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. 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 principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. 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. A former Wellspring Capital Management employee filed a lawsuit against the son of Wellspring chief executive Bill Dawson, alleging that he raped her and that Bill Dawson threatened to. 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. pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. Id. 1996)). Corp. v. Twombly, 550 U.S. 544, 555 (2007)). . Id. 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. 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. (quoting Bell Atl. Certain state securities regulatory authorities have similar exemptions based on . The plaintiff responds that the express terms of the choice of law provisions provide that the clause applies only to the parties to the Loan Agreements and the Amendments and that the defendants' indirect connection to the parties to the agreements, and the nature of their received benefit, a distribution, are not sufficient to render them third-party beneficiaries of the Loan Agreements and the Amendments. On 05/20/2022 Wellspring Capital Management, LLC Wellspring Cap filed an Other lawsuit against Barry, III.This case was filed in U.S. Bankruptcy Courts, New York Southern Bankruptcy. The plaintiff's third cause of action, for negligent misrepresentation against defendants Wellspring Capital, Mr. Carles, and Mr. Johnson, must also be dismissed. 541, 546 (Bankr. David R. Duncan US Bankruptcy Judge District of South Carolina. 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. An actual fraudulent conveyance is any "conveyance made . Va. Mar. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. Ellett Brothers LLC ("Ellett"), a South Carolina limited liability company, was a sporting goods distributor. "); Terry v. Walker, 2006 WL 736861, at *5 (W.D. 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. This is the best way to manage and repair your business reputation. 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. By teaming up with strong management, Wellspring is able to unlock underlying value and Note: This site is for informational purposes only. Id. Please see our Privacy Policy. 112]. Angel, Fund of Funds, Venture Capital), This describes the stage of investments made by this organization (e.g. 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 South Carolina Supreme Court stated that New York law would govern the validity of the transfer before it, unless applying New York law would result in a violation of South Carolina public policy. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . About Wellspring Capital Management Wellspring Capital Management is a leading private equity firm headquartered in New York. [Amended Complaint, 54]. from 8 AM - 9 PM ET. By teaming up with strong management, Wellspring seeks to unlock underlying value and pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 20-50554, 2021 WL 4823513 (Bankr. 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. 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." The Court addresses in this order only those arguments that clearly mandate dismissal. Wellspring Capital Management is a middle-market private equity financing firm. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. You can review interesting Flipbooks on my site. 915 0 obj <> endobj Middle Market Private Equity. 1999)). There are no allegations in the amended complaint that the debtors' liabilities exceeded their assets at the time of the transfers. 1984) for the proposition that under New York law, opinions are actionable in a negligence context. 'Ov}b0. Home; About Us; Investment Approach. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. 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. 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. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through . at 382. Public Records Policy. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. 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. 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. Jan. 25, 2016) (alteration original). These tools have been used since the firm's inception in 1995 to generate consistent business improvement in its portfolios. We look forward to carrying forward that vision and continuing our success in the years ahead.". 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 court considered whether the plaintiff had proved the tort of innocent misrepresentation. 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. Accordingly, Wellspring did not find that the defendants in fact breached their duties, but rather held that the plaintiff, a litigation trust, had asserted a viable claim that could proceed to a trier of fact. W.D. 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. 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. Attorney advertising. 609, 614 (Bankr. Wellspring Capital Management is a leading private equity firm headquartered in New York. 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. 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. 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. They were not statements of presently existing fact. Wellspring Capital Management is a middle-market private equity firm that has approximately $2 billion of private equity. 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. Wellsprings facts, as alleged, are fairly straightforward. REGISTRATION STATUS. 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. 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. The court considered whether inaccurate credit ratings can form the basis for a negligent misrepresentation claim. 3d 341, 357 (D.S.C. v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 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. 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. Corporate Advocacy Program. 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. King County, 863 F. Supp.2d at 318. 0 Wellspring, 2021 WL 4823513, at *10. The Court now issues this order, granting the motions to dismiss for the reasons set forth below. Munich, German Mnchen, city, capital of Bavaria Land (state), southern Germany. & Loan Ass'n v. Hirschfeld, 476 N.Y.S.2d 292 (N.Y. App. Finally, in West Side Fed. 23, 2006) (stating that some courts characterize fraudulent conveyance actions as tort actions, while others characterize them as matters in equity). 