wellspring capital management lawsuitwellspring capital management lawsuit

@S1 $82N+ZJ | Wellspring brought its assets under management to more than $4.4 billion as of January 2018. 0 You have to know whats happening with clients, competitors, practice areas, and industries. Fax: 877 376-7003. 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. Middle Market Private Equity. The Uniform Commercial Code defines insolvency as the inability to pay debts in the ordinary course or when they come due, while the Bankruptcy Code defines insolvency as debts exceeding assets. Id. 598, 614 (Bankr. Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. Public Records Policy. Federal Rule of Bankruptcy Procedure 7012(b). Section 544(b) states: The defendants' motions assert numerous arguments in support of the assertion that the Court must dismiss the plaintiff's causes of action. (Compl. . REGISTRATION STATUS . A finding that Prospect is a preexisting creditor compels the same result. Many of the facts underlying the Wellspring decision are neither unique nor unusual. & Loan Ass'n of New York City, the plaintiff loaned funds to the defendant, secured by a mortgage on a parking garage. In Cyrus II, the court also acknowledged that the Fourth Circuit has found otherwise and determined that state choice of law rules should be used in bankruptcy cases. Try our Advanced Search for more refined results. Please see our Privacy Policy. A former employee of Wellspring Capital Management filed a lawsuit in a New York Thursday alleging that the CEO's son, Christopher Dawson, drugged and repeatedly raped her one night in the. Under either New York or South Carolina law, the plaintiff's third cause of action for negligent misrepresentation fails to state a claim for which relief can be granted. Amazon Pauses Construction on Second Headquarters in Virginia as It Cuts Jobs, Amazon Is Closing Its Cashierless Stores in NYC, San Francisco and Seattle, iPhone Maker Plans $700 Million India Plant in Shift From China, Stock Traders Are Ignoring Blaring Bond Alarms, S&P 500 Notches Best Week Since Late January: Markets Wrap. 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. 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. (quoting Bell Atl. 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. 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 Wellspring Capital and the D&O Defendants grossly and recklessly mismanaged the business and carried out their respective roles in a manner that was devoid of reasonable inquiry and diligence in dereliction of their fiduciary duties to Prospect as a creditor of the increasingly insolvent enterprise. Sav. As we here at Ropes & Gray look back on 2021 and ahead into 2022, we call your attention to the lessons of Friedman v. Wellspring Capital Mgmt., LLC (In re SportCo Holdings, Inc.), Case No. *aUQBT&1#J$8Q)=WE9M'v1s_)GG+.kbN;yELi.UD1N{f'u$y`'GCJfS;4yXwbW${%^tcxG2}+/P@U `a$b6? Will His AI Plans Be Any Different? 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. Fund VI brings the firm's assets under management to more than $4.4 billion. These are high quality companies, essential to the national, regional, or global economy but whose fundamental qualities are underappreciated and undervalued by the market. Id. Id. 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). Id. The firms objective is to bring partnership, experience and value creation to each investment. The defendants' motions to dismiss are granted. Wellspring, founded in 1995, has raised more than $4 billion of capital commitments through six private equity funds, according to its website. In 2010, Bain Capital acquired the company for US$1.8 billion. Whether youre building capital for your family, retirement or other life goals, we can help you with our high conviction and disciplined investment style. 1991) (unpublished table decision). Note: This site is for informational purposes only. 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. January 12, 2022 A customer lawsuit filed earlier this month against Sequoia, Paradigm, and Thoma Bravo, alleges these funds gave an "air of legitimacy" to FTX andvia their hundreds of millions in funding and. The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. 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. Further, if the statement is solely a speculative prediction about some potential business venture or course of action being contemplated, it is not actionable. In April 2018, Prospect agreed to defer two quarters of cash interest payments. Finally, although the plaintiff asserts that federal conflict of law principles should apply, he argues that even under South Carolina conflict of law rules, South Carolina law should apply. The issue in Merritt Dredging was the sale of a barge and the priority of parties' interests in the proceeds of the sale. The amended complaint is dismissed. "); Terry v. Walker, 2006 WL 736861, at *5 (W.D. Therefore, the plaintiff argues that he is only required to establish constructive fraud. James brought a civil suit against Trump in September, alleging the Trump organization had fraudulently inflated the value of . 