Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. & Loan Ass'n of New York City, the plaintiff loaned funds to the defendant, secured by a mortgage on a parking garage. Litigation. with actual intent . It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. 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. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. Wellspring Capital Management LLC operates as a private equity firm. 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. to hinder, delay, or defraud either present or future creditors." 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. v. Holmes (In re Holmes), 610 B.R. 92], Todd Boehly [Docket No. All rights reserved. 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. As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. Fund VI brings the firm's assets under management to more than $4.4 billion. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. 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. 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 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. Crazy 8 was started in August 2007. In fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. 2009). 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. Otherwise you cannot get paid." Another email stated, in part: "Gotta get your interest? Type: Company - Private. Our tight-knit culture enables transparent oversight and a streamlined decision-making process. Your livelihoodand your sanitydepend . The firm's objective is to . 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. (quoting Bell Atl. Designed By BM Designs. The firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . 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. SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. Wellspring CEO Bill Dawson is taking a leave of absence, the firm said Tuesday Last week a shocking lawsuit was filed against his son Christopher It claims he drugged and violently raped and. Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. articles a month for anyone to read, even non-subscribers! (Wellspring). After the defendants filed replies, the Court held a hearing on June 18, 2020. Id. [Amended Complaint, 32]. endstream
endobj
startxref
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. ~p03ngx1Ai63*oP 4TP3Nt'xn0R8tJ'a7D2P6ILky6L;0;0SUNrtd t
";Qb[K-Ii 1g%\i) IZ3uAH0J40v0xt0v40Xt8 y CJ3t@y`$21kL However, the garage actually had only 402 parking spaces. 19.)1. When typing in this field, a list of search results will appear and be automatically updated as you type. 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. 987, 999-1000 (Bankr. 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. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through . About Wellspring Capital Management Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $4.4 billion of private equity capital. PLEASE NOTE: A verification email will be sent to your address before you can access your trial. 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. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. 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. 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." These emails can hardly be considered negligent misrepresentations. Already a subscriber? Musk Made a Mess at Twitter. Wellspring Capital Management is a leading private equity firm headquartered in New York. Fed. Posted By: Imright , 3/3/2023 9:31:52 PM. By teaming up with strong management, Wellspring is able to unlock underlying value and. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. 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. 1991) (unpublished table decision). %%EOF
2022 Wellspring Capital Management Group LLC |. 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. Brought up in a family enjoying long-term success in real estate investment, Avrohom instead turned to the stock market. 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. UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. 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. 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. 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. Description. from 8 AM - 9 PM ET. 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. 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). Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. We are motivated and incentivised to succeed.
Consumers want to see how a business took care of business. 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. 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 [. (Compl. .JFY+h!Hkw;s"$
4AuF~!D =j]4z*g7i>B
1NEDm @@,!ptz"Br}-rh>wI
}9.&>5/n2n/OefX Salaries posted anonymously by Wellspring Capital Management employees. It is not unusual for an entity facing distress to engage with their stakeholders and to negotiate any number of transaction alternatives and terms. Menu Home; Rankings. To summarize New York law, then, it appears that opinions can be actionable, but are not always actionable. Wellspring Capital Management is a leading private equity firm headquartered in New York. They were not statements of presently existing fact. Prior results do not guarantee a similar outcome. You can help Wikipedia by expanding it. e""8*&B Public Records Policy. These are high quality companies, essential to the national, regional, or global economy but whose fundamental qualities are underappreciated and undervalued by the market. v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. The court stated that expressions of opinion are actionable under New York law, but further stated: New York courts have also stated that statements of "mere puffery", or "statements founded entirely on speculation concerning future profits from proposed business endeavors" are not actionable. [Amended Complaint, 49]. 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. 1999)). 2005)). $46H$DrGHi`0I"DE$"J(aH! The Wellspring ruling was not appealed, nor has any trial occurred on this matter. "); Terry v. Walker, 2006 WL 736861, at *5 (W.D. 