wellspring capital management lawsuit

For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. We work with successful motivated individuals to help them achieve their investment and wealth management objectives. The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. 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. R. Civ. 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. Ashmore for Wilson v. Dodds, 262 F. Supp. The firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . 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 . View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. To summarize New York law, then, it appears that opinions can be actionable, but are not always actionable. Investment Approach Target Investments Wellspring's objective is to acquire or invest in companies that are well-positioned to capitalize on change and can benefit from Wellspring's operating and financial expertise. [Amended Complaint, 32]. 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. "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."'" (Compl. Posted By: Imright , 3/3/2023 9:31:52 PM. Founded in 1995, Wellspring invests anywhere . Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States The amended complaint further states that from October 2012 to October 2013, "Ellett achieved record sales and earned revenues of approximately $1.2 billion." Prior results do not guarantee a similar outcome. The amended complaint is dismissed. 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. This article about a private equity or venture capital firm based in the United States is a stub. 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. Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. Consumers want to see how a business took care of business. When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. In support of this argument, the plaintiff cites a case from the United States District court for the District of Idaho, which was affirmed by the Ninth Circuit, as well as a case from the United States Bankruptcy Court for the Southern District of Texas, in which the court stated that 544(b) claims are unique "because they exist only to the extent of applicable state law," but then found, "Even so, such claims are not pendant state claims in federal bankruptcy cases, but are federal causes of action rooted in federal bankruptcy law and policy." (quoting Bell Atl. 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. 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. (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. The plaintiff responds that Prospect is a preexisting creditor because the distributions were not made until after Prospect became a creditor when the Loan Agreements and the Amendments were signed. 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. By teaming up with strong management, Wellspring is able to unlock underlying value and The Partners of Wellspring constitute a long-tenured team, having worked together an average of 15 years over three funds. Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. e""8*&B If you want your business to survive, you need to understand your-self. Practices: Oct. 14, 2021) (Stickles, J.) Active, Closed, This describes the type of investor this organization is (e.g. They were not statements of presently existing fact. 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. 2012) and West Side Fed. 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." Menu Home; Rankings. 3d 341, 357 (D.S.C. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. v. Holmes (In re Holmes), 610 B.R. These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. 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 Defendant Bernard Ziomek is in default in this matter. 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. [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]. Password (at least 8 characters required). Crazy 8 was started in August 2007. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. The case status is Pending - Other Pending. The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. Business Restructuring, In June 2017, Gymboree announced it was filing for Chapter 11 bankruptcy protection. at *3 (quoting In re Sharp Int'l Corp., 403 F.3d 43, 53 (2d Cir. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. After all, corporate decisionmakers are often tasked with choosing a path where outcomes are at best uncertain. 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. 91], Andrew Kupchik [Docket No. 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 leading private equity firm headquartered in New York. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. Please Update this case to get latest docket information. 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. Copyright 2023 Ropes & Gray LLP. 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. 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. Wellsprings investment professionals possess diverse and complementary backgrounds that combine valuable experience in private equity, restructuring, corporate finance, capital markets and corporate law. Federal Rule of Bankruptcy Procedure 7012(b). 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. 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. David R. Duncan US Bankruptcy Judge District of South Carolina. As with the plaintiffs assertions around disinterested governance, such allegations may (or may not) bear any semblance to the actual facts. On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. D.S.C. The Loan Agreements and the First and Second Amendments each contain a choice of law provision, providing that New York law applies. Accordingly, SportCo began negotiations with certain of its lenders around a potential restructuring transaction. They are simply not statements of preexisting fact that were false when made. 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. Ellett used $54,860,549.74 of the First Amendment loan proceeds to fund distributions to the Transferee Defendants. A free inside look at Wellspring Capital Management salary trends based on 22 salaries wages for 17 jobs at Wellspring Capital Management. The defendants' motions to dismiss are granted. D. Del. 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. Brought up in a family enjoying long-term success in real estate investment, Avrohom instead turned to the stock market. hb```e``jb`a`\ @1V h`2q:lp10qfaqB,X3s10iH(^t1 1994)). It identifies undervalued companies whose share price does not properly reflect the true value of the business. 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. 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. 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 [. R. Civ. In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. 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. Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. Wellspring Capital Management is a mega-sized private equity firm that focused on a variety of transaction situations. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . 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. Cancellation and Refund Policy, Privacy Policy, and Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. 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. 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. 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. Sav. The court considered whether the plaintiff had proved the tort of innocent misrepresentation. The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . Munich, German Mnchen, city, capital of Bavaria Land (state), southern Germany. Their most recent investment was on Jan 1, 2020, when Steele Solutions raised These emails may be a lot of things, but negligent misrepresentations they are not. Phone: 650 729-8626. Their most recent acquisition was Caring Brands International on Oct 25, 2021. Designed By BM Designs. 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. 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. You can review interesting Flipbooks on my site. 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. At the conclusion of the hearing, the Court took the motions under advisement. 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. About Wellspring Capital Management Wellspring Capital Management is a leading private equity firm headquartered in New York. (Wellspring). Id. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. In fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. But Wellspring would arguably undermine the ability to negotiate for what are customary and, indeed, necessary protections for corporate decisionmakers in those same transactions, such as releases, indemnity, or exculpation. at 382. Use tab to navigate through the menu items. Wellspring, founded in 1995, has raised more than $4 billion of capital commitments through six private equity funds, according to its website. The District Court in Ashmore for Wilson stated: The parties' arguments regarding what law applies to the plaintiff's fraudulent conveyance claims present some complicated and novel questions; however, it is not necessary for the Court to decide whether the defendants are third party beneficiaries of the Loan Agreements or the Amendments. 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 MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. Already a subscriber? You have to know whats happening with clients, competitors, practice areas, and industries. Wellspring Capital and the D&O Defendants grossly and recklessly mismanaged the business and carried out their respective roles in a manner that was devoid of reasonable inquiry and diligence in dereliction of their fiduciary duties to Prospect as a creditor of the increasingly insolvent enterprise. Wellspring 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. "[F]or purposes of Rule 12(b)(6), '[the court is] not required to accept as true the legal conclusions set forth in a plaintiff's complaint.'" 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.

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