OpenGate Capital. After we signed a contract we thought we were golden, but two months later they told us they were closing the place, Harrelle said. Andrew McCarthy, 53, started working for Golden Guernsey when he was 19 years old. On Friday May 21,2015 they fired all employees. Instead, he sits on numerous boards and hes even been in talks about a reality TV show built around his private equity business. 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. OpenGate nevertheless was lured back in as a short-term lender to Darden. But Fusion closed the plant only a year and a half after receiving the loan, Osten said. Not meeting those goals or maintaining those levels would result in a default regardless of whether loan payments were made. Ive been doing this over three decades. Acquiring and creating transformative value in the lowertomiddle market across North America and Europe. With a strategic international presence and a focus on corporate carve-outs and complex . Previously, Andrew was the Board Membe r at Yellow and also held positions at SPACInsider, Platinum Equity. OpenGate Capital regularly acquires under-performing businesses that by their very nature are sometimes operationally distressed, said Terry Fahn, a senior executive at the crisis management firm Sitrick and Company that represents OpenGate. OpenGate Capital, LLC, et al., Central District of California, Case No. This case was filed in Orange County Superior Courts, Civil Complex Center located in Orange, California. A $300-million (minimum) gondola to Dodger Stadium? 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. Andrew Nikou Founder, Chief Executive Officer OpenGate Capital 10250 Constellation Boulevard, 30th Floor OpenGate Capital has a history of buying companies, only to close operations shortly thereafter, leaving communities across the country in the lurch. It was one of the most shocking things that ever happened to me in my business life, Weinberg testified. 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. That would be a hard argument to make, he said. But Pawluk said things deteriorated soon after OpenGate Capital acquired Hufcor, a family-owned company founded in Janesville 120 years ago. Register now to read this article and more for free. Your activity looks suspicious to us. Andrew received a Bachelor of Science degree from University of Southern . In too many cases with private equity, big firms acquire businesses and squeeze them for cash, routinely causing bankruptcies. OpenGate Capital partners with companies to . for a better future. In February, the PennySaver building on Orbiter Street in Brea was sold for $14 million, according to public records. Hufcor employees, Janesville residents, and union organizers have rallied against OpenGates greedy and exploitative practices. Post-closing, Open Gate employee Andrew Nikou was appointed as the sole member of Golden Guernsey. In January 2013, for instance, OpenGate abruptly shut down Golden Guernsey Dairy in Waukesha, Wis. Andrew Nikou is the Founder and Chief Executive Officer of OpenGate Capital, a Los Angeles-based firm with offices in Paris, France. But in court papers, Hamilton denied any illegal conduct. It would. BURKE v. TV GUIDE MAGAZINE GROUP, INC., 09-56989 (9th Cir. PennySaver workers are suing OpenGate in state and federal court, alleging that the company failed to provide adequate notice about the shutdown. OpenGate Capital, a Los Angeles firm that amassed $5 billion in revenue during its first decade in business, has run exactly that playbook in Janesville since acquiring Hufcor in 2017. 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 . 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. About OpenGate Capital. Too often, private equity firms like OpenGate extract cash from the companies they acquire and walk away richer, regardless of what happens to workers and communities. The lawsuit, filed in federal court in Los Angeles, alleged that Thermo Fisher had acted in bad faith by withholding documents and directing employees to conceal the drug gangs presence at the facility. Employees of other OpenGate companies have suffered similar fates. LOS ANGELES, August 23, 2022 -- ( BUSINESS WIRE )-- OpenGate Capital, a global private equity firm, announced today it . 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. While Janesville was once a manufacturing hub, it has experienced the devastating consequences of unfettered corporate greed. OpenGate Capital is a global private equity firm active in the lower middle-market and focused on acquiring corporate carve-outs, divestitures and special situations throughout North America, Western Europe and Latin America. ), Concertgoer lets out a loud full body orgasm while L.A. Phil plays Tchaikovskys 5th, 8 best interview questions to land a top job, Bank rates are up. E-FILING TRANSACTION 2392305 RECEIVED ON 07/15/2015 . 