My company, Asia Marketing and Management, has global ambitions but consists largely of me and the intelligence, experience, contacts, and per-sonality I bring to my clients . The defendants filed separate motions. 2021 by wellspring capital Management. Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. 0 22-2003, 2023 WL 1098189 (3d Cir. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. S.D. The amended complaint is dismissed. The Loan Agreements and the First and Second Amendments each contain a choice of law provision, providing that New York law applies. 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir. "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."'" Middle Market Private Equity. @S1 $82N+ZJ | 91], Andrew Kupchik [Docket No. 19-80071-DD (Bankr. However, whether a fraudulent conveyance action is characterized as a tort action is unsettled. 6. pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. Corporate Advocacy Program. Salaries posted anonymously by Wellspring Capital Management employees. R. Civ. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. And the best part of all, documents in their CrowdSourced Library are FREE. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. 'Ov}b0. Wellspring Capital Management is a leading private equity firm headquartered in New York. At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners 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. at 385. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of . This approach has historically delivered returns well above inflation Our clients 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. Id. [Amended Complaint, 49]. 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. 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. 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 . They are simply not statements of preexisting fact that were false when made. [Amended Complaint, 57]. 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. Why is this public record being published online? 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. The court considered whether the plaintiff had proved the tort of innocent misrepresentation. 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. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: This site is for informational purposes only. 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. 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. Id. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. %PDF-1.5 % at 613-14. The elements of a negligent misrepresentation claim under South Carolina law are as follows: Turning now to the present case, the third cause of action must be dismissed under either New York or South Carolina law because the statements that the plaintiff asserts constituted negligent misrepresentations were all statements regarding potential outcomes of a potential business endeavor; thus, they relate to future events and cannot form the basis of a negligent misrepresentation claim. Adversary Proceeding No. By teaming up with strong management, Wellspring is able to unlock underlying value and. In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. The court stated: See Credit Alliance Corp. v. Arthur Anderson & Co., 65 N.Y.2d 536 (NY App. 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 District Court discussed the South Carolina Supreme Court's decision in Sheldon v. Blauvelt, 29 S.C. 453 (1888). Revenue: $500 million to $1 billion (USD) Competitors: Unknown. at 358. 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. The plaintiff, Ronald J. Friedman, the trustee for the SportCo Creditors' Liquidation Trust, filed an omnibus response to the motions to dismiss [Docket No. 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. Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. Div. Prior results do not guarantee a similar outcome. The origins of Wellspring Philanthropic Fund are shrouded. A second amendment to the Loan Agreements (the "Second Amendment") was executed on September 30, 2014. 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. Law360 takes your privacy seriously. Investment Approach Target Investments Wellspring's objective is to acquire or invest in companies that are well-positioned to capitalize on change and can benefit from Wellspring's operating and financial expertise. REGISTRATION STATUS . 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. 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. They were not statements of presently existing fact. It had previously received notification, in early 2018, that the Borrowers would default on their obligation under the Loan Agreements and the Amendments in the second quarter of 2018. 544 and 550 and S.C. Code 27-23-10; (2) avoidance and recovery of fraudulent transfers by SportCo against the Transferee Defendants pursuant to 11 U.S.C. 2007) (citations omitted). In Sheldon, the defendant, a New York citizen, assigned some personal property to Mr. Dickinson. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through . Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. 962 0 obj <>stream 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). 101 (32). Investment Philosophy; Target Investments; Portfolio Posted By: Imright , 3/3/2023 9:31:52 PM. If you do not agree with these terms, then do not use our website and/or services. hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h [Amended Complaint, 31]. 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. 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." Ellett used $54,860,549.74 of the First Amendment loan proceeds to fund distributions to the Transferee Defendants. 1991) (unpublished table decision). The plaintiff's first and second causes of action are based on 11 U.S.C. 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 By teaming up with strong management, Wellspring is able to unlock underlying value and A litigation trust formed through the SportCo bankruptcy then sued, among others, SportCos former directors and its equity sponsor. See Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. This article about a private equity or venture capital firm based in the United States is a stub. 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 firm's objective is to bring partnership, experience and value creation to each investment. Certain state securities regulatory authorities have similar exemptions based on . 