OpenGate Capital has a history of buying companies, only to close operations shortly thereafter, leaving communities across the country in the lurch. 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. Those who cashed the bad checks were left on the hook for penalties levied by their banks. Were hiring an Advocacy & Political Manager. 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 . 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. 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. Thomas Bardet - Senior Vice President Operations - OpenGate Capital 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. Wrong. "Meet The Private Equity CEO Who's In Talks For His Own Reality Show," Julia La Roche, Business Insider, 8-16-2011. More than two years after the dairy closed, with bankruptcy proceedings still unfolding, the Storm family hasnt seen the $23,000 they estimate they are owed for the lack of notice and unpaid vacation days. Contact the writer: 714-796-2286 or lwilliams@ocregister.com. OpenGate Capital Reviews: What Is It Like to Work At - Glassdoor Sontchi, C.J. OpenGate Capital, the private equity firm that owns their employer, Hufcor, announced it was moving its plant out of Janesville, taking those workers' jobs and livelihoods with it. The closure of PennySaver only reaffirmed the Connecticut state senators opinion of OpenGate. OpenGate manages a diverse, global portfolio across key verticals within Industrials and Technology sectors. PDF In the United States Bankruptcy Court for The District of Delaware "Nicole Farhi Buyer OpenGate Set to Announce Three More Deals," David Altaner, Bloomberg, 3-15-2010. June 18, 10:39 a.m.: An earlier version of this article and an accompanying photo caption reported that PennySaver workers were suing OpenGate Capital and its managing partner, Andrew Nikou. [10], In 2008, Nikou negotiated the deal for OpenGate Capital to acquire TV Guide for $1 and $50 million in assumed liabilities from owner Rovi Corporation (previously Macrovision). . Joshua Adams Email & Phone Number - OpenGate Ca.. | ZoomInfo The legislation will end "the failed experiment of gutting Michigan workers' rights," said one lawmaker. At their side are elected officials who know that the whole country needs tough measures to reform private equity. OpenGate Capital raised a new fund: OpenGate Capital Partners II ($585,000,000) News Aug 20, 2019 FinSMEs OpenGate Capital Adds Mr. Damian Blazy as Principal in Operations Mr. Moazami is currently the Chairman of Astrea Acquisition Corp (NASDAQ: ASAX) and Vcinity [] 3 min read. Former employees of other OpenGate Capital portfolio companies have similar stories of hardship, and some warn that the ex-PennySaver employees are up against serious challenges. Before the deal even closed, executives at OpenGate met with PennySaver employees and touted their roughly 20 other acquisitions in a PowerPoint presentation obtained by the Register. The company was starting to be profitable. On 09/21/2021 Finsa Portafolios, S A de C V, filed a Property - Personal Property Fraud lawsuit against OpenGate Capital, LLC,. Hamilton Scientific would pay employees once it got its funding together, according to the April PE Hub article. Federal Civil Lawsuit California Central District Court, Case No. The efforts by Cerberus Capital Management to unload Maxim magazine in late 2013 may go down as one of the most litigious divestments in publishing history. This article was originally published on OtherWords. Earlier this year, employees at Hamilton Scientifics Wisconsin facility received notices that they would be laid off in 60 days but were then furloughed, according to an article from PE Hub, a publication that focuses on private equity companies. Andrew received a Bachelor of Science degree from University of Southern . I did NOT send that email [releasing the escrow fund].. Thermo Fisher, the world's largest maker of laboratory equipment and scientific instruments, agreed to acquire Life Technologies Inc. Lauren moved back to the states in 2011 and now lives in Long Beach. Similarly, employees at Golden Guernsey learned their company was closing when they showed up to work only to find the doors locked. Janesville, Wis. - U.S. Hufcor workers battle private equity owner with shame ad - GazetteXtra OpenGate, which acquired PennySaver in 2013, specializes in buying units of larger companies and reselling them. [9] In 2006, OpenGate purchased OMMIC, a former division of Philips. 7-14-2011) . Employees who started work later arrived to find the facility locked. Confronted with this looming loss, Hufcor employees, Janesville residents and CWA union organizers have rallied against OpenGates greedy and exploitative practices. OpenGate Capital Group LLC et al v. Thermo Fisher Scientific Inc, Court Case No. To me, you dont sign a six-year contract and decide to close a facility.. This case was filed in Orange County Superior Courts, Civil Complex Center located in Orange, California. PennySaver had been in financial distress for months before closure Working at OpenGate Capital | Glassdoor Thats the thing that bothers us most, McCarthy said. Thermo Fisher sued over sale of Mexico plant used by drug cartel Founder & Chief Executive Officer at OpenGate Capital . [5] At Platinum Equity, he expanded the firm's international presence in Europe. It also said employees sought help from Thermo Fisher to address the cartel activity, but that security upgrade proposals were not implemented. Opengate