Once the OpenGate deal blew up, Darden Jr. and Newkirk turned to Mark Weinberg, at Versant Funding and MDW Funding, who agreed to a short-term loan of $5.5 million. OpenGate Capital, a global private equity firm, announced today in a joint statement with its portfolio company, Hufcor Inc. ("Hufcor"), the world leader in the design, manufacturing and installation of movable partitions and flexible space management solutions, the appointment of Mr. Koben Miceli as Chief Executive Officer, effective immediately. Why would we put in all that effort?. OpenGate Capital is planning the launch of its third flagship fund over the next 6-12 months, with a target of up to $700m, according to a source close to the situation., Funds, Buyout, France, UK / Ireland, Benelux, Southern Europe, DACH, Nordics, CEE, OpenGate Capital, Exclusive The state had awarded the company the loan with the understanding that it would stay in Connecticut 10 years. OpenGate Capital Group LLC et al v. Thermo Fisher Scientific Inc, Court Case No. [30][31][32], Nikou sits on the Board of YELLOW, the non-profit organization founded by Pharrell Williams. I find it to be despicable.. OpenGate is moving the plant to Mexico anyway. [16], In 2012, through the firm's legacy, pre-fund investment process, OpenGate Capital acquired the Latin American operations of Getronics from the Dutch conglomerate, KPN. To date, OpenGate has laid off 678 California workers from the Pennysaver classified ad magazine, 100 Wisconsin workers at its Golden Guernsey dairy plant, 140 employees of the Connecticut boxboard company Fusion Paperboard, and nearly 200 employees in Texas, Arkansas, and Wisconsin, who worked for Hamilton Scientific, an OpenGate-owned laboratory furniture company. By continuing to use this site, closing this banner, or clicking I Agree, you agree to the use of cookies. This is ClassAction.org's current list of open lawsuits and investigations. Private equity, an ownership structure that puts distant financiers in charge of how a business is run, has been shown to result in worse health outcomes for patients, at greater cost. We work with every customer to find a workable solution, but unfortunately we werent able to reach an agreement in this situation.. It maintained operations during the worst of the pandemic and even. This spring, 166 workers in Janesville, Wisconsin awoke to a nightmare. [33] In 2014, Nikou announced that he was forming a partnership with businessman Ricardo Salinas to bring Esperanza Azteca Youth Orchestra to Los Angeles through a partnership with the city's mayor, Eric Garcetti. The firm focuses on the acquisition of lower-to-mid-market businesses in the industrials, business services, and technology sectors. This isnt just another story about corporate globalization or pandemic upheaval. Baldwin was a co-sponsor of the Stop Wall Street Looting Act, the first major effort to reform the private equity sector, in the last Congress. The lawsuits allege that a company or individual violated securities laws and are brought on behalf of the class. LOS ANGELES - June 1, 2022 - OpenGate Capital, a global private equity firm, announced that it has exited its investment in EverZinc, a global provider of specialty zinc materials, through a sale to U.S. Zinc, a portfolio company of Aterian Investment Partners. [27], On January 5, 2013, Golden Guernsey ceased operations without notice in an alleged violation of the State of Wisconsin's mass layoff/shutdown regulations. On 06/01/2015 MALLOY MITRA filed a Labor - Other Labor lawsuit against OPENGATE CAPITAL LLC. Opengate Capital Group LLC filed a lawsuit on Friday alleging that laboratory equipment maker Thermo Fisher Scientific Inc <TMO.N> sold it a Mexican plant last year without revealing that a drug . Stanziale alleged that the dairy was insolvent in December 2011, more than a year before the hurried shutdown. With a strategic international presence and a focus on corporate carve-outs and complex . Reporting by Pallavi Ail in Bangalore, Karl Plume in Chicago; editing by Gunna Dickson. It bought Gabriel Ride Control, a shock absorber maker losing $20 million a year, returned it to profitability and preserved 1,400 jobs before selling it in 2012. Employees at other OpenGate-owned companies have voiced similar complaints. of the Connecticut boxboard company Fusion Paperboard, and nearly. Hamilton Scientific would pay employees once it got its funding together, according to the April PE Hub article. A Delaware federal judge on Tuesday rejected Thermo Fisher Scientific Inc.'s bid to toss a suit alleging it fraudulently concealed that a Mexico manufacturing facility it sold to private equity . 