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. Shoe designer and creative Salehe Bembury takes us on a journey from his childhood growing up in Manhattan, to an invaluable degree in industrial design, to working with some of the biggest names in fashionbefore breaking off to make his own name. 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. WELLSPRING CAPITAL MANAGEMENT LIMITED is registered in England and Wales under Company Number 12429146, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. They are not actionable. 0 2d 317 (S.D.N.Y. 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. (Wellspring). Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 Revenue: $500 million to $1 billion (USD) Competitors: Unknown. at *3 (quoting In re Sharp Int'l Corp., 403 F.3d 43, 53 (2d Cir. Our tight-knit culture enables transparent oversight and a streamlined decision-making process. Description. $46H$DrGHi`0I"DE$"J(aH! The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. Corporate Advocacy Program. When typing in this field, a list of search results will appear and be automatically updated as you type. Sec'y of State for Def. Their most recent investment was on Jan 1, 2020, when Steele Solutions raised Many of the facts underlying the Wellspring decision are neither unique nor unusual. See Silvercreek Mgmt., Inc. v. Citigroup, Inc., 346 F. Supp. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. Wellspring Capital Management is a middle-market private equity firm that has approximately $2 billion of private equity. with actual intent . Wellspring Capital Management is a leading private equity firm headquartered in New York. New York law prohibits both actual and constructive fraudulent conveyances. 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. 544(b). It identifies undervalued companies whose share price does not properly reflect the true value of the business. You can help Wikipedia by expanding it. This approach has historically delivered returns well above inflation Our clients The portfolio manager is also a co-investor in the strategy. . 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 Fund VI brings the firm's assets under management to more . 1994)). 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 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 Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. 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. (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. To summarize New York law, then, it appears that opinions can be actionable, but are not always actionable. Crazy 8 was started in August 2007. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. Id. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. Designed By BM Designs. Whether youre building capital for your family, retirement or other life goals, we can help you with our high conviction and disciplined investment style. %PDF-1.5 % The first and second causes of action are dismissed. .JFY+h!Hkw;s"$ 4AuF~!D =j]4z*g7i>B 1NEDm @@,!ptz"Br}-rh>wI }9.&>5/n2n/OefX N.D.N.Y. UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy. articles a month for anyone to read, even non-subscribers! 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. %%EOF 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. 1999)). 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. Id. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. It is not unusual for an entity facing distress to engage with their stakeholders and to negotiate any number of transaction alternatives and terms. 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. 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 filed separate motions. They were not statements of presently existing fact. Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. Please see our Privacy Policy. 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 amended complaint further states that from October 2012 to October 2013, "Ellett achieved record sales and earned revenues of approximately $1.2 billion." The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 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. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Musk Made a Mess at Twitter. 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 . Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. Wellspring Capital Management is a leading private equity firm headquartered in New York. 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." If you do not agree with these terms, then do not use our website and/or services. Try our Advanced Search for more refined results. 20-50554, 2021 WL 4823513 (Bankr. 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. 91], F. Hewitt Grant [Docket No. The court considered whether the plaintiff had proved the tort of innocent misrepresentation. 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. (Bloomberg) -- 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."We are taking this matter very seriously, and have launched an immediate internal investigation," Jeffrey Gould, Wellspring's head of marketing and investor . The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. Password (at least 8 characters required). Financial terms of the transaction were not disclosed. New York law and South Carolina law differed as to whether such a transfer was permitted. The principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. We work with successful motivated individuals to help them achieve their investment and wealth management objectives. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. A second amendment to the Loan Agreements (the "Second Amendment") was executed on September 30, 2014. The defendants' motions to dismiss are granted. pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. Ashmore for Wilson v. Dodds, 262 F. Supp. 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. App'x 143 (4th Cir. UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. In fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. 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. We are motivated and incentivised to succeed. For example, the October 27, 2017 email stated, "The only way to optimize is to merge with Acusport." In 2010, Bain Capital acquired the company for US$1.8 billion. Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. Use tab to navigate through the menu items. We look forward to carrying forward that vision and continuing our success in the years ahead.". 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. 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. to hinder, delay, or defraud either present or future creditors." 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. The firms objective is to bring partnership, experience and value creation to each investment. 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. 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. Over the past 20 years, Wellspring has invested in over 35 platform investments across . 23, 2006) (stating that some courts characterize fraudulent conveyance actions as tort actions, while others characterize them as matters in equity). In the legal profession, information is the key to success. 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. The Court now issues this order, granting the motions to dismiss for the reasons set forth below. [Amended Complaint, 54]. All rights reserved. This is the best way to manage and repair your business reputation. hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h 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. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. The middle-market private equity firm invests in companies with strong business . 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. 2021 by wellspring capital 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. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. 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. By teaming up with strong management, Wellspring is able to unlock underlying value and. 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. 101 (32). & Loan Ass'n v. Hirschfeld, 476 N.Y.S.2d 292 (N.Y. App. Salaries posted anonymously by Wellspring Capital Management employees. 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." 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. 544 and 550 and S.C. Code 27-23-10; and (3) negligent misrepresentations against Wellspring Capital, Mr. Carles, and Mr. Johnson. 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. Public Records Policy. 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. 1985). 2022 Wellspring Capital Management Group LLC |. 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. 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." Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. Id. And the best part of all, documents in their CrowdSourced Library are FREE. A finding that Prospect is a preexisting creditor compels the same result. "); Terry v. Walker, 2006 WL 736861, at *5 (W.D. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. 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. Posted By: Imright , 3/3/2023 9:31:52 PM. W.D. This article about a private equity or venture capital firm based in the United States is a stub. 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. 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. Their most recent acquisition was Caring Brands International on Oct 25, 2021. After all, corporate decisionmakers are often tasked with choosing a path where outcomes are at best uncertain. . Aug. 27, 2020). 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." Find More Contacts for Wellspring Capital Management, Edit Lists Featuring This Company Section, European Regulation Ushers In Global Future For Fundraising, Wellspring Capital Management Acquires Caring Brands International, Private Equity Firms with Investments in United States, Greater New York Area Investors with Funds Raised in 2017, Private Equity Firms with Investments in Asia. GitHub export from English Wikipedia. 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. Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. 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. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. 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. Copyright 2023 Ropes & Gray LLP. 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. 1984) for the proposition that under New York law, opinions are actionable in a negligence context. 91], Andrew Kupchik [Docket No. Federal Rule of Bankruptcy Procedure 7012(b) provides that Federal Rule of Civil Procedure 12(b) applies in adversary proceedings. 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. 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). 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 [. 609, 614 (Bankr. 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. Wellspring brought its assets under management to more than $4.4 billion as of January 2018. Jan. 25, 2016) (alteration original). The Court addresses in this order only those arguments that clearly mandate dismissal. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. 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. 962 0 obj <>stream The Partners of Wellspring constitute a long-tenured team, having worked together an average of 15 years over three funds. Jan. 30, 2023). Industry: Investment & Asset Management. D. Del. 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. Type: Company - Private. e""8*&B at 382. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. at 385. A constructive fraudulent conveyance exists under New York law if the conveyance was made without fair consideration and "(1) the transferor is insolvent or will be rendered insolvent by the transfer in question; (2) the transferor is engaged in or is about to engage in a business transaction for which its remaining property constitutes unreasonably small capital; or (3) the transferor believes that it will incur debt beyond its ability to pay." Another email stated, in part: "Gotta get your interest? 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. Founded in 1995, Wellspring invests anywhere . The assignment was executed in New York, but the personal property was located in South Carolina at the time the assignment was executed.

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