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." Investments Number of Investments 2 Wellspring Capital Management has made 2 investments. Try our Advanced Search for more refined results. David R. Duncan US Bankruptcy Judge District of South Carolina. Already a subscriber? These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. You have to know whats happening with clients, competitors, practice areas, and industries. 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. Id. The firms objective is to bring partnership, experience and value creation to each investment. Time to Read: 6 minutes 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. 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. Ashmore for Wilson v. Dodds, 262 F. Supp. 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. Sounds like a tidy deal at year end [2017] made a lot of sense." 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." Id. 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. SportCos negotiations were led by a SportCo director, who was also the managing partner of Wellspring Capital, SportCos equity sponsor. At Wellspring we pride ourselves on client service. 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. 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. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. This Supreme Court Case Could Redefine Crime, YellowstoneBackers Wanted to Cash OutThen the Streaming Bubble Burst, How Countries Leading on Early Years of Child Care Get It Right, Female Execs Are Exhausted, Frustrated and Heading for the Exits, No Major Offer Expected on Childcare in UK Budget, Biden Gives Medal of Honor to Trailblazing Special Forces Member, Climate Change Is Launching a MutantSeed Space Race, UK Braces for Rare Weather Event That Risks Late-Winter Freeze, This Former Factory Is Now New Taipeis Edgiest Project, What Do You Want to See in a Covid Memorial? [Amended Complaint, 93]. Founded in 1995, Wellspring Capital Management is a private equity firm headquartered in New York, New York. The court must construe the allegations in the complaint in the light most favorable to the plaintiff. 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. We look forward to carrying forward that vision and continuing our success in the years ahead.". The amended complaint further states that from October 2012 to October 2013, "Ellett achieved record sales and earned revenues of approximately $1.2 billion." Shoe designer and creative Salehe Bembury takes us on a journey from his childhood growing up in Manhattan, to an invaluable degree in industrial design, to working with some of the biggest names in fashionbefore breaking off to make his own name. Financial terms of the transaction were not disclosed. The firm's objective is to . 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. About Wellspring Capital Management Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $4.4 billion of private equity capital. The. When typing in this field, a list of search results will appear and be automatically updated as you type. 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. We look forward to hearing from you. Oct. 14, 2021) (Stickles, J.) 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. Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States Under either New York or South Carolina law, the plaintiff's third cause of action for negligent misrepresentation fails to state a claim for which relief can be granted. The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. . The plaintiff responds that the express terms of the choice of law provisions provide that the clause applies only to the parties to the Loan Agreements and the Amendments and that the defendants' indirect connection to the parties to the agreements, and the nature of their received benefit, a distribution, are not sufficient to render them third-party beneficiaries of 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. 915 0 obj <> endobj A finding that Prospect is a preexisting creditor compels the same result. The defendants asserted common arguments in support of dismissal, but all arguments made in support of dismissal were not asserted by each defendant. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. They are not actionable. The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. Fund VI brings the firm's assets under management to more . to hinder, delay, or defraud either present or future creditors." Description. . 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). 112]. It identifies undervalued companies whose share price does not properly reflect the true value of the business. 598, 614 (Bankr. Charles E. Walker, Jr. argued in support of dismissal due to lack of a triggering creditor based on Prospect's secured status, failure to state a claim under New York law due to lack of insolvency, on equity grounds because Prospect failed to obtain a personal guaranty from Mr. Walker and because the distributions were specifically contemplated by the loan transaction, and due to failure to state a claim for fraudulent conveyance under South Carolina law. 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. 24. & Loan Ass'n v. Hirschfeld, 476 N.Y.S.2d 292 (N.Y. App. & Loan Ass'n of New York City, the plaintiff loaned funds to the defendant, secured by a mortgage on a parking garage. Wellspring Capital Management is a leading private equity firm headquartered in New York. 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. 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 Court now issues this order, granting the motions to dismiss for the reasons set forth below. 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." The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. Business Restructuring, The defendants' remaining arguments need not be addressed. Finally, one place to get all the court documents we need. Finally, although the plaintiff asserts that federal conflict of law principles should apply, he argues that even under South Carolina conflict of law rules, South Carolina law should apply. Will Others Follow? Password (at least 8 characters required). The Debtors in the bankruptcy cases, pending in the District of Delaware, are SportCo Holdings, Inc.; Ellett Brothers, LLC; United Sporting Company, Inc.; Bonitz Brothers, Inc.; Evans Sports, Inc.; Jerry's Sports, Inc.; Outdoor Sports Headquarters, Inc.; Quality Boxes, Inc.; and Simmons Guns Specialties, Inc. Public Records Policy. 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. 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. There are also no allegations concerning expenses. Id. The firm's objective is to bring partnership, experience and value creation to each investment.
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