Ellett Brothers LLC ("Ellett"), a South Carolina limited liability company, was a sporting goods distributor. [Amended Complaint, 31]. Wellspring Capital Exits Strategic Investment in Great Lakes Caring v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. You can review interesting Flipbooks on my site. Friedman v. Wellspring Capital Mgmt. - Casetext 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. 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. 2021 by wellspring capital Management. 70% of dealmakers say that investment managers share culpability for Investment adviser | Wellspring Capital Management Ltd | M25 0FX When typing in this field, a list of search results will appear and be automatically updated as you type. We work with successful motivated individuals to help them achieve their investment and wealth management objectives. %%EOF . The plaintiff's first and second causes of action are based on 11 U.S.C. Please see our Privacy Policy. 2012) and West Side Fed. There are different definitions of insolvency. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. Description. 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. 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. & Loan Ass'n of New York City, the plaintiff loaned funds to the defendant, secured by a mortgage on a parking garage. Business Restructuring, The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. Sec'y of State for Def. Menu Home; Rankings. We are motivated and incentivised to succeed. What happened to Birchbox? | Retail Dive Federal Rule of Bankruptcy Procedure 7012(b). 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. Christopher Dawson: 5 Fast Facts You Need to Know - Heavy Wellspring CEO Takes Leave After Son Accused of Rape in Lawsuit 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. Wellspring, founded in 1995, has raised more than $4 billion of capital commitments through six private equity funds, according to its website. 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). UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy. After all, corporate decisionmakers are often tasked with choosing a path where outcomes are at best uncertain. Certain state securities regulatory authorities have similar exemptions based on . 8h`6$67Xn@,`& 19-80071-DD (Bankr. Their most recent acquisition was Caring Brands International on Oct 25, 2021. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. Wellspring Capital Management Acquires Steele Solutions, Inc. Wellspring Capital - Middle Market Private Equity For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. 'Ov}b0. Hiding negative complaints is only a Band-Aid. From reading the Financial Times at school to managing his first portfolio at just 18, he has built Wellspring Capital into a nationwide wealth management boutique. R. Civ. Another email stated, in part: "Gotta get your interest? It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. Whether youre building capital for your family, retirement or other life goals, we can help you with our high conviction and disciplined investment style. 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. These emails can hardly be considered negligent misrepresentations. P. 12(b)(6). The February 20, 2018 stated, "You're [sic] economics are going down and the risk of chapter is going up. In fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. This preference is a result of the Firms differentiated and conservative approach to leverage, in addition to a transparent oversight model, which is driven by our small group of senior professionals and absence of bureaucracy. 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. Wellspring Capital Management - Investments, Portfolio & Company Exits At the conclusion of the hearing, the Court took the motions under advisement. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. California Weighs $360,000 in Reparations to Eligible Black Residents. The Loan Agreements and the First and Second Amendments each contain a choice of law provision, providing that New York law applies. 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. Federal Rule of Bankruptcy Procedure 7012(b) provides that Federal Rule of Civil Procedure 12(b) applies in adversary proceedings. 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 2d 317 (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. 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. endstream endobj startxref e""8*&B In 2012, the year that the amended complaint alleges Ellett "achieved record sales and earned revenues of approximately $1.2 billion," Ellett and its operating subsidiaries (the "Borrowers") entered into a Third Amended and Restated Loan and Security Agreement and a Second Lien Loan and Security Agreement (collectively, the "Loan Agreements") with lenders including Prospect Capital Corporation ("Prospect"), pursuant to which Prospect and the other lenders loaned $280 million to the Borrowers. Wellspring Capital Management is a mega-sized private equity firm that focused on a variety of transaction situations. Therefore, the plaintiff argues that he is only required to establish constructive fraud. 544(b). Wellspring Capital Management LLC - Company Profile and News New York law and South Carolina law differed as to whether such a transfer was permitted. Trump legal team requests six-month delay in New York civil lawsuit Wellspring Capital Management - Crunchbase 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. If you do not agree with these terms, then do not use our website and/or services. 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. 2022 Wellspring Capital Management Group LLC |. Our tight-knit culture enables transparent oversight and a streamlined decision-making process. 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. 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. Wellspring Capital Management, LLC; Wellspring Cap v Barry, III et al . San Francisco Bay Area, Silicon Valley), Operating Status of Organization e.g. 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. Working at Wellspring Capital Management | Glassdoor 92], Todd Boehly [Docket No. It is not unusual for an entity facing distress to engage with their stakeholders and to negotiate any number of transaction alternatives and terms. Tex. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. 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. