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. The February 20, 2018 stated, "You're [sic] economics are going down and the risk of chapter is going up. v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. The company will explode Rich!" Wall Street tycoon takes leave of absence after lawsuit claims his son 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. [Amended Complaint, 93]. 0 Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. .JFY+h!Hkw;s"$ 4AuF~!D =j]4z*g7i>B 1NEDm @@,!ptz"Br}-rh>wI }9.&>5/n2n/OefX 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 . Judge opens door for bankruptcy blame suits - Axios hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h 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. The firm's objective is to bring partnership, experience and value creation to each investment. Jan. 25, 2016) (alteration original). D.S.C. Menu Home; Rankings. Investment adviser | Wellspring Capital Management Ltd | M25 0FX Full title:Ronald J. Friedman, as the trustee for the SportCo Creditors' Liquidation, Court:UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. 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. In Sheldon, the defendant, a New York citizen, assigned some personal property to Mr. Dickinson. Friedman v. Wellspring Capital Mgmt. (In re Sportco Holdings) Accordingly, SportCo began negotiations with certain of its lenders around a potential restructuring transaction. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: This site is for informational purposes only. Id. Reputation Management. Wellspring Capital Management Acquires Cadence Petroleum Group Mar 19, 2019 New York private equity firm Wellspring Capital Management said Monday it has acquired Center for Diagnostic Imaging, a Minneapolis-based operator of MRI and CT scanners that. 2021 by wellspring capital Management. In June 2017, Gymboree announced it was filing for Chapter 11 bankruptcy protection. Practices: 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. 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 Defendant Bernard Ziomek is in default in this matter. Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: https://www.wellspringcapital.co.uk/disclaimer. 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. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. Lawsuit: Wellspring CEO Told - Institutional Investor Please see our Privacy Policy. Investments Number of Investments 2 Wellspring Capital Management has made 2 investments. Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. 70% of dealmakers say that investment managers share culpability for The defendants' motions to dismiss are granted. [Amended Complaint, 57]. The parties disagree on what law should applyfederal or state, and further if state law applies, New York or South Carolina. Christopher Dawson: 5 Fast Facts You Need to Know - Heavy The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. Financial terms of the transaction were not disclosed. Seth Pearson - Managing Director - Private Equity - York Capital 2007) (citations omitted). Wellspring Capital Management Company Profile | Management and REGISTRATION STATUS. The firm functions as a strategic rather than tactical partner, providing management teams with top-line support, M&A experience and financial expertise, and access to resources. Wellspring CEO Takes Leave After Son Accused of Rape in Lawsuit [Amended Complaint, 51]. Wellspring Capital manages an investment portfolio of between 10 and 15 international stocks. California Weighs $360,000 in Reparations to Eligible Black Residents. 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." A customer lawsuit filed earlier this month against Sequoia, Paradigm, and Thoma Bravo, alleges these funds gave an "air of legitimacy" to FTX andvia their hundreds of millions in funding and. 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. San Francisco Bay Area, Silicon Valley), Operating Status of Organization e.g. Wellspring Capital Management is a middle-market private equity firm that has approximately $2 billion of private equity. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Posted By: Imright , 3/3/2023 9:31:52 PM. 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 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. . ~p03ngx1Ai63*oP 4TP3Nt'xn0R8tJ'a7D2P6ILky6L;0;0SUNrtd t ";Qb[K-Ii 1g%\i) IZ3uAH0J40v0xt0v40Xt8 y CJ3t@y`$21kL We work with successful motivated individuals to help them achieve their investment and wealth management objectives. Wellspring Capital Management Salaries - Glassdoor The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . The defendants argue that this cause of action must be dismissed because the alleged misrepresentations were forward-looking statements and opinions; therefore, they are not actionable and cannot form the basis for a negligent misrepresentation cause of action. 22-2003, 2023 WL 1098189 (3d Cir. . Wellspring Capital Acquires Caring Brands International Consumers want to see how a business took care of business. The elements of a negligent misrepresentation claim under New York law are: The plaintiff also cites King County, Washington v. IKB Deutsche Industriebank, 863 F. Supp. Wellspring Capital Management - Investments, Portfolio & Company Exits [Amended Complaint, 54]. Please Update this case to get latest docket information. 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. SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. 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. A finding that Prospect is a preexisting creditor compels the same result. Why is this public record being published online? Id. 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. 609, 614 (Bankr. Public Records Policy. WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. Angel, Fund of Funds, Venture Capital), General contact email for the organization. Wellspring partners with highly qualified and motivated senior management teams, actively working together to unlock a companys potential by providing ongoing financial, strategic and operational support. Wellspring Capital Management LLC - Company Profile and News 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). your most valuable capital, your ultimate resource. 3d 473, 506 (S.D.N.Y. Under either New York or South Carolina law, the plaintiff's third cause of action for negligent misrepresentation fails to state a claim for which relief can be granted. 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. 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. The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. 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. CDI's smaller Atlanta peer said to weigh sale in '18. 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. Flipbooks. Oct. 14, 2021) (Stickles, J.) Prior results do not guarantee a similar outcome. Id. But Wellspring would arguably undermine the ability to negotiate for what are customary and, indeed, necessary protections for corporate decisionmakers in those same transactions, such as releases, indemnity, or exculpation. Wellspring Sues Insurers To Fight Claims It Tanked Gun Seller THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. Sec'y of State for Def. For example, the October 27, 2017 email stated, "The only way to optimize is to merge with Acusport." Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . We look forward to hearing from you. Copyright 2023 Ropes & Gray LLP. See Scheidelman v. Henderson (In re Henderson), 423 B.R. IAPD - Investment Adviser Public Disclosure - Homepage Even California Democrats don't want Newsom to run for president 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. Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . Make your practice more effective and efficient with Casetexts legal research suite. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through . 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. 19.)1. An outside law firm will assist with the probe to determine the validity of these reports, which allege behavior that is not only shocking but completely inconsistent with our corporate values and standards., Family calls complaint pure fiction intended as a shakedown, Dawson steps away from firm to spend time with his family. 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. 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. 101 (32). Wellspring Capital Management, LLC; Wellspring Cap. Haynsworth Sinkler Boyd, P.A. 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. at 613-14. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 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. 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. About Us - Wellspring Capital Fund VI brings the firm's assets under management to more . The court considered whether the plaintiff had proved the tort of innocent misrepresentation. 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. hXO8WtVH,~W"I/ {;N7'0HAA0%`Ih5L!p! Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of Dawson's threats, according to an internal memo. In April 2018, Prospect agreed to defer two quarters of cash interest payments. 544 and 550 and S.C. Code 27-23-10; and (3) negligent misrepresentations against Wellspring Capital, Mr. Carles, and Mr. Johnson. Certain state securities regulatory authorities have similar exemptions based on . Aug. 27, 2020). Wellspring Capital - Middle Market Private Equity View Videos. All business will get complaints. They are not actionable. 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. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. Munich | Germany, History, Population, Oktoberfest, & Facts - Britannica Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States Business Restructuring, There are different definitions of insolvency. 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. Wellspring Capital Management LLC - Dun & Bradstreet Finally, in West Side Fed. The firm functions as a strategic rather than tactical partner, providing management teams with top-line support, M&A experience and financial expertise, and access to resources. Wellspring Philanthropic: An Ocean of "Dark Money" on the Left Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. hb```e``jb`a`\ @1V h`2q:lp10qfaqB,X3s10iH(^t1 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. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. 987, 999-1000 (Bankr. When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. Wellspring Capital Management | LinkedIn 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. There are no allegations in the amended complaint that the debtors' liabilities exceeded their assets at the time of the transfers. Wellspring CEO takes leave after explosive rape allegations against his It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. Type: Company - Private. The middle-market private equity firm invests in companies with strong business . 112]. Id. Use tab to navigate through the menu items. 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. They were not statements of presently existing fact. Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. The portfolio manager is also a co-investor in the strategy. 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. 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. 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 plaintiff, Ronald J. Friedman, the trustee for the SportCo Creditors' Liquidation Trust, filed an omnibus response to the motions to dismiss [Docket No. Trump legal team requests six-month delay in New York civil lawsuit PDF Wellspring CEO Takes Leave After Son Accused of Rape in Lawsuit %%EOF Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. Revenue: $500 million to $1 billion (USD) Competitors: Unknown. The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. Litigation. 930 0 obj <>/Filter/FlateDecode/ID[<6781EE974E7B2C4D9274E8F359D28E60>]/Index[915 48]/Info 914 0 R/Length 80/Prev 600062/Root 916 0 R/Size 963/Type/XRef/W[1 2 1]>>stream The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). The defendants' remaining arguments need not be addressed. 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." It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. Password (at least 8 characters required). Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. 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. The. 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." wikipedia.en/Vatterott_College.md at main chinapedia/wikipedia.en Wellspring Capital Management LLC operates as a private equity firm. 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. 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. Investment Philosophy; Target Investments; Portfolio The Wellspring ruling was not appealed, nor has any trial occurred on this matter. Their most recent acquisition was Caring Brands International on Oct 25, 2021. The defendants filed separate motions. These emails may be a lot of things, but negligent misrepresentations they are not. 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. January 12, 2022 Wellspring Capital Exits Strategic Investment in Great Lakes Caring 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). 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." Mr. Friedman was substituted as the plaintiff on January 10, 2020. The court addressed the dissent's finding, that the defendant's determination of the number of parking spaces was a matter of judgment or opinion and was therefore unactionable. 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. 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. W.D. Probitas Partners acted as exclusive placement agent and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel with respect to formation of Fund VI. 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. 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. Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 Broker-Dealers Business & Commercial Litigation Business Restructuring California Consumer Privacy Act Capital Markets Capital Solutions & Private Credit Charitable Foundations China Life Sciences Committee on Foreign Investment in the United States (CFIUS) Consumer Protection and Advertising Law Corporate & Securities Litigation 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. 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.