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. In the legal profession, information is the key to success. The February 20, 2018 stated, "You're [sic] economics are going down and the risk of chapter is going up. 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. The assignment was executed in New York, but the personal property was located in South Carolina at the time the assignment was executed. The firm's objective is to bring partnership, experience and value creation to each investment. Consumers want to see how a business took care of business. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. REGISTRATION STATUS . See Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy. Wellspring Capital manages an investment portfolio of between 10 and 15 international stocks. Investment Approach Target Investments Wellspring's objective is to acquire or invest in companies that are well-positioned to capitalize on change and can benefit from Wellspring's operating and financial expertise. Over the past 20 years, Wellspring has invested in over 35 platform investments across . This approach has historically delivered returns well above inflation Our clients Hiding negative complaints is only a Band-Aid. 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. 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. Litigation. 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. Our returning and new limited partners share our belief in the unique value proposition that Wellspring brings to the investment process, with our focus on strategic partnership and tailored approach to each investment. 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." Less than a year later, the liquidation trustee sued Wellspring and related parties, alleging breaches of fiduciary duty of care and loyalty. *aUQBT&1#J$8Q)=WE9M'v1s_)GG+.kbN;yELi.UD1N{f'u$y`'GCJfS;4yXwbW${%^tcxG2}+/P@U `a$b6? Wellspring Capital Management, LLC; Wellspring Cap. The United States Court of Appeals for the Third Circuit wasted no time getting the new year off to a roaring start through its ruling in In re LTL Mgmt., LLC, Case No. 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. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. They are not actionable. Sounds like a tidy deal at year end [2017] made a lot of sense." Id. Defendant Bernard Ziomek is in default in this matter. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, WELLSPRING CAPITAL MANAGEMENT LIMITED is registered in England and Wales under Company Number 12429146, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. SaaS, Android, Cloud Computing, Medical Device), Where the organization is headquartered (e.g. The parties disagree on what law should applyfederal or state, and further if state law applies, New York or South Carolina. Designed By BM Designs. Wellspring Capital Management is a leading private equity firm headquartered in New York. 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. 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. 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. Id. In 2008, Wellspring Capital, through its fund Wellspring Capital Partners, acquired Ellett. hb```e``jb`a`\ @1V h`2q:lp10qfaqB,X3s10iH(^t1 The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 19-80071-DD (Bankr. SEC / JURISDICTION. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. 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. 1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. The plaintiff's first and second causes of action are based on 11 U.S.C. January 12, 2022 THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. 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 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. Password (at least 8 characters required). 2007) (citations omitted). 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. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. 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 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Id. 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. Your livelihoodand your sanitydepend . Id. Mr. Friedman filed an amended complaint the same day. Investors in its most recent fund include the Washington State Retirement System, Minnesota State Board of Investment, Connecticut Retirement Plans & Trust Funds, Kansas Public Employees' Retirement 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. The Wellspring Defendants asserted all of these arguments and also asserted failure to state a claim under section 550 against certain defendants. In Fall 2018, SportCo Holdings, Inc. (SportCo) was facing severe financial distress. v. Holmes (In re Holmes), 610 B.R. Id. The firm's objective is to bring partnership, experience and value creation to each investment. Industry: Investment & Asset Management. These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. Brought up in a family enjoying long-term success in real estate investment, Avrohom instead turned to the stock market. Posted By: Imright , 3/3/2023 9:31:52 PM. 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. Contribute to chinapedia/wikipedia.en development by creating an account on GitHub. 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. In this process, SportCo initially exchanged a term sheet with certain of its lenders in early November 2018 and allegedly reached an agreement in principle in late December 2018. Oct. 14, 2021) (Stickles, J.) to hinder, delay, or defraud either present or future creditors." D. Del. Sav. your most valuable capital, your ultimate resource. Further, if the statement is solely a speculative prediction about some potential business venture or course of action being contemplated, it is not actionable. 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. Wellspring Capital Management is a mega-sized private equity firm that focused on a variety of transaction situations. Founded in 1995, Wellspring Capital Management is a private equity firm headquartered in New York, New York. ~p03ngx1Ai63*oP 4TP3Nt'xn0R8tJ'a7D2P6ILky6L;0;0SUNrtd t ";Qb[K-Ii 1g%\i) IZ3uAH0J40v0xt0v40Xt8 y CJ3t@y`$21kL San Francisco Bay Area, Silicon Valley), Operating Status of Organization e.g. In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. 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.
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