wellspring capital management lawsuit

Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. Wellspring Capital Management LLC operates as a private equity firm. Over the past 20 years, Wellspring has invested in over 35 platform investments across . Most of them do not even contain any concrete information about the proposed AcuSport purchase or the likelihood of the Borrowers' default. Angel, Fund of Funds, Venture Capital), This describes the stage of investments made by this organization (e.g. It featured lower-priced clothing and was Gymboree's direct competitor for The Children's Place and Old Navy.. 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. Id. D. Del. In June 2017, Gymboree announced it was filing for Chapter 11 bankruptcy protection. Wellspring Capital Management is a leading private equity firm headquartered in New York. Less than a year later, the liquidation trustee sued Wellspring and related parties, alleging breaches of fiduciary duty of care and loyalty. 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 firms objective is to bring partnership, experience and value creation to each investment. In Sheldon, the defendant, a New York citizen, assigned some personal property to Mr. Dickinson. Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . 1996)). Law360 takes your privacy seriously. The District Court stated that "[w]hether a fraudulent conveyance claim should be characterized as a tort action is uncertain and disputed among American jurisdictions." Ronald J. Friedman, as the trustee for the SportCo Creditors' Liquidation Trust, Plaintiff, v. Wellspring Capital Management, LLC, Wellspring Capital Partners IV, L.P., WCM Genpar IV, L.P., WCM Genpar IV GP, LLC, Alexander E. Carles, Bradley Johnson, F. Hewitt Grant, Charles E. Walker, Jr., Todd Boehly, Bernard Ziomek, and Andrew Kupchik, Defendants. Oct. 14, 2021) (Stickles, J.) The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). Defendant Bernard Ziomek is in default in this matter. Wellspring has earned the reputation as a trusted, reliable partner and is often the preferred partner of a portfolio companys senior management team. D.S.C. 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. & Loan Ass'n of New York City, the plaintiff loaned funds to the defendant, secured by a mortgage on a parking garage. Litigation. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. Jan. 25, 2016) (alteration original). 1994)). Finally, in West Side Fed. These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. The court considered whether inaccurate credit ratings can form the basis for a negligent misrepresentation claim. Id. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. 1984) for the proposition that under New York law, opinions are actionable in a negligence context. January 12, 2022 v. Holmes (In re Holmes), 610 B.R. There are no allegations in the amended complaint that the debtors' liabilities exceeded their assets at the time of the transfers. The Wellspring Defendants asserted all of these arguments and also asserted failure to state a claim under section 550 against certain defendants. Adversary Proceeding No. 19-80071-DD (Bankr. Wellspring Capital Management is a leading private equity firm headquartered in New York. As with the plaintiffs assertions around disinterested governance, such allegations may (or may not) bear any semblance to the actual facts. 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. Consumers want to see how a business took care of business. 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. A New York buyout baron has taken a leave of absence from his fund after an explosive lawsuit claimed last week that he threatened an ex-employee to keep quiet after she accused his son of raping her. 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. A former employee of Wellspring Capital Management filed a lawsuit in a New York Thursday alleging that the CEO's son, Christopher Dawson, drugged and repeatedly raped her one night in the. . The court must construe the allegations in the complaint in the light most favorable to the plaintiff. 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. Middle Market Private Equity. Contribute to chinapedia/wikipedia.en development by creating an account on GitHub. We look forward to hearing from you. Wellspring also rejected in cursory fashion the defendants argument that it is not necessarily a breach . 544(b). @S1 $82N+ZJ | Sounds like a tidy deal at year end [2017] made a lot of sense." 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. In Wellsprings view, the extent to which releases might have benefitted SportCo (as opposed to benefiting the directors alone) was at least in part a question of fact that could not be resolved on a motion to dismiss. Id. Investment Philosophy; Target Investments; Portfolio 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. They are not actionable. 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. All business will get complaints. 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 amended complaint fails to allege insolvency at the time of the transfer, an essential element of a fraudulent conveyance claim under either New York or South Carolina law, and therefore fails to state a claim under 544(b). Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States These emails can hardly be considered negligent misrepresentations. 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. . 112]. Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. ~p03ngx1Ai63*oP 4TP3Nt'xn0R8tJ'a7D2P6ILky6L;0;0SUNrtd t ";Qb[K-Ii 1g%\i) IZ3uAH0J40v0xt0v40Xt8 y CJ3t@y`$21kL 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 mega-sized private equity firm that focused on a variety of transaction situations. The amended complaint contains no allegations that either Ellett, with respect to the first cause of action, or SportCo, with respect to the second cause of action, was insolvent at the time of the distributions or became, at the time of the transfers, insolvent as a result of the transfers. Wellspring Capital Management is a middle-market private equity financing firm. Crazy 8 was started in August 2007. Va. June 8, 2011) (acknowledging that Maryland law is not clear regarding whether a fraudulent conveyance action sounds in tort, but concluding that "given that the gravamen of the fraudulent conveyance claim is the wrongfulness of the conveyance and the injury to the creditor, rather than balancing equities or fairness, it is appropriate to conclude that fraudulent conveyance claims sound in tort. Flipbooks. By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, 8h`6$67Xn@,`& By teaming up with strong management, Wellspring is able to unlock underlying value and Wellspring Capital Management, LLC; Wellspring Cap. They are simply not statements of preexisting fact that were false when made. Sav. Founded in 1995, Wellspring invests anywhere . Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. The court considered whether the plaintiff had proved the tort of innocent misrepresentation. Asia Pacific; EMEA; Latin America; UK Solicitors; UK Bar; United States California Weighs $360,000 in Reparations to Eligible Black Residents. Please see our Privacy Policy. 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 elements of a negligent misrepresentation claim under New York law are: The plaintiff also cites King County, Washington v. IKB Deutsche Industriebank, 863 F. Supp. 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. 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. 85]. 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). In fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. The defendants' motions to dismiss are granted. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 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. 3d 341, 357 (D.S.C. 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." You have to know whats happening with clients, competitors, practice areas, and industries. Angel, Fund of Funds, Venture Capital), General contact email for the organization. Menu Home; Rankings. Wellspring Capital Management has acquired 38 organizations. 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. R. Civ. Todd Boehly filed a joinder to the Wellspring Defendants' motion to dismiss. SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. 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. The court stated: See Credit Alliance Corp. v. Arthur Anderson & Co., 65 N.Y.2d 536 (NY App. However, the garage actually had only 402 parking spaces. 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. Another email stated, in part: "Gotta get your interest? 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. 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"). 91], F. Hewitt Grant [Docket No. 0 . PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. Mr. Friedman filed an amended complaint the same day. Already a subscriber? *aUQBT&1#J$8Q)=WE9M'v1s_)GG+.kbN;yELi.UD1N{f'u$y`'GCJfS;4yXwbW${%^tcxG2}+/P@U `a$b6? Founded in 1995, Wellspring Capital Management is a private equity firm headquartered in New York, New York. The court addressed the dissent's finding, that the defendant's determination of the number of parking spaces was a matter of judgment or opinion and was therefore unactionable. New York law and South Carolina law differed as to whether such a transfer was permitted. However, whether a fraudulent conveyance action is characterized as a tort action is unsettled. v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 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. The case status is Pending - Other Pending. The plaintiff's first and second causes of action are based on 11 U.S.C. 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. 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. 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. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. The Court addresses in this order only those arguments that clearly mandate dismissal. 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. Fed. You can review interesting Flipbooks on my site. 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. Fund VI brings the firm's assets under management to more than $4.4 billion. 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. 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