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. "[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.'" Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. 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. Because the Court dismisses the complaint as to all other defendants, the Court sua sponte dismisses the causes of action against Mr. Ziomek as well. . Wellspring Capital Management. And the best part of all, documents in their CrowdSourced Library are FREE. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. Sec'y of State for Def. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. 93], and Bradley Johnson [Docket No. The defendants asserted common arguments in support of dismissal, but all arguments made in support of dismissal were not asserted by each defendant. Attorney advertising. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. *aUQBT&1#J$8Q)=WE9M'v1s_)GG+.kbN;yELi.UD1N{f'u$y`'GCJfS;4yXwbW${%^tcxG2}+/P@U
`a$b6? Make your practice more effective and efficient with Casetexts legal research suite. 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). Fax: 877 376-7003. It is Bavaria's largest city and the third largest city in Germany (after Berlin and Hamburg). The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. Wellspring Capital Management is a mega-sized private equity firm that focused on a variety of transaction situations. Flipbooks. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. The firm's objective is to bring partnership, experience and value creation to each investment. 19-80071-DD (Bankr. Password (at least 8 characters required). R. Civ. They were not statements of presently existing fact. 1999)). These are high quality companies, essential to the national, regional, or global economy but whose fundamental qualities are underappreciated and undervalued by the market. [Amended Complaint, 93]. to hinder, delay, or defraud either present or future creditors." 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. 101 (32). 1996)). Crazy 8 was started in August 2007. Todd Boehly filed a joinder to the Wellspring Defendants' motion to dismiss. endstream
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The defendants' motions to dismiss are granted. 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. your most valuable capital, your ultimate resource. Accordingly, SportCo began negotiations with certain of its lenders around a potential restructuring transaction. The defendants filed separate motions. 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. 1984) for the proposition that under New York law, opinions are actionable in a negligence context. Description. We look forward to hearing from you. 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. However, the garage actually had only 402 parking spaces. The principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. In Fall 2018, SportCo Holdings, Inc. (SportCo) was facing severe financial distress. 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. The defendants argue that in the event the Court finds the choice of law provision does not apply, South Carolina choice of law principles should be consulted to reach a finding that New York law applies. Mr. Friedman filed an amended complaint the same day. The parties disagree on what law should applyfederal or state, and further if state law applies, New York or South Carolina. 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. 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 Uniform Commercial Code defines insolvency as the inability to pay debts in the ordinary course or when they come due, while the Bankruptcy Code defines insolvency as debts exceeding assets. 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. Many of the facts underlying the Wellspring decision are neither unique nor unusual. 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. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. 89], Charles E. Walker, Jr. [Docket No. 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. Jan. 25, 2016) (alteration original). These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. (Compl. 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir. Wellspring Capital Management is a leading private equity firm headquartered in New York. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. 1994)). See Scheidelman v. Henderson (In re Henderson), 423 B.R. Revenue: $500 million to $1 billion (USD) Competitors: Unknown. D.S.C. 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." Oil Producers Hand $128 Billionto Investors as Doubts Grow About Future of Fossil Fuels, Your Saturday Briefing: Trumps Comeback Plan, Wall Street Whistles Away, British Parents Turn to Home Equity to Help Young Buy Property, Japanese Unions Seek Biggest Pay Rise in 25 Years for Workers, Sorry, Fed, Most US Mortgage Rates Were Locked In During Pandemic Lows, Italys CDP Is Nearing Offer for Telecom Italia Network. 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. The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. . 3d 473, 506 (S.D.N.Y. Therefore, the plaintiff argues that he is only required to establish constructive fraud. 2100 Geng Road, Suite 210 Palo Alto, CA 94303. The firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . Accordingly, Wellspring did not find that the defendants in fact breached their duties, but rather held that the plaintiff, a litigation trust, had asserted a viable claim that could proceed to a trier of fact. A second amendment to the Loan Agreements (the "Second Amendment") was executed on September 30, 2014. The middle-market private equity firm invests in companies with strong business . at 382. While New York law and South Carolina law have slightly different tests for avoiding constructive fraudulent conveyances, there exists a common thread which is not satisfied hereinsolvency at the time of the transfer. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. The amended complaint further states, "As recently as 2015, Ellett was the fifth largest private company in South Carolina and the largest distributor of firearms in the United States, with annual revenues of $750 million, over 350 employees nationwide, and 175 employees in South Carolina." The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. %PDF-1.5
