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. 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 Partners of Wellspring constitute a long-tenured team, having worked together an average of 15 years over three funds. Id. These tools have been used since the firm's inception in 1995 to generate consistent business improvement in its portfolios. Wellspring Capital manages an investment portfolio of between 10 and 15 international stocks. 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. Munich, German Mnchen, city, capital of Bavaria Land (state), southern Germany. Lister v. NationsBank of Delaware, N.A., 329 S.C. 133, 143 (Ct. App. 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. All business will get complaints. 2d 317 (S.D.N.Y. Accordingly, Wellspring reinforces the importance of disinterested governance and arms length dealing in connection with the restructuring process. Federal Rule of Bankruptcy Procedure 7012(b). It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. Law360 takes your privacy seriously. Further, if the statement is solely a speculative prediction about some potential business venture or course of action being contemplated, it is not actionable. See Silvercreek Mgmt., Inc. v. Citigroup, Inc., 346 F. Supp. 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. at 358. 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. View contacts for Wellspring Capital Management to access new leads and connect with decision-makers. 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." Password (at least 8 characters required). THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. As part of the debt management process, it said it would close 375 of its 1,300 stores. Wellspring Capital Management is a middle-market private equity firm that has approximately $2 billion of private equity. 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." Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . Middle Market Private Equity. 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). By Zachary Zagger (July 31, 2020, 9:56 PM EDT) -- 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 millions of dollars from gun seller United Sporting Cos. Inc., which blamed its bankruptcy on Donald Trump's win in the 2016 election. Access to case data within articles (numbers, filings, courts, nature of suit, and more. These are high quality companies, essential to the national, regional, or global economy but whose fundamental qualities are underappreciated and undervalued by the market. Wellspring Capital Management is a leading private equity firm headquartered in New York. A second amendment to the Loan Agreements (the "Second Amendment") was executed on September 30, 2014. 2007) (citations omitted). 987, 999-1000 (Bankr. 962 0 obj <>stream 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. An actual fraudulent conveyance is any "conveyance made . 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. The firm, which is based in New York City, was founded in 1995 by Martin Davis and Greg Feldman. 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. D. Del. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. PLEASE SEE THIS LINK FOR FULL DISCLAIMER: https://www.wellspringcapital.co.uk/disclaimer. Limited partners include leading pension funds, endowments, fund of funds and family offices from the U.S., Europe and Asia. Wellspring also rejected in cursory fashion the defendants argument that it is not necessarily a breach . If you want your business to survive, you need to understand your-self. 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. 6. Id. Wellspring Capital Management, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. 2d 520, 529 n.14 (E.D. Prospect is a sophisticated party and, to the extent that it wanted to confirm the predictions made by Mr. Carles and Mr. Johnson were in fact accurate, it could have exercised due diligence. 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. In this process, SportCo initially exchanged a term sheet with certain of its lenders in early November 2018 and allegedly reached an agreement in principle in late December 2018. All rights reserved. For example, the October 27, 2017 email stated, "The only way to optimize is to merge with Acusport." 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. 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. About Wellspring Capital Management Wellspring Capital Management is a leading private equity firm headquartered in New York. articles a month for anyone to read, even non-subscribers! Wellspring Capital Management is a leading middle-market private equity firm headquartered in New York. 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. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. Corporate Advocacy Program. UNITED STATES BANKRUPTCY COURT DISTRICT OF SOUTH CAROLINA. In Sheldon, the defendant, a New York citizen, assigned some personal property to Mr. Dickinson. See Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 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. 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. 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. In re Merritt Dredging Co., Inc., 839 F.2d 203, 205 (4th Cir. Please see our Privacy Policy. Bloomberg View columnist Barry Ritholtz looks at the people and ideas that shape markets, investing and business. endstream endobj startxref The 2011 Wellspring Capital Partners V LP was fully invested at $1.2 billion and has generated positive returns for its investors to-date. It identifies undervalued companies whose share price does not properly reflect the true value of the business. After all, corporate decisionmakers are often tasked with choosing a path where outcomes are at best uncertain. And the best part of all, documents in their CrowdSourced Library are FREE. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. The amended complaint fails to allege insolvency at the time of the transfer, an essential element of a fraudulent conveyance claim under either New York or South Carolina law, and therefore fails to state a claim under 544(b). Will Others Follow? Their most recent acquisition was Caring Brands International on Oct 25, 2021. Flipbooks. 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." San Francisco Bay Area, Silicon Valley), Operating Status of Organization e.g. & Loan Ass'n v. Hirschfeld, 476 N.Y.S.2d 292 (N.Y. App. 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. 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. In connection with this contemplated purchase, Alexander Carles, a managing partner of Wellspring Capital and an officer and director of SportCo and its subsidiaries, and Bradley Johnson, the president and chief executive officer of SportCo and its subsidiaries, sought to convince Prospect to forbear from exercising any remedies in the event of a payment default. The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. The defendants argue that in the event the Court finds the choice of law provision does not apply, South Carolina choice of law principles should be consulted to reach a finding that New York law applies. Phone: 650 729-8626. Tenn. 1991); 11 U.S.C. Accordingly, SportCo began negotiations with certain of its lenders around a potential restructuring transaction. from 8 AM - 9 PM ET. 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. at 382. Since its founding in 1995, Wellspring has raised over $4 billion of initial capital commitments through . Wellspring Capital Management prevailed in the sponsor-driven process for Center for Diagnostic Imaging, the country's largest private . You have to know whats happening with clients, competitors, practice areas, and industries. The parties disagree on what law should applyfederal or state, and further if state law applies, New York or South Carolina. Therefore, a finding that Prospect is a subsequent creditor would require dismissal of the first and second causes of action. 2021 by wellspring capital Management. 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. Wellspring Capital Management is a leading private equity firm headquartered in New York. "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."'" WELLSPRING CAPITAL MANAGEMENT ( CRD # 135455/SEC#:801-64341 ) WELLSPRING CAPITAL MANAGEMENT, WELLSPRING CAPITAL MANAGEMENT, INC. View latest Form ADV filed Part 2 Brochures.
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