1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. "[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.'" [Amended Complaint, 51]. 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. The parties disagree on what law should applyfederal or state, and further if state law applies, New York or South Carolina. 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. at 385. It identifies undervalued companies whose share price does not properly reflect the true value of the business. The defendants' remaining arguments need not be addressed. App'x 143 (4th Cir. The plaintiff, Ronald J. Friedman, the trustee for the SportCo Creditors' Liquidation Trust, filed an omnibus response to the motions to dismiss [Docket No. 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. 2012) and West Side Fed. 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. Posted By: Imright , 3/3/2023 9:31:52 PM. 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. Use tab to navigate through the menu items. In considering whether to grant a motion to dismiss under Rule 12(b)(6), the court may take judicial notice of matters of public record and may consider documents attached to the complaint and the motion to dismiss, "so long as they are integral to the complaint and authentic." [Amended Complaint, 54]. 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. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . The firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . The firm's objective is to bring partnership, experience and value creation to each investment. 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. Less than a year later, the liquidation trustee sued Wellspring and related parties, alleging breaches of fiduciary duty of care and loyalty. The Loan Agreements and the First and Second Amendments each contain a choice of law provision, providing that New York law applies. Sav. By teaming up with strong management, Wellspring is able to unlock underlying value and The Wellspring ruling was not appealed, nor has any trial occurred on this matter. The middle-market private equity firm invests in companies with strong business . 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. As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. [Amended Complaint, 37, 40]. To summarize New York law, then, it appears that opinions can be actionable, but are not always actionable. at 382. Wellspring Capital Management Fund Manager Website www.wellspringcapital.com Fund Category Private Equity Close Date 0000-00-00 Fund Family Wellspring Capital Partners Native Currency USD Fund Manager's Location 605 Third Avenue 44th Floor New York, NY 10158 United States +1 (212) 000-0000 Fund Domiciles Canada & Loan Ass'n of New York City, the plaintiff loaned funds to the defendant, secured by a mortgage on a parking garage. Investments Number of Investments 2 Wellspring Capital Management has made 2 investments. We work with successful motivated individuals to help them achieve their investment and wealth management objectives. & Loan Ass'n v. Hirschfeld, 476 N.Y.S.2d 292 (N.Y. App. 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. Jan. 25, 2016) (alteration original). 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. Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. Id. (Wellspring). 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. See Scheidelman v. Henderson (In re Henderson), 423 B.R. 962 0 obj <>stream The February 20, 2018 stated, "You're [sic] economics are going down and the risk of chapter is going up. 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. %%EOF at 358. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of . 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. A free inside look at Wellspring Capital Management salary trends based on 22 salaries wages for 17 jobs at Wellspring Capital Management. The firm's objective is to bring partnership, experience and value creation to each investment. Attorney advertising. 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. The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . 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. Wellsprings facts, as alleged, are fairly straightforward. Id. UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. The South Carolina Supreme Court stated that New York law would govern the validity of the transfer before it, unless applying New York law would result in a violation of South Carolina public policy. REGISTRATION STATUS . WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. Charles E. Walker, Jr. argued in support of dismissal due to lack of a triggering creditor based on Prospect's secured status, failure to state a claim under New York law due to lack of insolvency, on equity grounds because Prospect failed to obtain a personal guaranty from Mr. Walker and because the distributions were specifically contemplated by the loan transaction, and due to failure to state a claim for fraudulent conveyance under South Carolina law. The case status is Pending - Other Pending. Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). 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." Mr. Friedman was substituted as the plaintiff on January 10, 2020. Their most recent investment was on Jan 1, 2020, when Steele Solutions raised It is not unusual for an entity facing distress to engage with their stakeholders and to negotiate any number of transaction alternatives and terms. N.D.N.Y. 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 a leading private equity firm headquartered in New York. 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. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. Wellspring has the flexibility to complete transactions ranging from $100 million to as much as $1.5 billion in total value in a wide range of industries. New York law and South Carolina law differed as to whether such a transfer was permitted. 8h`6$67Xn@,`& 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. Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. Salaries posted anonymously by Wellspring Capital Management employees. Wellsprings objective is to bring partnership, experience and value creation to each investment. At Wellspring we pride ourselves on client service. 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. Despite that agreement in principle, it was alleged in relevant part that: Unable to agree on the release and indemnification issue, SportCos out-of-court restructuring failed, and SportCo defaulted on its funded debt shortly thereafter. 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. Sounds like a tidy deal at year end [2017] made a lot of sense." . It is Bavaria's largest city and the third largest city in Germany (after Berlin and Hamburg). $46H$DrGHi`0I"DE$"J(aH! There are also no allegations concerning expenses. The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. They are not actionable. Therefore, the plaintiff argues that he is only required to establish constructive fraud. 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. REGISTRATION STATUS. 544(b). Copyright 2023 Ropes & Gray LLP. This article about a private equity or venture capital firm based in the United States is a stub. The first and second causes of action are dismissed. 