wellspring capital management lawsuit

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. Make your practice more effective and efficient with Casetexts legal research suite. Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. 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. 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. Wellspring Capital and the D&O Defendants grossly and recklessly mismanaged the business and carried out their respective roles in a manner that was devoid of reasonable inquiry and diligence in dereliction of their fiduciary duties to Prospect as a creditor of the increasingly insolvent enterprise. The assignment was executed in New York, but the personal property was located in South Carolina at the time the assignment was executed. In considering whether to grant a motion to dismiss under Rule 12(b)(6), the court may take judicial notice of matters of public record and may consider documents attached to the complaint and the motion to dismiss, "so long as they are integral to the complaint and authentic." Investments Number of Investments 2 Wellspring Capital Management has made 2 investments. at *3 (quoting In re Sharp Int'l Corp., 403 F.3d 43, 53 (2d Cir. 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." UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. After all, corporate decisionmakers are often tasked with choosing a path where outcomes are at best uncertain. Financial terms of the transaction were not disclosed. 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. Therefore, the plaintiff argues that he is only required to establish constructive fraud. Wellspring, founded in 1995, has raised more than $4 billion of capital commitments through six private equity funds, according to its website. Wellspring Capital, Mr. Carles, and Mr. Johnson were not insiders of AcuSport, and the amended complaint does not allege that they had any special knowledge or information about AcuSport that was not available to the public. W.D. Reputation Management. 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. Consumers want to see how a business took care of business. Id. In the legal profession, information is the key to success. 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. 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. 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. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. [Amended Complaint, 31]. 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. Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. . 915 0 obj <> endobj v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. Amazon Pauses Construction on Second Headquarters in Virginia as It Cuts Jobs, Amazon Is Closing Its Cashierless Stores in NYC, San Francisco and Seattle, iPhone Maker Plans $700 Million India Plant in Shift From China, Stock Traders Are Ignoring Blaring Bond Alarms, S&P 500 Notches Best Week Since Late January: Markets Wrap. Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . 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. 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. [Amended Complaint, 54]. Tex. 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. 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. Follow along as he lays out the blueprint for his career, and takes us all the way from his first sketch to his thriving personal brand, Spunge. It identifies undervalued companies whose share price does not properly reflect the true value of the business. At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners The middle-market private equity firm invests in companies with strong business . After the defendants filed replies, the Court held a hearing on June 18, 2020. Federal Rule of Bankruptcy Procedure 7012(b). Brought up in a family enjoying long-term success in real estate investment, Avrohom instead turned to the stock market. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. At the conclusion of the hearing, the Court took the motions under advisement. Because the Court dismisses the complaint as to all other defendants, the Court sua sponte dismisses the causes of action against Mr. Ziomek as well. PLEASE NOTE: A verification email will be sent to your address before you can access your trial. 1999)). Posted By: Imright , 3/3/2023 9:31:52 PM. 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. "[F]or purposes of Rule 12(b)(6), '[the court is] not required to accept as true the legal conclusions set forth in a plaintiff's complaint.'" This preference is a result of the Firms differentiated and conservative approach to leverage, in addition to a transparent oversight model, which is driven by our small group of senior professionals and absence of bureaucracy. On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. 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. 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. 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. The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. 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. There are also no allegations concerning expenses. 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. 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." [cV3ljHkT/bx @A,20p1 ks Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. 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. R. Civ. 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. 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. The plaintiff responds that Prospect is a preexisting creditor because the distributions were not made until after Prospect became a creditor when the Loan Agreements and the Amendments were signed. Wellspring Capital Management Fund Manager Website www.wellspringcapital.com Fund Category Private Equity Close Date 0000-00-00 Fund Family Wellspring Capital Partners Native Currency USD Fund Manager's Location 605 Third Avenue 44th Floor New York, NY 10158 United States +1 (212) 000-0000 Fund Domiciles Canada The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. S.D. Founded in 1995, Wellspring Capital Management is a private equity firm headquartered in New York, New York. Exempt Reporting Advisers ("ERA") are investment advisers that are not required to register as investment advisers because they rely on certain exemptions from registration under sections 203 (l) and 203 (m) of the Investment Advisers Act of 1940 and related rules. 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. A litigation trust formed through the SportCo bankruptcy then sued, among others, SportCos former directors and its equity sponsor. The firm's objective is to bring partnership, experience and value creation to each investment. 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. 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. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through . In April 2018, Prospect agreed to defer two quarters of cash interest payments. Designed By, https://www.wellspringcapital.co.uk/disclaimer. Jan. 25, 2016) (alteration original). Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 About Wellspring Capital Management Wellspring Capital Management is a leading private equity firm headquartered in New York. Public Records Policy. Va. Mar. However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. The Loan Agreements and the First and Second Amendments each contain a choice of law provision, providing that New York law applies. 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. 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? Finally, in West Side Fed. 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. