2005)). Investment Philosophy; Target Investments; Portfolio But Wellspring would arguably undermine the ability to negotiate for what are customary and, indeed, necessary protections for corporate decisionmakers in those same transactions, such as releases, indemnity, or exculpation. New York law and South Carolina law differed as to whether such a transfer was permitted. Law360 provides the intelligence you need to remain an expert and beat the competition. 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. For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. Id. . 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. [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]. It had previously received notification, in early 2018, that the Borrowers would default on their obligation under the Loan Agreements and the Amendments in the second quarter of 2018. Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 Home; About Us; Investment Approach. 19-80071-DD (Bankr. 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. Jan. 30, 2023). Sav. 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. Please see our Privacy Policy. Ellett used $54,860,549.74 of the First Amendment loan proceeds to fund distributions to the Transferee Defendants. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. 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 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 middle-market private equity firm that has approximately $2 billion of private equity. Wellspring Capital, Mr. Carles, and Mr. Johnson were not insiders of AcuSport, and the amended complaint does not allege that they had any special knowledge or information about AcuSport that was not available to the public. The firm's objective is to bring partnership, experience and value creation to each investment. %%EOF 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. The adviser's REGISTRATION status is listed below. In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. Crazy 8 was started in August 2007. Wellspring Capital Management is a leading private equity firm headquartered in New York. endstream endobj startxref The Court now issues this order, granting the motions to dismiss for the reasons set forth below. The case status is Pending - Other Pending. [Amended Complaint, 37, 40]. Ashmore for Wilson v. Dodds, 262 F. Supp. After the defendants filed replies, the Court held a hearing on June 18, 2020. However, whether a fraudulent conveyance action is characterized as a tort action is unsettled. There are no allegations in the amended complaint that the debtors' liabilities exceeded their assets at the time of the transfers. SportCo later filed a free fall bankruptcy and liquidatedallegedly causing substantial losses for unsecured creditors that would not have occurred had SportCo accepted that agreement in principle allegedly reached in December 2018. 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. 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. *aUQBT&1#J$8Q)=WE9M'v1s_)GG+.kbN;yELi.UD1N{f'u$y`'GCJfS;4yXwbW${%^tcxG2}+/P@U `a$b6? Wellspring has one of the best track records in middle-market private equity; its people, capital and reputation bring certainty to transactions. (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 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. 1985). Contribute to chinapedia/wikipedia.en development by creating an account on GitHub. We have interesting videos for you to watch on my site. 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Wellspring, founded in 1995, has raised more than $4 billion of capital commitments through six private equity funds, according to its website. Prior results do not guarantee a similar outcome. 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. Id. pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. SEC / JURISDICTION. Mr. Friedman was substituted as the plaintiff on January 10, 2020. [Amended Complaint, 31]. The assignment was executed in New York, but the personal property was located in South Carolina at the time the assignment was executed. 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. This is the best way to manage and repair your business reputation. If you want your business to survive, you need to understand your-self. Phone: 650 729-8626. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. 1994)). [Amended Complaint, 49]. Their most recent acquisition was Caring Brands International on Oct 25, 2021. 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." Div. WELLSPRING CAPITAL MANAGEMENT LIMITED is registered in England and Wales under Company Number 12429146, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. 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. Password (at least 8 characters required). The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . 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 [. The firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . As with the plaintiffs assertions around disinterested governance, such allegations may (or may not) bear any semblance to the actual facts. Over the past 27 years, Wellspring has invested in over 50 platform investments and completed over 80 add-on acquisitions across various segments of the U.S. and global economies. 6. 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. 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. 92], Todd Boehly [Docket No. January 12, 2022 Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States Aug. 27, 2020). 3d 341, 357 (D.S.C. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. 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. 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. 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. The Loan Agreements and the First and Second Amendments each contain a choice of law provision, providing that New York law applies. Oct. 14, 2021) (Stickles, J.) They were not statements of presently existing fact. at 382. We are taking this matter very seriously, and have launched an immediate internal investigation, Jeffrey Gould, Wellsprings head of marketing and investor relations, told investors last week in a note seen by Bloomberg News. 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. The amended complaint asserts three causes of action: (1) avoidance and recovery of fraudulent transfers by Ellett against the Transferee Defendants pursuant to 11 U.S.C. Wellspring Capital manages an investment portfolio of between 10 and 15 international stocks. At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. You have to know whats happening with clients, competitors, practice areas, and industries. York Capital Management Feb 2021 - Present2 years 1 month New York, New York, United States Wellspring Capital Management LLC 13 years 5 months Partner Dec 2016 - Dec 20204 years 1 month. 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. The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). Note: This site is for informational purposes only. at 321. To summarize New York law, then, it appears that opinions can be actionable, but are not always actionable. 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 . at 382. There are also no allegations concerning expenses. Your livelihoodand your sanitydepend . 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. Federal Rule of Bankruptcy Procedure 7012(b) provides that Federal Rule of Civil Procedure 12(b) applies in adversary proceedings. And the best part of all, documents in their CrowdSourced Library are FREE. 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. The firm's objective is to bring partnership, experience and value creation to each investment. 24. Over the past 20 years, Wellspring has invested in over 35 platform investments across . Will Others Follow? The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. Wellspring, 2021 WL 4823513, at *10. Additionally, the plaintiff argues that the third element of New York's third-party beneficiary test is not met because there is no express intent in the Loan Agreements or the Amendments to compensate the defendants in the event the distributions were not paid and in fact, the Loan Agreement indicates the opposite by virtue of the inurement clause found in Section 13.1. 