2:17-cv-04360-SB-E ("Underlying Lawsuit") under Private Equity Liability Insurance Policy No. Founded in 1979, Chemsolv is a diversified distributor offering more than 1,000 chemicals including solvents, plasticizers, coolants . Banks dont do this. Every major bank in the U.S. covers the payrolls.. Were hiring an Advocacy & Political Manager. 1:13-cv-01475 in the Delaware District Court. [6] He was bullied in school for being short. Withdrawing funding is a last minute resort, Capital One spokesman Michael Bulger said in an emailed statement. OpenGate tried to buy Maxim in early 2013 but was outbid by Darden Media Group. Most of my clients are in default. His father, who majored in mathematics at a German university, worked at the Los Angeles Department of Water and Power. [28][29], Past closures also included PennySaver USA and Hamilton Scientific. BURKE v. TV GUIDE MAGAZINE GROUP, INC., 09-56989 (9th Cir. OpenGate, which acquired PennySaver in 2013, specializes in buying units of larger companies and reselling them. By continuing to use this site, closing this banner, or clicking I Agree, you agree to the use of cookies. [35][36][37], Nikou is married with children and resides in Nevada.[7]. The company is in the process of selling assets to make good on the loan, Fahn said. Nikou instead tries to generate goodwill as a philanthropist and has even started his own foundation, which boasts of a mission driven by values empowering individuals and communities. Nikou still sits on numerous boards, including that of the Hammer Museum in Los Angeles. Our six-week newsletter will help you make the right decision for you and your property. OpenGate notes that its business model is to take chances on faltering companies, and that carries inherent risks. Senator Tammy Baldwin (D-WI) sent a letter today to Andrew Nikou, founder and CEO of OpenGate Capital, asking the Los Angeles-based private equity firm to honor their agreement with former Hufcor employees in Wisconsin. The Motion was joined by defendants Andrew Nikou and Jay Yook.4 The We've received your submission. Nikou, its founder, is a board member at the Hammer Museum and, until recently, at the Museum of Contemporary Art. Industry: Investment & Asset Management. A decision by Wisconsins Department of Workforce Development said Golden Guernsey employees never got compensation for accrued vacation and wages, or for the 60 days that correspond with the required notice period. Nikou increased OpenGate's pace of international acquisitions in the 2010s. it's been delivered there. In December 2014, while their lawsuit against Thenno Fisher was pending, the OpenGate and RoundRock entitles negotiated a sale-leaseback agreement for the . OpenGate nevertheless was lured back in as a short-term lender to Darden. We need a new push to pass this law. "Meet The Private Equity CEO Who's In Talks For His Own Reality Show," Julia La Roche, Business Insider, 8-16-2011. Thermo Fisher, the world's largest maker of laboratory equipment and scientific instruments, agreed to acquire Life Technologies Inc LIFE.O in mid-April for more than $13 billion. OpenGate Capital is a private equity firm with offices in Los Angeles and Paris that strives to acquire and optimize lower middle market businesses throughout North America and Europe. The trustee, Charles Stanziale, said OpenGate made no net investment in the dairy after its initial purchase and the value was consistently eroded over the months leading to bankruptcy. How to avoid leaving money on the table, Congressional investigators blame airlines for most flight cancellations, First Republic Bank stock plunges to record low as rescue plan proves elusive, Fed faults Silicon Valley Bank execs and itself in bank failure. Chief Operating Officer & Managing Director, Head of Investor Relations & Communications, Operations Expert, Manufacturing & Supply Chain, Senior Advisor, European M&A - Technology, Founder, Executive Chairman, XPRIZE Foundation, Technology Expert, Industrials, Environmental, & Manufacturing 4.0, 2023 OpenGate Capital Management, LLC. OpenGate's professionals possess the . You may occasionally receive promotional content from the Los Angeles Times. [25] In that