Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. Attorney advertising. Investments Number of Investments 2 Wellspring Capital Management has made 2 investments. The defendants' remaining arguments need not be addressed. 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. Nor is it necessary for the Court to decide whether New York or South Carolina law applies under South Carolina's choice of law principles. The court considered whether inaccurate credit ratings can form the basis for a negligent misrepresentation claim. Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. 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. Contribute to chinapedia/wikipedia.en development by creating an account on GitHub. 2007) (citations omitted). PLEASE SEE THIS LINK FOR FULL DISCLAIMER: https://www.wellspringcapital.co.uk/disclaimer. 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. Therefore, the plaintiff argues that he is only required to establish constructive fraud. 598, 614 (Bankr. Flipbooks. 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. D. Del. Wellsprings investment professionals possess diverse and complementary backgrounds that combine valuable experience in private equity, restructuring, corporate finance, capital markets and corporate law. 2d 317 (S.D.N.Y. Wellspring, founded in 1995, has raised more than $4 billion of capital commitments through six private equity funds, according to its website. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. %PDF-1.5 % Mr. Friedman was substituted as the plaintiff on January 10, 2020. The elements of a negligent misrepresentation claim under South Carolina law are as follows: Turning now to the present case, the third cause of action must be dismissed under either New York or South Carolina law because the statements that the plaintiff asserts constituted negligent misrepresentations were all statements regarding potential outcomes of a potential business endeavor; thus, they relate to future events and cannot form the basis of a negligent misrepresentation claim. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. 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. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of Dawson's threats, according to an internal memo. 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. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 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 December 26, 2017 email stated, "So you will waive [your interest payments]. The firms objective is to bring partnership, experience and value creation to each investment. from 8 AM - 9 PM ET. 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. Designed By BM Designs. Wellspring Capital Management. The first and second causes of action are dismissed. We charge a minimal base fee and the rest is performance fees we generate for clients and not on the amount of capital clients allocate. 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." And the best part of all, documents in their CrowdSourced Library are FREE. 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. R. Civ. 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. 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. 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. All rights reserved. Aug. 27, 2020). Revenue: $500 million to $1 billion (USD) Competitors: Unknown. 112]. You have to know whats happening with clients, competitors, practice areas, and industries. James brought a civil suit against Trump in September, alleging the Trump organization had fraudulently inflated the value of . SportCo later filed a free fall bankruptcy and liquidatedallegedly causing substantial losses for unsecured creditors that would not have occurred had SportCo accepted that agreement in principle allegedly reached in December 2018. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. Wellspring Capital Management is a middle-market private equity firm that has approximately $2 billion of private equity. These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). 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. Id. But Wellspring would arguably undermine the ability to negotiate for what are customary and, indeed, necessary protections for corporate decisionmakers in those same transactions, such as releases, indemnity, or exculpation. These emails can hardly be considered negligent misrepresentations. 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. Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. Crazy 8 was started in August 2007. [Amended Complaint, 54]. This approach has historically delivered returns well above inflation. A litigation trust formed through the SportCo bankruptcy then sued, among others, SportCos former directors and its equity sponsor. The issue in Merritt Dredging was the sale of a barge and the priority of parties' interests in the proceeds of the sale. 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. The principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. 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. D.S.C. [cV3ljHkT/bx @A,20p1 ks Jan. 25, 2016) (alteration original). Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. 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. 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. In early 2018, Wellspring Capital notified SportCo's secured lenders that SportCo would default on a $4.7 million interest payment due in the second quarter of 2018. & Loan Ass'n v. Hirschfeld, 476 N.Y.S.2d 292 (N.Y. App. Further, if the statement is solely a speculative prediction about some potential business venture or course of action being contemplated, it is not actionable. . 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. 92], Todd Boehly [Docket No. 915 0 obj <> endobj Jan. 30, 2023). It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. York Capital Management Feb 2021 - Present2 years 1 month New York, New York, United States Wellspring Capital Management LLC 13 years 5 months Partner Dec 2016 - Dec 20204 years 1 month. Angel, Fund of Funds, Venture Capital), General contact email for the organization. