Wellsprings investment professionals possess diverse and complementary backgrounds that combine valuable experience in private equity, restructuring, corporate finance, capital markets and corporate law. James brought a civil suit against Trump in September, alleging the Trump organization had fraudulently inflated the value of . Wellspring Capital is a boutique discretionary management service with a portfolio positioned for high performance. 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. The adviser's REGISTRATION status is listed below. The origins of Wellspring Philanthropic Fund are shrouded. This is the best way to manage and repair your business reputation. 1985). 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." The plaintiff's first and second causes of action are based on 11 U.S.C. Angel, Fund of Funds, Venture Capital), This describes the stage of investments made by this organization (e.g. 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. Industry: Investment & Asset Management. In April 2018, Prospect agreed to defer two quarters of cash interest payments. Later emails berate Prospect's representative for failing to agree to the AcuSport purchase more quickly. 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. Wellsprings facts, as alleged, are fairly straightforward. Mr. Friedman was substituted as the plaintiff on January 10, 2020. These emails may be a lot of things, but negligent misrepresentations they are not. Total number of employee profiles an organization has on Crunchbase, Total number of Crunchbase contacts associated with this organization, Descriptive keyword for an Organization (e.g. [Amended Complaint, 49]. 1997) (citing Bannister v. Hertz Corp., 316 S.C. 513 (Ct. App. Already a subscriber? James Chan - Spare Room Tycoon - The Seventy Lessons of Sane Self The seller, PE outfit Levine Leichtman Capital Partners, purchased the company in 2015. Financial terms of the transaction were not disclosed. .JFY+h!Hkw;s"$ 4AuF~!D =j]4z*g7i>B 1NEDm @@,!ptz"Br}-rh>wI }9.&>5/n2n/OefX 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. Note: This site is for informational purposes only. At all times relevant to these claims, Wellspring Capital controlled (a) Wellspring Capital Partners 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. Wellspring CEO Takes Leave After Son Accused of Rape in Lawsuit Angel, Fund of Funds, Venture Capital), General contact email for the organization. Certain state securities regulatory authorities have similar exemptions based on . Mr. Friedman filed an amended complaint the same day. 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. The defendants asserted common arguments in support of dismissal, but all arguments made in support of dismissal were not asserted by each defendant. at 382. Todd Boehly filed a joinder to the Wellspring Defendants' motion to dismiss. 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. 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. 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. [Amended Complaint, 31]. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. Wellspring Sues Insurers To Fight Claims It Tanked Gun Seller Try our Advanced Search for more refined results. 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. Wellspring Capital Management is an American private equity firm focused on leveraged buyout investments in middle-market companies across a range of industries. Wellspring CEO takes leave after explosive rape allegations against his 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. WELLSPRING CAPITAL MANAGEMENT, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. Probitas Partners acted as exclusive placement agent and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel with respect to formation of Fund VI. 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 LLC - Dun & Bradstreet The defendants filed separate motions. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. ), Create custom alerts for specific article and case topics and, I took a free trial but didn't get a verification email. Id. 91], Andrew Kupchik [Docket No. 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." 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. Why is this public record being published online? Wellspring Capital Management Acquires Steele Solutions, Inc. 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." Relevant here: the plaintiff/litigation trust alleged that SportCos directors: Finally, the litigation trust also asserted a variety of other counts in its complaint related to other facts, circumstances, and actions that are not the subject of this Alert. 2005)). The. Id. These emails can hardly be considered negligent misrepresentations. 22-2003, 2023 WL 1098189 (3d Cir. (Compl. Nor is it necessary for the Court to decide whether New York or South Carolina law applies under South Carolina's choice of law principles. 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. 92], Todd Boehly [Docket No. Id. The firms objective is to bring partnership, experience and value creation to each investment. 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. At the conclusion of the hearing, the Court took the motions under advisement. Friedman v. Wellspring Capital Mgmt. - Casetext Wellspring Capital Management is a leading private equity firm headquartered in New York. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. 