same year, the firm also completed six platform investments, and one add-on, all within the second fund. 1:13-cv-01475 in the Delaware District Court. Previously, Andrew was the Board Membe r at Yellow and also held positions at SPACInsider, Platinum Equity. And the firm shut down its Fusion Paperboard plant just three years after acquiring it and only a few months after entering into a, Even as hundreds of American workers have suffered from OpenGates schemes, Andrew Nikou, the OpenGate founder and CEO, has not faced any meaningful financial or social consequences for repeated business failures at the hands of his firm. Kasoff, making the first extended comments on behalf of PennySaver since its closure, said the default was technical and that the company was paying down the loan. And the firm shut down its Fusion Paperboard plant just three years after acquiring it and only a few months after entering into a six-year contract with the local steelworkers union. Open Gate Capital aquired my company Pennysaver USA 1 1/2 years ago. Hufcor is shipping its Janesville plant to Monterrey, Mexico, making it the biggest business closure in Janesville since the town lost 2,500 jobs when a GM plant closed during the Great Recession. In court papers, the company said the trustees allegations are without merit. How Palm Springs ran out Black and Latino families to build a fantasy for rich, white people, 17 SoCal hiking trails that are blooming with wildflowers (but probably not for long! Kasoff said that his sole focus after his company was brought in was on fixing PennySaver and that a shutdown was never contemplated until Capital One shut off credit without explanation. June 16, 2021. An investigation by the states Department of Workforce Development in 2013 cited the dairy for violating a federal law requiring a 60-day warning of mass layoffs and said it owed workers $1.6 million. OpenGate uncovered that the facility was being used by senior local leaders of the Mexican Gulf Cartel, according to a federal complaint filed on June 12 . Lawyer Harvey Newkirk, formerly with the Bryan Cave firm, this week sits in the legal dock in Manhattan federal court, accused of concocting a fraud with Calvin Darden Jr., a convicted felon, to rob investors of millions of dollars by falsely presenting successful businessman Calvin Darden Sr. as the leading force behind the deal. employees in the middle of a work day and failing to give workers their final paychecks. Terms of the investment were not disclosed. The owner, private equity firm OpenGate Capital in Century City, had turned over management of the firm in December to a restructuring and liquidation company, Realization Services Inc. in Bedford . But the checks, it turned out, would not clear. Those companies included a dairy in Wisconsin, a boxboard manufacturer in Connecticut and a laboratory furniture maker with operations in several U.S. states and Mexico. After decades of pro-corporate globalization, people numb to its effects might write off Hufcors closure as a tragic but ultimately unavoidable consequence of a deadly pandemic and economic upheaval. The companys shares closed at $84.46 on Friday on the Nasdaq. [9], In 2019, OpenGate purchased the lock company Sargent and Greenleaf from Stanley Black & Decker. here to register, Not for publication, email or dissemination, Veritas-backed HMH buys educational services nonprofit NWEA, Professional services company FMP inks $36.5m from Alaris, NMS recaps environmental services firms Texas Pride and Texas Dumpster Companies, MSCP invests in services for homeowners; Patient Square launches platform for medical device makers, Leonard Green to acquire minority stake in HUB; plus Investcorp, Sound Partners, Odyssey invest in HVAC, 700 million people will make their home in African cities over the next decade, said DPIs Marc Stoneham. Mr. Moazami's career spans 30+ years in the technology industry; predominantly in operating roles and the last nine years as a professional venture capitalist & advisor in Silicon Valley. They have a right to do what they did as far as liquidate the company, but they dont have a right to do it in the manner they did.. Also this year, four employees filed a lawsuit against Hamilton Scientific and OpenGate in Texas federal court, alleging they shuttered the plant without giving the legally required notice. Investment Represents Strategy to Create European Aluminium Solutions