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. GitHub export from English Wikipedia. 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. 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. Haynsworth Sinkler Boyd, P.A. 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. PLEASE NOTE: A verification email will be sent to your address before you can access your trial. Wellspring Capital Management is a middle-market private equity firm that has approximately $2 billion of private equity. The Wellspring ruling was not appealed, nor has any trial occurred on this matter. 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. The company will explode Rich!" Even among California Democrats, Newsom is still in the negatives, with 54% wanting him to sit out in 2024 and only 35% wanting him to run. On May 3, 2018, SportCo agreed to acquire AcuSport's assets in bankruptcy for $7 million. Most of them do not even contain any concrete information about the proposed AcuSport purchase or the likelihood of the Borrowers' default. The amended complaint further states that from October 2012 to October 2013, "Ellett achieved record sales and earned revenues of approximately $1.2 billion." Federal Rule of Bankruptcy Procedure 7012(b) provides that Federal Rule of Civil Procedure 12(b) applies in adversary proceedings. Law360 may contact you in your professional capacity with information about our other products, services and events that we believe may be of interest.Youll be able to update your communication preferences via the unsubscribe link provided within our communications.We take your privacy seriously. 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. Hiding negative complaints is only a Band-Aid. The first and second causes of action are dismissed. The. Mr. Friedman filed an amended complaint the same day. This approach has historically delivered returns well above inflation Our clients The firm's objective is to bring partnership, experience and value creation to each investment. 401(k)/403(b) Plan Litigation Risk Management, Analytics & Behavioral Science Consulting (R&G Insights Lab), Committee on Foreign Investment in the United States (CFIUS), E-Discovery, Discovery Strategies & Data Analytics, Executive Compensation & Employee Benefits, Government Enforcement / White Collar Criminal Defense, Life Sciences Licensing, Collaborations & Joint Ventures, The Music Stops on the Texas Two-Step: Third Circuit Dismisses LTL Bankruptcy Case. This article about a private equity or venture capital firm based in the United States is a stub. D.S.C. 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. 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 Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. 8h`6$67Xn@,`& As we here at Ropes & Gray look back on 2021 and ahead into 2022, we call your attention to the lessons of Friedman v. Wellspring Capital Mgmt., LLC (In re SportCo Holdings, Inc.), Case No. Designed By, https://www.wellspringcapital.co.uk/disclaimer. The defendants argue that in the event the Court finds the choice of law provision does not apply, South Carolina choice of law principles should be consulted to reach a finding that New York law applies. Asia Pacific; EMEA; Latin America; UK Solicitors; UK Bar; United States The Court addresses in this order only those arguments that clearly mandate dismissal. Ashmore for Wilson v. Dodds, 262 F. Supp. 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. 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. S.D. Follow along as he lays out the blueprint for his career, and takes us all the way from his first sketch to his thriving personal brand, Spunge. 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. [Amended Complaint, 51]. 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. your most valuable capital, your ultimate resource. The alleged statements simply do not constitute actionable statements that can form the basis of a negligent misrepresentation claim. E-mail: sandra@wellspring-cap.com; Videos. 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 Limited partners include leading pension funds, endowments, fund of funds and family offices from the U.S., Europe and Asia. These emails can hardly be considered negligent misrepresentations. Tex. We believe that this breadth and depth of experience enables the team to efficiently evaluate and complete acquisition opportunities across a broad range of industries. 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." 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. 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. Try our Advanced Search for more refined results. Wellspring Capital Management is a leading private equity firm headquartered in New York. 92], Todd Boehly [Docket No. There are no allegations in the amended complaint that the debtors' liabilities exceeded their assets at the time of the transfers. Using a sophisticated network of for-profits, shell corporations, and consultancies, Wellspring has poured out an incredible $1.1 billion into nonprofits, most of which is hidden from prying eyes in donor-advised funds. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through . 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. The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. & Loan Ass'n of New York City, the plaintiff loaned funds to the defendant, secured by a mortgage on a parking garage. California Weighs $360,000 in Reparations to Eligible Black Residents. %PDF-1.5 % There are different definitions of insolvency. They are not actionable. Please see our Privacy Policy. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. 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. The Partners of Wellspring constitute a long-tenured team, having worked together an average of 15 years over three funds. Your livelihoodand your sanitydepend . UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. Id. 22-2003, 2023 WL 1098189 (3d Cir. articles a month for anyone to read, even non-subscribers! We look forward to carrying forward that vision and continuing our success in the years ahead.". Industry: Investment & Asset Management. In June 2017, Gymboree announced it was filing for Chapter 11 bankruptcy protection. 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. 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. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. 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. Make your practice more effective and efficient with Casetexts legal research suite. When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. Probitas Partners acted as exclusive placement agent and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel with respect to formation of Fund VI. R. Civ. 1001 to 5000 Employees. Section 544(b) states: The defendants' motions assert numerous arguments in support of the assertion that the Court must dismiss the plaintiff's causes of action. We charge a minimal base fee and the rest is performance fees we generate for clients and not on the amount of capital clients allocate. at 385. 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. Id. [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]. 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. James brought a civil suit against Trump in September, alleging the Trump organization had fraudulently inflated the value of . 101 (32). Sec'y of State for Def. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. Crazy 8 was started in August 2007. On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. %%EOF 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." The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. Jan. 30, 2023). Wellspring, founded in 1995, has raised more than $4 billion of capital commitments through six private equity funds, according to its website. 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. Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States . Description. The court must construe the allegations in the complaint in the light most favorable to the plaintiff. 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. Wellspring brought its assets under management to more than $4.4 billion as of January 2018. 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. Accordingly, SportCo began negotiations with certain of its lenders around a potential restructuring transaction. The middle-market private equity firm invests in companies with strong business . Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. 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." Sav. Financial terms of the transaction were not disclosed. Their most recent investment was on Jan 1, 2020, when Steele Solutions raised William F. Dawson, Jr., Chief Executive Officer of Wellspring, said, "My partners and I are pleased to complete the successful raising of Wellspring's sixth fund, which is a direct result of the strong relationships we have built with the investment community over many years and the returns we have generated. 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. These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. 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. Wellspring Capital Management is a middle-market private equity financing firm. 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. REGISTRATION STATUS. Salaries posted anonymously by Wellspring Capital Management employees. 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. N.D.N.Y. Aug. 27, 2020). The origins of Wellspring Philanthropic Fund are shrouded. 1985). 19.)1. 112]. Id. @S1 $82N+ZJ | 1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. 3d 341, 357 (D.S.C. 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 defendants asserted common arguments in support of dismissal, but all arguments made in support of dismissal were not asserted by each defendant. 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. Investments Number of Investments 2 Wellspring Capital Management has made 2 investments.