2021 by wellspring capital Management. . Over the past 27 years, Wellspring has invested in over 50 platform investments and completed over 80 add-on acquisitions across various segments of the U.S. and global economies. at 321. D. Del. A second amendment to the Loan Agreements (the "Second Amendment") was executed on September 30, 2014. Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States Otherwise you cannot get paid." Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. Adversary Proceeding No. In April 2018, Prospect agreed to defer two quarters of cash interest payments. The District Court discussed the South Carolina Supreme Court's decision in Sheldon v. Blauvelt, 29 S.C. 453 (1888). These tools have been used since the firm's inception in 1995 to generate consistent business improvement in its portfolios. SaaS, Android, Cloud Computing, Medical Device), Where the organization is headquartered (e.g. Wellspring Capital Management LLC operates as a private equity firm. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. New York law and South Carolina law differed as to whether such a transfer was permitted. from 8 AM - 9 PM ET. They were not statements of presently existing fact. What happened to Birchbox? | Retail Dive 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. 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. CDI's smaller Atlanta peer said to weigh sale in '18. hb```e``jb`a`\ @1V h`2q:lp10qfaqB,X3s10iH(^t1 Id. 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. R. Civ. Law360 provides the intelligence you need to remain an expert and beat the competition. 1991) (unpublished table decision). Time to Read: 6 minutes
Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. Wellspring Capital Management Closes Fund VI at $1.415 Billion For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. 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. 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. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. 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. 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 . Investors in its most recent fund include the Washington State Retirement System, Minnesota State Board of Investment, Connecticut Retirement Plans & Trust Funds, Kansas Public Employees' Retirement The Wellspring ruling was not appealed, nor has any trial occurred on this matter. The assignment was executed in New York, but the personal property was located in South Carolina at the time the assignment was executed. Pentec Health Inc. Acquired by Wellspring Capital Management Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. 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. Please Update this case to get latest docket information. Haynsworth Sinkler Boyd, P.A. The third cause of action asserts that those parties "made numerous representations to Prospect concerning the AcuSport Purchase, including that the purchase would allow the Debtors to acquire $14 million worth of AcuSport inventory at a substantial discount; that it would result in the Debtors' immediate realization of a $7 million profit on the sale of the AcuSport inventory so purchased; and that it would result in the Debtors' capturing 20% to 30% of AcuSport sales." Please see our Privacy Policy. D.S.C. Their most recent acquisition was Caring Brands International on Oct 25, 2021. 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. It is not unusual for an entity facing distress to engage with their stakeholders and to negotiate any number of transaction alternatives and terms. Wellspring Capital Management. The firm's objective is to bring partnership, experience and value creation to each investment. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. By teaming up with strong management, Wellspring is able to unlock underlying value and Wellspring Capital Lawsuit | PDF | Limited Partnership | Loans - Scribd 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 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. 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. 'Ov}b0. (Compl. It identifies undervalued companies whose share price does not properly reflect the true value of the business. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. 2d 520, 529 n.14 (E.D. After the defendants filed replies, the Court held a hearing on June 18, 2020. 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. 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." It featured lower-priced clothing and was Gymboree's direct competitor for The Children's Place and Old Navy.. Jan. 30, 2023). 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. 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 Court now issues this order, granting the motions to dismiss for the reasons set forth below. 2100 Geng Road, Suite 210 Palo Alto, CA 94303. We have interesting videos for you to watch on my site. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. Wellspring CEO Takes Leave After Son Accused of Rape in Lawsuit [Amended Complaint, 54]. 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? 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 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. Id. Wellspring targets investments with the following characteristics: Wellspring Capital Exits Strategic Investment in Great Lakes Caring "[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.'" The firm's objective is to bring partnership, experience and value creation to each investment. The court must construe the allegations in the complaint in the light most favorable to the plaintiff. 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. 1984) for the proposition that under New York law, opinions are actionable in a negligence context. Wellspring also rejected in cursory fashion the defendants argument that it is not necessarily a breach . We look forward to hearing from you. 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. Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. Wellspring brought its assets under management to more than $4.4 billion as of January 2018. 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. 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. Wellspring Philanthropic: An Ocean of "Dark Money" on the Left 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. Description. 92], Todd Boehly [Docket No. Oct. 14, 2021) (Stickles, J.) (quoting Bell Atl. Designed By, https://www.wellspringcapital.co.uk/disclaimer. Wellspring CEO Takes Leave After Son Accused of Rape in Lawsuit
New York law prohibits both actual and constructive fraudulent conveyances. You have to know whats happening with clients, competitors, practice areas, and industries. 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. Sav. 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. 101 (32). Similarly, Merritt Dredging suggests that federal law would apply to a section 548 cause of action, but that state law should apply to fraudulent conveyance claims based on state law. *aUQBT&1#J$8Q)=WE9M'v1s_)GG+.kbN;yELi.UD1N{f'u$y`'GCJfS;4yXwbW${%^tcxG2}+/P@U
`a$b6? Therefore, the plaintiff argues that he is only required to establish constructive fraud. All rights reserved. However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. If our offering sounds like something you would like to discuss, please get in touch on any of our contact details or the form below. Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. We look forward to carrying forward that vision and continuing our success in the years ahead.". The firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . Finally, although the plaintiff asserts that federal conflict of law principles should apply, he argues that even under South Carolina conflict of law rules, South Carolina law should apply.