Group. Why is Frank McCourt really pushing it? EverZinc is headquartered in Lige . However, after making a few payments, Fusion defaulted on a loan from the state of Connecticut, said State Sen. Cathy Osten, who is also the first selectman of Sprague the small town where Fusion was the main employer. LOS ANGELES, June 01, 2022 -- ( BUSINESS WIRE )-- OpenGate Capital, a global private equity firm, announced that it has exited its investment in EverZinc, a global provider of specialty zinc . He said that cost cuts and other moves had pushed PennySaver back toward profitability by May and the company was nearing the end of negotiations to refinance the line of credit or sell the company when Capital One stopped returning the companys calls. A court filing by the trustee overseeing the bankruptcy proceedings said Golden Guernsey owed $1.5 million because it had violated state labor laws that require 60 days notice to employees of mass layoffs. To date, the firm has completed more than 75 transactions, including acquisitions and divestitures, and has acquired more than $8 billion in gross consolidated revenues. The first named plaintiff, OpenGate Capital Group LLC, and four of its subsidiaries named as plaintiffs are creatures of Delaware law as well. Andrew Nikou is the Founder & Chief Executive Officer at OpenGate Capital based in Los Angeles, California. While OpenGate was in negotiations to buy the business from Thermo Fisher, armed militants took cover in the Reynosa buildings cafeteria while fleeing their rivals, according to OpenGates lawsuit. Established in 2005, OpenGate Capital is headquartered in Los Angeles, California with a European office in Paris, France. In May of 2022, it was announced Thermo Fisher Scientific went to court to seek a dismissal of the lawsuit. 14 at 5-6; D.I. Those who cashed the bad checks were left on the hook for penalties levied by their banks. A link has been emailed to you - check your inbox. But the fact is that weve lost those jobs and nothing has replaced them.. When OpenGate bankrupted Pennysaver, a court-appointed trustee sued OpenGate for fraudulently siphoning money from the company through a variety of shady tactics: billing it for non-existent tax payments, loaning money to another OpenGate company at knockdown rates, and putting non-working OpenGate employees on its payroll. Our Standards: The Thomson Reuters Trust Principles. In her letter to OpenGate Capital, Baldwin writes, "Your predatory actions in Wisconsin are a powerful example of the urgent need for these reforms." A copy of Senator Baldwin's letter can be found here and below. I worked the for a little over 4. The spokesman, who did not want to be identified because of pending litigation, said the company warned workers about the possibility of a plant closure when it learned of the eviction threat. He was born in Vancouver, attended USCs business school and then took a job at Los Angeles private equity firm Platinum Equity in its Paris office, according to OpenGates website. 7-14-2011) . Your activity looks suspicious to us. OpenGate is moving the plant to Mexico anyway. OPENGATE CAPITAL GROUP, LLC, OPENGATE CAPITAL MANAGEMENT . 14 at 5-6.) Hufcor, a market-leading producer of accordion-style doors and mobile room partitions, was profitable when OpenGate bought it. In 2019, OpenGate acquired the German content-management platform CoreMedia. Hufcor, a market-leading producer of accordion-style doors and mobile room partitions, is one of many companies reeling from the private equity model in which firms acquire businesses and squeeze them for cash, routinely causing bankruptcies. This story has been shared 673,260 times. Fahn, speaking for OpenGate, said that the union wasnt privy to the sale because the sale wasnt final. The default, the hiring of the restructuring firm and the lenders presence on site paint a picture of a company in financial distress, the kind that former employees allege should have prompted OpenGate to provide a federally required 60 days notice before closing the plant. The allegations are often complex, and the plaintiffs must prove that the defendant violated securities . Heres what the numbers show. OpenGate gets sued for alleged WARN Act violations. Catherine A. Osten, Spragues first selectman, the equivalent of mayor, said the company owes more than $240,000 in back taxes. . Herb Titus, on what would have been his 20th anniversary with PennySaver, spent