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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 Firm will consider buyouts of private companies, acquisitions of divisions or subsidiaries of public companies, shareholder liquidity needs, partnering with entrepreneurs for growth opportunities, and special situations. This approach has historically delivered returns well above inflation Our clients As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. Contribute to chinapedia/wikipedia.en development by creating an account on GitHub. 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. 1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. 544(b). Angel, Fund of Funds, Venture Capital), General contact email for the organization. to negotiate for release or indemnification, with the defendants arguing that such releases may have saved the post-restructuring company the expense of indemnifying the D&O Defendants in subsequent litigation. Designed By, https://www.wellspringcapital.co.uk/disclaimer. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. All business will get complaints. Most of them do not even contain any concrete information about the proposed AcuSport purchase or the likelihood of the Borrowers' default. (quoting Bell Atl. SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. [Amended Complaint, 51]. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. 92], Todd Boehly [Docket No. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. Wellspring has earned the reputation as a trusted, reliable partner and is often the preferred partner of a portfolio companys senior management team. Jan. 25, 2016) (alteration original). Wellspring Capital Management is a leading private equity firm headquartered in New York. Please Update this case to get latest docket information. It is Bavaria's largest city and the third largest city in Germany (after Berlin and Hamburg). New York law and South Carolina law differed as to whether such a transfer was permitted. 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. Wellspring Capital Management Group LLC ("Wellspring"), a New York-based private equity firm, announced that on May 29, 2020, it closed the acquisition of Steele Solutions, Inc. ("SSI" or the "Company"), a value-add supplier into the industrial automation sector. 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. Full title:Ronald J. Friedman, as the trustee for the SportCo Creditors' Liquidation, Court:UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. 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. Later emails berate Prospect's representative for failing to agree to the AcuSport purchase more quickly. 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. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. The company will explode Rich!" 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 case status is Pending - Other Pending. 544 and 550 and S.C. Code 27-23-10; and (3) negligent misrepresentations against Wellspring Capital, Mr. Carles, and Mr. Johnson. As part of the debt management process, it said it would close 375 of its 1,300 stores. Adversary Proceeding No. 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. 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. 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. Our tight-knit culture enables transparent oversight and a streamlined decision-making process. Wellsprings investment professionals possess diverse and complementary backgrounds that combine valuable experience in private equity, restructuring, corporate finance, capital markets and corporate law. Already a subscriber? On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. 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. 2d 520, 529 n.14 (E.D. at 382. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. 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. $46H$DrGHi`0I"DE$"J(aH! 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. ), Create custom alerts for specific article and case topics and, I took a free trial but didn't get a verification email. Wellspring Capital Management is a leading private equity firm headquartered in New York. The court must construe the allegations in the complaint in the light most favorable to the plaintiff. Oct. 14, 2021) (Stickles, J.) In fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. 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." Federal Rule of Bankruptcy Procedure 7012(b) provides that Federal Rule of Civil Procedure 12(b) applies in adversary proceedings. (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. [Amended Complaint, 93]. After all, corporate decisionmakers are often tasked with choosing a path where outcomes are at best uncertain. And the best part of all, documents in their CrowdSourced Library are FREE. 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. 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 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. 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. Broker-Dealers Business & Commercial Litigation Business Restructuring California Consumer Privacy Act Capital Markets Capital Solutions & Private Credit Charitable Foundations China Life Sciences Committee on Foreign Investment in the United States (CFIUS) Consumer Protection and Advertising Law Corporate & Securities Litigation The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. 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. The defendants argue that as a subsequent creditor, Prospect is required to plead actual fraud, and the amended complaint fails to do so. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. 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. 915 0 obj <> endobj Id. 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. 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. Ronald J. Friedman, as the trustee for the SportCo Creditors' Liquidation Trust, Plaintiff, v. Wellspring Capital Management, LLC, Wellspring Capital Partners IV, L.P., WCM Genpar IV, L.P., WCM Genpar IV GP, LLC, Alexander E. Carles, Bradley Johnson, F. Hewitt Grant, Charles E. Walker, Jr., Todd Boehly, Bernard Ziomek, and Andrew Kupchik, Defendants. 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. We have interesting videos for you to watch on my site. 2007) (citations omitted). 101 (32). 