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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. 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. See Silvercreek Mgmt., Inc. v. Citigroup, Inc., 346 F. Supp. Because the Court dismisses the complaint as to all other defendants, the Court sua sponte dismisses the causes of action against Mr. Ziomek as well. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 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. 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. at 321. All rights reserved. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. 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. 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. Oct. 14, 2021) (Stickles, J.) 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. Law360 provides the intelligence you need to remain an expert and beat the competition. Ellett used $54,860,549.74 of the First Amendment loan proceeds to fund distributions to the Transferee Defendants. at 613-14. . Federal Rule of Bankruptcy Procedure 7012(b). 20-50554, 2021 WL 4823513 (Bankr. Consumers want to see how a business took care of business. The firm's objective is to bring partnership, experience and value creation to each investment. 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. PLEASE NOTE: A verification email will be sent to your address before you can access your trial. The defendants filed separate motions. [Amended Complaint, 57]. However, the garage actually had only 402 parking spaces. Brought up in a family enjoying long-term success in real estate investment, Avrohom instead turned to the stock market. By teaming up with strong management, Wellspring is able to unlock underlying value and pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. 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. 6. 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. . These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. 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 plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. They were not statements of presently existing fact. It is notable that the first and second causes of action are based only on South Carolina law; however, because the parties disagree as to whether South Carolina or New York law should apply, the Court will analyze the first and second causes of action under both. 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. Type: Company - Private. Reputation Management. The February 20, 2018 stated, "You're [sic] economics are going down and the risk of chapter is going up. Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . 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. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. 1984) for the proposition that under New York law, opinions are actionable in a negligence context. 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. Mr. Friedman was substituted as the plaintiff on January 10, 2020. 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. The parties are in agreement that New York and South Carolina law regarding negligent misrepresentations are substantially similar and that as a result, the Court is not required to engage in a choice of law analysis as to the third cause of action. 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 . 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. Click here to login, 2023, Portfolio Media, Inc. | About | Contact Us | Legal Jobs | Advertise with Law360 | Careers at Law360 | Terms | Privacy Policy | Cookie Settings | Help | Site Map, Enter your details below and select your area(s) of interest to stay ahead of the curve and receive Law360's daily newsletters, Email (NOTE: Free email domains not supported). All business will get complaints. Time to Read: 6 minutes Will His AI Plans Be Any Different? July 5, 2017). Wellspring targets investments with the following characteristics: By teaming up with strong management, Wellspring is able to unlock underlying value and Practices: Whether youre building capital for your family, retirement or other life goals, we can help you with our high conviction and disciplined investment style. 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). The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). Posted By: Imright , 3/3/2023 9:31:52 PM. An actual fraudulent conveyance is any "conveyance made . 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. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. Finally, one place to get all the court documents we need. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. These emails can hardly be considered negligent misrepresentations. 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. 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. 3d 473, 506 (S.D.N.Y. At Wellspring we pride ourselves on client service. 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 firm's objective is to bring partnership, experience and value creation to each investment. Wellspring Capital Management is a leading private equity firm headquartered in New York. The December 26, 2017 email stated, "So you will waive [your interest payments]. Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h 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. 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. endstream endobj startxref 23, 2006) (stating that some courts characterize fraudulent conveyance actions as tort actions, while others characterize them as matters in equity). There are different definitions of insolvency. SportCo later filed a free fall bankruptcy and liquidatedallegedly causing substantial losses for unsecured creditors that would not have occurred had SportCo accepted that agreement in principle allegedly reached in December 2018. 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. 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. In 2008, Wellspring Capital, through its fund Wellspring Capital Partners, acquired Ellett. The Wellspring ruling was not appealed, nor has any trial occurred on this matter. 0 The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. 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. Wellspring, 2021 WL 4823513, at *10. 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 middle-market private equity firm invests in companies with strong business . 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. EFFECTIVE DATE; SEC: Terminated: 3/2/2007: Wellspring Capital Management. Limited partners include leading pension funds, endowments, fund of funds and family offices from the U.S., Europe and Asia. Wellsprings objective is to bring partnership, experience and value creation to each investment. Investment Philosophy; Target Investments; Portfolio The case status is Pending - Other Pending. Sounds like a tidy deal at year end [2017] made a lot of sense." Accordingly, SportCo began negotiations with certain of its lenders around a potential restructuring transaction. By teaming up with strong management, Wellspring is able to unlock underlying value and. Defendant Bernard Ziomek is in default in this matter. at *3 (quoting In re Sharp Int'l Corp., 403 F.3d 43, 53 (2d Cir. When typing in this field, a list of search results will appear and be automatically updated as you type. Id. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. 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. @S1 $82N+ZJ | (Compl. & Loan Ass'n v. Hirschfeld, 476 N.Y.S.2d 292 (N.Y. App. The amended complaint is dismissed. Finally, in West Side Fed. WELLSPRING CAPITAL MANAGEMENT LIMITED is registered in England and Wales under Company Number 12429146, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. 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. The defendants asserted common arguments in support of dismissal, but all arguments made in support of dismissal were not asserted by each defendant. Wellspring CEO Bill Dawson is taking a leave of absence, the firm said Tuesday Last week a shocking lawsuit was filed against his son Christopher It claims he drugged and violently raped and. Probitas Partners acted as exclusive placement agent and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel with respect to formation of Fund VI. Crazy 8 was started in August 2007. 