. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through . Wellspring Capital Management LLC Chief Executive Officer Bill Dawson has taken a leave of absence, days after a former employee alleged in a lawsuit that he threatened her for accusing his son of sexual assault. The complaint must provide more than mere "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Wellspring CEO Bill Dawson is taking a leave of absence, the firm said Tuesday Last week a shocking lawsuit was filed against his son Christopher It claims he drugged and violently raped and. It identifies undervalued companies whose share price does not properly reflect the true value of the business. These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. 89], Charles E. Walker, Jr. [Docket No. At Wellspring we pride ourselves on client service. Id. The adviser's REGISTRATION status is listed below. Ellett Brothers LLC ("Ellett"), a South Carolina limited liability company, was a sporting goods distributor. With respect to which state's law applies, the defendants argue that the elements required to find that a party is a third party beneficiary are all met in this case and therefore New York law, as specified in the Loan Agreement's and Amendments' choice of law provisions, should apply to the plaintiff's causes of action against them. The District Court in Ashmore for Wilson stated: The parties' arguments regarding what law applies to the plaintiff's fraudulent conveyance claims present some complicated and novel questions; however, it is not necessary for the Court to decide whether the defendants are third party beneficiaries of the Loan Agreements or the Amendments. Law360 provides the intelligence you need to remain an expert and beat the competition. Oct. 14, 2021) (Stickles, J.) Wellsprings objective is to bring partnership, experience and value creation to each investment. San Francisco Bay Area, Silicon Valley), Operating Status of Organization e.g. Adversary Proceeding No. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 24. The Firm takes pride in its ability to marshal its resources quickly and focus on the issues that matter, resulting in speed and certainty during the acquisition process. When typing in this field, a list of search results will appear and be automatically updated as you type. The company will explode Rich!" Consumers want to see how a business took care of business. A finding that Prospect is a preexisting creditor compels the same result. Wellspring brought its assets under management to more than $4.4 billion as of January 2018. Wellspring Capital Management is a mega-sized private equity firm that focused on a variety of transaction situations. The portfolio manager is also a co-investor in the strategy. endstream endobj 916 0 obj <>/Metadata 258 0 R/Pages 913 0 R/StructTreeRoot 384 0 R/Type/Catalog>> endobj 917 0 obj <>/MediaBox[0 0 612 792]/Parent 913 0 R/Resources<>/Font<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI]>>/Rotate 0/StructParents 0/Tabs/S/Type/Page>> endobj 918 0 obj <>stream Specifically, Mr. Carles and Mr. Johnson represented to Prospect that a purchase of AcuSport would result in: (1) Debtors' capturing 20 to 30 percent of AcuSport sales; (2) Acquisition of $14 million worth of AcuSport's inventory at a significant discount; and (3) Realization of an immediate $7 million profit from the sale of the inventory acquired in the purchase. 609, 614 (Bankr. The first and second causes of action are dismissed. Limited partners include leading pension funds, endowments, fund of funds and family offices from the U.S., Europe and Asia. The emails, often using colorful language and harassing tones, essentially represent to Prospect that if the AcuSport transaction is not completed, Prospect will not get paid on its obligations. 90], Alexander E. Carles [Docket No. The plaintiff's first and second causes of action both assert claims for fraudulent conveyances pursuant to 544(b) and S.C. Code 27-23-10. The amended complaint further states, "As recently as 2015, Ellett was the fifth largest private company in South Carolina and the largest distributor of firearms in the United States, with annual revenues of $750 million, over 350 employees nationwide, and 175 employees in South Carolina." The amended complaint also details numerous emails sent by Mr. Carles and Mr. Johnson to a representative of Prospect, urging Prospect to defer its right to payment in the event of a default. Id. The amended complaint further states that from October 2012 to October 2013, "Ellett achieved record sales and earned revenues of approximately $1.2 billion." In Wellsprings view, the extent to which releases might have benefitted SportCo (as opposed to benefiting the directors alone) was at least in part a question of fact that could not be resolved on a motion to dismiss. The Firm will consider buyouts of private companies, acquisitions of divisions or subsidiaries of public companies, shareholder liquidity needs, partnering with entrepreneurs for growth opportunities, and special situations. NEW YORK, Jan. 10, 2018 /PRNewswire/ -- Wellspring Capital Management LLC ("Wellspring") today announced the successful closing of Wellspring Capital Partners VI L.P. ("Fund VI") with capital commitments totaling the hard cap of $1.415 billion. 2d 520, 529 n.14 (E.D. King County, 863 F. Supp.2d at 318. CDI's smaller Atlanta peer said to weigh sale in '18. Reputation Management. The Court addresses in this order only those arguments that clearly mandate dismissal. 19.)1. Wellsprings facts, as alleged, are fairly straightforward. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. Wellspring targets investments with the following characteristics: 2021 by wellspring capital Management. Id. 22-2003, 2023 WL 1098189 (3d Cir. Why is this public record being published online? There are different definitions of insolvency. In 2010, Bain Capital acquired the company for US$1.8 billion. Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. Wellspring Capital Management is a middle-market private equity firm that has approximately $2 billion of private equity. The legal team representing former President Donald Trump formally has requested a six-month delay in the civil case filed against him by New York Attorney General Letitia James. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). William F. Dawson, Jr., Chief Executive Officer of Wellspring, said, "My partners and I are pleased to complete the successful raising of Wellspring's sixth fund, which is a direct result of the strong relationships we have built with the investment community over many years and the returns we have generated. Similarly, Merritt Dredging suggests that federal law would apply to a section 548 cause of action, but that state law should apply to fraudulent conveyance claims based on state law. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. Cases involving other matters not classified elsewhere, 890, 1890, 1990, 2890, 2899, 2999, 3375, 3890, 3896, 3899, 3999, 4890, 4896, 4999, Wellspring Capital Management, LLC; Wellspring Cap v. Barry, III et al. Investment Philosophy; Target Investments; Portfolio Wellspring also rejected in cursory fashion the defendants argument that it is not necessarily a breach . At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. However, the garage actually had only 402 parking spaces. D. Del. The courts analysis of the duty of loyalty claim can be fairly characterized as limited, consisting of four short paragraphs that largely restate or simply quote the complaint. hXO8WtVH,~W"I/ {;N7'0HAA0%`Ih5L!p! Wellspring is a cautionary tale for the fiduciaries of a distressed or potentially distressed corporationparticularly with respect to negotiations around release and/or indemnification provisions for those same fiduciaries. To summarize New York law, then, it appears that opinions can be actionable, but are not always actionable. 0 On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. Wellspring Capital Management has acquired 38 organizations. REGISTRATION STATUS . at 613-14. Over the past 20 years, Wellspring has invested in over 35 platform investments across . From reading the Financial Times at school to managing his first portfolio at just 18, he has built Wellspring Capital into a nationwide wealth management boutique. UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. 962 0 obj <>stream Note: This site is for informational purposes only. Certain state securities regulatory authorities have similar exemptions based on . Charles E. Walker, Jr. argued in support of dismissal due to lack of a triggering creditor based on Prospect's secured status, failure to state a claim under New York law due to lack of insolvency, on equity grounds because Prospect failed to obtain a personal guaranty from Mr. Walker and because the distributions were specifically contemplated by the loan transaction, and due to failure to state a claim for fraudulent conveyance under South Carolina law. %%EOF Wellspring partners with highly qualified and motivated senior management teams, actively working together to unlock a companys potential by providing ongoing financial, strategic and operational support. P. 12(b)(6). (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. The elements of a negligent misrepresentation claim under South Carolina law are as follows: Turning now to the present case, the third cause of action must be dismissed under either New York or South Carolina law because the statements that the plaintiff asserts constituted negligent misrepresentations were all statements regarding potential outcomes of a potential business endeavor; thus, they relate to future events and cannot form the basis of a negligent misrepresentation claim. Will His AI Plans Be Any Different? If our offering sounds like something you would like to discuss, please get in touch on any of our contact details or the form below. The court addressed the dissent's finding, that the defendant's determination of the number of parking spaces was a matter of judgment or opinion and was therefore unactionable. (Bloomberg) -- Wellspring Capital Management LLC Chief Executive Officer Bill Dawson has taken a leave of absence, days after a former employee alleged in a lawsuit that he threatened her for accusing his son of sexual assault."We are taking this matter very seriously, and have launched an immediate internal investigation," Jeffrey Gould, Wellspring's head of marketing and investor . . Twitter Revenue, Earnings Fell About 40% in December, WSJ Says, John Malone andCharter Directors Agree to $87.5 Million Settlement, China E-Commerce Giant JD Set for $1.4 Billion Discount Spree, Between Rounds of Golf, Trumps Searching for the Perfect DeSantis Diss, Your Saturday UK Briefing: Sunak Chalks Up a Win as the Budget Looms, Harrods Shrugs Off Recession Fears as Rich Get Richer, FT Says, Wealthy NYC Family Feuds Over $258 Million Madison Avenue Sale, Tom Sizemore, 'Saving Private Ryan' Actor, Dies at 61, The Exhibit Reality TV Show PittingArtist Against ArtistIs No Masterpiece. 101 (32). July 5, 2017). Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. Use tab to navigate through the menu items. .JFY+h!Hkw;s"$ 4AuF~!D =j]4z*g7i>B 1NEDm @@,!ptz"Br}-rh>wI }9.&>5/n2n/OefX Sounds like a tidy deal at year end [2017] made a lot of sense." E-mail: sandra@wellspring-cap.com; Videos. Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. Defendant Bernard Ziomek is in default in this matter. [Amended Complaint, 37, 40]. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of . Click here to login, 2023, Portfolio Media, Inc. | About | Contact Us | Legal Jobs | Advertise with Law360 | Careers at Law360 | Terms | Privacy Policy | Cookie Settings | Help | Site Map, Enter your details below and select your area(s) of interest to stay ahead of the curve and receive Law360's daily newsletters, Email (NOTE: Free email domains not supported). 3d 473, 506 (S.D.N.Y. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. 112]. Fax: 877 376-7003. Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States