The amended complaint further states, "As recently as 2015, Ellett was the fifth largest private company in South Carolina and the largest distributor of firearms in the United States, with annual revenues of $750 million, over 350 employees nationwide, and 175 employees in South Carolina." You have to know whats happening with clients, competitors, practice areas, and industries. WELLSPRING CAPITAL MANAGEMENT LIMITED is registered in England and Wales under Company Number 12429146, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. . Business Restructuring, However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. Make your practice more effective and efficient with Casetexts legal research suite. The firm's objective is to bring partnership, experience and value creation to each investment. 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. [Amended Complaint, 37, 40]. 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. In Fall 2018, SportCo Holdings, Inc. (SportCo) was facing severe financial distress. 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." 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. Working at Wellspring Capital Management | Glassdoor Wellspring Capital Management Acquires Paragon Films 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 Court addresses in this order only those arguments that clearly mandate dismissal. Limited partners include leading pension funds, endowments, fund of funds and family offices from the U.S., Europe and Asia. Wellspring Capital Management is a mega-sized private equity firm that focused on a variety of transaction situations. e""8*&B CDI's smaller Atlanta peer said to weigh sale in '18. 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. 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. UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. These emails can hardly be considered negligent misrepresentations. Angel, Fund of Funds, Venture Capital), General contact email for the organization. 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. 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. Law360 takes your privacy seriously. The middle-market private equity firm invests in companies with strong business . It identifies undervalued companies whose share price does not properly reflect the true value of the business. Id. Time to Read: 6 minutes PLEASE NOTE: A verification email will be sent to your address before you can access your trial. There are also no allegations concerning expenses. 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. D. Del. Id. NEW YORK, Jan. 10, 2018 /PRNewswire/ -- Wellspring Capital Management LLC ("Wellspring") today announced the successful closing of Wellspring Capital Partners VI L.P. ("Fund VI") with capital commitments totaling the hard cap of $1.415 billion. 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. The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . View Videos. Over $134 million of the loan proceeds were used to fund distributions to Wellspring Capital Partners, WCM GenPar IV, L.P., WCM GenPar IV GP, LLC, F. Hewitt Grant, Charles E. Walker, Jr., Todd Boehly, Bernard Ziomek, and Andrew Kupchik (collectively, the "Transferee Defendants"). 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. 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 work with successful motivated individuals to help them achieve their investment and wealth management objectives. 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. 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. 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. Id. (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 . 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. The firm's objective is to bring partnership, experience and value creation to each investment. Tenn. 1991); 11 U.S.C. [Amended Complaint, 31]. 544 and 550 and S.C. Code 27-23-10; and (3) negligent misrepresentations against Wellspring Capital, Mr. Carles, and Mr. Johnson. This is despite the fact that 57% of Californians and 37% of California Democrats do not want President Joe Biden to run, according to a poll from the Berkeley Institute of Governmental Studies. . 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. 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. [Amended Complaint, 51]. 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. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. 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. 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. W.D. Pentec Health Inc. Acquired by Wellspring Capital Management - PRWeb 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. Wellspring Sues Insurers To Fight Claims It Tanked Gun Seller SaaS, Android, Cloud Computing, Medical Device), Where the organization is headquartered (e.g. 1984) for the proposition that under New York law, opinions are actionable in a negligence context. 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. About Wellspring Capital Management Wellspring Capital Management is a leading private equity firm headquartered in New York. 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. 'Ov}b0. Wellspring Capital Management | LinkedIn Friedman v. Wellspring Capital Mgmt. (In re Sportco Holdings) Id. This is the best way to manage and repair your business reputation. & Loan Ass'n v. Hirschfeld, 476 N.Y.S.2d 292 (N.Y. App. Active, Closed, This describes the type of investor this organization is (e.g. Wellspring Capital Management is a leading private equity firm headquartered in New York. The defendants asserted common arguments in support of dismissal, but all arguments made in support of dismissal were not asserted by each defendant. Flipbooks. Gymboree - Wikipedia Sav. Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . Wellspring Capital Management is a leading private equity firm headquartered in New York. 6. Wellspring Capital is a boutique discretionary management service - with a portfolio positioned for high performance. 1001 to 5000 Employees. 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. Lawsuit: Wellspring CEO Told - Institutional Investor There are different definitions of insolvency. California Weighs $360,000 in Reparations to Eligible Black Residents. 8h`6$67Xn@,`& Target Investments - Wellspring Capital 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. In connection with this contemplated purchase, Alexander Carles, a managing partner of Wellspring Capital and an officer and director of SportCo and its subsidiaries, and Bradley Johnson, the president and chief executive officer of SportCo and its subsidiaries, sought to convince Prospect to forbear from exercising any remedies in the event of a payment default. 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. S.D. Oct. 14, 2021) (Stickles, J.) at *3 (quoting In re Sharp Int'l Corp., 403 F.3d 43, 53 (2d Cir. The complaint must provide more than mere "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." 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. All rights reserved. The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. These emails may be a lot of things, but negligent misrepresentations they are not. Wellspring Philanthropic: An Ocean of "Dark Money" on the Left Federal Rule of Bankruptcy Procedure 7012(b). 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 firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . Wellspring, founded in 1995, has raised more than $4 billion of capital commitments through six private equity funds, according to its website. 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. Investment Philosophy; Target Investments; Portfolio at 382. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. 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. 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. R. Civ. In Sheldon, the defendant, a New York citizen, assigned some personal property to Mr. Dickinson. The defendants' motions to dismiss are granted. For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. Wellspring Capital Management - Crunchbase 598, 614 (Bankr. 23, 2006) (stating that some courts characterize fraudulent conveyance actions as tort actions, while others characterize them as matters in equity). 20-50554, 2021 WL 4823513 (Bankr. [Amended Complaint, 54]. Wellsprings investment professionals possess diverse and complementary backgrounds that combine valuable experience in private equity, restructuring, corporate finance, capital markets and corporate law. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . 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." The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. Wellspring Capital Lawsuit | PDF | Limited Partnership | Loans - Scribd Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. 89], Charles E. Walker, Jr. [Docket No. Wellspring CEO takes leave after explosive rape allegations against his son 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. 101 (32). It featured lower-priced clothing and was Gymboree's direct competitor for The Children's Place and Old Navy.. 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 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. Wellspring Capital buys Center for Diagnostic Imaging - Minneapolis In April 2018, Prospect agreed to defer two quarters of cash interest payments. Wellspring Capital Management - Wikipedia 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. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. 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. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. Practices: Fed. 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. Mr. Friedman filed an amended complaint the same day. Note: This site is for informational purposes only. The Court further notes that here, section 548 is not available to the plaintiff due to the timing of the transfers and the bankruptcy filings. with actual intent . . These tools have been used since the firm's inception in 1995 to generate consistent business improvement in its portfolios. As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. 70% of dealmakers say that investment managers share culpability for The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. 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. By teaming up with strong management, Wellspring is able to unlock underlying value and Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Instead, they may form the basis for a negligent misrepresentation claim if the party making the misrepresentation possesses some special expertise (by way of his job title or position, for example), or has some special knowledge about the particular fact that is allegedly misrepresented. Consumers want to see how a business took care of business. Wellspring Capital Management Closes Fund VI at $1.415 Billion 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. Law360 provides the intelligence you need to remain an expert and beat the competition. Munich, by far the largest city in southern Germany, lies about 30 miles (50 km) north of the edge of the Alps and along the Isar River, which flows through the middle . You can help Wikipedia by expanding it. hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. 544(b). See Scheidelman v. Henderson (In re Henderson), 423 B.R. WELLSPRING CAPITAL MANAGEMENT, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. $46H$DrGHi`0I"DE$"J(aH! 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