Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. 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"). As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. Further, if the statement is solely a speculative prediction about some potential business venture or course of action being contemplated, it is not actionable. 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 principal and lead portfolio manager at Wellspring Capital is Avrohom Neumann. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. 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. Trump legal team requests six-month delay in New York civil lawsuit 20-50554, 2021 WL 4823513 (Bankr. Pentec Health Inc. Acquired by Wellspring Capital Management - PRWeb Wellspring Sues Insurers To Fight Claims It Tanked Gun Seller These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. Alexander Carles' and Bradley Johnson's arguments are limited to the negligent misrepresentation cause of action, the only cause of action asserted against them. They are simply not statements of preexisting fact that were false when made. Wellsprings facts, as alleged, are fairly straightforward. Sounds like a tidy deal at year end [2017] made a lot of sense." They are not actionable. Ellett Brothers LLC ("Ellett"), a South Carolina limited liability company, was a sporting goods distributor. 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 [. 2022 Wellspring Capital Management Group LLC |. 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. 1999)). It is Bavaria's largest city and the third largest city in Germany (after Berlin and Hamburg). This is the best way to manage and repair your business reputation. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h Industry: Investment & Asset Management. 8h`6$67Xn@,`& Another email stated, in part: "Gotta get your interest? Christopher Dawson: 5 Fast Facts You Need to Know - Heavy 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. 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 . 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 . 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. 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. Wall Street tycoon takes leave of absence after lawsuit claims his son We are motivated and incentivised to succeed. Finally, in West Side Fed. 3d 341, 357 (D.S.C. We look forward to hearing from you. Wellspring has earned the reputation as a trusted, reliable partner and is often the preferred partner of a portfolio companys senior management team. Wellspring Capital Management is a middle-market private equity firm that has approximately $2 billion of private equity. [cV3ljHkT/bx @A,20p1 ks The United States District Court for the District of South Carolina found in a fraudulent conveyance case, relying on Terry v. Walker, that South Carolina conflict of law rules should apply to determine the applicable substantive law. Full title:Ronald J. Friedman, as the trustee for the SportCo Creditors' Liquidation, Court:UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. 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. 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. The amended complaint asserts three causes of action: (1) avoidance and recovery of fraudulent transfers by Ellett against the Transferee Defendants pursuant to 11 U.S.C. 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. 2100 Geng Road, Suite 210 Palo Alto, CA 94303. @S1 $82N+ZJ | 91], F. Hewitt Grant [Docket No. 2012) and West Side Fed. Wellspring also rejected in cursory fashion the defendants argument that it is not necessarily a breach . 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. Attorney advertising. When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. Wellspring Capital Management, LLC; Wellspring Cap. Therefore, the plaintiff argues that he is only required to establish constructive fraud. App'x 143 (4th Cir. 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. Federal Rule of Bankruptcy Procedure 7012(b). Wellspring Capital Management Group LLC ("Wellspring"), a New York-based private equity firm, announced that on May 29, 2020, it closed the acquisition of Steele Solutions, Inc. ("SSI" or the "Company"), a value-add supplier into the industrial automation sector. In June 2017, Gymboree announced it was filing for Chapter 11 bankruptcy protection. Seth Pearson - Managing Director - Private Equity - York Capital Fax: 877 376-7003. 89], Charles E. Walker, Jr. [Docket No. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. 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. 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. 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 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. 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. 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. In the legal profession, information is the key to success. 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. e""8*&B Investments Number of Investments 2 Wellspring Capital Management has made 2 investments. 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. After all, corporate decisionmakers are often tasked with choosing a path where outcomes are at best uncertain. 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." Probitas Partners acted as exclusive placement agent and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel with respect to formation of Fund VI. 112]. San Francisco Bay Area, Silicon Valley), Operating Status of Organization e.g. Wellspring, 2021 WL 4823513, at *10. The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). "); Terry v. Walker, 2006 WL 736861, at *5 (W.D. articles a month for anyone to read, even non-subscribers! 