wellspring capital management lawsuit

Our tight-knit culture enables transparent oversight and a streamlined decision-making process. . 8h`6$67Xn@,`& In fact, the amended complaint states that the distributions at issue here were made in October 2012 and March 2013. View Videos. WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. If you do not agree with these terms, then do not use our website and/or services. v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. It identifies undervalued companies whose share price does not properly reflect the true value of the business. Will Others Follow? 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. Angel, Fund of Funds, Venture Capital), This describes the stage of investments made by this organization (e.g. 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. 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. Private equity firm Wellspring Capital Management has acquired Caring Brands International, parent company of home health and hospice franchise company Interim Healthcare, for an undisclosed amount. On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. Wellsprings facts, as alleged, are fairly straightforward. hXO8WtVH,~W"I/ {;N7'0HAA0%`Ih5L!p! The Wellspring ruling was not appealed, nor has any trial occurred on this matter. Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 Consumers want to see how a business took care of business. Description. Finally, in West Side Fed. 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. Phone: 650 729-8626. 3d 341, 357 (D.S.C. David R. Duncan US Bankruptcy Judge District of South Carolina. Sav. 1985). 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. 22-2003, 2023 WL 1098189 (3d Cir. Full title:Ronald J. Friedman, as the trustee for the SportCo Creditors' Liquidation, Court:UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. A second amendment to the Loan Agreements (the "Second Amendment") was executed on September 30, 2014. %PDF-1.5 % Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. 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. Defendant Bernard Ziomek is in default in this matter. 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. Wellspring Capital Management LLC operates as a private equity firm. 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. [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]. SEC / JURISDICTION. Less than a year later, the liquidation trustee sued Wellspring and related parties, alleging breaches of fiduciary duty of care and loyalty. 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This approach has historically delivered returns well above inflation Our clients 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." Todd Boehly filed a joinder to the Wellspring Defendants' motion to dismiss. Already a subscriber? v. Holmes (In re Holmes), 610 B.R. Please Update this case to get latest docket information. Further, if the statement is solely a speculative prediction about some potential business venture or course of action being contemplated, it is not actionable. Aug. 27, 2020). Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. App'x 143 (4th Cir. Prior results do not guarantee a similar outcome. As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. 93], and Bradley Johnson [Docket No. 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. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: This site is for informational purposes only. 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. Id. Id. Corporate Advocacy Program. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. The firm's objective is to . 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. You can review interesting Flipbooks on my site. 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. 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 . The Court now issues this order, granting the motions to dismiss for the reasons set forth below. Haynsworth Sinkler Boyd, P.A. Andrew Kupchik argued dismissal was necessary due to Prospect's ratification and/or consent to the distributions, due to failure to state a claim under New York law because of lack of insolvency and failure to state a claim under South Carolina law due to failure to plead actual fraud, due to the expiration of the statute of limitations on the fraudulent conveyance claims, and due to failure to plead the existence of a triggering unsecured creditor. 1988) (adopting rule from Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487 (1941) stating that a federal court sitting in diversity should apply the choice of law rules of the state in which it sits). 2021 by wellspring capital Management. 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). 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. In considering whether to grant a motion to dismiss under Rule 12(b)(6), the court may take judicial notice of matters of public record and may consider documents attached to the complaint and the motion to dismiss, "so long as they are integral to the complaint and authentic." The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. New York law and South Carolina law differed as to whether such a transfer was permitted. 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. 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. Munich, German Mnchen, city, capital of Bavaria Land (state), southern Germany. Id. The firm's objective is to bring partnership, experience and value creation to each investment. 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. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. Over the past 20 years, Wellspring has invested in over 35 platform investments across . In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. endstream endobj 916 0 obj <>/Metadata 258 0 R/Pages 913 0 R/StructTreeRoot 384 0 R/Type/Catalog>> endobj 917 0 obj <>/MediaBox[0 0 612 792]/Parent 913 0 R/Resources<>/Font<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI]>>/Rotate 0/StructParents 0/Tabs/S/Type/Page>> endobj 918 0 obj <>stream The District Court stated that "[w]hether a fraudulent conveyance claim should be characterized as a tort action is uncertain and disputed among American jurisdictions." The court must construe the allegations in the complaint in the light most favorable to the plaintiff. [Amended Complaint, 49]. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. P. 12(b)(6). Copyright 2023 Ropes & Gray LLP. The company will explode Rich!" There are different definitions of insolvency. The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. Id. Adversary Proceeding No. 112]. 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. 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. 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. [cV3ljHkT/bx @A,20p1 ks Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. About Wellspring Capital Management Wellspring Capital Management is a leading private equity firm headquartered in New York. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 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. 'Ov}b0. 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. 1999)). The court stated: See Credit Alliance Corp. v. Arthur Anderson & Co., 65 N.Y.2d 536 (NY App. The amended complaint fails to allege insolvency at the time of the transfer, an essential element of a fraudulent conveyance claim under either New York or South Carolina law, and therefore fails to state a claim under 544(b). This is the best way to manage and repair your business reputation. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. Va. Mar. Salaries posted anonymously by Wellspring Capital Management employees. The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. ~p03ngx1Ai63*oP 4TP3Nt'xn0R8tJ'a7D2P6ILky6L;0;0SUNrtd t ";Qb[K-Ii 1g%\i) IZ3uAH0J40v0xt0v40Xt8 y CJ3t@y`$21kL 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. 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, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. As with the plaintiffs assertions around disinterested governance, such allegations may (or may not) bear any semblance to the actual facts. 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 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." When typing in this field, a list of search results will appear and be automatically updated as you type. & Loan Ass'n of New York City, the plaintiff loaned funds to the defendant, secured by a mortgage on a parking garage. Middle Market Private Equity. with actual intent . They are not actionable. Try our Advanced Search for more refined results. 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. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. Litigation. 1996)). E-mail: sandra@wellspring-cap.com; Videos. 19-80071-DD (Bankr. Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. $46H$DrGHi`0I"DE$"J(aH! 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. The defendants' motions to dismiss are granted. 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. 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. Most of them do not even contain any concrete information about the proposed AcuSport purchase or the likelihood of the Borrowers' default. Accordingly, SportCo began negotiations with certain of its lenders around a potential restructuring transaction.

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