But Wellspring would arguably undermine the ability to negotiate for what are customary and, indeed, necessary protections for corporate decisionmakers in those same transactions, such as releases, indemnity, or exculpation. 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 the legal profession, information is the key to success. See Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. Posted By: Imright , 3/3/2023 9:31:52 PM. 91], F. Hewitt Grant [Docket No. This article about a private equity or venture capital firm based in the United States is a stub. 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. Consumers want to see how a business took care of business. 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Mr. Friedman filed an amended complaint the same day. 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. 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. 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 seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. The Wellspring Defendants asserted all of these arguments and also asserted failure to state a claim under section 550 against certain defendants. 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. If you do not agree with these terms, then do not use our website and/or services. at 321. 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." 2005)). There are different definitions of insolvency. Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. . Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. Tex. 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. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. The middle-market private equity firm invests in companies with strong business . It featured lower-priced clothing and was Gymboree's direct competitor for The Children's Place and Old Navy.. 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. 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. 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. For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. The plaintiff's first and second causes of action are based on 11 U.S.C. We work with successful motivated individuals to help them achieve their investment and wealth management objectives. 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. 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. The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). e""8*&B Law360 provides the intelligence you need to remain an expert and beat the competition. 3d 473, 506 (S.D.N.Y. Div. This approach has historically delivered returns well above inflation Our clients Make your practice more effective and efficient with Casetexts legal research suite. 2009). 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. Wellsprings objective is to bring partnership, experience and value creation to each investment. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of . In Cyrus II, the court also acknowledged that the Fourth Circuit has found otherwise and determined that state choice of law rules should be used in bankruptcy cases. Please see our Privacy Policy. 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. 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. 6. Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. 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 [. By teaming up with strong management, Wellspring is able to unlock underlying value and pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. at 385. To summarize New York law, then, it appears that opinions can be actionable, but are not always actionable. 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). Twitter Revenue, Earnings Fell About 40% in December, WSJ Says, John Malone andCharter Directors Agree to $87.5 Million Settlement, China E-Commerce Giant JD Set for $1.4 Billion Discount Spree, Between Rounds of Golf, Trumps Searching for the Perfect DeSantis Diss, Your Saturday UK Briefing: Sunak Chalks Up a Win as the Budget Looms, Harrods Shrugs Off Recession Fears as Rich Get Richer, FT Says, Wealthy NYC Family Feuds Over $258 Million Madison Avenue Sale, Tom Sizemore, 'Saving Private Ryan' Actor, Dies at 61, The Exhibit Reality TV Show PittingArtist Against ArtistIs No Masterpiece. E-mail: sandra@wellspring-cap.com; Videos. 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. Using a sophisticated network of for-profits, shell corporations, and consultancies, Wellspring has poured out an incredible $1.1 billion into nonprofits, most of which is hidden from prying eyes in donor-advised funds. David Westin speaks with top names in finance about the week's biggest issues on Wall Street. Over $134 million of the loan proceeds were used to fund distributions to Wellspring Capital Partners, WCM GenPar IV, L.P., WCM GenPar IV GP, LLC, F. Hewitt Grant, Charles E. Walker, Jr., Todd Boehly, Bernard Ziomek, and Andrew Kupchik (collectively, the "Transferee Defendants"). Even among California Democrats, Newsom is still in the negatives, with 54% wanting him to sit out in 2024 and only 35% wanting him to run. Investment Philosophy; Target Investments; Portfolio Ronald J. Friedman, as the trustee for the SportCo Creditors' Liquidation Trust, Plaintiff, v. Wellspring Capital Management, LLC, Wellspring Capital Partners IV, L.P., WCM Genpar IV, L.P., WCM Genpar IV GP, LLC, Alexander E. Carles, Bradley Johnson, F. Hewitt Grant, Charles E. Walker, Jr., Todd Boehly, Bernard Ziomek, and Andrew Kupchik, Defendants. 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. . Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. Why is this public record being published online? We are motivated and incentivised to succeed. Ellett Brothers LLC ("Ellett"), a South Carolina limited liability company, was a sporting goods distributor. [Amended Complaint, 54]. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. . WELLSPRING CAPITAL MANAGEMENT LIMITED is registered in England and Wales under Company Number 12429146, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners Wellsprings facts, as alleged, are fairly straightforward. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. Crazy 8 was started in August 2007. 22-2003, 2023 WL 1098189 (3d Cir. The complaint must provide more than mere "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." The firm's objective is to bring partnership, experience and value creation to each investment. 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 is a middle-market private equity financing firm. [Amended Complaint, 37, 40]. 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. The firm's objective is to bring partnership, experience and value creation to each investment. On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. 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. 598, 614 (Bankr. 401(k)/403(b) Plan Litigation Risk Management, Analytics & Behavioral Science Consulting (R&G Insights Lab), Committee on Foreign Investment in the United States (CFIUS), E-Discovery, Discovery Strategies & Data Analytics, Executive Compensation & Employee Benefits, Government Enforcement / White Collar Criminal Defense, Life Sciences Licensing, Collaborations & Joint Ventures, The Music Stops on the Texas Two-Step: Third Circuit Dismisses LTL Bankruptcy Case. 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. 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. 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. We look forward to hearing from you. 90], Alexander E. Carles [Docket No. 2022 Wellspring Capital Management Group LLC |. Wellspring Capital Management is a leading private equity firm headquartered in New York. Finally, one place to get all the court documents we need. 112]. 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. 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. If our offering sounds like something you would like to discuss, please get in touch on any of our contact details or the form below. with actual intent . pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. Fund VI brings the firm's assets under management to more than $4.4 billion. SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. 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 App'x 143 (4th Cir. This approach has historically delivered returns well above inflation. These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. 2007) (citations omitted). Flipbooks. In 2010, Bain Capital acquired the company for US$1.8 billion. R. Civ. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. at 358. The defendants' motions to dismiss are granted. Wellspring Capital Management has acquired 38 organizations. 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. On March 7, 2013, the Borrowers entered into a First Amendment to the Loan Agreements (the "First Amendment"), pursuant to which Prospect loaned the Borrowers an additional $60 million. Ashmore for Wilson v. Dodds, 262 F. Supp. A former employee of Wellspring Capital Management filed a lawsuit in a New York Thursday alleging that the CEO's son, Christopher Dawson, drugged and repeatedly raped her one night in the. 2012) and West Side Fed. 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. Financial terms of the transaction were not disclosed. 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. 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. . Wellspring targets investments with the following characteristics: 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 further notes that here, section 548 is not available to the plaintiff due to the timing of the transfers and the bankruptcy filings. 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." About Wellspring Capital Management Wellspring Capital Management is a leading private equity firm headquartered in New York. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. REGISTRATION STATUS. The firm's objective is to . 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." Prior results do not guarantee a similar outcome. An actual fraudulent conveyance is any "conveyance made . 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. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. 915 0 obj <> endobj 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 However, the Court has the discretion to sua sponte dismiss a complaint pursuant to Fed. 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. If you want your business to survive, you need to understand your-self. 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. %PDF-1.5 % to hinder, delay, or defraud either present or future creditors." Id. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir.
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