Wellspring Capital Accused of Looting Bankrupt United Sporting

Private equity firm Wellspring Capital Management allegedly mismanaged and siphoned the value from former firearm distributor United Sporting Companies, leading to its bankruptcy last year, a trustee liquidating the company’s estate says.

The New York investment firm and a group of its managing partners allegedly engaged in “self-dealing and gross mismanagement” related to their stewardship of the company, which Wellspring acquired in 2008, according to a complaint filed in the U.S. Bankruptcy Court for the District of Delaware.

The Chapter 11 liquidation trust for creditors of United Sporting’s parent company SportCo Holdings Inc. says Wellspring and a group of SportCo ...