At the conclusion of the hearing, the Court took the motions under advisement. Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States San Francisco Bay Area, Silicon Valley), Operating Status of Organization e.g. A finding that Prospect is a preexisting creditor compels the same result. Type: Company - Private. When typing in this field, a list of search results will appear and be automatically updated as you type. 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." Id. In the legal profession, information is the key to success. On May 3, 2018, SportCo agreed to acquire AcuSport's assets in bankruptcy for $7 million. The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. 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. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. The amended complaint further states that from October 2012 to October 2013, "Ellett achieved record sales and earned revenues of approximately $1.2 billion." 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. Designed By, https://www.wellspringcapital.co.uk/disclaimer. Will His AI Plans Be Any Different? Sav. 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." The District Court discussed the South Carolina Supreme Court's decision in Sheldon v. Blauvelt, 29 S.C. 453 (1888). When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. 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." 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. SEC / JURISDICTION. 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. Why is this public record being published online? The defendants filed separate motions. The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. 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. Jan. 25, 2016) (alteration original). July 5, 2017). 19-80071-DD (Bankr. 2100 Geng Road, Suite 210 Palo Alto, CA 94303. Their most recent investment was on Jan 1, 2020, when Steele Solutions raised (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, The Court addresses in this order only those arguments that clearly mandate dismissal. See Silvercreek Mgmt., Inc. v. Citigroup, Inc., 346 F. Supp. D.S.C. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. We have interesting videos for you to watch on my site. The court considered whether the plaintiff had proved the tort of innocent misrepresentation. Tenn. 1991); 11 U.S.C. PLEASE NOTE: A verification email will be sent to your address before you can access your trial. 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. The firm's objective is to bring partnership, experience and value creation to each investment. WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. The firm's objective is to bring partnership, experience and value creation to each investment. 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. 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. The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . 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. The court must construe the allegations in the complaint in the light most favorable to the plaintiff. The case status is Pending - Other Pending. All business will get complaints. at 382. 2005)). 544(b). And the best part of all, documents in their CrowdSourced Library are FREE. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. R. Civ. at 382. 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. See Sheehan v. Saoud, 650 Fed. 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"). [Amended Complaint, 31]. 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." Wellspring also rejected in cursory fashion the defendants argument that it is not necessarily a breach . Federal Rule of Bankruptcy Procedure 7012(b). 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. Wellspring Capital Management has acquired 38 organizations. At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners These emails may be a lot of things, but negligent misrepresentations they are not. In fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. 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. Designed By BM Designs. In June 2017, Gymboree announced it was filing for Chapter 11 bankruptcy protection. 90], Alexander E. Carles [Docket No. See Scheidelman v. Henderson (In re Henderson), 423 B.R. These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. They are not actionable. 962 0 obj <>stream 1001 to 5000 Employees. By teaming up with strong management, Wellspring is able to unlock underlying value and 2d 520, 529 n.14 (E.D. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: This site is for informational purposes only. 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. ~p03ngx1Ai63*oP 4TP3Nt'xn0R8tJ'a7D2P6ILky6L;0;0SUNrtd t ";Qb[K-Ii 1g%\i) IZ3uAH0J40v0xt0v40Xt8 y CJ3t@y`$21kL Fund VI brings the firm's assets under management to more . [Amended Complaint, 57]. 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. [Amended Complaint, 54]. Cases involving other matters not classified elsewhere, 890, 1890, 1990, 2890, 2899, 2999, 3375, 3890, 3896, 3899, 3999, 4890, 4896, 4999, Wellspring Capital Management, LLC; Wellspring Cap v. Barry, III et al. The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. Another email stated, in part: "Gotta get your interest? . Id. 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. It is not unusual for an entity facing distress to engage with their stakeholders and to negotiate any number of transaction alternatives and terms. The portfolio manager is also a co-investor in the strategy. 1984) for the proposition that under New York law, opinions are actionable in a negligence context. We look forward to hearing from you. your most valuable capital, your ultimate resource. Ellett used $54,860,549.74 of the First Amendment loan proceeds to fund distributions to the Transferee Defendants. Reputation Management. 