19-80071-DD (Bankr. R. Civ. A litigation trust formed through the SportCo bankruptcy then sued, among others, SportCos former directors and its equity sponsor. Wellspring CEO takes leave after explosive rape allegations against his son Flipbooks. 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. 6. 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. All rights reserved. 22-2003, 2023 WL 1098189 (3d Cir. 19.)1. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of . Angel, Fund of Funds, Venture Capital), This describes the stage of investments made by this organization (e.g. These tools have been used since the firm's inception in 1995 to generate consistent business improvement in its portfolios. $46H$DrGHi`0I"DE$"J(aH! Wellspring Capital Management Acquires Cadence Petroleum Group In 2008, Wellspring Capital, through its fund Wellspring Capital Partners, acquired Ellett. McDermott Will & Emery LLP > San Francisco > United States | The Legal Law360 provides the intelligence you need to remain an expert and beat the competition. Read More Key Principal: William Dawson Junior See more contacts Industry: Management investment, open-end Printer Friendly View Address: 605 3RD Ave FL 44 New York, NY, 10158-0011 United States See other locations Phone: Website: www.wellspringcapital.com Employees (this site): Actual 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. These emails can hardly be considered negligent misrepresentations. 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 defendants argue that New York law should apply, first, because the Loan Agreements and the First and Second Amendments contain choice of law provisions stating that New York law will apply and second, because South Carolina choice of law analysis dictates that New York law should apply. Friedman v. Wellspring Capital Mgmt. - Casetext The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. Id. 93], and Bradley Johnson [Docket No. . Posted By: Imright , 3/3/2023 9:31:52 PM. Blackstone to Acquire Tradesmen International from Wellspring Capital Specifically, Mr. Carles and Mr. Johnson represented to Prospect that a purchase of AcuSport would result in: (1) Debtors' capturing 20 to 30 percent of AcuSport sales; (2) Acquisition of $14 million worth of AcuSport's inventory at a significant discount; and (3) Realization of an immediate $7 million profit from the sale of the inventory acquired in the purchase. For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. Wellspring Capital buys Center for Diagnostic Imaging - Minneapolis 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 . Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. There are no allegations in the amended complaint that the debtors' liabilities exceeded their assets at the time of the transfers. A customer lawsuit filed earlier this month against Sequoia, Paradigm, and Thoma Bravo, alleges these funds gave an "air of legitimacy" to FTX andvia their hundreds of millions in funding and. Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). It is not unusual for an entity facing distress to engage with their stakeholders and to negotiate any number of transaction alternatives and terms. at 382. Time to Read: 6 minutes 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." 2021 by wellspring capital Management. P. 12(b)(6). 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. 987, 999-1000 (Bankr. All business will get complaints. The Court now issues this order, granting the motions to dismiss for the reasons set forth below. Angel, Fund of Funds, Venture Capital), General contact email for the organization. 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. Aug. 27, 2020). Friedman v. Wellspring Capital Mgmt. (In re Sportco Holdings) Wellspring brought its assets under management to more than $4.4 billion as of January 2018. The plaintiff does not dispute that the amended complaint does not plead actual fraud, and it clearly does not. 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. Wellspring Capital Management has acquired 38 organizations. 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. IAPD - Investment Adviser Public Disclosure - Homepage 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 PDF In the United States Bankruptcy Court for The District of Delaware 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 seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. The defendants argue that as a subsequent creditor, Prospect is required to plead actual fraud, and the amended complaint fails to do so. Environmental, Social and Governance (ESG), HVAC (Heating, Ventilation and Air-Conditioning), Machine Tools, Metalworking and Metallurgy, Aboriginal, First Nations & Native American. Active, Closed, This describes the type of investor this organization is (e.g. 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. The plaintiff's third cause of action, for negligent misrepresentation against defendants Wellspring Capital, Mr. Carles, and Mr. Johnson, must also be dismissed. 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. 90], Alexander E. Carles [Docket No. WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. 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." 