Jan. 25, 2016) (alteration original). Wellspring Capital Management is a mega-sized private equity firm that focused on a variety of transaction situations. In April 2018, Prospect agreed to defer two quarters of cash interest payments. Importantly, however, the Wellspring court declined to dismiss the litigation trusts duty of loyalty claim, stating on a cursory basis that Drawing all inferences in favor of the Trustee, the Complaint contains sufficient allegations that the D&O Defendants breached their duty of loyalty regarding the Failed Out of Court Restructuring. Id. There are also no allegations concerning expenses. Wellspring has earned the reputation as a trusted, reliable partner and is often the preferred partner of a portfolio companys senior management team. 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. Posted By: Imright , 3/3/2023 9:31:52 PM. Designed By, https://www.wellspringcapital.co.uk/disclaimer. 544(b). Investment Philosophy; Target Investments; Portfolio The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. Why is this public record being published online? The firm's objective is to bring partnership, experience and value creation to each investment. 23, 2006) (stating that some courts characterize fraudulent conveyance actions as tort actions, while others characterize them as matters in equity). Defendant Wellspring Capital Management LLC is a Delaware limited liability company with its principal place of business at 390 Park Avenue, New York, New York 10022. 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. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. July 5, 2017). %%EOF
. The Partners of Wellspring constitute a long-tenured team, having worked together an average of 15 years over three funds. About Wellspring Capital Management Wellspring Capital Management is a leading private equity firm headquartered in New York. W.D. Will His AI Plans Be Any Different? [cV3ljHkT/bx
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E-mail: sandra@wellspring-cap.com; Videos. 91], F. Hewitt Grant [Docket No. These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. Type: Company - Private. After the defendants filed replies, the Court held a hearing on June 18, 2020. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. The plaintiff, Ronald J. Friedman, the trustee for the SportCo Creditors' Liquidation Trust, filed an omnibus response to the motions to dismiss [Docket No. 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. The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. 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. Fax: 877 376-7003. David R. Duncan US Bankruptcy Judge District of South Carolina. Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. The Court now issues this order, granting the motions to dismiss for the reasons set forth below. The plaintiff/litigation trust also asserted claims directly against Wellspring Capital under an aiding and abetting theoryi.e., asserting that Wellspring Capital itself aided and abetted the SportCo Boards alleged fiduciary duty breaches. Consumers want to see how a business took care of business. 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." Flipbooks. The first and second causes of action are dismissed. Founded in 1995, Wellspring invests anywhere . 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. 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 . 2012) and West Side Fed. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. [Amended Complaint, 51]. 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 Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . Whether youre building capital for your family, retirement or other life goals, we can help you with our high conviction and disciplined investment style. 2005)). The court considered whether the plaintiff had proved the tort of innocent misrepresentation. 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." The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. 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. (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. (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 . We work with successful motivated individuals to help them achieve their investment and wealth management objectives. See Sheehan v. Saoud, 650 Fed. Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. Reputation Management. articles a month for anyone to read, even non-subscribers! In connection with this contemplated purchase, Alexander Carles, a managing partner of Wellspring Capital and an officer and director of SportCo and its subsidiaries, and Bradley Johnson, the president and chief executive officer of SportCo and its subsidiaries, sought to convince Prospect to forbear from exercising any remedies in the event of a payment default. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. The middle-market private equity firm invests in companies with strong business . As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. Wellspring Capital Management. Law360 provides the intelligence you need to remain an expert and beat the competition. The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). [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]. 1988) (adopting rule from Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487 (1941) stating that a federal court sitting in diversity should apply the choice of law rules of the state in which it sits). Active, Closed, This describes the type of investor this organization is (e.g. The Court addresses in this order only those arguments that clearly mandate dismissal. Later emails berate Prospect's representative for failing to agree to the AcuSport purchase more quickly. Wellsprings objective is to bring partnership, experience and value creation to each investment. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. The firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . The defendants' motions to dismiss are granted. 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. Home; About Us; Investment Approach. 2009). 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 firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . The Firm also has a long history of collaboration with entrepreneurs and closely held businesses to achieve outsized growth, with a large percentage of our portfolio companies being transitioned from founder ownership. 