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. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of Dawson's threats, according to an internal memo. Litigation. In an email obtained by . Most of them do not even contain any concrete information about the proposed AcuSport purchase or the likelihood of the Borrowers' default. . Your livelihoodand your sanitydepend . Wellspring, 2021 WL 4823513, at *10. Note: This site is for informational purposes only. A social media content creator signed an agreement with Birchbox in May of 2022 and hadn't been paid the $2,500 due as of Jan. 24, despite several emails to the company. The alleged statements simply do not constitute actionable statements that can form the basis of a negligent misrepresentation claim. The firm's objective is to bring partnership, experience and value creation to each investment. 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. e""8*&B [Amended Complaint, 51]. 598, 614 (Bankr. & Loan Ass'n of New York City, the plaintiff loaned funds to the defendant, secured by a mortgage on a parking garage. Wellsprings objective is to bring partnership, experience and value creation to each investment. These tools have been used since the firm's inception in 1995 to generate consistent business improvement in its portfolios. 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." Business Restructuring, 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. James brought a civil suit against Trump in September, alleging the Trump organization had fraudulently inflated the value of . 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." Investments Number of Investments 2 Wellspring Capital Management has made 2 investments. N.D.N.Y. 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. We have interesting videos for you to watch on my site. 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. The amended complaint is dismissed. E-mail: sandra@wellspring-cap.com; Videos. 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. UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. . 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. 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. 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 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. 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. On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. . The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. 2d 520, 529 n.14 (E.D. Id. 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). In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. 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. The firm's objective is to . Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. The court must construe the allegations in the complaint in the light most favorable to the plaintiff. 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. See Sheehan v. Saoud, 650 Fed. 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. 1996)). [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]. These emails can hardly be considered negligent misrepresentations. 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. . 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. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. Sounds like a tidy deal at year end [2017] made a lot of sense." The Partners of Wellspring constitute a long-tenured team, having worked together an average of 15 years over three funds. hb```e``jb`a`\ @1V h`2q:lp10qfaqB,X3s10iH(^t1 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir. UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy. All rights reserved. The plaintiff's third cause of action, for negligent misrepresentation against defendants Wellspring Capital, Mr. Carles, and Mr. Johnson, must also be dismissed. 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. 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. GitHub export from English Wikipedia. 1991) (unpublished table decision). July 5, 2017). 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 . 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. The adviser's REGISTRATION status is listed below. Password (at least 8 characters required). The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. Id. Id. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. Limited partners include leading pension funds, endowments, fund of funds and family offices from the U.S., Europe and Asia. Later emails berate Prospect's representative for failing to agree to the AcuSport purchase more quickly. 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 Capital, through defendants Mr. Carles and Mr. Johnson, allegedly represented to Prospect that: (1) Ellett could purchase assets of AcuSport for $14.8 million; (2) the purchase would result in the Debtors' capturing 20% to 30% of AcuSport sales; (3) the Debtors could acquire $14 million of AcuSport inventory at a substantial discount; and (4) Ellett would immediately realize a $7 million profit on the sale of the inventory acquired in the purchase. Adversary Proceeding No. Mr. Friedman filed an amended complaint the same day. The principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. We work with successful motivated individuals to help them achieve their investment and wealth management objectives. at *3 (quoting In re Sharp Int'l Corp., 403 F.3d 43, 53 (2d Cir. The Wellspring ruling was not appealed, nor has any trial occurred on this matter. After all, corporate decisionmakers are often tasked with choosing a path where outcomes are at best uncertain. Wellspring Capital Management, LLC; Wellspring Cap. 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. Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. [Amended Complaint, 57]. 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. This approach has historically delivered returns well above inflation Our clients at 613-14. 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. The portfolio manager is also a co-investor in the strategy. Full title:Ronald J. Friedman, as the trustee for the SportCo Creditors' Liquidation, Court:UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. Type: Company - Private. Salaries posted anonymously by Wellspring Capital Management employees. WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. 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 The plaintiff's first and second causes of action are based on 11 U.S.C. Aug. 27, 2020). 