Wellspring Capital Management is a leading private equity firm headquartered in New York. See Sheehan v. Saoud, 650 Fed. Ashmore for Wilson v. Dodds, 262 F. Supp. The December 26, 2017 email stated, "So you will waive [your interest payments]. Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. 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. 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." The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. In Wellsprings view, the extent to which releases might have benefitted SportCo (as opposed to benefiting the directors alone) was at least in part a question of fact that could not be resolved on a motion to dismiss. 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 . 2009). . There are also no allegations concerning expenses. The assignment was executed in New York, but the personal property was located in South Carolina at the time the assignment was executed. 1991) (unpublished table decision). 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. Cancellation and Refund Policy, Privacy Policy, and 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. Home; About Us; Investment Approach. 544(b). Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. 987, 999-1000 (Bankr. Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. Our tight-knit culture enables transparent oversight and a streamlined decision-making process. Wellspring CEO takes leave after explosive rape allegations against his At Wellspring we pride ourselves on client service. Wellspring CEO Bill Dawson is taking a leave of absence, the firm said Tuesday Last week a shocking lawsuit was filed against his son Christopher It claims he drugged and violently raped and. In June 2017, Gymboree announced it was filing for Chapter 11 bankruptcy protection. 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. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. at 385. 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. Therefore, the plaintiff argues that he is only required to establish constructive fraud. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. 101 (32). The Loan Agreements and the First and Second Amendments each contain a choice of law provision, providing that New York law applies. Wellspring Capital Management, LLC; Wellspring Cap. Ellett used $54,860,549.74 of the First Amendment loan proceeds to fund distributions to the Transferee Defendants. N.D.N.Y. 2100 Geng Road, Suite 210 Palo Alto, CA 94303. The origins of Wellspring Philanthropic Fund are shrouded. The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. The plaintiff, Ronald J. Friedman, the trustee for the SportCo Creditors' Liquidation Trust, filed an omnibus response to the motions to dismiss [Docket No. Wellspring CEO takes leave after explosive rape allegations against his son View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. A social media content creator signed an agreement with Birchbox in May of 2022 and hadn't been paid the $2,500 due as of Jan. 24, despite several emails to the company. Click here to login, 2023, Portfolio Media, Inc. | About | Contact Us | Legal Jobs | Advertise with Law360 | Careers at Law360 | Terms | Privacy Policy | Cookie Settings | Help | Site Map, Enter your details below and select your area(s) of interest to stay ahead of the curve and receive Law360's daily newsletters, Email (NOTE: Free email domains not supported). 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. 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. 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. The firm's objective is to bring partnership, experience and value creation to each investment. Founded in 1995, Wellspring Capital Management is a private equity firm headquartered in New York, New York. This approach has historically delivered returns well above inflation. The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. Wellspring Capital buys Center for Diagnostic Imaging - Minneapolis For example, the October 27, 2017 email stated, "The only way to optimize is to merge with Acusport." 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." 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. Fed. "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."'" 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. Probitas Partners acted as exclusive placement agent and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel with respect to formation of Fund VI. CDI's smaller Atlanta peer said to weigh sale in '18. 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. The Wellspring ruling was not appealed, nor has any trial occurred on this matter. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. This approach has historically delivered returns well above inflation Our clients 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. 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). These emails may be a lot of things, but negligent misrepresentations they are not. In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. Wellspring CEO Takes Leave After Son Accused of Rape in Lawsuit Adversary Proceeding No. The issue in Merritt Dredging was the sale of a barge and the priority of parties' interests in the proceeds of the sale. The defendant represented to the plaintiff, and to an appraiser who performed an appraisal of the garage, that the parking garage had 500 parking spaces. James Chan - Spare Room Tycoon - The Seventy Lessons of Sane Self By teaming up with strong management, Wellspring is able to unlock underlying value and The Wellspring Defendants asserted all of these arguments and also asserted failure to state a claim under section 550 against certain defendants. All business will get complaints. Investment adviser | Wellspring Capital Management Ltd | M25 0FX Wellspring Capital Management LLC operates as a private equity firm. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. Time to Read: 6 minutes A constructive fraudulent conveyance exists under New York law if the conveyance was made without fair consideration and "(1) the transferor is insolvent or will be rendered insolvent by the transfer in question; (2) the transferor is engaged in or is about to engage in a business transaction for which its remaining property constitutes unreasonably small capital; or (3) the transferor believes that it will incur debt beyond its ability to pay." 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." Id. Munich, German Mnchen, city, capital of Bavaria Land (state), southern Germany. Copyright 2023 Ropes & Gray LLP. 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. This is the best way to manage and repair your business reputation. 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. Wellspring has one of the best track records in middle-market private equity; its people, capital and reputation bring certainty to transactions. *aUQBT&1#J$8Q)=WE9M'v1s_)GG+.kbN;yELi.UD1N{f'u$y`'GCJfS;4yXwbW${%^tcxG2}+/P@U `a$b6? The District Court discussed the South Carolina Supreme Court's decision in Sheldon v. Blauvelt, 29 S.C. 453 (1888). 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. 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. Oct. 14, 2021) (Stickles, J.) e""8*&B Wellspring Capital Management Acquires Steele Solutions, Inc. Otherwise you cannot get paid." The court considered whether inaccurate credit ratings can form the basis for a negligent misrepresentation claim. Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. McDermott Will & Emery LLP > San Francisco > United States | The Legal Id. Id. 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." Public Records Policy. Will His AI Plans Be Any Different? Angel, Fund of Funds, Venture Capital), General contact email for the organization. Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. Financial terms of the transaction were not disclosed. Gymboree - Wikipedia 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. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. Cases involving other matters not classified elsewhere, 890, 1890, 1990, 2890, 2899, 2999, 3375, 3890, 3896, 3899, 3999, 4890, 4896, 4999, Wellspring Capital Management, LLC; Wellspring Cap v. Barry, III et al. Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. The court considered whether the plaintiff had proved the tort of innocent misrepresentation. 2022 Wellspring Capital Management Group LLC |. However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. 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 a leading private equity firm headquartered in New York. The plaintiff's first and second causes of action both assert claims for fraudulent conveyances pursuant to 544(b) and S.C. Code 27-23-10. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: This site is for informational purposes only. 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. Hiding negative complaints is only a Band-Aid. Defendant Bernard Ziomek is in default in this matter. 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir. If you do not agree with these terms, then do not use our website and/or services. to hinder, delay, or defraud either present or future creditors." (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 . They are not actionable. Most of them do not even contain any concrete information about the proposed AcuSport purchase or the likelihood of the Borrowers' default. [Amended Complaint, 93]. 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. Id. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. 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. Aug. 27, 2020). The amended complaint further states that from October 2012 to October 2013, "Ellett achieved record sales and earned revenues of approximately $1.2 billion." THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. Id. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. Wellspring Capital Management is a middle-market private equity financing firm. Business Restructuring, 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. Wellspring has earned the reputation as a trusted, reliable partner and is often the preferred partner of a portfolio companys senior management team. Munich | Germany, History, Population, Oktoberfest, & Facts - Britannica 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. wikipedia.en/Vatterott_College.md at main chinapedia/wikipedia.en 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. Wellspring, 2021 WL 4823513, at *10. [cV3ljHkT/bx @A,20p1 ks Fund VI brings the firm's assets under management to more than $4.4 billion. @S1 $82N+ZJ | This matter is before the Court on motions to dismiss filed by the defendants Wellspring Capital Management, LLC ("Wellspring Capital"), Wellspring Capital Partners IV, L.P. ("Wellspring Capital Partners"), WCM Genpar IV, L.P., WCM Genpar IV GP, LLC (collectively, the "Wellspring Defendants") [Docket No. hXO8WtVH,~W"I/ {;N7'0HAA0%`Ih5L!p! 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. 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. Id. The plaintiff's first and second causes of action are based on 11 U.S.C. With respect to which state's law applies, the defendants argue that the elements required to find that a party is a third party beneficiary are all met in this case and therefore New York law, as specified in the Loan Agreement's and Amendments' choice of law provisions, should apply to the plaintiff's causes of action against them. (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. After all, corporate decisionmakers are often tasked with choosing a path where outcomes are at best uncertain. Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. 112]. 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. Contribute to chinapedia/wikipedia.en development by creating an account on GitHub. 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. 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. 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." They were not statements of presently existing fact. 2021 by wellspring capital Management. The defendants' motions to dismiss are granted. 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. These tools have been used since the firm's inception in 1995 to generate consistent business improvement in its portfolios. See Silvercreek Mgmt., Inc. v. Citigroup, Inc., 346 F. Supp. The February 20, 2018 stated, "You're [sic] economics are going down and the risk of chapter is going up. It featured lower-priced clothing and was Gymboree's direct competitor for The Children's Place and Old Navy.. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. Federal Rule of Bankruptcy Procedure 7012(b) provides that Federal Rule of Civil Procedure 12(b) applies in adversary proceedings. The alleged statements simply do not constitute actionable statements that can form the basis of a negligent misrepresentation claim. The firm's objective is to bring partnership, experience and value creation to each investment. The middle-market private equity firm invests in companies with strong business . Va. June 8, 2011) (acknowledging that Maryland law is not clear regarding whether a fraudulent conveyance action sounds in tort, but concluding that "given that the gravamen of the fraudulent conveyance claim is the wrongfulness of the conveyance and the injury to the creditor, rather than balancing equities or fairness, it is appropriate to conclude that fraudulent conveyance claims sound in tort. The court stated: See Credit Alliance Corp. v. Arthur Anderson & Co., 65 N.Y.2d 536 (NY App. 1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. Wellspring Capital Management Investor Profile: Portfolio & Exits 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. Crazy 8 was started in August 2007. [Amended Complaint, 57]. 19-80071-DD (Bankr. at 382. 89], Charles E. Walker, Jr. [Docket No. D.S.C. 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. In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. 609, 614 (Bankr. D. Del. 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. 930 0 obj <>/Filter/FlateDecode/ID[<6781EE974E7B2C4D9274E8F359D28E60>]/Index[915 48]/Info 914 0 R/Length 80/Prev 600062/Root 916 0 R/Size 963/Type/XRef/W[1 2 1]>>stream 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. 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. App'x 143 (4th Cir. I Shall [Not] Be Released: Wellspring, Director Releases, and the Duty Id. Wellspring Capital Management - Investments, Portfolio & Company Exits From reading the Financial Times at school to managing his first portfolio at just 18, he has built Wellspring Capital into a nationwide wealth management boutique. These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. 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. 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. 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 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. It identifies undervalued companies whose share price does not properly reflect the true value of the business. PLEASE NOTE: A verification email will be sent to your address before you can access your trial. Limited partners include leading pension funds, endowments, fund of funds and family offices from the U.S., Europe and Asia. Even California Democrats don't want Newsom to run for president Working at Wellspring Capital Management | Glassdoor 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. Seth Pearson - Managing Director - Private Equity - York Capital
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