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(quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. Wellspring Capital Acquires SupplyOne | Markets Insider In fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. 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 Philanthropic: An Ocean of "Dark Money" on the Left Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. Full title:Ronald J. Friedman, as the trustee for the SportCo Creditors' Liquidation, Court:UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. "); Terry v. Walker, 2006 WL 736861, at *5 (W.D. 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. 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 Middle Market Private Equity. 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. 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. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. 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 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. 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. Certain state securities regulatory authorities have similar exemptions based on . In June 2019, SportCo and its subsidiaries (the "Debtors") filed chapter 11 bankruptcy cases in the United States Bankruptcy Court for the District of Delaware. Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. We work with successful motivated individuals to help them achieve their investment and wealth management objectives. 90], Alexander E. Carles [Docket No. PDF In the United States Bankruptcy Court for The District of Delaware WELLSPRING CAPITAL MANAGEMENT, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. Wellspring Capital Management LLC - Company Profile and News SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. Wellspring Capital Management. Gymboree - Wikipedia Pentec Health Inc. Acquired by 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. Tex. 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. 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. Salaries posted anonymously by Wellspring Capital Management employees. Wellspring Capital is a boutique discretionary management service - with a portfolio positioned for high performance. Time to Read: 6 minutes 1994)). *aUQBT&1#J$8Q)=WE9M'v1s_)GG+.kbN;yELi.UD1N{f'u$y`'GCJfS;4yXwbW${%^tcxG2}+/P@U `a$b6? The plaintiff's first and second causes of action are based on 11 U.S.C. 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 [. These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. Id. E-mail: sandra@wellspring-cap.com; Videos. IAPD - Investment Adviser Public Disclosure - Homepage Wellspring Capital Management 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. Wellspring CEO Takes Leave After Son Accused of Rape in Lawsuit 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. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. These tools have been used since the firm's inception in 1995 to generate consistent business improvement in its portfolios. Munich | Germany, History, Population, Oktoberfest, & Facts - Britannica In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. What happened to Birchbox? | Retail Dive Id. 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. Musk Made a Mess at Twitter. At Wellspring we pride ourselves on client service. Wellspring Capital Management is a middle-market private equity financing firm. View Videos. [Amended Complaint, 37, 40]. The court must construe the allegations in the complaint in the light most favorable to the plaintiff. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. Reputation Management. The defendants asserted common arguments in support of dismissal, but all arguments made in support of dismissal were not asserted by each defendant. Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. Wellspring has one of the best track records in middle-market private equity; its people, capital and reputation bring certainty to transactions. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. 3d 473, 506 (S.D.N.Y. Contribute to chinapedia/wikipedia.en development by creating an account on GitHub. Trump legal team requests six-month delay in New York civil lawsuit 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. The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. Ashmore for Wilson v. Dodds, 262 F. Supp. 987, 999-1000 (Bankr. %PDF-1.5 % Defendant Wellspring Capital Management LLC is a Delaware limited liability company with its principal place of business at 390 Park Avenue, New York, New York 10022. 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. These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. 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. 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. 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. 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. 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. 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. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. [Amended Complaint, 32]. Id. [Amended Complaint, 51]. In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. Password (at least 8 characters required). at 385. 544(b). Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through . Founded in 1995, Wellspring invests anywhere . Adversary Proceeding No. 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. The December 26, 2017 email stated, "So you will waive [your interest payments]. January 12, 2022 As with the plaintiffs assertions around disinterested governance, such allegations may (or may not) bear any semblance to the actual facts. As discussed in Cyrus II, the Fourth Circuit has stated that a bankruptcy court should apply the choice of law rules of the state in which it sits. About Wellspring Capital Management Wellspring Capital Management is a leading private equity firm headquartered in New York. [Amended Complaint, 49]. Id. 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. 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. 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. The court stated that expressions of opinion are actionable under New York law, but further stated: New York courts have also stated that statements of "mere puffery", or "statements founded entirely on speculation concerning future profits from proposed business endeavors" are not actionable. The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. 2009). The defendants argue that as a subsequent creditor, Prospect is required to plead actual fraud, and the amended complaint fails to do so. Wellspring Capital Lawsuit | PDF | Limited Partnership | Loans - Scribd Wellspring, 2021 WL 4823513, at *10. App'x 143 (4th Cir. The company will explode Rich!" In Fall 2018, SportCo Holdings, Inc. (SportCo) was facing severe financial distress. Attorney advertising. Wellspring Capital Management Portfolio Investments, Wellspring Capital All rights reserved. Accordingly, SportCo began negotiations with certain of its lenders around a potential restructuring transaction. 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. On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. 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. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. Wellspring has earned the reputation as a trusted, reliable partner and is often the preferred partner of a portfolio companys senior management team. 0 Wellspring Capital Management LLC - Dun & Bradstreet Please see our Privacy Policy. 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. hb```e``jb`a`\ @1V h`2q:lp10qfaqB,X3s10iH(^t1 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir. The issue in Merritt Dredging was the sale of a barge and the priority of parties' interests in the proceeds of the sale. If you want your business to survive, you need to understand your-self. 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. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. D. Del. W.D. Wellspring Capital Management is a leading private equity firm headquartered in New York. Whether youre building capital for your family, retirement or other life goals, we can help you with our high conviction and disciplined investment style. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. They are not actionable. These emails can hardly be considered negligent misrepresentations. 22-2003, 2023 WL 1098189 (3d Cir. 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.
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