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. Phone: 650 729-8626. Founded in 1995, Wellspring invests anywhere . Password (at least 8 characters required). It identifies undervalued companies whose share price does not properly reflect the true value of the business. Wellspring Capital Management is a middle-market private equity firm that has approximately $2 billion of private equity. Id. 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. In Cyrus II, the court also acknowledged that the Fourth Circuit has found otherwise and determined that state choice of law rules should be used in bankruptcy cases. When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. 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 Mr. Friedman filed an amended complaint the same day. 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. 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"). Id. Crazy 8 was started in August 2007. your most valuable capital, your ultimate resource. Todd Boehly filed a joinder to the Wellspring Defendants' motion to dismiss. endstream endobj startxref [Amended Complaint, 93]. P. 12(b)(6). Whether youre building capital for your family, retirement or other life goals, we can help you with our high conviction and disciplined investment style. to hinder, delay, or defraud either present or future creditors." Wellsprings investment professionals possess diverse and complementary backgrounds that combine valuable experience in private equity, restructuring, corporate finance, capital markets and corporate law. WELLSPRING CAPITAL MANAGEMENT, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. Use tab to navigate through the menu items. [Amended Complaint, 57]. All rights reserved. Wellspring partners with highly qualified and motivated senior management teams, actively working together to unlock a companys potential by providing ongoing financial, strategic and operational support. Type: Company - Private. The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. .JFY+h!Hkw;s"$ 4AuF~!D =j]4z*g7i>B 1NEDm @@,!ptz"Br}-rh>wI }9.&>5/n2n/OefX at 382. 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. SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. Defendant Bernard Ziomek is in default in this matter. And the best part of all, documents in their CrowdSourced Library are FREE. 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. 3d 473, 506 (S.D.N.Y. REGISTRATION STATUS . Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. These emails may be a lot of things, but negligent misrepresentations they are not. Will Others Follow? 598, 614 (Bankr. Contribute to chinapedia/wikipedia.en development by creating an account on GitHub. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. 89], Charles E. Walker, Jr. [Docket No. D. Del. Wellspring Capital Management is a leading private equity firm headquartered in New York. The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. 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. Importantly, however, the Wellspring court declined to dismiss the litigation trusts duty of loyalty claim, stating on a cursory basis that Drawing all inferences in favor of the Trustee, the Complaint contains sufficient allegations that the D&O Defendants breached their duty of loyalty regarding the Failed Out of Court Restructuring. Id. ), Create custom alerts for specific article and case topics and, I took a free trial but didn't get a verification email. 1996)). The case status is Pending - Other Pending. Many of the facts underlying the Wellspring decision are neither unique nor unusual. (quoting Bell Atl. Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. The firm's objective is to . 85]. ~p03ngx1Ai63*oP 4TP3Nt'xn0R8tJ'a7D2P6ILky6L;0;0SUNrtd t ";Qb[K-Ii 1g%\i) IZ3uAH0J40v0xt0v40Xt8 y CJ3t@y`$21kL 91], Andrew Kupchik [Docket No. The. 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. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. . For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. Flipbooks. The Court now issues this order, granting the motions to dismiss for the reasons set forth below. Charles E. Walker, Jr. argued in support of dismissal due to lack of a triggering creditor based on Prospect's secured status, failure to state a claim under New York law due to lack of insolvency, on equity grounds because Prospect failed to obtain a personal guaranty from Mr. Walker and because the distributions were specifically contemplated by the loan transaction, and due to failure to state a claim for fraudulent conveyance under South Carolina law. 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. 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. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. The plaintiff, however, asserts that federal conflict of law principles should govern what state's law applies in this case, because "[a] claim under 544(b) incorporates 'applicable law,' but it is a claim under federal law with a substantive federal law recovery scheme." 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). 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. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 19-80071-DD (Bankr. 112]. July 5, 2017). 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. They were not statements of presently existing fact. By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, SaaS, Android, Cloud Computing, Medical Device), Where the organization is headquartered (e.g. See Scheidelman v. Henderson (In re Henderson), 423 B.R. See Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. Wellspring has earned the reputation as a trusted, reliable partner and is often the preferred partner of a portfolio companys senior management team. The Court addresses in this order only those arguments that clearly mandate dismissal. Try our Advanced Search for more refined results. New York law and South Carolina law differed as to whether such a transfer was permitted. . Wellspring brought its assets under management to more than $4.4 billion as of January 2018. The court considered whether the plaintiff had proved the tort of innocent misrepresentation. 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." 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. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. Id. 'Ov}b0. Most of them do not even contain any concrete information about the proposed AcuSport purchase or the likelihood of the Borrowers' default. 6. 2005)). hb```e``jb`a`\ @1V h`2q:lp10qfaqB,X3s10iH(^t1 The court considered whether inaccurate credit ratings can form the basis for a negligent misrepresentation claim. 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. For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. Wellspring Capital Management is a leading private equity firm headquartered in New York. 1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. 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. Law360 provides the intelligence you need to remain an expert and beat the competition. The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. . Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. The defendants filed separate motions. The principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. Investment Philosophy; Target Investments; Portfolio The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. [Amended Complaint, 37, 40]. Id. 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. EFFECTIVE DATE; SEC: Terminated: 3/2/2007: As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. Investment Approach Target Investments Wellspring's objective is to acquire or invest in companies that are well-positioned to capitalize on change and can benefit from Wellspring's operating and financial expertise. The firm's objective is to bring partnership, experience and value creation to each investment. 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 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.

Bt Field Engineer Salary, How Can I Tell If I Smell Like Alcohol, Articles W