Id. Id. The defendants' motions rely on Federal Rule of Civil Procedure 12(b)(6). Tenn. 1991); 11 U.S.C. 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. 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. Middle Market Private Equity. A constructive fraudulent conveyance exists under New York law if the conveyance was made without fair consideration and "(1) the transferor is insolvent or will be rendered insolvent by the transfer in question; (2) the transferor is engaged in or is about to engage in a business transaction for which its remaining property constitutes unreasonably small capital; or (3) the transferor believes that it will incur debt beyond its ability to pay." 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. Tow v. Rafizadeh (In re Cyrus II P'ship), 413 B.R. Defendant Bernard Ziomek is in default in this matter. The firm's objective is to . Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through six private equity funds. 1994)). Law360 takes your privacy seriously. WELLSPRING CAPITAL MANAGEMENT, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. On May 3, 2018, SportCo agreed to acquire AcuSport's assets in bankruptcy for $7 million. Active, Closed, This describes the type of investor this organization is (e.g. Note: This site is for informational purposes only. The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. If you want your business to survive, you need to understand your-self. 962 0 obj <>stream For purposes of South Carolina law, the parties disagree whether Prospect was a preexisting creditor or a subsequent creditor. Wellsprings facts, as alleged, are fairly straightforward. 2018) (distinguishing cases where the courts dismissed negligent misrepresentation claims based on "puffery" or founded solely on speculative statements regarding future profits as a result of proposed transactions, and finding that the misrepresentations at issue were actionable because they involved present facts). The firm's objective is to bring partnership, experience and value creation to each investment. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. 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 . . pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. Fund VI brings the firm's assets under management to more . 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." The plaintiff responds that the statements relate to presently existing facts and that opinions are actionable in a negligence context. When it comes to helping companies that show promise, Wellspring Capital Management is overflowing with support. There are also no allegations concerning expenses. REGISTRATION STATUS. Id. App'x 143 (4th Cir. Try our Advanced Search for more refined results. Sav. Marlow v. Oakland Gin Co. (In re The Julien Co.), 128 B.R. Wellspring Capital Management is a mega-sized private equity firm that focused on a variety of transaction situations. 1999)). The defendants argue that as a subsequent creditor, Prospect is required to plead actual fraud, and the amended complaint fails to do so. Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. 2d 317 (S.D.N.Y. Later emails berate Prospect's representative for failing to agree to the AcuSport purchase more quickly. Please see our Privacy Policy. We look forward to hearing from you. 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. 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. 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. A free inside look at Wellspring Capital Management salary trends based on 22 salaries wages for 17 jobs at Wellspring Capital Management. Use tab to navigate through the menu items. The defendants' motions to dismiss are granted. e""8*&B 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. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through six private equity funds. 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. 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 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. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. As a result, the defendants argue, it would be unjust for Prospect to now be able to avoid the distributions. The firm's objective is to bring partnership, experience and value creation to each investment. . The Court does not have to decide whether Prospect is a preexisting or a subsequent creditor. 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. Contact:KekstMark Semer or Peter Hill212.521.4800, Cision Distribution 888-776-0942 The District Court stated that "[w]hether a fraudulent conveyance claim should be characterized as a tort action is uncertain and disputed among American jurisdictions." 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. 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. Will Others Follow? This approach has historically delivered returns well above inflation. 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. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. Wellspring targets investments with the following characteristics: Id. 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. Broker-Dealers Business & Commercial Litigation Business Restructuring California Consumer Privacy Act Capital Markets Capital Solutions & Private Credit Charitable Foundations China Life Sciences Committee on Foreign Investment in the United States (CFIUS) Consumer Protection and Advertising Law Corporate & Securities Litigation 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. 89], Charles E. Walker, Jr. [Docket No. The middle-market private equity firm invests in companies with strong business . 93], and Bradley Johnson [Docket No. Investments Number of Investments 2 Wellspring Capital Management has made 2 investments. Wellspring Capital Management LLC operates as a private equity firm. These emails can hardly be considered negligent misrepresentations. Id. You can help Wikipedia by expanding it. UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy. Amazon Pauses Construction on Second Headquarters in Virginia as It Cuts Jobs, Amazon Is Closing Its Cashierless Stores in NYC, San Francisco and Seattle, iPhone Maker Plans $700 Million India Plant in Shift From China, Stock Traders Are Ignoring Blaring Bond Alarms, S&P 500 Notches Best Week Since Late January: Markets Wrap. Sav. Law360 provides the intelligence you need to remain an expert and beat the competition. The amended complaint also details numerous emails sent by Mr. Carles and Mr. Johnson to a representative of Prospect, urging Prospect to defer its right to payment in the event of a default. Corporate Advocacy Program. 598, 614 (Bankr. Mr. Friedman filed an amended complaint the same day. Their most recent investment was on Jan 1, 2020, when Steele Solutions raised The court stated: See Credit Alliance Corp. v. Arthur Anderson & Co., 65 N.Y.2d 536 (NY App. The Wellspring ruling was not appealed, nor has any trial occurred on this matter. The defendants' remaining arguments need not be addressed. 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. 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. 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." In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States 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. (Compl. The Wellspring court dismissed the litigation trusts claim for breach of the fiduciary duty of care, holding that it was not adequately pled. 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. $46H$DrGHi`0I"DE$"J(aH! WELLSPRING CAPITAL MANAGEMENT LIMITED is registered in England and Wales under Company Number 12429146, PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. 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. When typing in this field, a list of search results will appear and be automatically updated as you type. Click here to login, 2023, Portfolio Media, Inc. | About | Contact Us | Legal Jobs | Advertise with Law360 | Careers at Law360 | Terms | Privacy Policy | Cookie Settings | Help | Site Map, Enter your details below and select your area(s) of interest to stay ahead of the curve and receive Law360's daily newsletters, Email (NOTE: Free email domains not supported). at 358. v. Holmes (In re Holmes), 610 B.R. Designed By BM Designs. 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. 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.
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