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. California Weighs $360,000 in Reparations to Eligible Black Residents. [Amended Complaint, 49]. Wellspring Capital Acquires SupplyOne | Markets Insider Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. Wellspring Capital Management Acquires Paragon Films Fed. 2007) (citations omitted). 1001 to 5000 Employees. Crazy 8 was started in August 2007. at 358. 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. 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. It identifies undervalued companies whose share price does not properly reflect the true value of the business. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through . 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. Try our Advanced Search for more refined results. PLEASE NOTE: A verification email will be sent to your address before you can access your trial. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. Fund VI brings the firm's assets under management to more than $4.4 billion. & Loan Ass'n v. Hirschfeld, 476 N.Y.S.2d 292 (N.Y. App. 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. An outside law firm will assist with the probe to determine the validity of these reports, which allege behavior that is not only shocking but completely inconsistent with our corporate values and standards., Family calls complaint pure fiction intended as a shakedown, Dawson steps away from firm to spend time with his family. See Silvercreek Mgmt., Inc. v. Citigroup, Inc., 346 F. Supp. Id. 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. The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . The plaintiff, Ronald J. Friedman, the trustee for the SportCo Creditors' Liquidation Trust, filed an omnibus response to the motions to dismiss [Docket No. We see how Bembury is able to walk the line of business convention while taking his art to new heights, turning ordinary items into extraordinary footwear. Wellspring Capital Management is a leading private equity firm headquartered in New York. Wellspring Capital Management Portfolio Investments, Wellspring Capital 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. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. 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. hb```e``jb`a`\ @1V h`2q:lp10qfaqB,X3s10iH(^t1 Pentec Health Inc. Acquired by Wellspring Capital Management Our tight-knit culture enables transparent oversight and a streamlined decision-making process. [Amended Complaint, 37, 40]. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. 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 A former Wellspring Capital Management employee filed a lawsuit against the son of Wellspring chief executive Bill Dawson, alleging that he raped her and that Bill Dawson threatened to. 1991) (unpublished table decision). 2008) (citing Southmark Corp. v. Crescent Heights VI, Inc. (In re Southmark Corp.), 95 F.3d 53, 53, n.7 (5th Cir. (Wellspring). 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. Target Investments - Wellspring Capital In 2012, the year that the amended complaint alleges Ellett "achieved record sales and earned revenues of approximately $1.2 billion," Ellett and its operating subsidiaries (the "Borrowers") entered into a Third Amended and Restated Loan and Security Agreement and a Second Lien Loan and Security Agreement (collectively, the "Loan Agreements") with lenders including Prospect Capital Corporation ("Prospect"), pursuant to which Prospect and the other lenders loaned $280 million to the Borrowers. Regardless, market participantsand equity sponsors in particularshould view Wellspring as an important reminder as to how both process and substance matter in restructuring negotiations. 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. %PDF-1.5 % 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. Will His AI Plans Be Any Different? Wellspring Capital Management Acquires Steele Solutions, Inc. The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. These emails may be a lot of things, but negligent misrepresentations they are not. Haynsworth Sinkler Boyd, P.A. Your livelihoodand your sanitydepend . The firm's objective is to . Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. 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. The firm prefers to invest through means of carveout, buyouts, add-on, public to private and growth capital. The court addressed the dissent's finding, that the defendant's determination of the number of parking spaces was a matter of judgment or opinion and was therefore unactionable. Wellspring Capital, through defendants Mr. Carles and Mr. Johnson, allegedly represented to Prospect that: (1) Ellett could purchase assets of AcuSport for $14.8 million; (2) the purchase would result in the Debtors' capturing 20% to 30% of AcuSport sales; (3) the Debtors could acquire $14 million of AcuSport inventory at a substantial discount; and (4) Ellett would immediately realize a $7 million profit on the sale of the inventory acquired in the purchase. SEC / JURISDICTION. IAPD - Investment Adviser Public Disclosure - Homepage See Scheidelman v. Henderson (In re Henderson), 423 B.R. 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. v. Holmes (In re Holmes), 610 B.R. It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. Wellspring Capital Management. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. Ellett used $54,860,549.74 of the First Amendment loan proceeds to fund distributions to the Transferee Defendants.

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