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." 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. from 8 AM - 9 PM ET. 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 Management is a middle-market private equity financing firm. 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. 112]. Further, if the statement is solely a speculative prediction about some potential business venture or course of action being contemplated, it is not actionable. Specifically, Mr. Carles and Mr. Johnson represented to Prospect that a purchase of AcuSport would result in: (1) Debtors' capturing 20 to 30 percent of AcuSport sales; (2) Acquisition of $14 million worth of AcuSport's inventory at a significant discount; and (3) Realization of an immediate $7 million profit from the sale of the inventory acquired in the purchase. It identifies undervalued companies whose share price does not properly reflect the true value of the business. [cV3ljHkT/bx @A,20p1 ks It featured lower-priced clothing and was Gymboree's direct competitor for The Children's Place and Old Navy.. Id. 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. New York law regarding third party beneficiaries provides: With respect to South Carolina's choice of law analysis, South Carolina conflict of law principles provide that "the substantive law governing a tort action is determined by the state in which the injury occurred." 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. Try our Advanced Search for more refined results. 93], and Bradley Johnson [Docket No. 24. Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. [4] Wellspring completed fundraising on its sixth fund in 2018 with $1.45 billion of investor commitments as a successor to its $1.2 billion 2011 Fund V.[3], Wellspring focuses on the packaging, healthcare, niche manufacturing and distribution sectors.[5][6]. The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. By teaming up with strong management, Wellspring is able to unlock underlying value and. 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. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. The plaintiff's first and second causes of action are based on 11 U.S.C. 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. The plaintiff's third cause of action, for negligent misrepresentation against defendants Wellspring Capital, Mr. Carles, and Mr. Johnson, must also be dismissed. 3d 341, 357 (D.S.C. 2007) (citations omitted). Id. 91], F. Hewitt Grant [Docket No. We look forward to hearing from you. 609, 614 (Bankr. 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. When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. 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. 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. The adviser's REGISTRATION status is listed below. . Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. R. Civ. And the best part of all, documents in their CrowdSourced Library are FREE. 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. As part of the debt management process, it said it would close 375 of its 1,300 stores. Wellspring Capital manages an investment portfolio of between 10 and 15 international stocks. Id. 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. 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. Id. 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. 1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. This article about a private equity or venture capital firm based in the United States is a stub. All rights reserved. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: https://www.wellspringcapital.co.uk/disclaimer. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. 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. Designed By, https://www.wellspringcapital.co.uk/disclaimer. 2022 Wellspring Capital Management Group LLC |. endstream endobj startxref Wellspring targets investments with the following characteristics: 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. We work with successful motivated individuals to help them achieve their investment and wealth management objectives. The Wellspring ruling was not appealed, nor has any trial occurred on this matter. 'Ov}b0. The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States Many of the facts underlying the Wellspring decision are neither unique nor unusual. Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. W.D. 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. Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. Share Your Design Ideas, New JerseysMurphy Defends $10 Billion Rainy Day Fund as States Economy Slows, This Week in Crypto: Ukraine War, Marathon Digital, FTX. We look forward to carrying forward that vision and continuing our success in the years ahead.". The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. & Loan Ass'n of New York City, the plaintiff loaned funds to the defendant, secured by a mortgage on a parking garage. 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. About Wellspring Capital Management Wellspring Capital Management is a leading private equity firm headquartered in New York. These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. Id. Designed By BM Designs. 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 Industry: Investment & Asset Management. The Court addresses in this order only those arguments that clearly mandate dismissal. 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. See Sheehan v. Saoud, 650 Fed. "); Terry v. Walker, 2006 WL 736861, at *5 (W.D. The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. 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. 2012) and West Side Fed. 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. 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. An actual fraudulent conveyance is any "conveyance made . Id. 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. Sec'y of State for Def. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . David R. Duncan US Bankruptcy Judge District of South Carolina. By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, The court must construe the allegations in the complaint in the light most favorable to the plaintiff. Type: Company - Private. at 382. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. Wellspring has one of the best track records in middle-market private equity; its people, capital and reputation bring certainty to transactions. If you want your business to survive, you need to understand your-self. A second amendment to the Loan Agreements (the "Second Amendment") was executed on September 30, 2014. The firms objective is to bring partnership, experience and value creation to each investment. The firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . 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. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. The origins of Wellspring Philanthropic Fund are shrouded. We have interesting videos for you to watch on my site. hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h The case status is Pending - Other Pending. 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. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. 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. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. The District Court discussed the South Carolina Supreme Court's decision in Sheldon v. Blauvelt, 29 S.C. 453 (1888). For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. 19.)1. 1001 to 5000 Employees. My company, Asia Marketing and Management, has global ambitions but consists largely of me and the intelligence, experience, contacts, and per-sonality I bring to my clients . The court stated: See Credit Alliance Corp. v. Arthur Anderson & Co., 65 N.Y.2d 536 (NY App. The plaintiff, Ronald J. Friedman, the trustee for the SportCo Creditors' Liquidation Trust, filed an omnibus response to the motions to dismiss [Docket No. 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 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. 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. Founded in 1995, Wellspring Capital Management is a private equity firm headquartered in New York, New York. 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. 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. Later emails berate Prospect's representative for failing to agree to the AcuSport purchase more quickly. 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. Wellspring partners with highly qualified and motivated senior management teams, actively working together to unlock a companys potential by providing ongoing financial, strategic and operational support. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. This approach has historically delivered returns well above inflation. Reputation Management. 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. EFFECTIVE DATE; SEC: Terminated: 3/2/2007: Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . 1991) (unpublished table decision). 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. 2100 Geng Road, Suite 210 Palo Alto, CA 94303. at 385. 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. at 358. Id. Litigation. 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 middle-market private equity firm invests in companies with strong business . 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. Wellspring Capital Management LLC operates as a private equity firm. Public Records Policy. 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). See Scheidelman v. Henderson (In re Henderson), 423 B.R. The Loan Agreements and the First and Second Amendments each contain a choice of law provision, providing that New York law applies. Over the past 20 years, Wellspring has invested in over 35 platform investments across . 20-50554, 2021 WL 4823513 (Bankr. At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners Wellspring Capital Management is a leading private equity firm headquartered in New York. When typing in this field, a list of search results will appear and be automatically updated as you type. Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. 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.