[Amended Complaint, 93]. 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. The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. They are not actionable. Our tight-knit culture enables transparent oversight and a streamlined decision-making process. The court considered whether the plaintiff had proved the tort of innocent misrepresentation. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. 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. 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. As part of the debt management process, it said it would close 375 of its 1,300 stores. Investment Philosophy; Target Investments; Portfolio 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. These emails may be a lot of things, but negligent misrepresentations they are not. Prospect is a sophisticated party and, to the extent that it wanted to confirm the predictions made by Mr. Carles and Mr. Johnson were in fact accurate, it could have exercised due diligence. 915 0 obj <> endobj Fed. Wellsprings facts, as alleged, are fairly straightforward. 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. The amended complaint further states that from October 2012 to October 2013, "Ellett achieved record sales and earned revenues of approximately $1.2 billion." 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. 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 Wellspring court was ruling on a motion to dismiss, and therefore accepted the plaintiffs somewhat barebones and perhaps self serving assertions as true and in the light most favorable to that plaintiff. 2022 Wellspring Capital Management Group LLC |. Federal Rule of Bankruptcy Procedure 7012(b) provides that Federal Rule of Civil Procedure 12(b) applies in adversary proceedings. On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. Ellett used $54,860,549.74 of the First Amendment loan proceeds to fund distributions to the Transferee Defendants. The plaintiff's first and second causes of action both assert claims for fraudulent conveyances pursuant to 544(b) and S.C. Code 27-23-10. 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. Va. Mar. UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy. Find More Contacts for Wellspring Capital Management, Edit Lists Featuring This Company Section, European Regulation Ushers In Global Future For Fundraising, Wellspring Capital Management Acquires Caring Brands International, Private Equity Firms with Investments in United States, Greater New York Area Investors with Funds Raised in 2017, Private Equity Firms with Investments in Asia. New York law and South Carolina law differed as to whether such a transfer was permitted. January 12, 2022 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. 541, 546 (Bankr. 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. 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. CDI's smaller Atlanta peer said to weigh sale in '18. from 8 AM - 9 PM ET. They were not statements of presently existing fact. 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 a mega-sized private equity firm that focused on a variety of transaction situations. After the defendants filed replies, the Court held a hearing on June 18, 2020. Wellsprings objective is to bring partnership, experience and value creation to each investment. The middle-market private equity firm invests in companies with strong business . WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. 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. Attorney advertising. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: https://www.wellspringcapital.co.uk/disclaimer. The amended complaint asserts three causes of action: (1) avoidance and recovery of fraudulent transfers by Ellett against the Transferee Defendants pursuant to 11 U.S.C. 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 [. The origins of Wellspring Philanthropic Fund are shrouded. 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. 19.)1. [cV3ljHkT/bx @A,20p1 ks In the legal profession, information is the key to success. 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. Certain state securities regulatory authorities have similar exemptions based on . 8h`6$67Xn@,`& Ashmore for Wilson v. Dodds, 262 F. Supp. Todd Boehly filed a joinder to the Wellspring Defendants' motion to dismiss. 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. Id. Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. My company, Asia Marketing and Management, has global ambitions but consists largely of me and the intelligence, experience, contacts, and per-sonality I bring to my clients . The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. Particularly where negotiations may involve releases, indemnification, or similar provisions, be advised that the ever-present tendency for counterparties to exercise 20/20 hindsight is fully in effect. The defendants asserted common arguments in support of dismissal, but all arguments made in support of dismissal were not asserted by each defendant. 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. See Sheehan v. Saoud, 650 Fed. 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. 0 The plaintiff relies on the fact that Ellett was unable to pay the debt owed to Prospect at the time that it had to be paid in full; however, this is not the only relevant point in time. California Weighs $360,000 in Reparations to Eligible Black Residents. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. These are high quality companies, essential to the national, regional, or global economy but whose fundamental qualities are underappreciated and undervalued by the market. hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h [Amended Complaint, 37, 40]. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. The December 26, 2017 email stated, "So you will waive [your interest payments]. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . 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. 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. Litigation. There are also no allegations concerning expenses. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. 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. In 2010, Bain Capital acquired the company for US$1.8 billion. 'Ov}b0. %%EOF 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." 112]. Id. 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. The Court also notes that, setting the other factors aside, given the extreme nature of the urgent tone of these emails, and the highly sophisticated status of Prospect, Prospect satisfying the justifiable reliance element of a negligent misrepresentation claim is questionable, at best. On May 3, 2018, SportCo agreed to acquire AcuSport's assets in bankruptcy for $7 million. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. 1999)). The defendants argue that as a subsequent creditor, Prospect is required to plead actual fraud, and the amended complaint fails to do so. 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 adviser's REGISTRATION status is listed below. Adversary Proceeding No. 