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. To me, you dont sign a six-year contract and decide to close a facility.. Unless we do, Hufcor employees wont be the last to suffer at the hands of private equity and its ruthless profiteering. This rating has decreased by -11% over the last 12 months. The lawsuits allege that a company or individual violated securities laws and are brought on behalf of the class. Several pre-fund, legacy investments that were made with the personal capital of Andrew Nikou and the Partners at OpenGate Capital were sold: Benvic was sold to InvestIndustrial in December 2017, NorPaper Avot-Vallee was sold in 2018 to a private investor, and in January 2019, NAKAN (the largest division within Ivy Group) was sold to Westlake Chemical Corporation. OpenGate said PennySaver had to be closed because Capital One unexpectedly pulled its line of credit at the last minute. Vice President. 1 at 17.) OpenGate Capital is a global private equity firm headquartered in Los Angeles, California and Paris, France that focuses on the acquisition and optimization of underperforming businesses in the lower middle market throughout North America and Europe. A global investment manager with a local touch. Then, their final checks bounced. INTRODUCTION Before the Court is the Motion to Dismiss Pursuant to FRCP 12(b)(6) filed by OpenGate Capital Group, LLC, OpenGate Capital Management, LLC and PennySaver Investors, LLC's (collectively, "OpenGate"), which seeks to dismiss the Complaint filed by Don A. Beskrone, Chapter 7 Trustee for the estates of PennySaver USA Publishing, LLC, et al. When PennySaver closed on May 22, it left 678 employees without a final paycheck or compensation for their accrued vacation days and it meant they had to scramble for health benefits. OpenGate Capital is a Los Angeles based private equity firm that specializes in acquiring and optimizing lower-to-middle market businesses across North America and Europe. Capital One said it tried to work with PennySaver on the closure, but to no avail. Headquartered in Los Angeles, California, . Terms of the investment were not disclosed. [15] In 2018, OpenGate acquired the Italian stove and fireplace manufacturer Jotul from the European private equity group Ratos. OpenGate Capital is a global private equity firm specializing in the acquisition and operation of businesses to create new value through operational improvements, innovation and growth. "Nicole Farhi Buyer OpenGate Set to Announce Three More Deals," David Altaner, Bloomberg, 3-15-2010. If we wanted the employees to be paid, we had to immediately terminate all the employees other than those that were needed to liquidate, Kasoff said. We need to take legislative action in Congress to rip up the predatory playbook that these private equity firms use to leave workers with nothing but pink slips and lost livelihoods, Senator Tammy Baldwin of Wisconsin wrote. 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. It was rough, but they didnt care. But OpenGate never got a dime after it lent the cash as the alleged fraud was uncovered. "Investment firm to buy Dean Foods dairy plant," BusinessWeek, 8-15-2011, Esperanza Azteca America launches first program in Los Angeles, Los Angeles Department of Water and Power, http://articles.businessinsider.com/2011-08-16/wall_street/29980017_1_private-equity-platinum-equity-pehub, http://www.themiddlemarket.com/maj/2010_25/andrew-nikou-213884-1.html, "Bullied as a Kid, This Founder Now Runs a $5 Billion Company. We need to take legislative action in Congress to rip up the predatory playbook that these private equity firms use to leave workers with nothing but pink slips and lost livelihoods, Senator Tammy Baldwin of Wisconsin, , the first major effort to reform the private equity sector, in the last Congress. Thermo Fisher made none of the upgrades that were recommended by its security advisers in January and February 2012, and took no meaningful action to fortify or further secure the Facility in response to the continuing cartel infiltration, the complaint said. Sontchi, C.J. They just dont flat out care about being a reputable business, from my perspective, Osten said. When Brea-based PennySaver abruptly closed last month at the end of a seemingly normal workday, employees of the classified ad magazine were stunned. (Reuters) - 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 cartel was operating there. Hamilton Scientific would pay employees once it got its funding together, according to the April PE Hub article. OpenGate Capital is a global private equity firm specializing in the acquisition and operation of businesses to create new value through operational improvements, innovation, and growth . Click here. The suit claimed that Thermo Fisher had rushed negotiations and provided misleading answers to due-diligence inquiries. 10250 Constellation Blvd Fl 30, Los Angeles, California, 90067, United States. Our six-week newsletter will help you make the right decision for you and your property. [23] OpenGate rebranded the business EverZinc; within Umicore it had generated $425 million in revenue in 2015.[24]. In May of 2022, it was announced Thermo Fisher Scientific went to court to seek a dismissal of the lawsuit. [25] In that same year, the firm also completed six platform investments, and one add-on, all within the second fund. Heres what the numbers show. The firm shut down its Fusion Paperboard plant just three years after acquiring it, 18 months after signing a 10-year loan from the state to remain operational, and only a few months after entering into a six-year contract with the local steelworkers union. [5] After graduating, he worked for the Patent and License Exchange, a start-up financed by Softbank Capital.