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." Certain state securities regulatory authorities have similar exemptions based on . Aug. 27, 2020). 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. As part of the debt management process, it said it would close 375 of its 1,300 stores. 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. Note: This site is for informational purposes only. They were not statements of presently existing fact. By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, 1001 to 5000 Employees. WELLSPRING CAPITAL MANAGEMENT, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. There are also no allegations concerning expenses. Type: Company - Private. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. at 613-14. Asia Pacific; EMEA; Latin America; UK Solicitors; UK Bar; United States Jan. 30, 2023). 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). At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners 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. Wellspring also rejected in cursory fashion the defendants argument that it is not necessarily a breach . PLEASE NOTE: A verification email will be sent to your address before you can access your trial. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. $46H$DrGHi`0I"DE$"J(aH! Wellspring Capital Management is a mega-sized private equity firm that focused on a variety of transaction situations. Despite that agreement in principle, it was alleged in relevant part that: Unable to agree on the release and indemnification issue, SportCos out-of-court restructuring failed, and SportCo defaulted on its funded debt shortly thereafter. We believe that this breadth and depth of experience enables the team to efficiently evaluate and complete acquisition opportunities across a broad range of industries. 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. 19.)1. Your livelihoodand your sanitydepend . Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. Practices: The District Court discussed the South Carolina Supreme Court's decision in Sheldon v. Blauvelt, 29 S.C. 453 (1888). . Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. Ashmore for Wilson v. Dodds, 262 F. Supp. Try our Advanced Search for more refined results. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. After all, corporate decisionmakers are often tasked with choosing a path where outcomes are at best uncertain. 91], F. Hewitt Grant [Docket No. Probitas Partners acted as exclusive placement agent and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel with respect to formation of Fund VI. [Amended Complaint, 49]. By teaming up with strong management, Wellspring is able to unlock underlying value and Brought up in a family enjoying long-term success in real estate investment, Avrohom instead turned to the stock market. 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). 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. We are motivated and incentivised to succeed. Id. Wellspring Capital, through defendants Mr. Carles and Mr. Johnson, allegedly represented to Prospect that: (1) Ellett could purchase assets of AcuSport for $14.8 million; (2) the purchase would result in the Debtors' capturing 20% to 30% of AcuSport sales; (3) the Debtors could acquire $14 million of AcuSport inventory at a substantial discount; and (4) Ellett would immediately realize a $7 million profit on the sale of the inventory acquired in the purchase. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. at 382. Fund VI brings the firm's assets under management to more than $4.4 billion. 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. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. About Wellspring Capital Management Wellspring Capital Management is a leading private equity firm headquartered in New York. Id. Law360 provides the intelligence you need to remain an expert and beat the competition. 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. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. The adviser's REGISTRATION status is listed below. %%EOF 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. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. The defendants' remaining arguments need not be addressed. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. 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. REGISTRATION STATUS . Wellspring Capital Management is a leading private equity firm headquartered in New York. 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. 85]. New York law and South Carolina law differed as to whether such a transfer was permitted. Jan. 25, 2016) (alteration original). It is notable that the first and second causes of action are based only on South Carolina law; however, because the parties disagree as to whether South Carolina or New York law should apply, the Court will analyze the first and second causes of action under both. 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." Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States They are simply not statements of preexisting fact that were false when made. to hinder, delay, or defraud either present or future creditors." . v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 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. 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. 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." We look forward to carrying forward that vision and continuing our success in the years ahead.". Cancellation and Refund Policy, Privacy Policy, and However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. 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. N.D.N.Y. Investments Number of Investments 2 Wellspring Capital Management has made 2 investments. In June 2017, Gymboree announced it was filing for Chapter 11 bankruptcy protection. 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. Founded in 1995, Wellspring Capital Management is a private equity firm headquartered in New York, New York. Wellspring Capital Management is a middle-market private equity financing firm. Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. 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. These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . ), Create custom alerts for specific article and case topics and, I took a free trial but didn't get a verification email. 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. with actual intent . 2009). Will Others Follow? 112]. 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. [Amended Complaint, 31]. 915 0 obj <> endobj The court considered whether the plaintiff had proved the tort of innocent misrepresentation. The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. These emails may be a lot of things, but negligent misrepresentations they are not. 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. 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: This site is for informational purposes only. 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." And the best part of all, documents in their CrowdSourced Library are FREE. Description. at 385. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 'Ov}b0. 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. You can review interesting Flipbooks on my site. Federal Rule of Bankruptcy Procedure 7012(b). EFFECTIVE DATE; SEC: Terminated: 3/2/2007: (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 . Please Update this case to get latest docket information. The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. 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. Ellett Brothers LLC ("Ellett"), a South Carolina limited liability company, was a sporting goods distributor. 