Already a subscriber? 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. The adviser's REGISTRATION status is listed below. 544 and 550 and S.C. Code 27-23-10; and (3) negligent misrepresentations against Wellspring Capital, Mr. Carles, and Mr. Johnson. 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. at 613-14. 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. The defendants' remaining arguments need not be addressed. Our tight-knit culture enables transparent oversight and a streamlined decision-making process. 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. The Partners of Wellspring constitute a long-tenured team, having worked together an average of 15 years over three funds. The defendants' motions to dismiss are granted. Finally, in West Side Fed. Less than a year later, the liquidation trustee sued Wellspring and related parties, alleging breaches of fiduciary duty of care and loyalty. The first and second causes of action are dismissed. Please Update this case to get latest docket information. The firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . The Court now issues this order, granting the motions to dismiss for the reasons set forth below. 1996)). 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 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. The firm's objective is to . The court considered whether inaccurate credit ratings can form the basis for a negligent misrepresentation claim. The plaintiff's first and second causes of action are based on 11 U.S.C. Home; About Us; Investment Approach. However, whether a fraudulent conveyance action is characterized as a tort action is unsettled. At Wellspring we pride ourselves on client service. . & Loan Ass'n of New York City, the plaintiff loaned funds to the defendant, secured by a mortgage on a parking garage. 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. July 5, 2017). 2100 Geng Road, Suite 210 Palo Alto, CA 94303. 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. The amended complaint is dismissed. 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. 2005)). The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. v. Holmes (In re Holmes), 610 B.R. Their most recent acquisition was Caring Brands International on Oct 25, 2021. On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. The alleged statements simply do not constitute actionable statements that can form the basis of a negligent misrepresentation claim. 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. Jan. 25, 2016) (alteration original). Prior results do not guarantee a similar outcome. The origins of Wellspring Philanthropic Fund are shrouded. The February 20, 2018 stated, "You're [sic] economics are going down and the risk of chapter is going up. . 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. It identifies undervalued companies whose share price does not properly reflect the true value of the business. at 382. 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. from 8 AM - 9 PM ET. 0 The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. 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. 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. San Francisco Bay Area, Silicon Valley), Operating Status of Organization e.g. Your livelihoodand your sanitydepend . However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. In Fall 2018, SportCo Holdings, Inc. (SportCo) was facing severe financial distress. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of . Make your practice more effective and efficient with Casetexts legal research suite. Founded in 1995, Wellspring invests anywhere . Wellspring Capital formed SportCo Holdings, Inc. ("SportCo") to serve as a holding company for United Sporting Company, Inc. ("United Sporting"), Ellett's direct parent; Ellett; and its subsidiaries. UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. Reputation Management. The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). Copyright 2023 Ropes & Gray LLP. An actual fraudulent conveyance is any "conveyance made . . The Wellspring ruling was not appealed, nor has any trial occurred on this matter. A finding that Prospect is a preexisting creditor compels the same result. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. 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. The firm's objective is to bring partnership, experience and value creation to each investment. Phone: 650 729-8626. 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." 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. When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. 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. After all, corporate decisionmakers are often tasked with choosing a path where outcomes are at best uncertain. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. 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. Therefore, the plaintiff argues that he is only required to establish constructive fraud. at 382. We have interesting videos for you to watch on my site. 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. Note: This site is for informational purposes only. 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. Wellspring Capital Management has acquired 38 organizations. [cV3ljHkT/bx @A,20p1 ks 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 Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. 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. Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. After the defendants filed replies, the Court held a hearing on June 18, 2020. Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. 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 firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 'Ov}b0. hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h The case status is Pending - Other Pending. The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. your most valuable capital, your ultimate resource. 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. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. It featured lower-priced clothing and was Gymboree's direct competitor for The Children's Place and Old Navy.. 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. 915 0 obj <> endobj Ashmore for Wilson v. Dodds, 262 F. Supp. Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. 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. The third cause of action asserts that those parties "made numerous representations to Prospect concerning the AcuSport Purchase, including that the purchase would allow the Debtors to acquire $14 million worth of AcuSport inventory at a substantial discount; that it would result in the Debtors' immediate realization of a $7 million profit on the sale of the AcuSport inventory so purchased; and that it would result in the Debtors' capturing 20% to 30% of AcuSport sales." 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. 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 A second amendment to the Loan Agreements (the "Second Amendment") was executed on September 30, 2014. Financial terms of the transaction were not disclosed. to hinder, delay, or defraud either present or future creditors." Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . At the conclusion of the hearing, the Court took the motions under advisement. The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. We look forward to carrying forward that vision and continuing our success in the years ahead.". The plaintiff relies on the fact that Ellett was unable to pay the debt owed to Prospect at the time that it had to be paid in full; however, this is not the only relevant point in time. Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. 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. 2007) (citations omitted). Id. 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. GitHub export from English Wikipedia. 23, 2006) (stating that some courts characterize fraudulent conveyance actions as tort actions, while others characterize them as matters in equity). 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. Certain state securities regulatory authorities have similar exemptions based on . 19.)1. The. & Loan Ass'n v. Hirschfeld, 476 N.Y.S.2d 292 (N.Y. App. Flipbooks. Sav. Business Restructuring, 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. v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. Adversary Proceeding No. 1001 to 5000 Employees. These are high quality companies, essential to the national, regional, or global economy but whose fundamental qualities are underappreciated and undervalued by the market. 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. The court considered whether the plaintiff had proved the tort of innocent misrepresentation. Defendant Bernard Ziomek is in default in this matter. 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." Wellspring Capital Management Fund Manager Website www.wellspringcapital.com Fund Category Private Equity Close Date 0000-00-00 Fund Family Wellspring Capital Partners Native Currency USD Fund Manager's Location 605 Third Avenue 44th Floor New York, NY 10158 United States +1 (212) 000-0000 Fund Domiciles Canada Wellspring Capital Management is a leading private equity firm headquartered in New York. [Amended Complaint, 32]. 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. Time to Read: 6 minutes 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. They are simply not statements of preexisting fact that were false when made. The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . with actual intent . 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. 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. Middle Market Private Equity.