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. . Wellspring Capital Management is a middle-market private equity financing firm. Tex. This article about a private equity or venture capital firm based in the United States is a stub. 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. The. Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. at 382. Todd Boehly filed a joinder to the Wellspring Defendants' motion to dismiss. 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. 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. 91], F. Hewitt Grant [Docket No. W.D. SportCo later filed a free fall bankruptcy and liquidatedallegedly causing substantial losses for unsecured creditors that would not have occurred had SportCo accepted that agreement in principle allegedly reached in December 2018. Aug. 27, 2020). 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. Asia Pacific; EMEA; Latin America; UK Solicitors; UK Bar; United States While New York law and South Carolina law have slightly different tests for avoiding constructive fraudulent conveyances, there exists a common thread which is not satisfied hereinsolvency at the time of the transfer. The plaintiff's first and second causes of action are based on 11 U.S.C. @S1 $82N+ZJ | 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. 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. Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. See Silvercreek Mgmt., Inc. v. Citigroup, Inc., 346 F. Supp. 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. 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. Wellspring, 2021 WL 4823513, at *10. 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 Angel, Fund of Funds, Venture Capital), General contact email for the organization. Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. Federal Rule of Bankruptcy Procedure 7012(b). If you do not agree with these terms, then do not use our website and/or services. New York law prohibits both actual and constructive fraudulent conveyances. 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. Id. See Sheehan v. Saoud, 650 Fed. As discussed in Cyrus II, the Fourth Circuit has stated that a bankruptcy court should apply the choice of law rules of the state in which it sits. 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. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. In Sheldon, the defendant, a New York citizen, assigned some personal property to Mr. Dickinson. 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. 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. 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. 1984) for the proposition that under New York law, opinions are actionable in a negligence context. Jan. 30, 2023). Wellspring Capital Management, LLC; Wellspring Cap. your most valuable capital, your ultimate resource. Div. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. [Amended Complaint, 93]. From October 2017 to April 2018, Mr. Carles and Mr. Johnson sent numerous emails to representatives of Prospect, attempting to induce Prospect to agree to forego exercising its rights in the event of a default. See Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. hb```e``jb`a`\ @1V h`2q:lp10qfaqB,X3s10iH(^t1 In an email obtained by . All business will get complaints. 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. The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. 1996)). Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. We look forward to hearing from you. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. 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. 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? Id. Wellsprings objective is to bring partnership, experience and value creation to each investment. 544 and 550 and S.C. Code 27-23-10; and (3) negligent misrepresentations against Wellspring Capital, Mr. Carles, and Mr. Johnson. Further, if the statement is solely a speculative prediction about some potential business venture or course of action being contemplated, it is not actionable. The court must construe the allegations in the complaint in the light most favorable to the plaintiff. 962 0 obj
<>stream
Id. 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. 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. CDI's smaller Atlanta peer said to weigh sale in '18. Wellspring brought its assets under management to more than $4.4 billion as of January 2018. A free inside look at Wellspring Capital Management salary trends based on 22 salaries wages for 17 jobs at Wellspring Capital Management. They are simply not statements of preexisting fact that were false when made. In Fall 2018, SportCo Holdings, Inc. (SportCo) was facing severe financial distress. The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. The court considered whether the plaintiff had proved the tort of innocent misrepresentation. In particular, the bankruptcy court held that the allegations failed to support a conclusion that the SportCo directors were somehow acting on an uninformed basis or that the rejection of the out-of-court restructuring was grossly negligent. Wellspring Capital is a boutique discretionary management service - with a portfolio positioned for high performance. King County, 863 F. Supp.2d at 318. Similarly, Merritt Dredging suggests that federal law would apply to a section 548 cause of action, but that state law should apply to fraudulent conveyance claims based on state law. The District Court discussed the South Carolina Supreme Court's decision in Sheldon v. Blauvelt, 29 S.C. 453 (1888). 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. 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. 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
Limited partners include leading pension funds, endowments, fund of funds and family offices from the U.S., Europe and Asia. 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 . at 385. The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going .