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 case status is Pending - Other Pending. This Supreme Court Case Could Redefine Crime, YellowstoneBackers Wanted to Cash OutThen the Streaming Bubble Burst, How Countries Leading on Early Years of Child Care Get It Right, Female Execs Are Exhausted, Frustrated and Heading for the Exits, No Major Offer Expected on Childcare in UK Budget, Biden Gives Medal of Honor to Trailblazing Special Forces Member, Climate Change Is Launching a MutantSeed Space Race, UK Braces for Rare Weather Event That Risks Late-Winter Freeze, This Former Factory Is Now New Taipeis Edgiest Project, What Do You Want to See in a Covid Memorial? to hinder, delay, or defraud either present or future creditors." Id. Otherwise you cannot get paid." articles a month for anyone to read, even non-subscribers! 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. Hiding negative complaints is only a Band-Aid. Law360 may contact you in your professional capacity with information about our other products, services and events that we believe may be of interest.Youll be able to update your communication preferences via the unsubscribe link provided within our communications.We take your privacy seriously. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . While New York law and South Carolina law have slightly different tests for avoiding constructive fraudulent conveyances, there exists a common thread which is not satisfied hereinsolvency at the time of the transfer. We look forward to carrying forward that vision and continuing our success in the years ahead.". 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. Will Others Follow? 1994)). The principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. Crazy 8 was started in August 2007. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. hb```e``jb`a`\ @1V h`2q:lp10qfaqB,X3s10iH(^t1 Posted By: Imright , 3/3/2023 9:31:52 PM. 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 New York law regarding third party beneficiaries provides: With respect to South Carolina's choice of law analysis, South Carolina conflict of law principles provide that "the substantive law governing a tort action is determined by the state in which the injury occurred." The alleged statements simply do not constitute actionable statements that can form the basis of a negligent misrepresentation claim. 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. The firm's objective is to bring partnership, experience and value creation to each investment. The United States District Court for the District of South Carolina found in a fraudulent conveyance case, relying on Terry v. Walker, that South Carolina conflict of law rules should apply to determine the applicable substantive law. All business will get complaints. SaaS, Android, Cloud Computing, Medical Device), Where the organization is headquartered (e.g. 2d 520, 529 n.14 (E.D. See Scheidelman v. Henderson (In re Henderson), 423 B.R. 2016) (citing numerous cases, recognizing disagreement among courts regarding whether fraudulent conveyance action is a tort action); MainStreet Bank v. Nat'l Excavating Corp., 791 F. Supp. By Zachary Zagger (July 31, 2020, 9:56 PM EDT) -- 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 millions of dollars from gun seller United Sporting Cos. Inc., which blamed its bankruptcy on Donald Trump's win in the 2016 election. Access to case data within articles (numbers, filings, courts, nature of suit, and more. Over $134 million of the loan proceeds were used to fund distributions to Wellspring Capital Partners, WCM GenPar IV, L.P., WCM GenPar IV GP, LLC, F. Hewitt Grant, Charles E. Walker, Jr., Todd Boehly, Bernard Ziomek, and Andrew Kupchik (collectively, the "Transferee Defendants"). Id. At the conclusion of the hearing, the Court took the motions under advisement. Shoe designer and creative Salehe Bembury takes us on a journey from his childhood growing up in Manhattan, to an invaluable degree in industrial design, to working with some of the biggest names in fashionbefore breaking off to make his own name. 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. REGISTRATION STATUS. Salaries posted anonymously by Wellspring Capital Management employees. The Court further notes that here, section 548 is not available to the plaintiff due to the timing of the transfers and the bankruptcy filings. The amended complaint further states that from October 2012 to October 2013, "Ellett achieved record sales and earned revenues of approximately $1.2 billion." Wellspring has the flexibility to complete transactions ranging from $100 million to as much as $1.5 billion in total value in a wide range of industries. In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. In Fall 2018, SportCo Holdings, Inc. (SportCo) was facing severe financial distress. 