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." D. Del. v. Holmes (In re Holmes), 610 B.R. 987, 999-1000 (Bankr. 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. They are simply not statements of preexisting fact that were false when made. Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. The issue in Merritt Dredging was the sale of a barge and the priority of parties' interests in the proceeds of the sale. The firm's objective is to bring partnership, experience and value creation to each investment. 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. Under certain conditions, section 548 allows the avoidance of a transfer made within two years of the date of the filing of the bankruptcy petition. . It identifies undervalued companies whose share price does not properly reflect the true value of the business. 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. Why is this public record being published online? Wellsprings investment professionals possess diverse and complementary backgrounds that combine valuable experience in private equity, restructuring, corporate finance, capital markets and corporate law. 544(b). All rights reserved. New York law prohibits both actual and constructive fraudulent conveyances. 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 is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. . 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. Many of the facts underlying the Wellspring decision are neither unique nor unusual. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . PLEASE NOTE: A verification email will be sent to your address before you can access your trial. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. See Silvercreek Mgmt., Inc. v. Citigroup, Inc., 346 F. Supp. 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 re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. EFFECTIVE DATE; SEC: Terminated: 3/2/2007: Designed By, https://www.wellspringcapital.co.uk/disclaimer. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. Va. Mar. These emails can hardly be considered negligent misrepresentations. 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. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. The firms objective is to bring partnership, experience and value creation to each investment. The Wellspring ruling was not appealed, nor has any trial occurred on this matter. The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. Salaries posted anonymously by Wellspring Capital Management employees. 962 0 obj <>stream 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." Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. Wellspring Capital Management is a leading private equity firm headquartered in New York. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: https://www.wellspringcapital.co.uk/disclaimer. REGISTRATION STATUS. 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. Already a subscriber? By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, San Francisco Bay Area, Silicon Valley), Operating Status of Organization e.g. Haynsworth Sinkler Boyd, P.A. App'x 143 (4th Cir. Musk Made a Mess at Twitter. The principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. Their most recent investment was on Jan 1, 2020, when Steele Solutions raised Sec'y of State for Def. They are not actionable. See Sheehan v. Saoud, 650 Fed. About Wellspring Capital Management Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $4.4 billion of private equity capital. We work with successful motivated individuals to help them achieve their investment and wealth management objectives. Ellett Brothers LLC ("Ellett"), a South Carolina limited liability company, was a sporting goods distributor. Id. Description. Wellspring Capital Management is a leading private equity firm headquartered in New York. King County, 863 F. Supp.2d at 318. 0 The District Court discussed the South Carolina Supreme Court's decision in Sheldon v. Blauvelt, 29 S.C. 453 (1888). The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. The defendants argue that in the event the Court finds the choice of law provision does not apply, South Carolina choice of law principles should be consulted to reach a finding that New York law applies. Id. 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 Wellspring Capital Management is a middle-market private equity financing firm. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of . By teaming up with strong management, Wellspring is able to unlock underlying value and pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. 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. The middle-market private equity firm invests in companies with strong business . In June 2017, Gymboree announced it was filing for Chapter 11 bankruptcy protection. Wellsprings facts, as alleged, are fairly straightforward. [Amended Complaint, 51]. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. 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. Posted By: Imright , 3/3/2023 9:31:52 PM. 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. Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. 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. By teaming up with strong management, Wellspring is able to unlock underlying value and 112]. 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. Practices: 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. 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." The company will explode Rich!" ), Create custom alerts for specific article and case topics and, I took a free trial but didn't get a verification email. 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. at 385. 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. The defendants asserted common arguments in support of dismissal, but all arguments made in support of dismissal were not asserted by each defendant. Todd Boehly filed a joinder to the Wellspring Defendants' motion to dismiss. 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, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. Corporate Advocacy Program. A constructive fraudulent conveyance exists under New York law if the conveyance was made without fair consideration and "(1) the transferor is insolvent or will be rendered insolvent by the transfer in question; (2) the transferor is engaged in or is about to engage in a business transaction for which its remaining property constitutes unreasonably small capital; or (3) the transferor believes that it will incur debt beyond its ability to pay." Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. There are different definitions of insolvency. Time to Read: 6 minutes Corp. v. Twombly, 550 U.S. 544, 555 (2007)). A finding that Prospect is a preexisting creditor compels the same result. James brought a civil suit against Trump in September, alleging the Trump organization had fraudulently inflated the value of . The Partners of Wellspring constitute a long-tenured team, having worked together an average of 15 years over three funds. David R. Duncan US Bankruptcy Judge District of South Carolina. A litigation trust formed through the SportCo bankruptcy then sued, among others, SportCos former directors and its equity sponsor. The court considered whether inaccurate credit ratings can form the basis for a negligent misrepresentation claim. Less than a year later, the liquidation trustee sued Wellspring and related parties, alleging breaches of fiduciary duty of care and loyalty. The defendants argue that New York law should apply, first, because the Loan Agreements and the First and Second Amendments contain choice of law provisions stating that New York law will apply and second, because South Carolina choice of law analysis dictates that New York law should apply. 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." In particular, the bankruptcy court held that the allegations failed to support a conclusion that the SportCo directors were somehow acting on an uninformed basis or that the rejection of the out-of-court restructuring was grossly negligent. 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.
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