Capital Grp. LLC v. Thermo Fisher Scientific Inc. [1] The firm is focused on the acquisition of lower to middle market businesses that are often privately owned, or non-core divisions of larger companies located around the world. Last Updated January 23, 2017 at 11:50 PM EST (5.7 years ago) Most of my clients are in default. Workers are suing OpenGate in state and federal court, alleging it failed to provide adequate notice to workers about the shutdown and issued final paychecks that bounced. Thermo Fisher was not immediately available for comment outside of normal U.S. business hours. Catherine A. Osten, Spragues first selectman, the equivalent of mayor, said the company owes more than $240,000 in back taxes. Its website says its businesses generate annual revenue of about $3 billion, making it a small player. The Industrial Division of the Communication Workers of America paid to publish an open letter to OpenGate Capital's CEO, Andrew Nikou, in an advertisement that . After laying off all 166 workers at Hufcor's Janesville plant, OpenGate Capital drove the company . close to . [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. This story has been shared 673,260 times. The suit claimed that Thermo Fisher had rushed negotiations and provided misleading answers to due-diligence inquiries. Employees of other OpenGate companies have suffered similar fates. of the Connecticut boxboard company Fusion Paperboard, and nearly. 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. Working at OpenGate Capital | Glassdoor 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. 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. But in some cases, as with PennySaver, external circumstances frustrate our ability to have our investments realize their full potential.. Among them were a French childrens book publisher, a Finnish paper producer, the Nicole Farhi division of fashion firm French Connection and Models One Ltd., the modeling agency that has represented supermodels Bar Refaeli, Alessandra Ambrosio, Linda Evangelista and others. You get out of default.. In May of 2022, it was announced Thermo Fisher Scientific went to court to seek a dismissal of the lawsuit. [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. It maintained operations during the worst of the pandemic and even advertised $16 hourly wages and generous benefits as recently as January 2021. OpenGate Capital Group LLC et al v. Thermo Fisher Scientific Inc et al But OpenGate never got a dime after it lent the cash as the alleged fraud was uncovered. That explanation ignores the blatant injustice done to Hufcor workers, whose woes reflect the influence of predatory private equity, and tells a story of Wall Street run amok. 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. Inequality.org is a project of the Institute for Policy Studies, Content licensed under a Creative Commons 3.0 License, Inequality Quotes by Historic World Leaders, Private Equity Can Kill: Fight Wall Streets Deadly Power in Nursing Homes, Labor Celebrates as Michigan Senate Votes to Overturn Right-to-Work Law. Your activity looks suspicious to us. 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. Type: Company - Private. Only months after signing the new union contract, employees were notified that the mill would close, said Richard Harrelle, president of the Steelworkers Local 1840, which represented around 100 of the approximately 145 people who worked at the company. The state had awarded the company the loan with the understanding that it would stay in Connecticut 10 years. They cut salaries. Elaine Buckley, a former senior vice president for sales and a 35-year employee, said she believes the company was in liquidation mode for months. It came as a complete shock to the management at the dairy and the union that they were about to close, said Eileen Appelbaum, a senior economist at the Washington, D.C.-based Center for Economic and Policy Research, whose book Private Equity at Work: When Wall Street Manages Main Street devotes a chapter to the Wisconsin dairy. A runner, rock climber and board game enthusiast, Lauren is perpetually training for the next race day. [22] The deal was the fifth platform investment from OpenGate's debut fund. OpenGate has had successes. I find it to be despicable.. By continuing to use this site, closing this banner, or clicking I Agree, you agree to the use of cookies. In too many cases with private equity, big firms acquire businesses and squeeze them for cash, routinely causing bankruptcies. OpenGate tried to buy Maxim in early 2013 but was outbid by Darden Media Group. OpenGate Capital - Recent News & Activity 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. In the weeks leading up to the coupon magazines mass layoffs, managers were on a tear, asking advertisers to pay up front and offering sales representatives bonuses for bringing in the most money, Buckley said. So far, six lawsuits have been filed against OpenGate Capital and/or PennySaver in local and federal courts for failing to notify employees of mass layoffs, according to Richard McCune, a lawyer representing PennySaver employees. 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. Opengate did not specify what damages it was seeking. To date, the firm has completed more than 75 transactions, including . (D.I. 