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Wellspring Capital Management, LLC; Wellspring Cap. 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be advised that the ever-present tendency for counterparties to exercise 20/20 hindsight is fully in effect. 1991) (unpublished table decision). 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. Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. Wellspring Capital, Mr. Carles, and Mr. Johnson were not insiders of AcuSport, and the amended complaint does not allege that they had any special knowledge or information about AcuSport that was not available to the public. 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. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. Wellspring Philanthropic: An Ocean of "Dark Money" on the Left The alleged statements simply do not constitute actionable statements that can form the basis of a negligent misrepresentation claim. Founded in 1995, Wellspring Capital Management is a private equity firm headquartered in New York, New York. The court stated: See Credit Alliance Corp. v. Arthur Anderson & Co., 65 N.Y.2d 536 (NY App. The Firm also has a long history of collaboration with entrepreneurs and closely held businesses to achieve outsized growth, with a large percentage of our portfolio companies being transitioned from founder ownership. When typing in this field, a list of search results will appear and be automatically updated as you type. For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor 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. Id. Industry: Investment & Asset Management. Wellspring Capital Management is a leading private equity firm headquartered in New York. 19-80071-DD (Bankr. 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." 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. 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 [. 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. Id. We are motivated and incentivised to succeed. This article about a private equity or venture capital firm based in the United States is a stub. 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. at 382. See Silvercreek Mgmt., Inc. v. Citigroup, Inc., 346 F. Supp. 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. Try our Advanced Search for more refined results. Wellspring Capital Management | LinkedIn The parties disagree on what law should applyfederal or state, and further if state law applies, New York or South Carolina. On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. Wellspring CEO Takes Leave After Son Accused of Rape in Lawsuit As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. An actual fraudulent conveyance is any "conveyance made . v. Holmes (In re Holmes), 610 B.R. The adviser's REGISTRATION status is listed below. This approach has historically delivered returns well above inflation. The plaintiff, however, asserts that federal conflict of law principles should govern what state's law applies in this case, because "[a] claim under 544(b) incorporates 'applicable law,' but it is a claim under federal law with a substantive federal law recovery scheme." @S1 $82N+ZJ | 1001 to 5000 Employees. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: https://www.wellspringcapital.co.uk/disclaimer. This approach has historically delivered returns well above inflation Our clients Ripoff Report | scalp-med complaints, reviews, scams, lawsuits and Wellspring Capital Management. Please Update this case to get latest docket information. However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. 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. 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. 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. 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. In fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. 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. IAPD - Investment Adviser Public Disclosure - Homepage In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. Aug. 27, 2020). 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. IAPD - Investment Adviser Public Disclosure - Homepage [Amended Complaint, 37, 40]. 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. 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. 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. Description. 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. Va. Mar. 'Ov}b0. Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. 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. An outside law firm will assist with the probe to determine the validity of these reports, which allege behavior that is not only shocking but completely inconsistent with our corporate values and standards., Family calls complaint pure fiction intended as a shakedown, Dawson steps away from firm to spend time with his family. In the legal profession, information is the key to success. 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. D.S.C. v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. In June 2017, Gymboree announced it was filing for Chapter 11 bankruptcy protection. 19.)1. Wellspring Capital Management - Crunchbase Time to Read: 6 minutes The plaintiff's first and second causes of action are based on 11 U.S.C. They were not statements of presently existing fact. to hinder, delay, or defraud either present or future creditors." PDF In the United States Bankruptcy Court for The District of Delaware 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. 544 and 550 and S.C. Code 27-23-10; and (3) negligent misrepresentations against Wellspring Capital, Mr. Carles, and Mr. Johnson. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. 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. 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. Jan. 30, 2023). Consumers want to see how a business took care of business. at 358. The United States District Court for the District of South Carolina found in a fraudulent conveyance case, relying on Terry v. Walker, that South Carolina conflict of law rules should apply to determine the applicable substantive law. I Shall [Not] Be Released: Wellspring, Director Releases, and the Duty For example, the October 27, 2017 email stated, "The only way to optimize is to merge with Acusport." 2d 520, 529 n.14 (E.D. [Amended Complaint, 32]. 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 On May 3, 2018, SportCo agreed to acquire AcuSport's assets in bankruptcy for $7 million. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. This is the best way to manage and repair your business reputation. It identifies undervalued companies whose share price does not properly reflect the true value of the business. (quoting Bell Atl. Wellspring Capital Management LLC - Company Profile and News 541, 546 (Bankr. Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. William F. Dawson, Jr., Chief Executive Officer of Wellspring, said, "My partners and I are pleased to complete the successful raising of Wellspring's sixth fund, which is a direct result of the strong relationships we have built with the investment community over many years and the returns we have generated. 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. Corporate Advocacy Program. SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. The principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. 1999)). Wellspring Capital Management Salaries - Glassdoor endstream endobj startxref Wellspring Capital Management LLC operates as a private equity firm. A social media content creator signed an agreement with Birchbox in May of 2022 and hadn't been paid the $2,500 due as of Jan. 24, despite several emails to the company. The Debtors in the bankruptcy cases, pending in the District of Delaware, are SportCo Holdings, Inc.; Ellett Brothers, LLC; United Sporting Company, Inc.; Bonitz Brothers, Inc.; Evans Sports, Inc.; Jerry's Sports, Inc.; Outdoor Sports Headquarters, Inc.; Quality Boxes, Inc.; and Simmons Guns Specialties, Inc. UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy. Federal Rule of Bankruptcy Procedure 7012(b) provides that Federal Rule of Civil Procedure 12(b) applies in adversary proceedings. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. Defendant Bernard Ziomek is in default in this matter. Id. PDF Wellspring CEO Takes Leave After Son Accused of Rape in Lawsuit Id. Probitas Partners acted as exclusive placement agent and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel with respect to formation of Fund VI. Prior results do not guarantee a similar outcome. The portfolio manager is also a co-investor in the strategy. Further, if the statement is solely a speculative prediction about some potential business venture or course of action being contemplated, it is not actionable. 2021 by wellspring capital Management. N.D.N.Y. 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." [Amended Complaint, 51]. These emails may be a lot of things, but negligent misrepresentations they are not. Middle Market Private Equity. 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. Antares Capital Supports Wellspring Capital Management's Acquisition of Founded in 1995, Wellspring invests anywhere . at *3 (quoting In re Sharp Int'l Corp., 403 F.3d 43, 53 (2d Cir. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. 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. 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. Tenn. 1991); 11 U.S.C. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. Mr. Friedman filed an amended complaint the same day. Salaries posted anonymously by Wellspring Capital Management employees. 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 0 544(b). 1985). The Loan Agreements and the First and Second Amendments each contain a choice of law provision, providing that New York law applies. App'x 143 (4th Cir. The firm's objective is to bring partnership, experience and value creation to each investment. Id. 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. 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." 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. Martin Davis, 72; Created Modern Paramount, "Financial Firm Wellspring Capital to Take Penthouse at 605 Third Avenue", "Wellspring Capital Management taps $1.45bn Fund VI for Cadence Petroleum Group buyout", "SupplyOne Acquires Fellow Packaging Distributor Romanow Container", "Healthcare & Life Sciences Private Equity Deal Tracker: Wellspring Acquires Pentec Health", https://en.wikipedia.org/w/index.php?title=Wellspring_Capital_Management&oldid=1118006247, This page was last edited on 24 October 2022, at 18:15. Menu Home; Rankings. These tools have been used since the firm's inception in 1995 to generate consistent business improvement in its portfolios. 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 . Less than a year later, the liquidation trustee sued Wellspring and related parties, alleging breaches of fiduciary duty of care and loyalty. The issue in Merritt Dredging was the sale of a barge and the priority of parties' interests in the proceeds of the sale. 92], Todd Boehly [Docket No. What happened to Birchbox? | Retail Dive A litigation trust formed through the SportCo bankruptcy then sued, among others, SportCos former directors and its equity sponsor. Wellspring Capital Partners VI Profile: Investments & Returns | PitchBook 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 firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. . 24. Christopher Dawson: 5 Fast Facts You Need to Know - Heavy 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. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. Wellspring Capital is a boutique discretionary management service - with a portfolio positioned for high performance. Mr. Friedman was substituted as the plaintiff on January 10, 2020. The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. Id. hXO8WtVH,~W"I/ {;N7'0HAA0%`Ih5L!p! Wellspring is a cautionary tale for the fiduciaries of a distressed or potentially distressed corporationparticularly with respect to negotiations around release and/or indemnification provisions for those same fiduciaries. When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. Jan. 25, 2016) (alteration original). 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. Their most recent acquisition was Caring Brands International on Oct 25, 2021. Many of the facts underlying the Wellspring decision are neither unique nor unusual. King County, 863 F. Supp.2d at 318. 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. REGISTRATION STATUS. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. View Videos. The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). SEC / JURISDICTION. D.S.C. Wellspring has earned the reputation as a trusted, reliable partner and is often the preferred partner of a portfolio companys senior management team. 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 firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. A second amendment to the Loan Agreements (the "Second Amendment") was executed on September 30, 2014. Wellspring Capital buys Center for Diagnostic Imaging - Minneapolis 609, 614 (Bankr. Phone: 650 729-8626. Limited partners include leading pension funds, endowments, fund of funds and family offices from the U.S., Europe and Asia. 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. 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. 2d 317 (S.D.N.Y. Id. Mar 19, 2019 New York private equity firm Wellspring Capital Management said Monday it has acquired Center for Diagnostic Imaging, a Minneapolis-based operator of MRI and CT scanners that. at 613-14. Copyright 2023 Ropes & Gray LLP. 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. Federal Rule of Bankruptcy Procedure 7012(b). 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.