8h`6$67Xn@,`& 1996)). By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, Prior results do not guarantee a similar outcome. Wellspring Capital Management is a middle-market private equity financing firm. Please Update this case to get latest docket information. WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. The firm's objective is to bring partnership, experience and value creation to each investment. Your livelihoodand your sanitydepend . at 321. This preference is a result of the Firms differentiated and conservative approach to leverage, in addition to a transparent oversight model, which is driven by our small group of senior professionals and absence of bureaucracy. 2007) (citations omitted). [Amended Complaint, 51]. These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. . 930 0 obj <>/Filter/FlateDecode/ID[<6781EE974E7B2C4D9274E8F359D28E60>]/Index[915 48]/Info 914 0 R/Length 80/Prev 600062/Root 916 0 R/Size 963/Type/XRef/W[1 2 1]>>stream Because the Court dismisses the complaint as to all other defendants, the Court sua sponte dismisses the causes of action against Mr. Ziomek as well. Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 Id. 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. In an email obtained by . 19-80071-DD (Bankr. pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. Asia Pacific; EMEA; Latin America; UK Solicitors; UK Bar; United States 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. Wellsprings investment professionals possess diverse and complementary backgrounds that combine valuable experience in private equity, restructuring, corporate finance, capital markets and corporate law. Id. at 382. 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." I Shall [Not] Be Released: Wellspring, Director Releases, breached their duty of care, since the directors refused to reasonably maximize corporate value by killing the restructuring on account of releases/indemnity (, breached their duty of loyalty, since they placed their own self-interests above those of their fiduciaries [. Find More Contacts for Wellspring Capital Management, Edit Lists Featuring This Company Section, European Regulation Ushers In Global Future For Fundraising, Wellspring Capital Management Acquires Caring Brands International, Private Equity Firms with Investments in United States, Greater New York Area Investors with Funds Raised in 2017, Private Equity Firms with Investments in Asia. It is not unusual for an entity facing distress to engage with their stakeholders and to negotiate any number of transaction alternatives and terms. 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. This approach has historically delivered returns well above inflation Our clients Business Restructuring, Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. $46H$DrGHi`0I"DE$"J(aH! at 613-14. 2021 by wellspring capital Management. This is the best way to manage and repair your business reputation. This is despite the fact that 57% of Californians and 37% of California Democrats do not want President Joe Biden to run, according to a poll from the Berkeley Institute of Governmental Studies. 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. 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. 2005)). 23, 2006) (stating that some courts characterize fraudulent conveyance actions as tort actions, while others characterize them as matters in equity). Wellspring Capital Management LLC operates as a private equity firm. 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. In the legal profession, information is the key to success. 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. 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. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. Id. 2012) and West Side Fed. Wellspring Capital Management is a leading private equity firm headquartered in New York. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). At Wellspring we pride ourselves on client service. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. The plaintiff's first and second causes of action are based on 11 U.S.C. 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. The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. Industry: Investment & Asset Management. 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. Ronald J. Friedman, as the trustee for the SportCo Creditors' Liquidation Trust, Plaintiff, v. Wellspring Capital Management, LLC, Wellspring Capital Partners IV, L.P., WCM Genpar IV, L.P., WCM Genpar IV GP, LLC, Alexander E. Carles, Bradley Johnson, F. Hewitt Grant, Charles E. Walker, Jr., Todd Boehly, Bernard Ziomek, and Andrew Kupchik, Defendants. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. e""8*&B Prospect is a sophisticated party and, to the extent that it wanted to confirm the predictions made by Mr. Carles and Mr. Johnson were in fact accurate, it could have exercised due diligence. .JFY+h!Hkw;s"$ 4AuF~!D =j]4z*g7i>B 1NEDm @@,!ptz"Br}-rh>wI }9.&>5/n2n/OefX Our tight-knit culture enables transparent oversight and a streamlined decision-making process. 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir. 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. 1985). By teaming up with strong management, Wellspring is able to unlock underlying value and Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. Nor is it necessary for the Court to decide whether New York or South Carolina law applies under South Carolina's choice of law principles. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. 541, 546 (Bankr. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. In 2012, the year that the amended complaint alleges Ellett "achieved record sales and earned revenues of approximately $1.2 billion," Ellett and its operating subsidiaries (the "Borrowers") entered into a Third Amended and Restated Loan and Security Agreement and a Second Lien Loan and Security Agreement (collectively, the "Loan Agreements") with lenders including Prospect Capital Corporation ("Prospect"), pursuant to which Prospect and the other lenders loaned $280 million to the Borrowers. If you want your business to survive, you need to understand your-self. The elements of a negligent misrepresentation claim under New York law are: The plaintiff also cites King County, Washington v. IKB Deutsche Industriebank, 863 F. Supp. In support of this argument, the plaintiff cites a case from the United States District court for the District of Idaho, which was affirmed by the Ninth Circuit, as well as a case from the United States Bankruptcy Court for the Southern District of Texas, in which the court stated that 544(b) claims are unique "because they exist only to the extent of applicable state law," but then found, "Even so, such claims are not pendant state claims in federal bankruptcy cases, but are federal causes of action rooted in federal bankruptcy law and policy." For example, the October 27, 2017 email stated, "The only way to optimize is to merge with Acusport." King County, 863 F. Supp.2d at 318. 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. Va. June 8, 2011) (acknowledging that Maryland law is not clear regarding whether a fraudulent conveyance action sounds in tort, but concluding that "given that the gravamen of the fraudulent conveyance claim is the wrongfulness of the conveyance and the injury to the creditor, rather than balancing equities or fairness, it is appropriate to conclude that fraudulent conveyance claims sound in tort. The parties are in agreement that New York and South Carolina law regarding negligent misrepresentations are substantially similar and that as a result, the Court is not required to engage in a choice of law analysis as to the third cause of action. 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. S.D. [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]. The Loan Agreements and the First and Second Amendments each contain a choice of law provision, providing that New York law applies. Password (at least 8 characters required). Time to Read: 6 minutes 22-2003, 2023 WL 1098189 (3d Cir. 101 (32). v. Holmes (In re Holmes), 610 B.R. Private equity firm Wellspring Capital Management has acquired Caring Brands International, parent company of home health and hospice franchise company Interim Healthcare, for an undisclosed amount. On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. Even among California Democrats, Newsom is still in the negatives, with 54% wanting him to sit out in 2024 and only 35% wanting him to run. 609, 614 (Bankr. In Sheldon, the defendant, a New York citizen, assigned some personal property to Mr. Dickinson. 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. [Amended Complaint, 32]. After all, corporate decisionmakers are often tasked with choosing a path where outcomes are at best uncertain. And the best part of all, documents in their CrowdSourced Library are FREE. Already a subscriber? 1999)). Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. D.S.C. WELLSPRING CAPITAL MANAGEMENT, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. Wellspring also rejected in cursory fashion the defendants argument that it is not necessarily a breach . Particularly where negotiations may involve releases, indemnification, or similar provisions, be advised that the ever-present tendency for counterparties to exercise 20/20 hindsight is fully in effect. Why is this public record being published online? 89], Charles E. Walker, Jr. [Docket No. The District Court stated that "[w]hether a fraudulent conveyance claim should be characterized as a tort action is uncertain and disputed among American jurisdictions." [Amended Complaint, 54]. The defendants asserted common arguments in support of dismissal, but all arguments made in support of dismissal were not asserted by each defendant. F. Hewitt Grant asserted the lack of a triggering creditor due to Prospect Capital Corporation's knowing participation in the transfers and failure to state a claim under New York law due to lack of insolvency and under South Carolina law due to failure to plead actual fraud. As part of the debt management process, it said it would close 375 of its 1,300 stores. We have interesting videos for you to watch on my site. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. 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. Limited partners include leading pension funds, endowments, fund of funds and family offices from the U.S., Europe and Asia. 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