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at 385. SaaS, Android, Cloud Computing, Medical Device), Where the organization is headquartered (e.g. Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States 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. The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). The firms objective is to bring partnership, experience and value creation to each investment. 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. Finally, in West Side Fed. The court stated: See Credit Alliance Corp. v. Arthur Anderson & Co., 65 N.Y.2d 536 (NY App. You have to know whats happening with clients, competitors, practice areas, and industries. 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. 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. 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. Industry: Investment & Asset Management. [Amended Complaint, 54]. Try our Advanced Search for more refined results. Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. 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. (quoting Bell Atl. Litigation. 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. These emails can hardly be considered negligent misrepresentations. PLEASE NOTE: A verification email will be sent to your address before you can access your trial. 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. 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 CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. Id. Ellett used $54,860,549.74 of the First Amendment loan proceeds to fund distributions to the Transferee Defendants. (Wellspring).
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. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. Musk Made a Mess at Twitter. 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. At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners 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. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. Sounds like a tidy deal at year end [2017] made a lot of sense." at 385. Type: Company - Private. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. 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. You can help Wikipedia by expanding it. Less than a year later, the liquidation trustee sued Wellspring and related parties, alleging breaches of fiduciary duty of care and loyalty. Jan. 30, 2023). Wellsprings objective is to bring partnership, experience and value creation to each investment. Our tight-knit culture enables transparent oversight and a streamlined decision-making process. 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 $4.0 billion of initial capital commitments through . The Wellspring ruling was not appealed, nor has any trial occurred on this matter. The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. Munich, by far the largest city in southern Germany, lies about 30 miles (50 km) north of the edge of the Alps and along the Isar River, which flows through the middle . pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. Wellspring has earned the reputation as a trusted, reliable partner and is often the preferred partner of a portfolio companys senior management team. The Court addresses in this order only those arguments that clearly mandate dismissal. For example, the October 27, 2017 email stated, "The only way to optimize is to merge with Acusport." This is the best way to manage and repair your business reputation. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. View Videos. 2016) (citing numerous cases, recognizing disagreement among courts regarding whether fraudulent conveyance action is a tort action); MainStreet Bank v. Nat'l Excavating Corp., 791 F. Supp. The court addressed the dissent's finding, that the defendant's determination of the number of parking spaces was a matter of judgment or opinion and was therefore unactionable. We charge a minimal base fee and the rest is performance fees we generate for clients and not on the amount of capital clients allocate. e""8*&B The assignment was executed in New York, but the personal property was located in South Carolina at the time the assignment was executed. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Sav. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. REGISTRATION STATUS . Mr. Friedman was substituted as the plaintiff on January 10, 2020. .JFY+h!Hkw;s"$
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Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . Fed. 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. 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. This article about a private equity or venture capital firm based in the United States is a stub. At Wellspring we pride ourselves on client service. In support of this argument, the plaintiff cites a case from the United States District court for the District of Idaho, which was affirmed by the Ninth Circuit, as well as a case from the United States Bankruptcy Court for the Southern District of Texas, in which the court stated that 544(b) claims are unique "because they exist only to the extent of applicable state law," but then found, "Even so, such claims are not pendant state claims in federal bankruptcy cases, but are federal causes of action rooted in federal bankruptcy law and policy." Will Others Follow? 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. On 05/20/2022 Wellspring Capital Management, LLC Wellspring Cap filed an Other lawsuit against Barry, III.This case was filed in U.S. Bankruptcy Courts, New York Southern Bankruptcy.