wellspring capital management lawsuit

THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. 91], F. Hewitt Grant [Docket No. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of . 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). Wellspring Capital is a boutique discretionary management service - with a portfolio positioned for high performance. [Amended Complaint, 57]. Wellspring CEO takes leave after explosive rape allegations against his son Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. 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." Wellspring also rejected in cursory fashion the defendants argument that it is not necessarily a breach . Wellspring Capital Management Group LLC ("Wellspring"), a New York-based private equity firm, announced that on May 29, 2020, it closed the acquisition of Steele Solutions, Inc. ("SSI" or the "Company"), a value-add supplier into the industrial automation sector. 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. [Amended Complaint, 32]. Wellspring Capital Lawsuit | PDF | Limited Partnership | Loans - Scribd 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. 2021 by wellspring capital Management. 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. Friedman v. Wellspring Capital Mgmt. - Casetext It identifies undervalued companies whose share price does not properly reflect the true value of the business. Div. The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. Aug. 27, 2020). v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. Investments Number of Investments 2 Wellspring Capital Management has made 2 investments. I Shall [Not] Be Released: Wellspring, Director Releases, and the Duty Please Update this case to get latest docket information. The amended complaint is dismissed. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. at 385. 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 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. Attorney advertising. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. Id. REGISTRATION STATUS . Their most recent acquisition was Caring Brands International on Oct 25, 2021. Private equity firm Wellspring Capital Management has acquired Caring Brands International, parent company of home health and hospice franchise company Interim Healthcare, for an undisclosed amount. Wellspring buys PE-backed Center for Diagnostic Imaging Gymboree - Wikipedia 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. Todd Boehly filed a joinder to the Wellspring Defendants' motion to dismiss. Ellett Brothers LLC ("Ellett"), a South Carolina limited liability company, was a sporting goods distributor. When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. Working at Wellspring Capital Management | Glassdoor In 2012, the year that the amended complaint alleges Ellett "achieved record sales and earned revenues of approximately $1.2 billion," Ellett and its operating subsidiaries (the "Borrowers") entered into a Third Amended and Restated Loan and Security Agreement and a Second Lien Loan and Security Agreement (collectively, the "Loan Agreements") with lenders including Prospect Capital Corporation ("Prospect"), pursuant to which Prospect and the other lenders loaned $280 million to the Borrowers. Further, if the statement is solely a speculative prediction about some potential business venture or course of action being contemplated, it is not actionable. 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. They are simply not statements of preexisting fact that were false when made. 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. The plaintiff's first and second causes of action are based on 11 U.S.C. In 2010, Bain Capital acquired the company for US$1.8 billion. & Loan Ass'n v. Hirschfeld, 476 N.Y.S.2d 292 (N.Y. App. 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. 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. with actual intent . A social media content creator signed an agreement with Birchbox in May of 2022 and hadn't been paid the $2,500 due as of Jan. 24, despite several emails to the company. UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. Revenue: $500 million to $1 billion (USD) Competitors: Unknown. Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. If you do not agree with these terms, then do not use our website and/or services. at 321. In Wellspring, the Delaware bankruptcy court held that an alleged duty of loyalty breach could survive a motion to dismiss where: Bear in mind that alleged is the operative word here. Make your practice more effective and efficient with Casetexts legal research suite. 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. . This is despite the fact that 57% of Californians and 37% of California Democrats do not want President Joe Biden to run, according to a poll from the Berkeley Institute of Governmental Studies. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. 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). 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. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. 19.)1. 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. "); Terry v. Walker, 2006 WL 736861, at *5 (W.D. 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. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. Wellspring Capital Management is a leading private equity firm headquartered in New York. After the defendants filed replies, the Court held a hearing on June 18, 2020. They were not statements of presently existing fact. Wellspring Capital Management Company Profile | Management and Wellspring has one of the best track records in middle-market private equity; its people, capital and reputation bring certainty to transactions. Angel, Fund of Funds, Venture Capital), This describes the stage of investments made by this organization (e.g. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. Relevant here: the plaintiff/litigation trust alleged that SportCos directors: Finally, the litigation trust also asserted a variety of other counts in its complaint related to other facts, circumstances, and actions that are not the subject of this Alert. Accordingly, SportCo began negotiations with certain of its lenders around a potential restructuring transaction. Wellspring Capital Management. Wellspring Capital Management is a middle-market private equity financing firm. (Wellspring). Id. 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Wellsprings investment professionals possess diverse and complementary backgrounds that combine valuable experience in private equity, restructuring, corporate finance, capital markets and corporate law. An actual fraudulent conveyance is any "conveyance made . Menu Home; Rankings. 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. James brought a civil suit against Trump in September, alleging the Trump organization had fraudulently inflated the value of . 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. The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. 3d 341, 357 (D.S.C. P. 12(b)(6). Our tight-knit culture enables transparent oversight and a streamlined decision-making process. Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. The case status is Pending - Other Pending. This approach has historically delivered returns well above inflation. 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. For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. Wellspring Capital Management LLC - Dun & Bradstreet Wellsprings facts, as alleged, are fairly straightforward. 