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. Whether youre building capital for your family, retirement or other life goals, we can help you with our high conviction and disciplined investment style. D. Del. 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 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. Law360 provides the intelligence you need to remain an expert and beat the competition. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. 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. 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. Wellspring brought its assets under management to more than $4.4 billion as of January 2018. W.D. All rights reserved. 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. 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. Id. Law360 takes your privacy seriously. Mr. Friedman was substituted as the plaintiff on January 10, 2020. Wellspring Capital Management is a leading private equity firm headquartered in New York. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. 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. For example, the October 27, 2017 email stated, "The only way to optimize is to merge with Acusport." 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. Please see our Privacy Policy. 112]. 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. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. Sounds like a tidy deal at year end [2017] made a lot of sense." 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. Id. 541, 546 (Bankr. 22-2003, 2023 WL 1098189 (3d Cir. 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. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. Wellsprings objective is to bring partnership, experience and value creation to each investment. These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. Public Records Policy. Salaries posted anonymously by Wellspring Capital Management employees. 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. 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 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. Founded in 1995, Wellspring invests anywhere . The defendants' motions to dismiss are granted. 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? The February 20, 2018 stated, "You're [sic] economics are going down and the risk of chapter is going up. In early 2018, Wellspring Capital notified SportCo's secured lenders that SportCo would default on a $4.7 million interest payment due in the second quarter of 2018. As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. David R. Duncan US Bankruptcy Judge District of South Carolina. As part of the debt management process, it said it would close 375 of its 1,300 stores. Crazy 8 was started in August 2007. The United States District Court for the District of South Carolina found in a fraudulent conveyance case, relying on Terry v. Walker, that South Carolina conflict of law rules should apply to determine the applicable substantive law. [4] Wellspring completed fundraising on its sixth fund in 2018 with $1.45 billion of investor commitments as a successor to its $1.2 billion 2011 Fund V.[3], Wellspring focuses on the packaging, healthcare, niche manufacturing and distribution sectors.[5][6]. 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 defendant represented to the plaintiff, and to an appraiser who performed an appraisal of the garage, that the parking garage had 500 parking spaces. Angel, Fund of Funds, Venture Capital), General contact email for the organization. . We look forward to carrying forward that vision and continuing our success in the years ahead.". Consumers want to see how a business took care of business. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. View Videos. 0 The Debtors in the bankruptcy cases, pending in the District of Delaware, are SportCo Holdings, Inc.; Ellett Brothers, LLC; United Sporting Company, Inc.; Bonitz Brothers, Inc.; Evans Sports, Inc.; Jerry's Sports, Inc.; Outdoor Sports Headquarters, Inc.; Quality Boxes, Inc.; and Simmons Guns Specialties, Inc. 2022 Wellspring Capital Management Group LLC |. 609, 614 (Bankr. Id. Sec'y of State for Def. Wellsprings investment professionals possess diverse and complementary backgrounds that combine valuable experience in private equity, restructuring, corporate finance, capital markets and corporate law. Despite that agreement in principle, it was alleged in relevant part that: Unable to agree on the release and indemnification issue, SportCos out-of-court restructuring failed, and SportCo defaulted on its funded debt shortly thereafter. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. Id. 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. Fax: 877 376-7003. @S1 $82N+ZJ | SaaS, Android, Cloud Computing, Medical Device), Where the organization is headquartered (e.g. 1996)). 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. These are high quality companies, essential to the national, regional, or global economy but whose fundamental qualities are underappreciated and undervalued by the market. In Fall 2018, SportCo Holdings, Inc. (SportCo) was facing severe financial distress. E-mail: sandra@wellspring-cap.com; Videos. articles a month for anyone to read, even non-subscribers! The parties are in agreement that New York and South Carolina law regarding negligent misrepresentations are substantially similar and that as a result, the Court is not required to engage in a choice of law analysis as to the third cause of action.

Pierre Jeanneret Chair, Stephanie Wanganeen, 10 Reasons Why Private Schools Are Bad, Articles W