6. 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. 2021 by wellspring capital Management. 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. After the defendants filed replies, the Court held a hearing on June 18, 2020. 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 . The emails, often using colorful language and harassing tones, essentially represent to Prospect that if the AcuSport transaction is not completed, Prospect will not get paid on its obligations. The principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. 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. Div. Id. The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. The court considered whether inaccurate credit ratings can form the basis for a negligent misrepresentation claim. When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. [Amended Complaint, 49]. 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. at 321. D. Del. 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. Law360 provides the intelligence you need to remain an expert and beat the competition. And the best part of all, documents in their CrowdSourced Library are FREE. 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. 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. R. Civ. 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 firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. Accordingly, Wellspring did not find that the defendants in fact breached their duties, but rather held that the plaintiff, a litigation trust, had asserted a viable claim that could proceed to a trier of fact. Another email stated, in part: "Gotta get your interest? View Videos. 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. S.D. 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. Make your practice more effective and efficient with Casetexts legal research suite. 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. 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. James brought a civil suit against Trump in September, alleging the Trump organization had fraudulently inflated the value of . 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 . Why is this public record being published online? 85]. Wellspring Capital manages an investment portfolio of between 10 and 15 international stocks. 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. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. Amazon Pauses Construction on Second Headquarters in Virginia as It Cuts Jobs, Amazon Is Closing Its Cashierless Stores in NYC, San Francisco and Seattle, iPhone Maker Plans $700 Million India Plant in Shift From China, Stock Traders Are Ignoring Blaring Bond Alarms, S&P 500 Notches Best Week Since Late January: Markets Wrap. In 2008, Wellspring Capital, through its fund Wellspring Capital Partners, acquired Ellett. 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. Angel, Fund of Funds, Venture Capital), This describes the stage of investments made by this organization (e.g. See Silvercreek Mgmt., Inc. v. Citigroup, Inc., 346 F. Supp. "); Terry v. Walker, 2006 WL 736861, at *5 (W.D. at 382. Mr. Friedman filed an amended complaint the same day. 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. "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."'" Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. 19-80071-DD (Bankr. 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. 91], F. Hewitt Grant [Docket No. 2d 317 (S.D.N.Y. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States Designed By, https://www.wellspringcapital.co.uk/disclaimer. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. 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. Id. California Weighs $360,000 in Reparations to Eligible Black Residents. Founded in 1995, Wellspring Capital Management is a private equity firm headquartered in New York, New York. 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. There are no allegations in the amended complaint that the debtors' liabilities exceeded their assets at the time of the transfers. Id. 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. The District Court discussed the South Carolina Supreme Court's decision in Sheldon v. Blauvelt, 29 S.C. 453 (1888). at 385. Whether youre building capital for your family, retirement or other life goals, we can help you with our high conviction and disciplined investment style. 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. 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. Middle Market Private Equity. This is the best way to manage and repair your business reputation. 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. Wellspring Capital is a boutique discretionary management service - with a portfolio positioned for high performance. 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir. Federal Rule of Bankruptcy Procedure 7012(b) provides that Federal Rule of Civil Procedure 12(b) applies in adversary proceedings. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. The plaintiff's first and second causes of action are based on 11 U.S.C. All rights reserved. Wellspring Capital Management is a leading private equity firm headquartered in New York. 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. 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. The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. 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. ), Create custom alerts for specific article and case topics and, I took a free trial but didn't get a verification email. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. Munich, German Mnchen, city, capital of Bavaria Land (state), southern Germany. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. 24. 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. 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." 0 The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. 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 [. Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. The Court also notes that, setting the other factors aside, given the extreme nature of the urgent tone of these emails, and the highly sophisticated status of Prospect, Prospect satisfying the justifiable reliance element of a negligent misrepresentation claim is questionable, at best. Law360 takes your privacy seriously. 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. 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. 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." 3d 473, 506 (S.D.N.Y. 544 and 550 and S.C. Code 27-23-10; and (3) negligent misrepresentations against Wellspring Capital, Mr. Carles, and Mr. Johnson. Fund VI brings the firm's assets under management to more . 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. As with the plaintiffs assertions around disinterested governance, such allegations may (or may not) bear any semblance to the actual facts. at 613-14. 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. Phone: 650 729-8626. Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. However, the garage actually had only 402 parking spaces. 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.
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