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 . Probitas Partners acted as exclusive placement agent and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel with respect to formation of Fund VI. Wellspring Capital Management - Crunchbase Finally, in West Side Fed. 2100 Geng Road, Suite 210 Palo Alto, CA 94303. 1984) for the proposition that under New York law, opinions are actionable in a negligence context. 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. Already a subscriber? R. Civ. Try our Advanced Search for more refined results. 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. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. Copyright 2023 Ropes & Gray LLP. Antares Capital Supports Wellspring Capital Management's Acquisition of 2d 520, 529 n.14 (E.D. Id. Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 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. 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. If you want your business to survive, you need to understand your-self. at *3 (quoting In re Sharp Int'l Corp., 403 F.3d 43, 53 (2d Cir. 19-80071-DD (Bankr. SaaS, Android, Cloud Computing, Medical Device), Where the organization is headquartered (e.g. Munich, German Mnchen, city, capital of Bavaria Land (state), southern Germany. Wall Street tycoon takes leave of absence after lawsuit claims his son Over the past 20 years, Wellspring has invested in over 35 platform investments across . The District Court discussed the South Carolina Supreme Court's decision in Sheldon v. Blauvelt, 29 S.C. 453 (1888). The Debtors in the bankruptcy cases, pending in the District of Delaware, are SportCo Holdings, Inc.; Ellett Brothers, LLC; United Sporting Company, Inc.; Bonitz Brothers, Inc.; Evans Sports, Inc.; Jerry's Sports, Inc.; Outdoor Sports Headquarters, Inc.; Quality Boxes, Inc.; and Simmons Guns Specialties, Inc. Posted By: Imright , 3/3/2023 9:31:52 PM. . REGISTRATION STATUS. 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. (quoting Bell Atl. King County, 863 F. Supp.2d at 318. 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. App'x 143 (4th Cir. The Court addresses in this order only those arguments that clearly mandate dismissal. Use tab to navigate through the menu items. 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 Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. [cV3ljHkT/bx @A,20p1 ks 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. Tex. Wellspring has earned the reputation as a trusted, reliable partner and is often the preferred partner of a portfolio companys senior management team. at 382. The emails, often using colorful language and harassing tones, essentially represent to Prospect that if the AcuSport transaction is not completed, Prospect will not get paid on its obligations. This is the best way to manage and repair your business reputation. 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. 2007) (citations omitted). Founded in 1995, Wellspring invests anywhere . The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). These emails can hardly be considered negligent misrepresentations. Wellspring Capital Management - Wikipedia In an email obtained by . The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. (Compl. 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. Oct. 14, 2021) (Stickles, J.) These emails may be a lot of things, but negligent misrepresentations they are not. 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. 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. Wellspring Capital manages an investment portfolio of between 10 and 15 international stocks. 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. We work with successful motivated individuals to help them achieve their investment and wealth management objectives. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. 1996)). Wellsprings objective is to bring partnership, experience and value creation to each investment. Wellspring, 2021 WL 4823513, at *10. At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners Id. The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . The court considered whether inaccurate credit ratings can form the basis for a negligent misrepresentation claim. 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. Defendant Bernard Ziomek is in default in this matter. Wellspring Capital Management Home; About Us; Investment Approach. WELLSPRING CAPITAL MANAGEMENT, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. The assignment was executed in New York, but the personal property was located in South Carolina at the time the assignment was executed. This article about a private equity or venture capital firm based in the United States is a stub. e""8*&B The middle-market private equity firm invests in companies with strong business . The court must construe the allegations in the complaint in the light most favorable to the plaintiff. Law360 takes your privacy seriously. 1001 to 5000 Employees. Wellspring Philanthropic: An Ocean of "Dark Money" on the Left 3d 473, 506 (S.D.N.Y. Note: This site is for informational purposes only. 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." Wellspring CEO Takes Leave After Son Accused of Rape in Lawsuit 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. Password (at least 8 characters required). 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. UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy. Less than a year later, the liquidation trustee sued Wellspring and related parties, alleging breaches of fiduciary duty of care and loyalty. Otherwise you cannot get paid." 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. Judge opens door for bankruptcy blame suits - Axios Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. 92], Todd Boehly [Docket No. Wellspring Capital - Middle Market Private Equity 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. [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]. 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. 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." Fax: 877 376-7003. Wellspring brought its assets under management to more than $4.4 billion as of January 2018. Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. Phone: 650 729-8626. This Supreme Court Case Could Redefine Crime, YellowstoneBackers Wanted to Cash OutThen the Streaming Bubble Burst, How Countries Leading on Early Years of Child Care Get It Right, Female Execs Are Exhausted, Frustrated and Heading for the Exits, No Major Offer Expected on Childcare in UK Budget, Biden Gives Medal of Honor to Trailblazing Special Forces Member, Climate Change Is Launching a MutantSeed Space Race, UK Braces for Rare Weather Event That Risks Late-Winter Freeze, This Former Factory Is Now New Taipeis Edgiest Project, What Do You Want to See in a Covid Memorial? We are motivated and incentivised to succeed. The Partners of Wellspring constitute a long-tenured team, having worked together an average of 15 years over three funds. 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. IAPD - Investment Adviser Public Disclosure - Homepage R. Civ. *aUQBT&1#J$8Q)=WE9M'v1s_)GG+.kbN;yELi.UD1N{f'u$y`'GCJfS;4yXwbW${%^tcxG2}+/P@U `a$b6? . ~p03ngx1Ai63*oP 4TP3Nt'xn0R8tJ'a7D2P6ILky6L;0;0SUNrtd t ";Qb[K-Ii 1g%\i) IZ3uAH0J40v0xt0v40Xt8 y CJ3t@y`$21kL Id. Hiding negative complaints is only a Band-Aid. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. See Silvercreek Mgmt., Inc. v. Citigroup, Inc., 346 F. Supp. Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. To summarize New York law, then, it appears that opinions can be actionable, but are not always actionable. WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures.