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Wellspring Capital Accused of Looting Bankrupt United Sporting

April 3, 2020, 9:05 PM

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 ...