Finally, in West Side Fed. 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. A litigation trust formed through the SportCo bankruptcy then sued, among others, SportCos former directors and its equity sponsor. By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, 915 0 obj <> endobj Ashmore for Wilson v. Dodds, 262 F. Supp. The court must construe the allegations in the complaint in the light most favorable to the plaintiff. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The defendants filed separate motions. Trump legal team requests six-month delay in New York civil lawsuit 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. Hiding negative complaints is only a Band-Aid. 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. Innovative Custom Brands, Inc. v. Minor, 2016 WL 308805, at *2 (S.D.N.Y. Investment Philosophy; Target Investments; Portfolio Wellspring Capital Management LLC operates as a private equity firm. 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. If you want your business to survive, you need to understand your-self. 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." Brought up in a family enjoying long-term success in real estate investment, Avrohom instead turned to the stock market. However, the garage actually had only 402 parking spaces. 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. 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. Share Your Design Ideas, New JerseysMurphy Defends $10 Billion Rainy Day Fund as States Economy Slows, This Week in Crypto: Ukraine War, Marathon Digital, FTX. Wellspring Capital Management D. Del. The Wellspring court was ruling on a motion to dismiss, and therefore accepted the plaintiffs somewhat barebones and perhaps self serving assertions as true and in the light most favorable to that plaintiff. at 613-14. There are no allegations in the amended complaint that the debtors' liabilities exceeded their assets at the time of the transfers. It identifies undervalued companies whose share price does not properly reflect the true value of the business. Federal Rule of Bankruptcy Procedure 7012(b). 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. The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. Business Restructuring, You can review interesting Flipbooks on my site. On December 31, 2018, the Borrowers defaulted on their obligations under the Loan Agreements and the Amendments. Ellett Brothers LLC ("Ellett"), a South Carolina limited liability company, was a sporting goods distributor. 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. 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. 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. 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." In an email obtained by . Seth Pearson - Managing Director - Private Equity - York Capital 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 targets investments with the following characteristics: %%EOF Wellspring, founded in 1995, has raised more than $4 billion of capital commitments through six private equity funds, according to its website. 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. Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States There are also no allegations concerning expenses. Wellsprings facts, as alleged, are fairly straightforward. at 382. 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. In Fall 2018, SportCo Holdings, Inc. (SportCo) was facing severe financial distress. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 90], Alexander E. Carles [Docket No. Designed By BM Designs. 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. "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 seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. The amended complaint contains no allegations that either Ellett, with respect to the first cause of action, or SportCo, with respect to the second cause of action, was insolvent at the time of the distributions or became, at the time of the transfers, insolvent as a result of the transfers. %PDF-1.5 % with actual intent . Wellspring Capital Management Acquires Cadence Petroleum Group PDF In the United States Bankruptcy Court for The District of Delaware Public Records Policy. 101 (32). Wellspring CEO takes leave after explosive rape allegations against his In the legal profession, information is the key to success. Investments Number of Investments 2 Wellspring Capital Management has made 2 investments. 6. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. 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. The alleged statements simply do not constitute actionable statements that can form the basis of a negligent misrepresentation claim. 2005)). Wall Street tycoon takes leave of absence after lawsuit claims his son 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. to hinder, delay, or defraud either present or future creditors." .JFY+h!Hkw;s"$ 4AuF~!D =j]4z*g7i>B 1NEDm @@,!ptz"Br}-rh>wI }9.&>5/n2n/OefX 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. Wellspring Capital Management - Wikipedia Fed. Sav. Their most recent investment was on Jan 1, 2020, when Steele Solutions raised 962 0 obj <>stream Wellspring Capital Management Salaries - Glassdoor Wellspring Capital Management | LinkedIn For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. E-mail: sandra@wellspring-cap.com; Videos. 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. Lawsuit: Wellspring CEO Told - Institutional Investor 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. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: This site is for informational purposes only. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . David Westin speaks with top names in finance about the week's biggest issues on Wall Street. 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. (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. Wellspring Capital Management Acquires Steele Solutions, Inc. 2009). The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. I Shall [Not] Be Released: Wellspring, Director Releases, and the Duty 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. v. Holmes (In re Holmes), 610 B.R. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. WELLSPRING CAPITAL MANAGEMENT LIMITED is registered in England and Wales under Company Number 12429146, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. The District Court discussed the South Carolina Supreme Court's decision in Sheldon v. Blauvelt, 29 S.C. 453 (1888). Wellspring Capital Management is a leading private equity firm headquartered in New York. The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. McDermott Will & Emery LLP > San Francisco > United States | The Legal Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. As with the plaintiffs assertions around disinterested governance, such allegations may (or may not) bear any semblance to the actual facts. Law360 provides the intelligence you need to remain an expert and beat the competition. The parties disagree on what law should applyfederal or state, and further if state law applies, New York or South Carolina. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). And the best part of all, documents in their CrowdSourced Library are FREE. 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. These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. 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. 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. 1991) (unpublished table decision). 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. 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. 19.)1. 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. 23, 2006) (stating that some courts characterize fraudulent conveyance actions as tort actions, while others characterize them as matters in equity). Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. Fax: 877 376-7003. . Limited partners include leading pension funds, endowments, fund of funds and family offices from the U.S., Europe and Asia. Id. 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. The defendants' motions to dismiss are granted. Follow along as he lays out the blueprint for his career, and takes us all the way from his first sketch to his thriving personal brand, Spunge. Attorney advertising. You have to know whats happening with clients, competitors, practice areas, and industries. The middle-market private equity firm invests in companies with strong business . Already a subscriber? 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. Id. 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