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. [Amended Complaint, 51]. You can help Wikipedia by expanding it. Further, if the statement is solely a speculative prediction about some potential business venture or course of action being contemplated, it is not actionable. 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. 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. 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. New York law and South Carolina law differed as to whether such a transfer was permitted. Menu Home; Rankings. Their most recent investment was on Jan 1, 2020, when Steele Solutions raised 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. "); Terry v. Walker, 2006 WL 736861, at *5 (W.D. 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. 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. 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. The defendants' motions to dismiss are granted. P. 12(b)(6). Our tight-knit culture enables transparent oversight and a streamlined decision-making process. 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. There are also no allegations concerning expenses. 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. Jan. 25, 2016) (alteration original). 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. Note: This site is for informational purposes only. Fund VI brings the firm's assets under management to more . 609, 614 (Bankr. Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. Wellsprings investment professionals possess diverse and complementary backgrounds that combine valuable experience in private equity, restructuring, corporate finance, capital markets and corporate law. Adversary Proceeding No. The amended complaint further states that from October 2012 to October 2013, "Ellett achieved record sales and earned revenues of approximately $1.2 billion." The origins of Wellspring Philanthropic Fund are shrouded. WELLSPRING CAPITAL MANAGEMENT, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. 1999)). 85]. 90], Alexander E. Carles [Docket No. [Amended Complaint, 54]. 544 and 550 and S.C. Code 27-23-10; and (3) negligent misrepresentations against Wellspring Capital, Mr. Carles, and Mr. Johnson. Full title:Ronald J. Friedman, as the trustee for the SportCo Creditors' Liquidation, Court:UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. 2005)). SaaS, Android, Cloud Computing, Medical Device), Where the organization is headquartered (e.g. In 2010, Bain Capital acquired the company for US$1.8 billion. Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. The court stated: See Credit Alliance Corp. v. Arthur Anderson & Co., 65 N.Y.2d 536 (NY App. 2016) (citing numerous cases, recognizing disagreement among courts regarding whether fraudulent conveyance action is a tort action); MainStreet Bank v. Nat'l Excavating Corp., 791 F. Supp. 2018) (distinguishing cases where the courts dismissed negligent misrepresentation claims based on "puffery" or founded solely on speculative statements regarding future profits as a result of proposed transactions, and finding that the misrepresentations at issue were actionable because they involved present facts). .JFY+h!Hkw;s"$ 4AuF~!D =j]4z*g7i>B 1NEDm @@,!ptz"Br}-rh>wI }9.&>5/n2n/OefX Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. 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. Div. 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. REGISTRATION STATUS . The Court now issues this order, granting the motions to dismiss for the reasons set forth below. 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. You have to know whats happening with clients, competitors, practice areas, and industries. Tenn. 1991); 11 U.S.C. 24. 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 fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. A finding that Prospect is a preexisting creditor compels the same result. 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. New York law prohibits both actual and constructive fraudulent conveyances. 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. Haynsworth Sinkler Boyd, P.A. The principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. 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 RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. 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 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. Id. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. Another email stated, in part: "Gotta get your interest? Id. 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 Id. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . The District Court discussed the South Carolina Supreme Court's decision in Sheldon v. Blauvelt, 29 S.C. 453 (1888). 2012) and West Side Fed. The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. Wellspring Capital Management has acquired 38 organizations. your most valuable capital, your ultimate resource. Over the past 20 years, Wellspring has invested in over 35 platform investments across . This Supreme Court Case Could Redefine Crime, YellowstoneBackers Wanted to Cash OutThen the Streaming Bubble Burst, How Countries Leading on Early Years of Child Care Get It Right, Female Execs Are Exhausted, Frustrated and Heading for the Exits, No Major Offer Expected on Childcare in UK Budget, Biden Gives Medal of Honor to Trailblazing Special Forces Member, Climate Change Is Launching a MutantSeed Space Race, UK Braces for Rare Weather Event That Risks Late-Winter Freeze, This Former Factory Is Now New Taipeis Edgiest Project, What Do You Want to See in a Covid Memorial? Ellett Brothers LLC ("Ellett"), a South Carolina limited liability company, was a sporting goods distributor. 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. These tools have been used since the firm's inception in 1995 to generate consistent business improvement in its portfolios. They are simply not statements of preexisting fact that were false when made. [Amended Complaint, 49]. This approach has historically delivered returns well above inflation Our clients 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." PLEASE SEE THIS LINK FOR FULL DISCLAIMER: https://www.wellspringcapital.co.uk/disclaimer. 1991) (unpublished table decision). Id. 930 0 obj <>/Filter/FlateDecode/ID[<6781EE974E7B2C4D9274E8F359D28E60>]/Index[915 48]/Info 914 0 R/Length 80/Prev 600062/Root 916 0 R/Size 963/Type/XRef/W[1 2 1]>>stream Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. 91], Andrew Kupchik [Docket No. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. "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."'" Many of the facts underlying the Wellspring decision are neither unique nor unusual. 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. As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. Active, Closed, This describes the type of investor this organization is (e.g. San Francisco Bay Area, Silicon Valley), Operating Status of Organization e.g. v. Holmes (In re Holmes), 610 B.R. D.S.C. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. Litigation. The Wellspring court was ruling on a motion to dismiss, and therefore accepted the plaintiffs somewhat barebones and perhaps self serving assertions as true and in the light most favorable to that plaintiff. Prior results do not guarantee a similar outcome. Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. The firm's objective is to bring partnership, experience and value creation to each investment. If you do not agree with these terms, then do not use our website and/or services. The plaintiff's third cause of action, for negligent misrepresentation against defendants Wellspring Capital, Mr. Carles, and Mr. Johnson, must also be dismissed. Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States The Court addresses in this order only those arguments that clearly mandate dismissal.