[5]. It maintained operations during the worst of the pandemic and even. In fact, prosecutors allege, it was the senior Dardens neer-do-well son who had already spent three years in jail on an unrelated stock swindle looking to buy the lad mag. close to . Financing terms required PennySaver to meet certain financial goals and maintain various debt ratios at certain levels. OpenGate notes that its business model is to take chances on faltering companies, and that carries inherent risks. He just settled this one, DeSantis board approves suing Disney in response to lawsuit, Regulators seize First Republic Bank, sell to JPMorgan Chase, What the work-from-home era has done to office politics, First Republic up in air as regulators juggle banks fate. [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. (D.I. All rights reserved. Uber drivers and other app-based workers are facing an all-out safety crisis. OpenGate manages a diverse, global portfolio across key verticals within Industrials and Technology sectors. Former employees of OpenGate Capital portfolio company Hamilton Scientific have filed a class action complaint alleging the firm and company owe them compensation after the company . Debra Clancy, a senior account manager at PennySaver, joined about 30 other former employees as they yelled towards the 17th floor of a building that houses OpenGate Capital in Century City during a recent protest against the company. By continuing to use this site, closing this banner, or clicking "I Agree", you agree to the use of cookies. The employees say they didn't get money owed to them including their paychecks and vacation time. OpenGate's professionals possess the . In December 2014, OpenGate Capital hired Realization Services, an East Coast company specializing in turnaround management. Likewise, OpenGate itself has continued to raise millions since bankrupting its previous companies, enabling these practices to continue unabated. I find it to be despicable.. 1:13-cv-01475 in the Delaware District Court. In 2010, Nikou was named a Top Dealmaker of 2010 by Mergers & Acquisitions magazine. Established in 2005, OpenGate Capital is headquartered in Los Angeles, California with a European office in Paris, France. Open Gate Capital aquired my company Pennysaver USA 1 1/2 years ago. Herb Titus, on what would have been his 20th anniversary with PennySaver, spent the afternoon protesting outside OpenGate Capital in Century City recently. A state claim for wages was filed in the dairys pending Delaware bankruptcy case. 9JANESVILLE The labor union that represents workers at Janesville's Hufcor factory is now pressuring Hufcor owner OpenGate Capital with a shame campaign that's playing out in Los Angeles, OpenGate's corporate home city. You get out of default.. [26], Prior to raising its first institutional fund, OpenGate also acquired the Waukesha, Wisconsin plant and brand rights to Golden Guernsey Dairy as the result of an antitrust divestment of Dean Foods, which was required to sell the plant to purchase GGD's other plants in the state. 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. We are proud to have a history of successfully turning around these types of businesses, Fahn added. We work with every customer to find a workable solution, but unfortunately we werent able to reach an agreement in this situation. He declined to comment further. For ScioTeq, 2020 was again a record . 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. At OpenGate, we recognize the importance of building resilient infrastructure for our employees, portfolio companies and environment through responsible investing. This article was originally published on OtherWords. Darden promised to repay OpenGate $3.41 million on Friday for the loan made on Monday, according to court testimony. 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. A fully integrated team of origination, investment and operations professionals. This case was filed in U.S. Courts Of Appeals, U.S. Court Of Appeals, Ninth Circuit. 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! This is ClassAction.org's current list of open lawsuits and investigations. What makes Janesville special in a lot of peoples minds is that we really had the real glory years here, former State Senator and activist Tim Cullen said. Language links are at the top of the page across from the title. Among those companies was Hamilton Scientific, the enterprise allegedly overrun by drug cartel members. . Nikou, its founder, is a board member at the Hammer Museum and, until recently, at the Museum of Contemporary Art. 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 . 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. Fahn points to OpenGates acquisition of TV Guide, auto part manufacturer Gabriel, and Europe-based companies NorPaper, Benvic, Kotkamills, and Fleurus Presse as a some of OpenGates successful turnarounds. But not all OpenGate deals have worked out. . Shortly after the presentation, senior PennySaver staff members were asked to write to OpenGate partner Jay Yook, outlining how they would turn around the company, said Elaine Buckley, who at the time was PennySavers vice president of outside sales. 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.