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20-50554, 2021 WL 4823513 (Bankr. %%EOF The Company specializes in private companies buyouts, acquisitions of divisions and subsidiaries of public companies, and going . Oct. 14, 2021) (Stickles, J.) UniCourt uses cookies to improve your online experience, for more information please see our Privacy Policy. hbbd``b`u@IHEX 3X "2A`V @B'Hl``bdV8 2h 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. 598, 614 (Bankr. However, whether a fraudulent conveyance action is characterized as a tort action is unsettled. 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. articles a month for anyone to read, even non-subscribers! The amended complaint does not allege that either Ellett or SportCo was insolvent at the time of the transfer or became insolvent as a result of the transfer. 1999)). View Videos. Wellsprings objective is to bring partnership, experience and value creation to each investment. Similarly, Merritt Dredging suggests that federal law would apply to a section 548 cause of action, but that state law should apply to fraudulent conveyance claims based on state law. Otherwise you cannot get paid." 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. 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. The firm's objective is to bring partnership, experience and value creation to each investment. Musk Made a Mess at Twitter. 8h`6$67Xn@,`& N.D.N.Y. 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. These tools have been used since the firm's inception in 1995 to generate consistent business improvement in its portfolios. 2010); Saifullah v. Johnson, 948 F.2d 1282, at *1 (4th Cir. 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. P. 12(b)(6). 1001 to 5000 Employees. 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. Menu Home; Rankings. 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. Please see our Privacy Policy. The Partners of Wellspring constitute a long-tenured team, having worked together an average of 15 years over three funds. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. 544 and 550 and S.C. Code 27-23-10; and (3) negligent misrepresentations against Wellspring Capital, Mr. Carles, and Mr. Johnson. Investments Number of Investments 2 Wellspring Capital Management has made 2 investments. Since its founding in 1995, Wellspring has raised over $4.0 billion of initial capital commitments through . 24. 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. Fund VI brings the firm's assets under management to more than $4.4 billion. 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. They were not statements of presently existing fact. 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. [Amended Complaint, 54]. 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." REGISTRATION STATUS . By continuing to use this website, you agree to UniCourts General Disclaimer, Terms of Service, W.D. 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. The December 26, 2017 email stated, "So you will waive [your interest payments]. See Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. EFFECTIVE DATE; SEC: Terminated: 3/2/2007: In Ashmore for Wilson, the District Court considered the question of how a fraudulent conveyance claim should be characterized for conflict of law purposes. The Wellspring Defendants asserted all of these arguments and also asserted failure to state a claim under section 550 against certain defendants. "); Terry v. Walker, 2006 WL 736861, at *5 (W.D. These all relate to a proposed business transactionthe purchase by Ellett of AcuSport. Limited partners include leading pension funds, endowments, fund of funds and family offices from the U.S., Europe and Asia. For the reasons set forth below, under the law of either state, the plaintiff's first and second causes of action must be dismissed. Phone: 650 729-8626. A former employee of Wellspring Capital Management filed a lawsuit in a New York Thursday alleging that the CEO's son, Christopher Dawson, drugged and repeatedly raped her one night in the. 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 Management is a leading private equity firm headquartered in New York. Tenn. 1991); 11 U.S.C. from 8 AM - 9 PM ET. 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. This is the best way to manage and repair your business reputation. [4] Wellspring completed fundraising on its sixth fund in 2018 with $1.45 billion of investor commitments as a successor to its $1.2 billion 2011 Fund V.[3], Wellspring focuses on the packaging, healthcare, niche manufacturing and distribution sectors.[5][6]. pursue new growth opportunities through strategic initiatives, operating improvements and add-on acquisitions. 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 the past 20 years, Wellspring has invested in over 35 platform investments across . Discretionary portfolio management with a difference, Make your investment with Wellspring Capital Management. In the legal profession, information is the key to success. The Firm takes pride in its ability to marshal its resources quickly and focus on the issues that matter, resulting in speed and certainty during the acquisition process. Ellett achieved high sales and revenues and had significant operations until sometime in 2016, when its profits began to decrease. Your livelihoodand your sanitydepend . In April 2018, Prospect agreed to defer two quarters of cash interest payments. The defendants filed separate motions. 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. We look forward to hearing from you. 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 . It is not intended as and should not be construed as financial, investment, tax, legal, regulatory, or other advice. Designed By BM Designs. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. The portfolio manager is also a co-investor in the strategy. Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $3 billion of private equity capital. It had previously received notification, in early 2018, that the Borrowers would default on their obligation under the Loan Agreements and the Amendments in the second quarter of 2018. The firm's objective is to bring partnership, experience and value creation to each investment. See Silvercreek Mgmt., Inc. v. Citigroup, Inc., 346 F. Supp. Todd Boehly filed a joinder to the Wellspring Defendants' motion to dismiss. The basic complaint is that Wellspring directors put self-interests above those of the company and its creditors. WELLSPRING CAPITAL MANAGEMENT, founded in 1995, is a middle-market private equity firm that has approximately $2 billion of private equity capital under management. 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. And the best part of all, documents in their CrowdSourced Library are FREE. 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. 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. Headquarters Location Lever House 390 Park Avenue New York, New York, 10022, United States 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 [. In early 2018, Wellspring Capital notified SportCo's secured lenders that SportCo would default on a $4.7 million interest payment due in the second quarter of 2018. In King County, the court considered suits by investors seeking to recover losses incurred after the collapse of a structured investment vehicle. About Wellspring Capital Management Wellspring Capital Management, founded in 1995, is a leading middle-market private equity firm that manages more than $4.4 billion of private equity capital. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. Adversary Proceeding No. hb```e``jb`a`\ @1V h`2q:lp10qfaqB,X3s10iH(^t1 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. ), Create custom alerts for specific article and case topics and, I took a free trial but didn't get a verification email. Since its founding in 1995, Wellspring has raised over $4.5 billion of initial capital commitments through six private equity funds. The firms objective is to bring partnership, experience and value creation to each investment. A finding that Prospect is a preexisting creditor compels the same result. Further, if the statement is solely a speculative prediction about some potential business venture or course of action being contemplated, it is not actionable. The Court addresses in this order only those arguments that clearly mandate dismissal. 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.