We work with successful motivated individuals to help them achieve their investment and wealth management objectives. . 2021 by wellspring capital Management. Federal Rule of Bankruptcy Procedure 7012(b). When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. Wellspring Capital Management, LLC; Wellspring Cap. These are high quality companies, essential to the national, regional, or global economy but whose fundamental qualities are underappreciated and undervalued by the market. However, whether a fraudulent conveyance action is characterized as a tort action is unsettled. SaaS, Android, Cloud Computing, Medical Device), Where the organization is headquartered (e.g. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. As we here at Ropes & Gray look back on 2021 and ahead into 2022, we call your attention to the lessons of Friedman v. Wellspring Capital Mgmt., LLC (In re SportCo Holdings, Inc.), Case No. 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. 609, 614 (Bankr. In June 2017, Gymboree announced it was filing for Chapter 11 bankruptcy protection. The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. 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. New York law and South Carolina law differed as to whether such a transfer was permitted. Haynsworth Sinkler Boyd, P.A. The plaintiff/litigation trust also asserted claims directly against Wellspring Capital under an aiding and abetting theoryi.e., asserting that Wellspring Capital itself aided and abetted the SportCo Boards alleged fiduciary duty breaches. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. See Sheehan v. Saoud, 650 Fed. 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. v. Holmes (In re Holmes), 610 B.R. It identifies undervalued companies whose share price does not properly reflect the true value of the business. [Amended Complaint, 51]. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . 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. Id. These emails can hardly be considered negligent misrepresentations. 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). 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." endstream endobj startxref 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. Most of them do not even contain any concrete information about the proposed AcuSport purchase or the likelihood of the Borrowers' default. 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 In particular, the bankruptcy court held that the allegations failed to support a conclusion that the SportCo directors were somehow acting on an uninformed basis or that the rejection of the out-of-court restructuring was grossly negligent. 2022 Wellspring Capital Management Group LLC |. %%EOF For example, the October 27, 2017 email stated, "The only way to optimize is to merge with Acusport." Further, if the statement is solely a speculative prediction about some potential business venture or course of action being contemplated, it is not actionable. The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. 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. 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. Wellspring also rejected in cursory fashion the defendants argument that it is not necessarily a breach . You have to know whats happening with clients, competitors, practice areas, and industries. The issue in Merritt Dredging was the sale of a barge and the priority of parties' interests in the proceeds of the sale. [Amended Complaint, 49]. 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. 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." Whether youre building capital for your family, retirement or other life goals, we can help you with our high conviction and disciplined investment style. 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 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. 2012) and West Side Fed. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. Copyright 2023 Ropes & Gray LLP. 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. 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 . PLEASE SEE THIS LINK FOR FULL DISCLAIMER: This site is for informational purposes only. Wellsprings objective is to bring partnership, experience and value creation to each investment. 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 further notes that here, section 548 is not available to the plaintiff due to the timing of the transfers and the bankruptcy filings. 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. 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. The amended complaint is dismissed. The principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. The company will explode Rich!" The court must construe the allegations in the complaint in the light most favorable to the plaintiff. This article about a private equity or venture capital firm based in the United States is a stub. Wellspring has the flexibility to complete transactions ranging from $100 million to as much as $1.5 billion in total value in a wide range of industries. Middle Market Private Equity. In fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. As with the plaintiffs assertions around disinterested governance, such allegations may (or may not) bear any semblance to the actual facts. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. Wellspring Capital Management has acquired 38 organizations. Law360 provides the intelligence you need to remain an expert and beat the competition. We look forward to hearing from you. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. Already a subscriber? D.S.C. Cancellation and Refund Policy, Privacy Policy, and Aug. 27, 2020). 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. Attorney advertising. 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. The firm's objective is to bring partnership, experience and value creation to each investment. Id. Litigation. In 2010, Bain Capital acquired the company for US$1.8 billion. Finally, one place to get all the court documents we need. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. Wellspring Capital Management LLC operates as a private equity firm. These tools have been used since the firm's inception in 1995 to generate consistent business improvement in its portfolios. 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"). Posted By: Imright , 3/3/2023 9:31:52 PM. Menu Home; Rankings. Corporate Advocacy Program. In this process, SportCo initially exchanged a term sheet with certain of its lenders in early November 2018 and allegedly reached an agreement in principle in late December 2018. The Wellspring ruling was not appealed, nor has any trial occurred on this matter. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. Tenn. 1991); 11 U.S.C. All rights reserved. 19-80071-DD (Bankr. 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. at 358. 8h`6$67Xn@,`& About Wellspring Capital Management Wellspring Capital Management is a leading private equity firm headquartered in New York. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. S.D. Phone: 650 729-8626. (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 . There are also no allegations concerning expenses. Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. The court considered whether the plaintiff had proved the tort of innocent misrepresentation. 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. However, the garage actually had only 402 parking spaces. 6. Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. 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 Court now issues this order, granting the motions to dismiss for the reasons set forth below. Revenue: $500 million to $1 billion (USD) Competitors: Unknown. 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. 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. Angel, Fund of Funds, Venture Capital), General contact email for the organization. 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 [. 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. 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. Investment Philosophy; Target Investments; Portfolio Wellsprings facts, as alleged, are fairly straightforward. 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. Exempt Reporting Advisers ("ERA") are investment advisers that are not required to register as investment advisers because they rely on certain exemptions from registration under sections 203 (l) and 203 (m) of the Investment Advisers Act of 1940 and related rules. Password (at least 8 characters required). Under certain conditions, section 548 allows the avoidance of a transfer made within two years of the date of the filing of the bankruptcy petition. Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. A litigation trust formed through the SportCo bankruptcy then sued, among others, SportCos former directors and its equity sponsor. For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. 2d 317 (S.D.N.Y. The defendants filed separate motions. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. Our tight-knit culture enables transparent oversight and a streamlined decision-making process. CDI's smaller Atlanta peer said to weigh sale in '18. Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. Active, Closed, This describes the type of investor this organization is (e.g. 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. 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. App'x 143 (4th Cir. $46H$DrGHi`0I"DE$"J(aH! 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. Wellspring, founded in 1995, has raised more than $4 billion of capital commitments through six private equity funds, according to its website. at *3 (quoting In re Sharp Int'l Corp., 403 F.3d 43, 53 (2d Cir. The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. 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. 598, 614 (Bankr. 401(k)/403(b) Plan Litigation Risk Management, Analytics & Behavioral Science Consulting (R&G Insights Lab), Committee on Foreign Investment in the United States (CFIUS), E-Discovery, Discovery Strategies & Data Analytics, Executive Compensation & Employee Benefits, Government Enforcement / White Collar Criminal Defense, Life Sciences Licensing, Collaborations & Joint Ventures, The Music Stops on the Texas Two-Step: Third Circuit Dismisses LTL Bankruptcy Case. Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. 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. Fund VI brings the firm's assets under management to more . James brought a civil suit against Trump in September, alleging the Trump organization had fraudulently inflated the value of . 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. 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. 1984) for the proposition that under New York law, opinions are actionable in a negligence context. Will His AI Plans Be Any Different? And the best part of all, documents in their CrowdSourced Library are FREE. Time to Read: 6 minutes from 8 AM - 9 PM ET. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. 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." The adviser's REGISTRATION status is listed below. Wellsprings investment professionals possess diverse and complementary backgrounds that combine valuable experience in private equity, restructuring, corporate finance, capital markets and corporate law. These emails may be a lot of things, but negligent misrepresentations they are not. 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. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. to hinder, delay, or defraud either present or future creditors." 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. In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. Wellspring Capital Management is a leading private equity firm headquartered in New York. W.D. The first and second causes of action are dismissed. 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. . 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. Please Update this case to get latest docket information. 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. Wellspring Capital Management is a middle-market private equity financing firm. "[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 prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . 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. WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. Their most recent acquisition was Caring Brands International on Oct 25, 2021. While property interests are defined by state law in the absence of a compelling federal interest, the Court would look to the Bankruptcy Code in making a determination of whether property is property of the estate under section 541. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. 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. 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. If you do not agree with these terms, then do not use our website and/or services. Jan. 30, 2023). REGISTRATION STATUS. Id. Investment Approach Target Investments Wellspring's objective is to acquire or invest in companies that are well-positioned to capitalize on change and can benefit from Wellspring's operating and financial expertise. [cV3ljHkT/bx @A,20p1 ks 23, 2006) (stating that some courts characterize fraudulent conveyance actions as tort actions, while others characterize them as matters in equity). In Sheldon, the defendant, a New York citizen, assigned some personal property to Mr. Dickinson. 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 Sav. Amazon Pauses Construction on Second Headquarters in Virginia as It Cuts Jobs, Amazon Is Closing Its Cashierless Stores in NYC, San Francisco and Seattle, iPhone Maker Plans $700 Million India Plant in Shift From China, Stock Traders Are Ignoring Blaring Bond Alarms, S&P 500 Notches Best Week Since Late January: Markets Wrap. (quoting Bell Atl. 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. [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].