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. Id. After the defendants filed replies, the Court held a hearing on June 18, 2020. to hinder, delay, or defraud either present or future creditors." Already a subscriber? Copyright 2023 Ropes & Gray LLP. Wellspring has one of the best track records in middle-market private equity; its people, capital and reputation bring certainty to transactions. Attorney advertising. Id. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. 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. 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. Div. New York law requires insolvency at the time of the transfer, and South Carolina law requires insolvency both at the time of the transfer, and at the time the creditor seeks to collect the debt. The court must construe the allegations in the complaint in the light most favorable to the plaintiff. The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. 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. Wellspring also rejected in cursory fashion the defendants argument that it is not necessarily a breach . WELLSPRING CAPITAL MANAGEMENT LIMITED is registered in England and Wales under Company Number 12429146, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. You have to know whats happening with clients, competitors, practice areas, and industries. Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. 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. 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 Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. Designed By, https://www.wellspringcapital.co.uk/disclaimer. 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. The firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . Read More Key Principal: William Dawson Junior See more contacts Industry: Management investment, open-end Printer Friendly View Address: 605 3RD Ave FL 44 New York, NY, 10158-0011 United States See other locations Phone: Website: www.wellspringcapital.com Employees (this site): Actual Home; About Us; Investment Approach. Id. 101 (32). Haynsworth Sinkler Boyd, P.A. Crazy 8 was started in August 2007. 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. Wellspring Capital Management is a middle-market private equity firm that has approximately $2 billion of private equity. 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. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. (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 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. Judge opens door for bankruptcy blame suits - Axios 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. 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. Wellspring Capital Management is a leading 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." 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 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. 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). 2100 Geng Road, Suite 210 Palo Alto, CA 94303. Their most recent investment was on Jan 1, 2020, when Steele Solutions raised 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. Wellspring CEO takes leave after explosive rape allegations against his The alleged statements simply do not constitute actionable statements that can form the basis of a negligent misrepresentation claim. "[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.'" Wellspring Capital Management Portfolio Investments, Wellspring Capital Oct. 14, 2021) (Stickles, J.) Fed. On May 3, 2018, SportCo agreed to acquire AcuSport's assets in bankruptcy for $7 million. The issue in Merritt Dredging was the sale of a barge and the priority of parties' interests in the proceeds of the sale. 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. Flipbooks. 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's objective is to . Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 Law360 takes your privacy seriously. Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. 85]. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . 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. [Amended Complaint, 49]. Va. Mar. App'x 143 (4th Cir. 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. Wellspring Philanthropic: An Ocean of "Dark Money" on the Left 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. The December 26, 2017 email stated, "So you will waive [your interest payments]. A free inside look at Wellspring Capital Management salary trends based on 22 salaries wages for 17 jobs at Wellspring Capital Management. These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. Wellspring Capital Management, LLC; Wellspring Cap. A constructive fraudulent conveyance exists under New York law if the conveyance was made without fair consideration and "(1) the transferor is insolvent or will be rendered insolvent by the transfer in question; (2) the transferor is engaged in or is about to engage in a business transaction for which its remaining property constitutes unreasonably small capital; or (3) the transferor believes that it will incur debt beyond its ability to pay." 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 Court addresses in this order only those arguments that clearly mandate dismissal. CDI's smaller Atlanta peer said to weigh sale in '18. A finding that Prospect is a preexisting creditor compels the same result. See Silvercreek Mgmt., Inc. v. Citigroup, Inc., 346 F. Supp. 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. McDermott Will & Emery LLP > San Francisco > United States | The Legal Middle Market Private Equity. Active, Closed, This describes the type of investor this organization is (e.g. Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. 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. at 321. Brought up in a family enjoying long-term success in real estate investment, Avrohom instead turned to the stock market. Wellspring Capital is a boutique discretionary management service - with a portfolio positioned for high performance. The firm's objective is to bring partnership, experience and value creation to each investment. Will Others Follow? 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. 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. Will His AI Plans Be Any Different? 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. 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. pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. Industry: Investment & Asset Management. 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.