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 plaintiff, Ronald J. Friedman, the trustee for the SportCo Creditors' Liquidation Trust, filed an omnibus response to the motions to dismiss [Docket No. It identifies undervalued companies whose share price does not properly reflect the true value of the business. UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. 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. 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. Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. In an email obtained by . 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. You have to know whats happening with clients, competitors, practice areas, and industries. 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, founded in 1995, has raised more than $4 billion of capital commitments through six private equity funds, according to its website. 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. 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. Va. Mar. The firm's objective is to bring partnership, experience and value creation to each investment. The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. 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. R. Civ. The firms objective is to bring partnership, experience and value creation to each investment. The firm's objective is to bring partnership, experience and value creation to each investment. Wellsprings objective is to bring partnership, experience and value creation to each investment. The plaintiff's first and second causes of action are based on 11 U.S.C. your most valuable capital, your ultimate resource. 609, 614 (Bankr. 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. In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. WELLSPRING CAPITAL MANAGEMENT LIMITED is registered in England and Wales under Company Number 12429146, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. 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. UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy. David R. Duncan US Bankruptcy Judge District of South Carolina. Wellspring Capital Management is a leading private equity firm headquartered in New York. . Use tab to navigate through the menu items. 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. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: This site is for informational purposes only. Wellspring brought its assets under management to more than $4.4 billion as of January 2018. 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. 0 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. at 385. Accordingly, SportCo began negotiations with certain of its lenders around a potential restructuring transaction. This is the best way to manage and repair your business reputation. The firm's objective is to bring partnership, experience and value creation to each investment. E-mail: sandra@wellspring-cap.com; Videos. The amended complaint is dismissed. When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. 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. Wellspring also rejected in cursory fashion the defendants argument that it is not necessarily a breach . 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." Cancellation and Refund Policy, Privacy Policy, and The Court addresses in this order only those arguments that clearly mandate dismissal. Id. Sec'y of State for Def. 2018) (distinguishing cases where the courts dismissed negligent misrepresentation claims based on "puffery" or founded solely on speculative statements regarding future profits as a result of proposed transactions, and finding that the misrepresentations at issue were actionable because they involved present facts). 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. 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. Tex. Their most recent investment was on Jan 1, 2020, when Steele Solutions raised Practices: The plaintiff's third cause of action, for negligent misrepresentation against defendants Wellspring Capital, Mr. Carles, and Mr. Johnson, must also be dismissed. Musk Made a Mess at Twitter. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. Time to Read: 6 minutes 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." Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. [Amended Complaint, 31]. However, the garage actually had only 402 parking spaces. In Sheldon, the defendant, a New York citizen, assigned some personal property to Mr. Dickinson. Wellspring Capital Management is a mega-sized private equity firm that focused on a variety of transaction situations. hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h 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. 91], F. Hewitt Grant [Docket No. Therefore, the plaintiff argues that he is only required to establish constructive fraud. [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]. [Amended Complaint, 57]. 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. 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." The Wellspring Defendants asserted all of these arguments and also asserted failure to state a claim under section 550 against certain defendants. 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. Id. They are not actionable. 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. 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. F. Hewitt Grant asserted the lack of a triggering creditor due to Prospect Capital Corporation's knowing participation in the transfers and failure to state a claim under New York law due to lack of insolvency and under South Carolina law due to failure to plead actual fraud. Please see our Privacy Policy. As with the plaintiffs assertions around disinterested governance, such allegations may (or may not) bear any semblance to the actual facts. [Amended Complaint, 37, 40]. The defendants filed separate motions. 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. [Amended Complaint, 32]. 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir. . New York law prohibits both actual and constructive fraudulent conveyances. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. The Partners of Wellspring constitute a long-tenured team, having worked together an average of 15 years over three funds. Will Others Follow? with actual intent . 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 At Wellspring we pride ourselves on client service. W.D. 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. The Court now issues this order, granting the motions to dismiss for the reasons set forth below.

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