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. It identifies undervalued companies whose share price does not properly reflect the true value of the business. Wellspring, 2021 WL 4823513, at *10. [Amended Complaint, 51]. 91], Andrew Kupchik [Docket No. 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 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. 1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. Angel, Fund of Funds, Venture Capital), This describes the stage of investments made by this organization (e.g. We have interesting videos for you to watch on my site. Please see our Privacy Policy. 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. Note: This site is for informational purposes only. Business Restructuring, 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. Id. endstream endobj startxref Therefore, the plaintiff argues that he is only required to establish constructive fraud. 6. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. 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. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. articles a month for anyone to read, even non-subscribers! In Sheldon, the defendant, a New York citizen, assigned some personal property to Mr. Dickinson. 91], F. Hewitt Grant [Docket No. at 382. We are taking this matter very seriously, and have launched an immediate internal investigation, Jeffrey Gould, Wellsprings head of marketing and investor relations, told investors last week in a note seen by Bloomberg News. N.D.N.Y. Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . Active, Closed, This describes the type of investor this organization is (e.g. Id. By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, Id. 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. The plaintiff, Ronald J. Friedman, the trustee for the SportCo Creditors' Liquidation Trust, filed an omnibus response to the motions to dismiss [Docket No. Probitas Partners acted as exclusive placement agent and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel with respect to formation of Fund VI. 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. Copyright 2023 Ropes & Gray LLP. The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . Total number of employee profiles an organization has on Crunchbase, Total number of Crunchbase contacts associated with this organization, Descriptive keyword for an Organization (e.g. In fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. 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. 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 Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. Id. The firms objective is to bring partnership, experience and value creation to each investment. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . . 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. EFFECTIVE DATE; SEC: Terminated: 3/2/2007: 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. Will His AI Plans Be Any Different? Designed By, https://www.wellspringcapital.co.uk/disclaimer. 1001 to 5000 Employees. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. By teaming up with strong management, Wellspring seeks to unlock underlying value and pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. Please see our Privacy Policy. 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. 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. Their most recent acquisition was Caring Brands International on Oct 25, 2021. Wellspring Capital Management is a middle-market private equity firm that has approximately $2 billion of private equity. Posted By: Imright , 3/3/2023 9:31:52 PM. You can help Wikipedia by expanding it. Will Others Follow? 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. 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. Id. 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. 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. 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 choice of law provision in the Loan Agreements states: In October 2017, Wellspring Capital was contemplating a purchase of AcuSport, a competitor, by Ellett, for $14.8 million. By teaming up with strong management, Wellspring is able to unlock underlying value and. 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. However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. 2021 by wellspring capital Management. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. They are simply not statements of preexisting fact that were false when made. Try our Advanced Search for more refined results. San Francisco Bay Area, Silicon Valley), Operating Status of Organization e.g. Id. 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. Already a subscriber? Defendant Bernard Ziomek is in default in this matter. 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. At the conclusion of the hearing, the Court took the motions under advisement. These emails can hardly be considered negligent misrepresentations. If you do not agree with these terms, then do not use our website and/or services. Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir. 1988) (adopting rule from Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487 (1941) stating that a federal court sitting in diversity should apply the choice of law rules of the state in which it sits). hXO8WtVH,~W"I/ {;N7'0HAA0%`Ih5L!p! The third cause of action asserts that those parties "made numerous representations to Prospect concerning the AcuSport Purchase, including that the purchase would allow the Debtors to acquire $14 million worth of AcuSport inventory at a substantial discount; that it would result in the Debtors' immediate realization of a $7 million profit on the sale of the AcuSport inventory so purchased; and that it would result in the Debtors' capturing 20% to 30% of AcuSport sales." The alleged statements simply do not constitute actionable statements that can form the basis of a negligent misrepresentation claim. New York law regarding third party beneficiaries provides: With respect to South Carolina's choice of law analysis, South Carolina conflict of law principles provide that "the substantive law governing a tort action is determined by the state in which the injury occurred." 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. Full title:Ronald J. Friedman, as the trustee for the SportCo Creditors' Liquidation, Court:UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. You can review interesting Flipbooks on my site. Munich, by far the largest city in southern Germany, lies about 30 miles (50 km) north of the edge of the Alps and along the Isar River, which flows through the middle . 2009). 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. SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. Finally, in West Side Fed. D. Del. Most of them do not even contain any concrete information about the proposed AcuSport purchase or the likelihood of the Borrowers' default. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. However, the garage actually had only 402 parking spaces. View Videos. Wellspring Capital Management is a leading private equity firm headquartered in New York. 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.