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. E-mail: sandra@wellspring-cap.com; Videos. 1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners We look forward to hearing from you. 2005)). v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. Public Records Policy. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. Federal Rule of Bankruptcy Procedure 7012(b). 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. "To survive a motion to dismiss, 'a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face."'" Id. Adversary Proceeding No. Todd Boehly filed a joinder to the Wellspring Defendants' motion to dismiss. In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. However, the garage actually had only 402 parking spaces. By teaming up with strong management, Wellspring is able to unlock underlying value and 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. By teaming up with strong management, Wellspring is able to unlock underlying value and pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. 2021 by wellspring capital Management. at 385. UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. Wellspring Capital manages an investment portfolio of between 10 and 15 international stocks. %%EOF 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. 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. . ~p03ngx1Ai63*oP 4TP3Nt'xn0R8tJ'a7D2P6ILky6L;0;0SUNrtd t ";Qb[K-Ii 1g%\i) IZ3uAH0J40v0xt0v40Xt8 y CJ3t@y`$21kL Wellspring Capital Management is a mega-sized private equity firm that focused on a variety of transaction situations. 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 South Carolina Supreme Court stated that New York law would govern the validity of the transfer before it, unless applying New York law would result in a violation of South Carolina public policy. By Zachary Zagger (July 31, 2020, 9:56 PM EDT) -- 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 millions of dollars from gun seller United Sporting Cos. Inc., which blamed its bankruptcy on Donald Trump's win in the 2016 election. Access to case data within articles (numbers, filings, courts, nature of suit, and more. 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. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. 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. In an email obtained by . Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . Id. The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. Id. 91], Andrew Kupchik [Docket No. Ashmore for Wilson v. Dodds, 262 F. Supp. SEC / JURISDICTION. 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. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. They are not actionable. However, whether a fraudulent conveyance action is characterized as a tort action is unsettled. Id. Prior results do not guarantee a similar outcome. 91], F. Hewitt Grant [Docket No. The. Haynsworth Sinkler Boyd, P.A. In the legal profession, information is the key to success. A second amendment to the Loan Agreements (the "Second Amendment") was executed on September 30, 2014. If you want your business to survive, you need to understand your-self. 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. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . 3d 473, 506 (S.D.N.Y. Later emails berate Prospect's representative for failing to agree to the AcuSport purchase more quickly. This preference is a result of the Firms differentiated and conservative approach to leverage, in addition to a transparent oversight model, which is driven by our small group of senior professionals and absence of bureaucracy. As part of the debt management process, it said it would close 375 of its 1,300 stores. 1999)). 22-2003, 2023 WL 1098189 (3d Cir. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. It is Bavaria's largest city and the third largest city in Germany (after Berlin and Hamburg). Finally, in West Side Fed. Defendant Bernard Ziomek is in default in this matter. The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. at 382. hXO8WtVH,~W"I/ {;N7'0HAA0%`Ih5L!p! The defendants asserted common arguments in support of dismissal, but all arguments made in support of dismissal were not asserted by each defendant. 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. New York law requires insolvency at the time of the transfer, and South Carolina law requires insolvency both at the time of the transfer, and at the time the creditor seeks to collect the debt. The 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. [Amended Complaint, 49]. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. The Court addresses in this order only those arguments that clearly mandate dismissal. 23, 2006) (stating that some courts characterize fraudulent conveyance actions as tort actions, while others characterize them as matters in equity). 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. 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. Copyright 2023 Ropes & Gray LLP. 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. 1996)). 1001 to 5000 Employees. Financial terms of the transaction were not disclosed. 3d 341, 357 (D.S.C. (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. Angel, Fund of Funds, Venture Capital), This describes the stage of investments made by this organization (e.g. California Weighs $360,000 in Reparations to Eligible Black Residents. 8h`6$67Xn@,`& To this end, Wellspring reinforces two key principles in particular: We encourage you to contact your Ropes & Gray team to discuss these matters more fully. On May 3, 2018, SportCo agreed to acquire AcuSport's assets in bankruptcy for $7 million. Accordingly, SportCo began negotiations with certain of its lenders around a potential restructuring transaction. [Amended Complaint, 32]. Business Restructuring, D.S.C. Wellspring Capital Management is a leading private equity firm headquartered in New York. Wellspring Capital is a boutique discretionary management service - with a portfolio positioned for high performance. 541, 546 (Bankr. 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.