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. From October 2017 to April 2018, Mr. Carles and Mr. Johnson sent numerous emails to representatives of Prospect, attempting to induce Prospect to agree to forego exercising its rights in the event of a default. Therefore, the plaintiff argues that he is only required to establish constructive fraud. Accordingly, SportCo began negotiations with certain of its lenders around a potential restructuring transaction. Mr. Friedman was substituted as the plaintiff on January 10, 2020. 23, 2006) (stating that some courts characterize fraudulent conveyance actions as tort actions, while others characterize them as matters in equity). Phone: 650 729-8626. Password (at least 8 characters required). 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. Public Records Policy. An outside law firm will assist with the probe to determine the validity of these reports, which allege behavior that is not only shocking but completely inconsistent with our corporate values and standards., Family calls complaint pure fiction intended as a shakedown, Dawson steps away from firm to spend time with his family. Wellspring brought its assets under management to more than $4.4 billion as of January 2018. We have interesting videos for you to watch on my site. 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 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. In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. All business will get complaints. ~p03ngx1Ai63*oP 4TP3Nt'xn0R8tJ'a7D2P6ILky6L;0;0SUNrtd t ";Qb[K-Ii 1g%\i) IZ3uAH0J40v0xt0v40Xt8 y CJ3t@y`$21kL 0 at 358. On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. This is the best way to manage and repair your business reputation. Make your practice more effective and efficient with Casetexts legal research suite. at 321. The defendants argue that as a subsequent creditor, Prospect is required to plead actual fraud, and the amended complaint fails to do so. It identifies undervalued companies whose share price does not properly reflect the true value of the business. Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. A free inside look at Wellspring Capital Management salary trends based on 22 salaries wages for 17 jobs at Wellspring Capital Management. R. Civ. The Court now issues this order, granting the motions to dismiss for the reasons set forth below. The firm's objective is to . 89], Charles E. Walker, Jr. [Docket No. The court considered whether inaccurate credit ratings can form the basis for a negligent misrepresentation claim. Id. 2021 by wellspring capital Management. Defendant Bernard Ziomek is in default in this matter. 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. [Amended Complaint, 37, 40]. At Wellspring we pride ourselves on client service. Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 The firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . The amended complaint contains no allegations that either Ellett, with respect to the first cause of action, or SportCo, with respect to the second cause of action, was insolvent at the time of the distributions or became, at the time of the transfers, insolvent as a result of the transfers. 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. The company will explode Rich!" Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. All rights reserved. Wellspring Capital manages an investment portfolio of between 10 and 15 international stocks. Wellspring Capital Management has acquired 38 organizations. 20-50554, 2021 WL 4823513 (Bankr. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of Dawson's threats, according to an internal memo. 1985). 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. This approach has historically delivered returns well above inflation. 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. After the defendants filed replies, the Court held a hearing on June 18, 2020. 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. This matter is before the Court on motions to dismiss filed by the defendants Wellspring Capital Management, LLC ("Wellspring Capital"), Wellspring Capital Partners IV, L.P. ("Wellspring Capital Partners"), WCM Genpar IV, L.P., WCM Genpar IV GP, LLC (collectively, the "Wellspring Defendants") [Docket No. 3d 473, 506 (S.D.N.Y. This approach has historically delivered returns well above inflation Our clients 2d 317 (S.D.N.Y. Use tab to navigate through the menu items. July 5, 2017). 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 In the legal profession, information is the key to success. The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. The third cause of action asserts that those parties "made numerous representations to Prospect concerning the AcuSport Purchase, including that the purchase would allow the Debtors to acquire $14 million worth of AcuSport inventory at a substantial discount; that it would result in the Debtors' immediate realization of a $7 million profit on the sale of the AcuSport inventory so purchased; and that it would result in the Debtors' capturing 20% to 30% of AcuSport sales." 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"). SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. 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. 2022 Wellspring Capital Management Group LLC |. 22-2003, 2023 WL 1098189 (3d Cir. Please see our Privacy Policy. The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. Crazy 8 was started in August 2007. By teaming up with strong management, Wellspring is able to unlock underlying value and. The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . 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. 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. Please see our Privacy Policy. Our tight-knit culture enables transparent oversight and a streamlined decision-making process. The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. Wellspring Capital Management is a leading private equity firm headquartered in New York. 1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. 101 (32). Their most recent investment was on Jan 1, 2020, when Steele Solutions raised Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of . Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. Martin Davis, 72; Created Modern Paramount, "Financial Firm Wellspring Capital to Take Penthouse at 605 Third Avenue", "Wellspring Capital Management taps $1.45bn Fund VI for Cadence Petroleum Group buyout", "SupplyOne Acquires Fellow Packaging Distributor Romanow Container", "Healthcare & Life Sciences Private Equity Deal Tracker: Wellspring Acquires Pentec Health", https://en.wikipedia.org/w/index.php?title=Wellspring_Capital_Management&oldid=1118006247, This page was last edited on 24 October 2022, at 18:15. View Videos. Oil Producers Hand $128 Billionto Investors as Doubts Grow About Future of Fossil Fuels, Your Saturday Briefing: Trumps Comeback Plan, Wall Street Whistles Away, British Parents Turn to Home Equity to Help Young Buy Property, Japanese Unions Seek Biggest Pay Rise in 25 Years for Workers, Sorry, Fed, Most US Mortgage Rates Were Locked In During Pandemic Lows, Italys CDP Is Nearing Offer for Telecom Italia Network. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: https://www.wellspringcapital.co.uk/disclaimer. The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. California Weighs $360,000 in Reparations to Eligible Black Residents. 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. 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. at 382. The plaintiff's third cause of action, for negligent misrepresentation against defendants Wellspring Capital, Mr. Carles, and Mr. Johnson, must also be dismissed. 2012) and West Side Fed. Musk Made a Mess at Twitter. The plaintiff, Ronald J. Friedman, the trustee for the SportCo Creditors' Liquidation Trust, filed an omnibus response to the motions to dismiss [Docket No.
Tom Felton Siblings Ages, Capitol Police Officer Lost An Eye, Trenton Times Obituaries, Issa Brothers Parents, How Far Is Kyiv From Belarus Border, Articles W