2021 by wellspring capital Management. Federal Rule of Bankruptcy Procedure 7012(b). There are also no allegations concerning expenses. Angel, Fund of Funds, Venture Capital), General contact email for the organization. Use tab to navigate through the menu items. from 8 AM - 9 PM ET. . Consumers want to see how a business took care of business. An actual fraudulent conveyance is any "conveyance made . Finally, one place to get all the court documents we need. 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. 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." Their most recent acquisition was Caring Brands International on Oct 25, 2021. at 382. Wellspring Capital Management is a mega-sized private equity firm that focused on a variety of transaction situations. Share Your Design Ideas, New JerseysMurphy Defends $10 Billion Rainy Day Fund as States Economy Slows, This Week in Crypto: Ukraine War, Marathon Digital, FTX. Click here to login, 2023, Portfolio Media, Inc. | About | Contact Us | Legal Jobs | Advertise with Law360 | Careers at Law360 | Terms | Privacy Policy | Cookie Settings | Help | Site Map, Enter your details below and select your area(s) of interest to stay ahead of the curve and receive Law360's daily newsletters, Email (NOTE: Free email domains not supported). 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. In considering what choice of law provisions to apply, the Fourth Circuit stated: The Court notes that there is a specific fraudulent conveyance section of the Bankruptcy Code. As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. Wellsprings facts, as alleged, are fairly straightforward. hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h Wellspring Capital Management is a leading private equity firm headquartered in New York. Jan. 25, 2016) (alteration original). Id. 101 (32). 91], Andrew Kupchik [Docket No. When typing in this field, a list of search results will appear and be automatically updated as you type. Otherwise you cannot get paid." Id. SEC / JURISDICTION. In 2010, Bain Capital acquired the company for US$1.8 billion. For example, the October 27, 2017 email stated, "The only way to optimize is to merge with Acusport." 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. ~p03ngx1Ai63*oP 4TP3Nt'xn0R8tJ'a7D2P6ILky6L;0;0SUNrtd t ";Qb[K-Ii 1g%\i) IZ3uAH0J40v0xt0v40Xt8 y CJ3t@y`$21kL 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. While property interests are defined by state law in the absence of a compelling federal interest, the Court would look to the Bankruptcy Code in making a determination of whether property is property of the estate under section 541. The defendants filed separate motions. EFFECTIVE DATE; SEC: Terminated: 3/2/2007: Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. Less than a year later, the liquidation trustee sued Wellspring and related parties, alleging breaches of fiduciary duty of care and loyalty. 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. Try our Advanced Search for more refined results. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: This site is for informational purposes only. 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. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of . January 12, 2022 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). Jan. 30, 2023). 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. Additionally, the plaintiff argues that the third element of New York's third-party beneficiary test is not met because there is no express intent in the Loan Agreements or the Amendments to compensate the defendants in the event the distributions were not paid and in fact, the Loan Agreement indicates the opposite by virtue of the inurement clause found in Section 13.1. Designed By, https://www.wellspringcapital.co.uk/disclaimer. In June 2019, SportCo and its subsidiaries (the "Debtors") filed chapter 11 bankruptcy cases in the United States Bankruptcy Court for the District of Delaware. 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. Nor is it necessary for the Court to decide whether New York or South Carolina law applies under South Carolina's choice of law principles. The defendants' remaining arguments need not be addressed. 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. Mr. Friedman was substituted as the plaintiff on January 10, 2020. 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. You can help Wikipedia by expanding it. Id. 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. Tex. Div. 2012) and West Side Fed. Sav. 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." 1994)). Hiding negative complaints is only a Band-Aid. Todd Boehly filed a joinder to the Wellspring Defendants' motion to dismiss. At Wellspring we pride ourselves on client service. Wellspring Capital Management is a middle-market private equity firm that has approximately $2 billion of private equity. App'x 143 (4th Cir. The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. 2009). 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) -- 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 . 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 . 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. 2021 by wellspring capital Management. PLEASE NOTE: A verification email will be sent to your address before you can access your trial. Designed By BM Designs. 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. In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. [Amended Complaint, 93]. Please see our Privacy Policy. 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 has earned the reputation as a trusted, reliable partner and is often the preferred partner of a portfolio companys senior management team. Wellsprings investment professionals possess diverse and complementary backgrounds that combine valuable experience in private equity, restructuring, corporate finance, capital markets and corporate law. They are not actionable. The middle-market private equity firm invests in companies with strong business . Description. Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. 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. The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. Industry: Investment & Asset Management. endstream endobj startxref By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, 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. 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.
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