There are different definitions of insolvency. Under certain conditions, section 548 allows the avoidance of a transfer made within two years of the date of the filing of the bankruptcy petition. 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. Id. For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 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. After the defendants filed replies, the Court held a hearing on June 18, 2020. Asia Pacific; EMEA; Latin America; UK Solicitors; UK Bar; United States 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. Practices: . January 12, 2022 At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners 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 defendants' remaining arguments need not be addressed. %PDF-1.5 % Why is this public record being published online? UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy. 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. 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. Fund VI brings the firm's assets under management to more . At the conclusion of the hearing, the Court took the motions under advisement. Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. Investors in its most recent fund include the Washington State Retirement System, Minnesota State Board of Investment, Connecticut Retirement Plans & Trust Funds, Kansas Public Employees' Retirement Later emails berate Prospect's representative for failing to agree to the AcuSport purchase more quickly. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. 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. And the best part of all, documents in their CrowdSourced Library are FREE. 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. 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. your most valuable capital, your ultimate resource. San Francisco Bay Area, Silicon Valley), Operating Status of Organization e.g. You can review interesting Flipbooks on my site. York Capital Management Feb 2021 - Present2 years 1 month New York, New York, United States Wellspring Capital Management LLC 13 years 5 months Partner Dec 2016 - Dec 20204 years 1 month. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. 112]. Brought up in a family enjoying long-term success in real estate investment, Avrohom instead turned to the stock market. Wellspring has one of the best track records in middle-market private equity; its people, capital and reputation bring certainty to transactions. 1996)). We look forward to carrying forward that vision and continuing our success in the years ahead.". 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. These emails can hardly be considered negligent misrepresentations. The amended complaint further states that from October 2012 to October 2013, "Ellett achieved record sales and earned revenues of approximately $1.2 billion." However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. Tenn. 1991); 11 U.S.C. 2d 317 (S.D.N.Y. 6. 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. e""8*&B 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. In an email obtained by . Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. 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. Finally, in West Side Fed. 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. 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. In Fall 2018, SportCo Holdings, Inc. (SportCo) was facing severe financial distress. . This approach has historically delivered returns well above inflation. The plaintiff/litigation trust also asserted claims directly against Wellspring Capital under an aiding and abetting theoryi.e., asserting that Wellspring Capital itself aided and abetted the SportCo Boards alleged fiduciary duty breaches. from 8 AM - 9 PM ET. 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. 544 and 550 and S.C. Code 27-23-10; (2) avoidance and recovery of fraudulent transfers by SportCo against the Transferee Defendants pursuant to 11 U.S.C. Federal Rule of Bankruptcy Procedure 7012(b) provides that Federal Rule of Civil Procedure 12(b) applies in adversary proceedings. 609, 614 (Bankr. 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. Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. The defendants filed separate motions. Wellspring Capital Management is a leading private equity firm headquartered in New York. To summarize New York law, then, it appears that opinions can be actionable, but are not always actionable. S.D. WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . Otherwise you cannot get paid." The emails, often using colorful language and harassing tones, essentially represent to Prospect that if the AcuSport transaction is not completed, Prospect will not get paid on its obligations. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. (Compl. (Bloomberg) -- 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."We are taking this matter very seriously, and have launched an immediate internal investigation," Jeffrey Gould, Wellspring's head of marketing and investor . In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. 89], Charles E. Walker, Jr. [Docket No. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. Litigation. Active, Closed, This describes the type of investor this organization is (e.g. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. 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. We work with successful motivated individuals to help them achieve their investment and wealth management objectives. Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. 0 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. 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. 1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. The plaintiff's first and second causes of action are based on 11 U.S.C. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. Id. 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. 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. Angel, Fund of Funds, Venture Capital), This describes the stage of investments made by this organization (e.g. 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 [. endstream endobj startxref Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. 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 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 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. Revenue: $500 million to $1 billion (USD) Competitors: Unknown. 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. Wellspring, founded in 1995, has raised more than $4 billion of capital commitments through six private equity funds, according to its website. You have to know whats happening with clients, competitors, practice areas, and industries. However, whether a fraudulent conveyance action is characterized as a tort action is unsettled. Will Others Follow? 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. Founded in 1995, Wellspring invests anywhere . Federal Rule of Bankruptcy Procedure 7012(b). By teaming up with strong management, Wellspring is able to unlock underlying value and. 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. Ashmore for Wilson v. Dodds, 262 F. Supp. As with the plaintiffs assertions around disinterested governance, such allegations may (or may not) bear any semblance to the actual facts. They are not actionable. 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. Id. 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. Va. Mar. 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. Our returning and new limited partners share our belief in the unique value proposition that Wellspring brings to the investment process, with our focus on strategic partnership and tailored approach to each investment. hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h Will His AI Plans Be Any Different? 3d 473, 506 (S.D.N.Y. 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. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. 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. It identifies undervalued companies whose share price does not properly reflect the true value of the 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. By teaming up with strong management, Wellspring is able to unlock underlying value and pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. All rights reserved. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. 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. 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. William F. Dawson, Jr., Chief Executive Officer of Wellspring, said, "My partners and I are pleased to complete the successful raising of Wellspring's sixth fund, which is a direct result of the strong relationships we have built with the investment community over many years and the returns we have generated. Twitter Revenue, Earnings Fell About 40% in December, WSJ Says, John Malone andCharter Directors Agree to $87.5 Million Settlement, China E-Commerce Giant JD Set for $1.4 Billion Discount Spree, Between Rounds of Golf, Trumps Searching for the Perfect DeSantis Diss, Your Saturday UK Briefing: Sunak Chalks Up a Win as the Budget Looms, Harrods Shrugs Off Recession Fears as Rich Get Richer, FT Says, Wealthy NYC Family Feuds Over $258 Million Madison Avenue Sale, Tom Sizemore, 'Saving Private Ryan' Actor, Dies at 61, The Exhibit Reality TV Show PittingArtist Against ArtistIs No Masterpiece. 92], Todd Boehly [Docket No. Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. This approach has historically delivered returns well above inflation Our clients REGISTRATION STATUS . 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. 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. 2007) (citations omitted). Musk Made a Mess at Twitter. 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. Less than a year later, the liquidation trustee sued Wellspring and related parties, alleging breaches of fiduciary duty of care and loyalty. 915 0 obj <> endobj 85]. A finding that Prospect is a preexisting creditor compels the same result. When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. at 385. Wellsprings objective is to bring partnership, experience and value creation to each investment. 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. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. 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 basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. Whether youre building capital for your family, retirement or other life goals, we can help you with our high conviction and disciplined investment style. Wellsprings facts, as alleged, are fairly straightforward. The firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . at 358. Please see our Privacy Policy. 598, 614 (Bankr. 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. 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. Wellspring Capital Management LLC operates as a private equity firm. GitHub export from English Wikipedia. 2012) and West Side Fed. Wellspring Capital Management. Consumers want to see how a business took care of business. We charge a minimal base fee and the rest is performance fees we generate for clients and not on the amount of capital clients allocate. "To survive a motion to dismiss, 'a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face."'" 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. (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. The court considered whether inaccurate credit ratings can form the basis for a negligent misrepresentation claim.
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