Opinion ID: 145387
Heading Depth: 2
Heading Rank: 1

Heading: The Parties to this Dispute

Text: The principal Debtor, Far & Wide, is a Delaware corporation formed in March 1999 to purchase travel companies. The Individual Defendants were officers and/or served on the board of directors of Far & Wide. Even though Far & Wide was incorporated in Delaware, the majority of its operations were in Florida. Wellspring is a Delaware corporation that manages private investment partnerships, such as Loan Capital Funding, LLC, which focus on investing in or acquiring companies.1 Wellspring and the Individual Defendants formed the 1 Loan Capital Funding, LLC acted as a conduit between Wellspring and the Debtors. Although the Trustee also named Loan Capital Funding, LLC as a defendant in the underlying litigation, the Court refers to both Wellspring individually and Wellspring and Loan Capital Funding, LLC collectively as “Wellspring”. 3 Debtor companies by consolidating various travel companies. Wellspring invested $45 million in the Debtors and acquired a majority of their stock. Wellspring also required the Debtors to appoint four of its partners to Far & Wide’s six-member board of directors. With a majority of the board, Wellspring exercised a controlling interest in the Debtors. From the time of the company’s creation, Far & Wide planned to purchase and consolidate a number of smaller travel companies and to sell the resulting conglomerate to the highest bidder for a profit. Appellant alleges that Wellspring and the Individual Defendants violated their fiduciary duty of loyalty to Far & Wide by pursuing a plan that maximized their own self-interest but was harmful in the long-term to Far & Wide’s creditors. Far & Wide established lines of credit with a number of banks to raise capital. In 1999, the Debtors entered into a loan agreement with a group of banks to infuse $70 million into the Debtors. The Debtors provided their assets as collateral. A year later, the Debtors obtained an additional $20 million in unsecured financing.