the afternoon protesting outside OpenGate Capital in Century City recently. OpenGate is headquartered in Los Angeles and Paris and has a seasoned in-house team of professionals . Hufcor, a market-leading producer of accordion-style doors and mobile room partitions, was profitable when OpenGate bought it. Several lawsuits had been filed claiming OpenGate and did not follow proper protocol under the WARN Act when firing hundreds of employees from both PennySaver and Hamilton Scientific. [34] On October 7, 2014, an official ceremony was held to celebrate the inauguration of the first Esperanza Azteca America program at the Florence Nightingale Middle School in Los Angeles. RSI operated PennySaver until its closure in May. Our tax dollars should make life better not go to waste on bloated military contracts and Pentagon boondoggles. 2:13-cv-03368 District Judge Audrey B. Collins, presiding. In 2010, Nikou was named a Top Dealmaker of 2010 by Mergers & Acquisitions magazine. At their side are elected officials who know that the whole country needs tough measures to reform private equity. Your email address will not be published. It was rough, but they didnt care. You get out of default.. One of the lenders was Andrew Nikous OpenGate Capital, the company that recently sold its TVGM Holdings (owner of TV Guide magazine). Financing terms required PennySaver to meet certain financial goals and maintain various debt ratios at certain levels. Description. You should only be asked to sign in once. In the last 16 years, Andrew's leadership has grown OpenGate into a global company with a reputation for innovation and deal-making. Nikou is actively involved with the management of each of the companies held in the portfolio. Post-closing, Open Gate employee Andrew Nikou was appointed as the sole member of Golden Guernsey. Roughly $4.9 million of the $5.5 million of Weinbergs cash, forwarded to Newkirk, disappeared on Nov. 12, 2013, when a fake email, purportedly from Weinberg, released the money, prosecutors charge. LOS ANGELES, October 13, 2022 -- ( BUSINESS WIRE )-- OpenGate Capital, a global private equity firm, today announced that it has exited its investment in . [8] In 2004, he left Platinum Equity and moved back to Los Angeles to start his own global investment firm. OpenGate has a history of buying companies only to close operations shortly thereafter, leaving communities across the country in the lurch. It agreed to provide $3.1 million in . OpenGate Capital has an overall rating of 3.9 out of 5, based on over 15 reviews left anonymously by employees. 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May 17-18, 2023 Hilton Tower Bridge, London, May 23-24, 2023 Convene 117 West 46th Street, New York, Get limited access to our industry news, analysis and data, plus regular email updates. The company was starting to be profitable. According to Opengate Capital, the company withheld important documents . Janesville, Wis. - U.S. The legislation will end "the failed experiment of gutting Michigan workers' rights," said one lawmaker. A bankruptcy trustee subsequently alleged in a court filing that Nikou and OpenGate had obtained the company at a bargain purchase price when the fair value of assets exceeded liabilities by $10.9 million. Register now to read this article and more for free. Hufcor employees will not be the last to suffer at the hands of OpenGate, and nothing will change unless the firm is held accountable for its ruthless profiteering. The cases that former employees have highlighted as OpenGate failures include: the shuttering of Golden Guernsey on a Saturday morning in 2013, with no notice to employees; the closure of Connecticut-based Fusion Paperboard shortly after it had received a state loan to stay put for 10 years; and the shutdown of OpenGates laboratory furniture business, Hamilton Scientific, after it discovered that a drug cartel had overrun its Mexico plant and it was evicted from its Texas facility. MILWAUKEE (January 11, 2022) - Chemsolv, Inc. ("Chemsolv"), a leading distributor of commodity and specialty chemicals based in Roanoke, VA, has been acquired by OpenGate Capital ("OpenGate"). Even though Hufcor was profitable when OpenGate bought it, maintained operations during the worst of the pandemic, and even advertised $16 hourly wages and generous benefits as recently as January 2021, OpenGate has nevertheless decided to relocate just as the pandemic eases.