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. OpenGate gets sued for alleged WARN Act violations | PE Hub A fully integrated team of origination, investment and operations professionals. In December 2014, while their lawsuit against Thenno Fisher was pending, the OpenGate and RoundRock entitles negotiated a sale-leaseback agreement for the . OpenGate Capital Shuts Gate on Janesville Plant OpenGate Capital Acquires Diversified Commodity and Specialty Chemical Established in 2005, OpenGate Capital is headquartered in Los Angeles, California with a European office in Paris, France. After the Fusion facility closed in September 2014, the state launched several programs to retrain workers, Osten said. In January 2013, for instance, OpenGate abruptly shut down Golden Guernsey Dairy in Waukesha, Wis. We work with every customer to find a workable solution, but unfortunately we werent able to reach an agreement in this situation.. OpenGate Capital, the private equity firm that owns their employer, Hufcor, announced it was moving their plant out of Janesville taking those workers jobs and livelihoods with it. Banks dont do this. Every major bank in the U.S. covers the payrolls.. 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. LOS ANGELES, August 23, 2022 -- ( BUSINESS WIRE )-- OpenGate Capital, a global private equity firm, announced today it . Investment Represents Strategy to Create European Aluminium Solutions Group. . 19, Ex. Terms of the investment were not disclosed. 14 at 5-6.) Andrew Nikou - Wikipedia [35][36][37], Nikou is married with children and resides in Nevada.[7]. They think its a big joke. "OpenGate buys Cascades recycled box makers," Los Angeles Business, 6-14-2011. 2:17-cv-04360-SB-E ("Underlying Lawsuit") under Private Equity Liability Insurance Policy No. OpenGate failed to give workers at Pennysaver and Golden Guernsey the 60 days notice of business closure that is required under U.S. labor law. Securities class action lawsuits are filed on behalf of a class of investors or a class of holders of a particular security. Mexican plant In 2013, Opengate Capital Group LLC filed suit against Thermo Fisher Scientific for selling it a manufacturing plant controlled by a drug cartel. OpenGate Capital Group LLC et al v. . His parents left their native Tehran before the Iranian Revolution and relocated to Canada, later moving with Nikou to California when he was four years old. Ive been doing this over three decades. You always pay your employees. They just care about lining their pockets with money. Nikou was not named as a defendant in the suit. 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. At OpenGate, we recognize the importance of building resilient infrastructure for our employees, portfolio companies and environment through responsible investing. It was one of the most shocking things that ever happened to me in my business life, Weinberg testified. Do Not Sell or Share My Personal Information, Musk said hed never settle an unjust legal case against him. 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 . 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. Kasoff said that the bank explicitly forced the default when, on the last day of operations, a bank representative phoned to say that the bank would not advance the $400,000 needed to fund corporate payrolls unless PennySaver agreed to shut down and dismiss all employees not needed to wind down the company. In January of this year, Thermo Fisher initiated the eviction of Hamilton Scientific from its Texas facility, alleging that it had failed to pay rent on time three times. Don't have an account? Acquiring and creating transformative value in the lowertomiddle market across North America and Europe. Founded in 2005, OpenGate Capital is a private equity firm based in Los Angeles, California. Previously, Andrew was the Board Membe r at Yellow and also held positions at SPACInsider, Platinum Equity. (D.I. OpenGate Capital Completes Acquisition of ScioTeq and TREALITY from It would curb the industrys worst abuses and prioritize people, not private equity profits. 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. The Golden Guernsey plant employed over 100 workers. Darden promised to repay OpenGate $3.41 million on Friday for the loan made on Monday, according to court testimony. $16 hourly wages and generous benefits as recently as January 2021. Nikou, its founder, is a board member at the Hammer Museum and, until recently, at the Museum of Contemporary Art. Rapacious LA Vulture Capitalist Firm: Ruins Job, Communities for Profit 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. . In 2005, Nikou founded OpenGate Capital with $30,000 from his own savings. She sharply criticized OpenGate Capital for the closure. Andrew Nikou is the founder and CEO of OpenGate Capital, a global private buyout firm. Class Action Lawsuit List | Open & Current Cases | ClassAction.org 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. The Motion was joined by defendants Andrew Nikou and Jay Yook.4 The In 2010, Dean Foods Company, its then owner, sold Golden Guernsey to a private equity company, Open Gate Capital, LLC ("Open Gate"), as part of the settlement of an antitrust lawsuit brought by the United States Department of Justice. Nikou was born in 1977 in Vancouver, British Columbia, Canada. Dean Starkman previously covered Wall Street for the Los Angeles Times; he left in 2016. 