Angel, Fund of Funds, Venture Capital), General contact email for the organization. Law360 takes your privacy seriously. Tenn. 1991); 11 U.S.C. Id. Cancellation and Refund Policy, Privacy Policy, and Wellspring CEO takes leave after explosive rape allegations against his son 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.
The plaintiff's third cause of action, for negligent misrepresentation against defendants Wellspring Capital, Mr. Carles, and Mr. Johnson, must also be dismissed. REGISTRATION STATUS. 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. Will His AI Plans Be Any Different? Corp. v. Twombly, 550 U.S. 544, 555 (2007)). REGISTRATION STATUS . For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. [Amended Complaint, 32]. 19-80071-DD (Bankr. They are simply not statements of preexisting fact that were false when made. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . 22-2003, 2023 WL 1098189 (3d Cir. By teaming up with strong management, Wellspring is able to unlock underlying value and. The firm's objective is to bring partnership, experience and value creation to each investment. From reading the Financial Times at school to managing his first portfolio at just 18, he has built Wellspring Capital into a nationwide wealth management boutique. ~p03ngx1Ai63*oP 4TP3Nt'xn0R8tJ'a7D2P6ILky6L;0;0SUNrtd t
";Qb[K-Ii 1g%\i) IZ3uAH0J40v0xt0v40Xt8 y CJ3t@y`$21kL Prospect is a sophisticated party and, to the extent that it wanted to confirm the predictions made by Mr. Carles and Mr. Johnson were in fact accurate, it could have exercised due diligence. 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. 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. Wall Street tycoon takes leave of absence after lawsuit claims his son The defendants asserted common arguments in support of dismissal, but all arguments made in support of dismissal were not asserted by each defendant. N.D.N.Y. The issue in Merritt Dredging was the sale of a barge and the priority of parties' interests in the proceeds of the sale. 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. Flipbooks. hXO8WtVH,~W"I/
{;N7'0HAA0%`Ih5L!p! Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. Id. Defendant Bernard Ziomek is in default in this matter. Hiding negative complaints is only a Band-Aid. 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. 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 February 20, 2018 stated, "You're [sic] economics are going down and the risk of chapter is going up. Financial terms of the transaction were not disclosed. 1996)). On March 7, 2013, the Borrowers entered into a First Amendment to the Loan Agreements (the "First Amendment"), pursuant to which Prospect loaned the Borrowers an additional $60 million. 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. Business Restructuring,
There are different definitions of insolvency. Munich | Germany, History, Population, Oktoberfest, & Facts - Britannica 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). An actual fraudulent conveyance is any "conveyance made . The parties disagree on what law should applyfederal or state, and further if state law applies, New York or South Carolina. McDermott Will & Emery LLP > San Francisco > United States | The Legal 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 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. 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 [. with actual intent . Particularly where negotiations may involve releases, indemnification, or similar provisions, be advised that the ever-present tendency for counterparties to exercise 20/20 hindsight is fully in effect. 3d 341, 357 (D.S.C. Ellett used $54,860,549.74 of the First Amendment loan proceeds to fund distributions to the Transferee Defendants. 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. Fax: 877 376-7003. These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. Wellspring Capital Management LLC - Company Profile and News Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. 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. A litigation trust formed through the SportCo bankruptcy then sued, among others, SportCos former directors and its equity sponsor. Why is this public record being published online? Wellspring CEO takes leave after explosive rape allegations against his