wellspring capital management lawsuit

Law360 provides the intelligence you need to remain an expert and beat the competition. 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. .JFY+h!Hkw;s"$ 4AuF~!D =j]4z*g7i>B 1NEDm @@,!ptz"Br}-rh>wI }9.&>5/n2n/OefX D.S.C. 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. 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 [. In the legal profession, information is the key to success. CDI's smaller Atlanta peer said to weigh sale in '18. 2018) (distinguishing cases where the courts dismissed negligent misrepresentation claims based on "puffery" or founded solely on speculative statements regarding future profits as a result of proposed transactions, and finding that the misrepresentations at issue were actionable because they involved present facts). Make your practice more effective and efficient with Casetexts legal research suite. The defendants asserted common arguments in support of dismissal, but all arguments made in support of dismissal were not asserted by each defendant. By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, In April 2018, Prospect agreed to defer two quarters of cash interest payments. . 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. 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. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. They are not actionable. 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. 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. 6. 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. 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. Whether youre building capital for your family, retirement or other life goals, we can help you with our high conviction and disciplined investment style. Will His AI Plans Be Any Different? Active, Closed, This describes the type of investor this organization is (e.g. E-mail: sandra@wellspring-cap.com; Videos. [Amended Complaint, 31]. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. This approach has historically delivered returns well above inflation. 19.)1. Wellspring Capital Management is a mega-sized private equity firm that focused on a variety of transaction situations. The first and second causes of action are dismissed. Wellspring is a cautionary tale for the fiduciaries of a distressed or potentially distressed corporationparticularly with respect to negotiations around release and/or indemnification provisions for those same fiduciaries. After all, corporate decisionmakers are often tasked with choosing a path where outcomes are at best uncertain. They were not statements of presently existing fact. The amended complaint further states that from October 2012 to October 2013, "Ellett achieved record sales and earned revenues of approximately $1.2 billion." There are no allegations in the amended complaint that the debtors' liabilities exceeded their assets at the time of the transfers. The Firm will consider buyouts of private companies, acquisitions of divisions or subsidiaries of public companies, shareholder liquidity needs, partnering with entrepreneurs for growth opportunities, and special situations. 544(b). The principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. Flipbooks. $46H$DrGHi`0I"DE$"J(aH! . Crazy 8 was started in August 2007. 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 . For the reasons set forth above, the first, second, and third causes of action set forth in the plaintiff's amended complaint fail to state claims for which relief can be granted. Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. R. Civ. 91], F. Hewitt Grant [Docket No. Wellspring Capital Management, LLC; Wellspring Cap. Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . 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. All rights reserved. The amended complaint is dismissed. 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States See Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 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 plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. articles a month for anyone to read, even non-subscribers! . 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. Most of them do not even contain any concrete information about the proposed AcuSport purchase or the likelihood of the Borrowers' default. 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. A former employee of Wellspring Capital Management filed a lawsuit in a New York Thursday alleging that the CEO's son, Christopher Dawson, drugged and repeatedly raped her one night in the. Munich, German Mnchen, city, capital of Bavaria Land (state), southern Germany. Corporate Advocacy Program. 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. Public Records Policy. Tenn. 1991); 11 U.S.C. 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. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of . Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. 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." Fax: 877 376-7003. Investment Philosophy; Target Investments; Portfolio The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. Wellspring Capital Management LLC Chief Executive Officer Bill Dawson has taken a leave of absence, days after a former employee alleged in a lawsuit that he threatened her for accusing his. We 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. Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. [Amended Complaint, 51]. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. R. Civ. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. 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. 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. In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. PLEASE NOTE: A verification email will be sent to your address before you can access your trial. [Amended Complaint, 54]. 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. 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 defendants filed separate motions. The Wellspring ruling was not appealed, nor has any trial occurred on this matter. 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. See Sheehan v. Saoud, 650 Fed. By teaming up with strong management, Wellspring is able to unlock underlying value and. 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. 