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 Hills, N.Y. And in the two months before the shutdown, the lender, a unit of Capital One Financial Corp., had placed one and sometimes two representatives at PennySavers Brea headquarters to monitor the operation and the companys financial condition, under terms of the line of credit it was using to pay employees, among other expenses. PE Firm Sues For Fees On 347M Bid For Engine-Maker - Law360 Uber drivers and other app-based workers are facing an all-out safety crisis. Doing otherwise could create confusion, disruptions and other difficulties with operations.. [30][31][32], Nikou sits on the Board of YELLOW, the non-profit organization founded by Pharrell Williams. The lawsuit was dismissed in April 2016. A court-appointed trustee, Similarly, employees at Golden Guernsey learned their company was closing when they showed up to work only to find the doors, . The sudden closure and lost pay did not surprise former employees of other companies once owned by OpenGate Capital the Los Angeles-based private equity firm that bought PennySaver in 2013. OpenGate Capital Company Profile | Management and Employees List Its not a good sign, obviously, Kasoff said of the default. Chemsolv Acquired - Everchem Specialty Chemicals 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. OpenGate, which Nikou started in 2005, has engaged in more than two dozen transactions. Six months after the purchase, OpenGate sued Thermo Fisher, saying the company had concealed the fact that the Reynosa, Mexico, facility was under seige by the Gulf cartel, whose senior members brandished weapons at company employees and parked tractor trailers and cars at the facility. 20201 an 1 mois. That would be a hard argument to make, he said. janv. All in the name to make us more efficient. His father, who majored in mathematics at a German university, worked at the Los Angeles Department of Water and Power. 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. Former employees of at least three former OpenGate portfolio companies have filed lawsuits or complaints alleging OpenGate or the companies it owned violated labor laws requiring businesses to notify employees 60 days before mass layoffs. Click Sign in to add some. 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. 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 . Capital One spokesman Michael Bulger said: Withdrawing funding is a last resort. This post was guest authored by Elisa McCartin. Language links are at the top of the page across from the title. In court papers, the company said the trustees allegations are without merit. In the last 16 years, Andrew's leadership has grown OpenGate into a global company with a reputation for innovation and deal-making. OpenGate tried to buy Maxim in early 2013 but was outbid by Darden Media Group. OpenGate strategically invests in targeted sectors across five continents utilizing a diverse and experienced team with the ability to connect with business owners around the globe. [23] OpenGate rebranded the business EverZinc; within Umicore it had generated $425 million in revenue in 2015.[24]. And employees became increasingly worried when PennySavers CEO, vice president of finance and the vice president of human resources all quit, Buckley said. Its the. Not the case? 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 Hufcor workers battle private equity owner with shame ad in Los Angeles He was also in talks about a reality TV show built around his private equity business. 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. Our tax dollars should make life better not go to waste on bloated military contracts and Pentagon boondoggles. MALLOY MITRA VS OPENGATE CAPITAL LLC | Court Records - UniCourt PennySaver workers are suing OpenGate in state and federal court, alleging that the company failed to provide adequate notice about the shutdown. OpenGate Capital, which owns PennySaver, has, Click to share on Facebook (Opens in new window), Click to share on Twitter (Opens in new window), Click to share on Reddit (Opens in new window), OpenGate Capital, which owns PennySaver, has closed other companies, too, Whats new: Loma Villas apartments sell for $21.5M to investor, 4 dead in Mojave Desert community after shooting report, El Chapo sons send Mexico cartels cheap fentanyl into US, Sacramento Snapshot: Cities would need to include homeless-serving housing in state plans under new bill, Orange County restaurants shut down by health inspectors (April 20-27), More land sliding at Casa Romantica; residents evacuated, trains halted through San Clemente, Orange County Artist of the Year winners announced, Then and Now: Photos of Casa Romantica show damage caused by landside, Fire at Barnes & Noble in Orange disrupts book-signing event, OC Marine who volunteered in Ukraine, survived rocket attack: I would do it again, The DMV says permission to drive is based on ability, but older drivers are scrutinized more, Cold, drizzly week ahead for Southern California, A look at Orange Countys baseball teams and the CIF-SS playoffs, Joe Bidens re-election bid is off to a bad start, Do Not Sell/Share My Personal Information. 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. In 2012, Nikou was a recipient of The M&A Advisor's "Top 40 Under 40" award,[4] for the West Region. [8] In 2004, he left Platinum Equity and moved back to Los Angeles to start his own global investment firm. OpenGate notes that its business model is to take chances on faltering companies, and that carries inherent risks. At OpenGate, we strive for a culture that promotes open communication and empowerment of fellow team members..
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