This post was guest authored by Elisa McCartin. 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. All quotes delayed a minimum of 15 minutes. The firm focuses on the acquisition of lower-to-mid-market businesses in the industrials, business services, and technology sectors. $16 hourly wages and generous benefits as recently as January 2021. 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 . 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 Why would we put in all that effort?. here to register, Not for publication, email or dissemination, Veritas-backed HMH buys educational services nonprofit NWEA, Professional services company FMP inks $36.5m from Alaris, NMS recaps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. A global investment manager with a local touch. EverZinc is headquartered in Lige . 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. [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. OpenGate also faced numerous lawsuits stemming from its dealings at Hamilton Scientific, including not giving employees adequate notice of its Texas plant closure and selling a Mexican plant without disclosing it was harboring a drug cartel. 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. 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. June 16, 2021. Later that year, Nikou led OpenGate Capital's bid for McGraw-Hill Companies BusinessWeek magazine, then withdrew from the bidding. Throughout the first year they started to liquidate assets selling property and equipment. Andrew Nikou is the Founder & Chief Executive Officer at OpenGate Capital based in Los Angeles, California. Description. In 2005, entrepreneur Andrew Nikou used $30,000 from his own savings to form a private equity firm, OpenGate Capital. Capital One spokesman Michael Bulger said: Withdrawing funding is a last resort. 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 partners with companies to . Barry L. Kasoff, president of Realization Services who served as PennySavers chief restructuring officer, denied the assertion and said the decision to close with little notice was dictated by Capital One. 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. Previously, Andrew was the Board Membe r at Yellow and also held positions at SPACInsider, Platinum Equity. 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. 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. LOS ANGELES, October 13, 2022 -- ( BUSINESS WIRE )-- OpenGate Capital, a global private equity firm, today announced that it has exited its investment in . [23] OpenGate rebranded the business EverZinc; within Umicore it had generated $425 million in revenue in 2015.[24]. In February, the PennySaver building on Orbiter Street in Brea was sold for $14 million, according to public records. Withdrawing funding is a last minute resort, Capital One spokesman Michael Bulger said in an emailed statement. Kasoff, who also handled the Connecticut plant for OpenGate, said Fusion acted properly in all respects in selling some assets to a competitor and said it retains ownership of its real estate and other assets, which it will sell to pay off creditors. I just dont find it funny to ruin peoples lives. [22] The deal was the fifth platform investment from OpenGate's debut fund. OpenGate Capital. [6] Nikou graduated from William Howard Taft Charter High School in Woodland Hills, California, where he was active in the Persian community. [20] As of August 2018, OpenGate's first fund had completed nine platform investments, five of which had closed in 2016. Please prove that you're human. Newkirks lawyer, Jonathan Harris, claims Newkirk is no more than a victim just one of many duped by con man Darden Jr. At least two civil suits were filed by lenders who forked over money because they thought they were lending it to Darden Sr. only to learn otherwise when it was too late. In addition, OpenGate was to get 10 percent in Maxim plus a $500,000-a-year annual consulting fee, according to testimony. It would curb the industrys worst abuses and prioritize people, not private equity profits. Not meeting those goals or maintaining those levels would result in a default regardless of whether loan payments were made. 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. RSI operated PennySaver until its closure in May. At OpenGate, we strive for a culture that promotes open communication and empowerment of fellow team members.. OpenGate closed PennySaver on May 22 without warning. BURKE v. TV GUIDE MAGAZINE GROUP, INC., 09-56989 (9th Cir. A runner, rock climber and board game enthusiast, Lauren is perpetually training for the next race day. His father, who majored in mathematics at a German university, worked at the Los Angeles Department of Water and Power. We work with every customer to find a workable solution, but unfortunately we werent able to reach an agreement in this situation.. On Jan. 5, 2013, employees who worked the early morning shift, starting between 3 and 5 a.m., were asked to leave and the doors were locked with no prior notice to employees, McCarthy said. Coupon mailing company PennySaver USA was in default on its main operating loan for five months before it abruptly shut down on the eve of the Memorial Day weekend, something few of its roughly 680 employees knew before they were put out of work. Vice President. [35][36][37], Nikou is married with children and resides in Nevada.[7]. The suit claimed that Thermo Fisher had rushed negotiations and provided misleading answers to due-diligence inquiries. 1 at 17.) We look to establish collaborative relationships with companies to drive operational improvement and realize opportunities for long-term value creation. This rating has decreased by -11% over the last 12 months. (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. The lawsuits allege that a company or individual violated securities laws and are brought on behalf of the class. But Fusion closed the plant only a year and a half after receiving the loan, Osten said. OpenGate Capital is a private equity firm that strives to acquire and optimize lower-to-middle market businesses throughout North America and Europe. In 2012, Nikou was a recipient of The M&A Advisor's "Top 40 Under 40" award,[4] for the West Region. 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. Newkirk was fully involved in the scam, prosecutors allege. 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. This May Day, let's show solidarity https://t.co/4v7zeBzAiz, . Hufcor, a market-leading producer of accordion-style doors and mobile room partitions, was profitable when OpenGate bought it. This case was filed in U.S. Courts Of Appeals, U.S. Court Of Appeals, Ninth Circuit. OPENGATE CAPITAL GROUP, LLC, OPENGATE CAPITAL MANAGEMENT . After we signed a contract we thought we were golden, but two months later they told us they were closing the place, Harrelle said. I find it to be despicable.. Employees at other OpenGate-owned companies have voiced similar complaints. OpenGate sued Thermo Fisher for breach of contract, negligent and fraudulent misrepresentation, and other things. OpenGate nevertheless was lured back in as a short-term lender to Darden. 14 at 5-6; D.I. 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. Three days later, the company filed for Chapter 7 bankruptcy liquidation. Likewise, OpenGate itself has continued to raise millions since bankrupting its previous companies, enabling these practices to continue unabated. You may occasionally receive promotional content from the Los Angeles Times. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Thanks for contacting us. But Pawluk said things deteriorated soon after OpenGate Capital acquired Hufcor, a family-owned company founded in Janesville 120 years ago. Fahn, speaking for OpenGate, said that the union wasnt privy to the sale because the sale wasnt final. Nikou, its founder, is a board member at the Hammer Museum and, until recently, at the Museum of Contemporary Art. Andrew received a Bachelor of Science degree from University of Southern . 1:13-cv-01475 in the Delaware District Court. In January 2013, for instance, OpenGate abruptly shut down Golden Guernsey Dairy in Waukesha, Wis. 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. It was rough, but they didnt care. [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). Its the biggest business closure in Janesville since the Great Recession. It was one of the most shocking things that ever happened to me in my business life, Weinberg testified. OpenGate, which acquired PennySaver in 2013, specializes in buying units of larger companies and reselling them. Do Not Sell or Share My Personal Information, Musk said hed never settle an unjust legal case against him. Through it all, few employees understood the depth of the companys distress. [17][18][19], In July 2016, OpenGate closed its first institutional fund, OpenGate Capital Partners I, at $305 million, exceeding its target of $300 million and raising about twice what the average new private equity fund does, according to Preqin. PennySaver workers are suing OpenGate in state and federal court, alleging that the company failed to provide adequate notice about the shutdown. In October 2012, OpenGate Capital bought the laboratory workstations business of Thermo Fisher Scientific, a maker of laboratory furniture. The firm faced six different lawsuits after abruptly laying off Pennysaver employees in the middle of a work day and failing to give workers their final . The company was starting to be profitable.

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