wellspring capital management lawsuit

What happened to Birchbox? | Retail Dive . 2100 Geng Road, Suite 210 Palo Alto, CA 94303. Home; About Us; Investment Approach. 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. 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. Id. The plaintiff's third cause of action, for negligent misrepresentation against defendants Wellspring Capital, Mr. Carles, and Mr. Johnson, must also be dismissed. 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 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. Wall Street tycoon takes leave of absence after lawsuit claims his son SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. The court considered whether inaccurate credit ratings can form the basis for a negligent misrepresentation claim. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. P. 12(b)(6). N.D.N.Y. The alleged statements simply do not constitute actionable statements that can form the basis of a negligent misrepresentation claim. Va. June 8, 2011) (acknowledging that Maryland law is not clear regarding whether a fraudulent conveyance action sounds in tort, but concluding that "given that the gravamen of the fraudulent conveyance claim is the wrongfulness of the conveyance and the injury to the creditor, rather than balancing equities or fairness, it is appropriate to conclude that fraudulent conveyance claims sound in tort. The issue in Merritt Dredging was the sale of a barge and the priority of parties' interests in the proceeds of the sale. Prior results do not guarantee a similar outcome. 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. Mr. Friedman was substituted as the plaintiff on January 10, 2020. Financial terms of the transaction were not disclosed. 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"). Wellspring Capital Management LLC - Dun & Bradstreet If you do not agree with these terms, then do not use our website and/or services. Wellspring Capital Management Acquires Cadence Petroleum Group In 2008, Wellspring Capital, through its fund Wellspring Capital Partners, acquired Ellett. hXO8WtVH,~W"I/ {;N7'0HAA0%`Ih5L!p! Middle Market Private Equity. Friedman v. Wellspring Capital Mgmt. (In re Sportco Holdings) 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). See Sheehan v. Saoud, 650 Fed. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. Make your practice more effective and efficient with Casetexts legal research suite. 3d 341, 357 (D.S.C. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. An actual fraudulent conveyance is any "conveyance made . 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 . Will Others Follow? 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. (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 . (quoting Bell Atl. 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. Fed. Hiding negative complaints is only a Band-Aid. at 382. New York law and South Carolina law differed as to whether such a transfer was permitted. The middle-market private equity firm invests in companies with strong business . 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. 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. WELLSPRING CAPITAL MANAGEMENT LIMITED is registered in England and Wales under Company Number 12429146, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. with actual intent . The court must construe the allegations in the complaint in the light most favorable to the plaintiff. In April 2018, Prospect agreed to defer two quarters of cash interest payments. A finding that Prospect is a preexisting creditor compels the same result. at 613-14. Musk Made a Mess at Twitter. Many of the facts underlying the Wellspring decision are neither unique nor unusual. v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. at 385. At Wellspring we pride ourselves on client service. 544(b). [Amended Complaint, 37, 40]. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. Va. Mar. . 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 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." 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 first and second causes of action are dismissed. These are high quality companies, essential to the national, regional, or global economy but whose fundamental qualities are underappreciated and undervalued by the market. The December 26, 2017 email stated, "So you will waive [your interest payments]. 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. There are also no allegations concerning expenses. 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. 1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. Limited partners include leading pension funds, endowments, fund of funds and family offices from the U.S., Europe and Asia. Pentec Health Inc. Acquired by Wellspring Capital Management - PRWeb The plaintiff, Ronald J. Friedman, the trustee for the SportCo Creditors' Liquidation Trust, filed an omnibus response to the motions to dismiss [Docket No. January 12, 2022 When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. 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. By teaming up with strong management, Wellspring is able to unlock underlying value and 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. Wellspring Philanthropic: An Ocean of "Dark Money" on the Left *aUQBT&1#J$8Q)=WE9M'v1s_)GG+.kbN;yELi.UD1N{f'u$y`'GCJfS;4yXwbW${%^tcxG2}+/P@U `a$b6? Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of . Wellspring Capital Management, LLC; Wellspring Cap v Barry, III et al 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. W.D. 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. The parties are in agreement that New York and South Carolina law regarding negligent misrepresentations are substantially similar and that as a result, the Court is not required to engage in a choice of law analysis as to the third cause of action. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. 2d 317 (S.D.N.Y. 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. 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. Wellspring Capital Management is a middle-market private equity financing firm. 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. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. [Amended Complaint, 49]. [cV3ljHkT/bx @A,20p1 ks In fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. Federal Rule of Bankruptcy Procedure 7012(b) provides that Federal Rule of Civil Procedure 12(b) applies in adversary proceedings. Section 544(b) states: The defendants' motions assert numerous arguments in support of the assertion that the Court must dismiss the plaintiff's causes of action. Working at Wellspring Capital Management | Glassdoor pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. Wellspring Capital Management Acquires Paragon Films Sav. Wellspring Capital Management is a leading private equity firm headquartered in New York. 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. (Wellspring). 20-50554, 2021 WL 4823513 (Bankr. 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 basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. 1999)). Consumers want to see how a business took care of business. 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. 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 firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . wikipedia.en/Vatterott_College.md at main chinapedia/wikipedia.en Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. Wellspring Capital Management, LLC; Wellspring Cap. Id. The firm's objective is to bring partnership, experience and value creation to each investment. Adversary Proceeding No. These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. Revenue: $500 million to $1 billion (USD) Competitors: Unknown. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. This approach has historically delivered returns well above inflation Our clients The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. 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. The defendants filed separate motions. . Id. Wellspring CEO takes leave after explosive rape allegations against his son Active, Closed, This describes the type of investor this organization is (e.g. 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. 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. You have to know whats happening with clients, competitors, practice areas, and industries. WELLSPRING CAPITAL MANAGEMENT, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. Public Records Policy. 1994)). SaaS, Android, Cloud Computing, Medical Device), Where the organization is headquartered (e.g. 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. . 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. Already a subscriber? Even California Democrats don't want Newsom to run for president McDermott Will & Emery LLP > San Francisco > United States | The Legal Their most recent acquisition was Caring Brands International on Oct 25, 2021. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). at 321. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. 91], Andrew Kupchik [Docket No. REGISTRATION STATUS. In an email obtained by . 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. 1984) for the proposition that under New York law, 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. Wellsprings objective is to bring partnership, experience and value creation to each investment. 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. 609, 614 (Bankr. The plaintiff relies on the fact that Ellett was unable to pay the debt owed to Prospect at the time that it had to be paid in full; however, this is not the only relevant point in time. To summarize New York law, then, it appears that opinions can be actionable, but are not always actionable. 2022 Wellspring Capital Management Group LLC |. 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. 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. At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners [Amended Complaint, 93]. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir. 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. at *3 (quoting In re Sharp Int'l Corp., 403 F.3d 43, 53 (2d Cir. 101 (32). Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 Id. Another email stated, in part: "Gotta get your interest? Copyright 2023 Ropes & Gray LLP. 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.