2022 Wellspring Capital Management Group LLC |. They are simply not statements of preexisting fact that were false when made. 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. To summarize New York law, then, it appears that opinions can be actionable, but are not always actionable. The choice of law provision in the Loan Agreements states: In October 2017, Wellspring Capital was contemplating a purchase of AcuSport, a competitor, by Ellett, for $14.8 million. By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, On March 7, 2013, the Borrowers entered into a First Amendment to the Loan Agreements (the "First Amendment"), pursuant to which Prospect loaned the Borrowers an additional $60 million. These are high quality companies, essential to the national, regional, or global economy but whose fundamental qualities are underappreciated and undervalued by the market. As discussed in Cyrus II, the Fourth Circuit has stated that a bankruptcy court should apply the choice of law rules of the state in which it sits. (quoting Bell Atl. [Amended Complaint, 31]. My company, Asia Marketing and Management, has global ambitions but consists largely of me and the intelligence, experience, contacts, and per-sonality I bring to my clients . Brought up in a family enjoying long-term success in real estate investment, Avrohom instead turned to the stock market. 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. at 385. 2d 317 (S.D.N.Y. Adversary Proceeding No. 401(k)/403(b) Plan Litigation Risk Management, Analytics & Behavioral Science Consulting (R&G Insights Lab), Committee on Foreign Investment in the United States (CFIUS), E-Discovery, Discovery Strategies & Data Analytics, Executive Compensation & Employee Benefits, Government Enforcement / White Collar Criminal Defense, Life Sciences Licensing, Collaborations & Joint Ventures, The Music Stops on the Texas Two-Step: Third Circuit Dismisses LTL Bankruptcy Case. Id. 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. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. We see how Bembury is able to walk the line of business convention while taking his art to new heights, turning ordinary items into extraordinary footwear. 85]. Mr. Friedman filed an amended complaint the same day. Id. Less than a year later, the liquidation trustee sued Wellspring and related parties, alleging breaches of fiduciary duty of care and loyalty. San Francisco Bay Area, Silicon Valley), Operating Status of Organization e.g. 1984) for the proposition that under New York law, opinions are actionable in a negligence context. Attorney advertising. 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. 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. The defendant represented to the plaintiff, and to an appraiser who performed an appraisal of the garage, that the parking garage had 500 parking spaces. A New York buyout baron has taken a leave of absence from his fund after an explosive lawsuit claimed last week that he threatened an ex-employee to keep quiet after she accused his son of raping her. 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. 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. SEC / JURISDICTION. Their most recent investment was on Jan 1, 2020, when Steele Solutions raised Over the past 20 years, Wellspring has invested in over 35 platform investments across . 544 and 550 and S.C. Code 27-23-10; (2) avoidance and recovery of fraudulent transfers by SportCo against the Transferee Defendants pursuant to 11 U.S.C. A litigation trust formed through the SportCo bankruptcy then sued, among others, SportCos former directors and its equity sponsor. The plaintiff's first and second causes of action are based on 11 U.S.C. James brought a civil suit against Trump in September, alleging the Trump organization had fraudulently inflated the value of . THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. Investments Number of Investments 2 Wellspring Capital Management has made 2 investments. Public Records Policy. Their most recent acquisition was Caring Brands International on Oct 25, 2021. 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. The amended complaint does not allege that either Ellett or SportCo was insolvent at the time of the transfer or became insolvent as a result of the transfer. However, the garage actually had only 402 parking spaces. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. The Wellspring ruling was not appealed, nor has any trial occurred on this matter. R. Civ. at 358. In 2008, Wellspring Capital, through its fund Wellspring Capital Partners, acquired Ellett. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. Wellspring brought its assets under management to more than $4.4 billion as of January 2018. 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. GitHub export from English Wikipedia. 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. 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 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. In early 2018, Wellspring Capital notified SportCo's secured lenders that SportCo would default on a $4.7 million interest payment due in the second quarter of 2018. UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. endstream
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It is Bavaria's largest city and the third largest city in Germany (after Berlin and Hamburg). 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. 930 0 obj
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The plaintiff responds that Prospect is a preexisting creditor because the distributions were not made until after Prospect became a creditor when the Loan Agreements and the Amendments were signed. WELLSPRING CAPITAL MANAGEMENT, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. At the conclusion of the hearing, the Court took the motions under advisement. EFFECTIVE DATE; SEC: Terminated: 3/2/2007: 91], Andrew Kupchik [Docket No. . Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. By teaming up with strong management, Wellspring is able to unlock underlying value and.
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