2012) and West Side Fed. Financial terms of the transaction were not disclosed. The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. 2009). 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 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. hb```e``jb`a`\ @1V h`2q:lp10qfaqB,X3s10iH(^t1 These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. 609, 614 (Bankr. 544 and 550 and S.C. Code 27-23-10; and (3) negligent misrepresentations against Wellspring Capital, Mr. Carles, and Mr. Johnson. (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 . Id. Wellspring Capital Management. at 358. Id. at *3 (quoting In re Sharp Int'l Corp., 403 F.3d 43, 53 (2d Cir. WELLSPRING CAPITAL MANAGEMENT LIMITED is registered in England and Wales under Company Number 12429146, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Musk Made a Mess at Twitter. An actual fraudulent conveyance is any "conveyance made . However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. to hinder, delay, or defraud either present or future creditors." "To survive a motion to dismiss, 'a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face."'" N.D.N.Y. The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. Martin Davis, 72; Created Modern Paramount, "Financial Firm Wellspring Capital to Take Penthouse at 605 Third Avenue", "Wellspring Capital Management taps $1.45bn Fund VI for Cadence Petroleum Group buyout", "SupplyOne Acquires Fellow Packaging Distributor Romanow Container", "Healthcare & Life Sciences Private Equity Deal Tracker: Wellspring Acquires Pentec Health", https://en.wikipedia.org/w/index.php?title=Wellspring_Capital_Management&oldid=1118006247, This page was last edited on 24 October 2022, at 18:15. 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. The Court further notes that here, section 548 is not available to the plaintiff due to the timing of the transfers and the bankruptcy filings. Middle Market Private Equity. In 2010, Bain Capital acquired the company for US$1.8 billion. 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. ~p03ngx1Ai63*oP 4TP3Nt'xn0R8tJ'a7D2P6ILky6L;0;0SUNrtd t ";Qb[K-Ii 1g%\i) IZ3uAH0J40v0xt0v40Xt8 y CJ3t@y`$21kL The issue in Merritt Dredging was the sale of a barge and the priority of parties' interests in the proceeds of the sale. 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. REGISTRATION STATUS . 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. King County, 863 F. Supp.2d at 318. Angel, Fund of Funds, Venture Capital), General contact email for the organization. from 8 AM - 9 PM ET. Oct. 14, 2021) (Stickles, J.) The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. The plaintiff's third cause of action, for negligent misrepresentation against defendants Wellspring Capital, Mr. Carles, and Mr. Johnson, must also be dismissed. At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners 92], Todd Boehly [Docket No. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. 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 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. 987, 999-1000 (Bankr. 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 WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. 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. 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. They are simply not statements of preexisting fact that were false when made. July 5, 2017). Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. 1001 to 5000 Employees. Please see our Privacy Policy. 1996)). The company will explode Rich!" Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . Their most recent acquisition was Caring Brands International on Oct 25, 2021. EFFECTIVE DATE; SEC: Terminated: 3/2/2007: your most valuable capital, your ultimate resource. at 382. Id. 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. Wellsprings objective is to bring partnership, experience and value creation to each investment. This article about a private equity or venture capital firm based in the United States is a stub. At Wellspring we pride ourselves on client service. 2005)). In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. It identifies undervalued companies whose share price does not properly reflect the true value of the business. 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. In June 2017, Gymboree announced it was filing for Chapter 11 bankruptcy protection. Law360 takes your privacy seriously. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. 1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. 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"). 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. 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. Federal Rule of Bankruptcy Procedure 7012(b). Id. 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. Salaries posted anonymously by Wellspring Capital Management employees. The origins of Wellspring Philanthropic Fund are shrouded. 962 0 obj <>stream All business will get complaints. For example, the October 27, 2017 email stated, "The only way to optimize is to merge with Acusport." 3d 473, 506 (S.D.N.Y. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. 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." The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 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. & Loan Ass'n v. Hirschfeld, 476 N.Y.S.2d 292 (N.Y. App. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through . Over the past 20 years, Wellspring has invested in over 35 platform investments across . Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. 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? Revenue: $500 million to $1 billion (USD) Competitors: Unknown. Another email stated, in part: "Gotta get your interest? 2021 by wellspring capital Management. 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. 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. 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. Todd Boehly filed a joinder to the Wellspring Defendants' motion to dismiss. Wellspring also rejected in cursory fashion the defendants argument that it is not necessarily a breach . 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. UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy.

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