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. The amended complaint is dismissed. See Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. endstream endobj startxref The firm's objective is to bring partnership, experience and value creation to each investment. Judge opens door for bankruptcy blame suits - Axios 101 (32). pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. Flipbooks. From October 2017 to April 2018, Mr. Carles and Mr. Johnson sent numerous emails to representatives of Prospect, attempting to induce Prospect to agree to forego exercising its rights in the event of a default. S.D. 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. IAPD - Investment Adviser Public Disclosure - Homepage 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. 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. It is Bavaria's largest city and the third largest city in Germany (after Berlin and Hamburg). Adversary Proceeding No. [Amended Complaint, 32]. Div. Lawsuit: Wellspring CEO Told - Institutional Investor 2009). 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. Accordingly, SportCo began negotiations with certain of its lenders around a potential restructuring transaction. at 385. Tex. Wellspring Capital is a boutique discretionary management service - with a portfolio positioned for high performance. 2020) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). 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. Bill Dawson is taking time off from his $2.2 billion private equity firm Wellspring Capital Management, which will investigate the claims of . 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." Time to Read: 6 minutes (quoting Bell Atl. 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. Jan. 25, 2016) (alteration original). 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. 19-80071-DD (Bankr. The case status is Pending - Other Pending. King County, 863 F. Supp.2d at 318. The Court addresses in this order only those arguments that clearly mandate dismissal. Sav. 2022 Wellspring Capital Management Group LLC |. your most valuable capital, your ultimate resource. WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures. There are different definitions of insolvency. Its success is based on a portfolio that, since inception in 2014, has delivered double digit returns on an annualised basis. Wellspring Capital Management LLC operates as a private equity firm. The firm's objective is to bring partnership, experience and value creation to each investment. The issue in Merritt Dredging was the sale of a barge and the priority of parties' interests in the proceeds of the sale. UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy. The Wellspring Defendants asserted all of these arguments and also asserted failure to state a claim under section 550 against certain defendants. Litigation. The Court also notes that, setting the other factors aside, given the extreme nature of the urgent tone of these emails, and the highly sophisticated status of Prospect, Prospect satisfying the justifiable reliance element of a negligent misrepresentation claim is questionable, at best. The Partners of Wellspring constitute a long-tenured team, having worked together an average of 15 years over three funds. We look forward to hearing from you. The defendants argue that Prospect is a subsequent creditor, because it had knowledge of and approved of the distributions prior to them being completed. 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. Wellspring Philanthropic: An Ocean of "Dark Money" on the Left These facts, as recited in the complaint, are taken as true for purposes of the motions to dismiss. Wellspring has earned the reputation as a trusted, reliable partner and is often the preferred partner of a portfolio companys senior management team. The court considered whether the plaintiff had proved the tort of innocent misrepresentation. David R. Duncan US Bankruptcy Judge District of South Carolina. 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. 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. 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. 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. The first and second causes of action are dismissed. 20-50554, 2021 WL 4823513 (Bankr. W.D. 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. 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. Va. Mar. It is not unusual for an entity facing distress to engage with their stakeholders and to negotiate any number of transaction alternatives and terms. In June 2017, Gymboree announced it was filing for Chapter 11 bankruptcy protection. You can review interesting Flipbooks on my site. In 2008, Wellspring Capital, through its fund Wellspring Capital Partners, acquired Ellett. Target Investments - Wellspring Capital The assignment was executed in New York, but the personal property was located in South Carolina at the time the assignment was executed. Attorney advertising. R. Civ. 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. (Wellspring). 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 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." In Wellspring, the Delaware bankruptcy court held that an alleged duty of loyalty breach could survive a motion to dismiss where: Bear in mind that alleged is the operative word here. Their most recent investment was on Jan 1, 2020, when Steele Solutions raised Wellspring, 2021 WL 4823513, at *10. Phone: 650 729-8626. 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. 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 firm prefers to invest in the business services, industrial, packaging, healthcare services, restaurants . 2021 by wellspring capital Management. Sav. 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. 24. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process.