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. Those who cashed the bad checks were left on the hook for penalties levied by their banks. You always pay your employees. But in some cases, as with PennySaver, external circumstances frustrate our ability to have our investments realize their full potential.. It would curb the industrys worst abuses and prioritize people, not private equity profits. BURKE v. TV GUIDE MAGAZINE GROUP, INC., 09-56989 (9th Cir. 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. But in court papers, Hamilton denied any illegal conduct. All in the name to make us more efficient. 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. Description. Above, workers attend a May 26 meeting. Power Partners Inc., the first investment completed in OpenGate's first fund, was realized in November 2019 through the sale to Pioneer Transformers, a portfolio company of Mill Point Partners. In too many cases with private equity, big firms acquire businesses and squeeze them for cash, routinely causing bankruptcies. [35][36][37], Nikou is married with children and resides in Nevada.[7]. A state claim for wages was filed in the dairys pending Delaware bankruptcy case. 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. You should only be asked to sign in once. 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. 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. 14 at 5-6; D.I. . His father, who majored in mathematics at a German university, worked at the Los Angeles Department of Water and Power. The companys shares closed at $84.46 on Friday on the Nasdaq. 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, 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. 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 company is in the process of selling assets to make good on the loan, Fahn said. Former PennySaver employees are administering a crowdfunding site to help those left in the lurch. After decades of pro-corporate globalization, people numb to its effects might write . 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. To me, you dont sign a six-year contract and decide to close a facility.. 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. Hufcor employees, Janesville residents, and union organizers have rallied against OpenGates greedy and exploitative practices. The firm focuses on the acquisition of lower-to-mid-market businesses in the industrials, business services, and technology sectors. [8] In 2004, he left Platinum Equity and moved back to Los Angeles to start his own global investment firm. 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 . 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. Sontchi, C.J. By continuing to use this site, closing this banner, or clicking I Agree, you agree to the use of cookies. 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. [23] OpenGate rebranded the business EverZinc; within Umicore it had generated $425 million in revenue in 2015.[24]. Description. A fully integrated team of origination, investment and operations professionals. [9], In 2019, OpenGate purchased the lock company Sargent and Greenleaf from Stanley Black & Decker. If we wanted to liquidate the company it would be done by now. 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. 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. 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. This story has been shared 673,260 times. 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 . Only one of OpenGate's subsidiaries included as a plaintiff is a California LLC. Then, their final checks bounced. Its the biggest business closure in Janesville since the Great Recession. business closure in Janesville since the Great Recession. The Hamilton shutdown was the result of a dispute in which the landlord of its main plant in Texas moved to evict the firm, imperiling the business, according to an OpenGate spokesman. It also said employees sought help from Thermo Fisher to address the cartel activity, but that security upgrade proposals were not implemented. We look to establish collaborative relationships with companies to drive operational improvement and realize opportunities for long-term value creation. I did NOT send that email [releasing the escrow fund].. 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. 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. OpenGate Capital Group LLC et al v. . $16 hourly wages and generous benefits as recently as January 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 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. 2:17-cv-04360-SB-E ("Underlying Lawsuit") under Private Equity Liability Insurance Policy No. OpenGate Capital, a global private equity firm, has acquired Umicore Zinc Chemicals, a global leader in the production of specialty zinc chemicals, from parent company Umicore. Type: Company - Private. LOS ANGELES, October 13, 2022 -- ( BUSINESS WIRE )-- OpenGate Capital, a global private equity firm, today announced that it has exited its investment in . Generating long-term value Andrew Nikou is the Founder & Chief Executive Officer at OpenGate Capital based in Los Angeles, California. This rating has decreased by -11% over the last 12 months. Vice President. employees in the middle of a work day and failing to give workers their final paychecks. [14] Also in 2019, OpenGate purchased the UK-based Duraco Specialty Tapes, which then acquired Infinity Tapes the following year. 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. Register now to read this article and more for free. 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. 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. 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. The list is updated frequently, so check . 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. 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 paychecks. 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. RSI operated PennySaver until its closure in May. A fully integrated team of origination, investment and operations professionals. OpenGate is not facing any lawsuits for lack of notification with regard to the mills closure. OpenGate is a global private equity firm that acquires and . Andrew received a Bachelor of Science degree from University of Southern . They think its a big joke. 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. Post-closing, Open Gate employee Andrew Nikou was appointed as the sole member of Golden Guernsey. Confronted with this looming loss, Hufcor employees, Janesville residents and CWA union organizers have rallied against OpenGates greedy and exploitative practices. 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. By continuing to use this site, closing this banner, or clicking "I Agree", you agree to the use of cookies. Nikou, its founder, is a board member at the Hammer Museum and, until recently, at the Museum of Contemporary Art. The employees say they didn't get money owed to them, including their final paychecks and vacation time. 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. 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. . 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! It would. [5], Under Nikou's leadership, OpenGate Capital bought founder-owned businesses and divisions of Fortune 500 companies such as Philips, Schlumberger, Arvin Meritor, Stora Enso and Cascades. 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. See here for a complete list of exchanges and delays. Andrew Nikou is the founder and CEO of OpenGate Capital, a global private buyout firm. 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. (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. 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. This case was filed in Orange County Superior Courts, Civil Complex Center located in Orange, California. 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. OpenGate tried to buy Maxim in early 2013 but was outbid by Darden Media Group. Andrew McCarthy, 53, started working for Golden Guernsey when he was 19 years old. Jul. 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. This spring, 166 workers in Janesville, Wisconsin awoke to a nightmare. 2:13-cv-03368 District Judge Audrey B. Collins, presiding. At their side are elected officials who know that the whole country needs tough measures to reform private equity. Once OpenGate snapped up by OpenGate in 2017, OpenGate's new regime heightened tensions and ended a relatively amicable relationship between management and the workers of IUE-CWA Local 84811 . Fahn, speaking for OpenGate, said that the union wasnt privy to the sale because the sale wasnt final. 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. While Janesville was once a manufacturing hub, it has experienced the devastating consequences of unfettered corporate greed. OpenGate, which acquired PennySaver in 2013, specializes in buying units of larger companies and reselling them. [25] In that same year, the firm also completed six platform investments, and one add-on, all within the second fund. Senator 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. 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. Our six-week newsletter will help you make the right decision for you and your property. Its not a good sign, obviously, Kasoff said of the default. "They basically told us 'We don't want to get to . Hamilton Scientific would pay employees once it got its funding together, according to the April PE Hub article. The lab workstations unit, headquartered in Wisconsin, had facilities in Mexico, Texas and Arkansas. Headquartered in Los Angeles, California, . Do Not Sell or Share My Personal Information, Musk said hed never settle an unjust legal case against him. Hufcor, a market-leading producer of accordion-style doors and mobile room partitions, was profitable when OpenGate bought it. 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 . 1:13-cv-01475 in the Delaware District Court. PennySaver workers are suing OpenGate in state and federal court, alleging that the company failed to provide adequate notice about the shutdown. It said the once-popular magazine was losing money and is now profitable. Grace Matthews advised Chemsolv on the transaction. OpenGate's professionals possess the . To date, the firm has completed more than 75 transactions, including . 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. 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. We look to establish collaborative relationships with companies to drive operational improvement and realize opportunities for long-term value creation. OpenGate has said that it boosted sales at the plant by 20%, but that the shutdown was forced by creditors and others who refused to make concessions on contracts that were not sustainable. (D.I. An uncommon approach to investing in and growing complex businesses. It agreed to provide $3.1 million in financing in November 2013 for five days. Employees of other OpenGate companies have suffered similar fates. and prioritize people, not private equity profits. 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. With a strategic international presence and a focus on corporate carve . Last Updated January 23, 2017 at 11:50 PM EST (5.7 years ago) (Reuters) - Opengate Capital Group LLC filed a lawsuit on Friday alleging that laboratory equipment maker Thermo Fisher Scientific Inc. sold it a Mexican plant last year without revealing that a drug cartel was operating there. On May 27, 2021, 166 workers in Janesville, Wisconsin awoke to a nightmare. 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. 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. Founded in 2005, OpenGate Capital is a global private equity firm that strives to acquire and optimize lower middle market businesses throughout North America and Europe with a strategic focus on operational improvement, innovation and growth. In 2005, entrepreneur Andrew Nikou used $30,000 from his own savings to form a private equity firm, OpenGate Capital. This case was filed in U.S. Courts Of Appeals, U.S. Court Of Appeals, Ninth Circuit. Janesville, Wis. - U.S. [21], In November 2016, OpenGate Capital completed the acquisition of the zinc products business of the Belgian company Umicore for $150 million in debt and equity. In October 2012, OpenGate Capital bought the laboratory workstations business of Thermo Fisher Scientific, a maker of laboratory furniture. It was rough, but they didnt care. Please check your spam or junk folder just in case One of those businesses, like PennySaver, filed for bankruptcy. 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. "Meet The Private Equity CEO Who's In Talks For His Own Reality Show," Julia La Roche, Business Insider, 8-16-2011. At OpenGate, we strive for a culture that promotes open communication and empowerment of fellow team members.. After we signed a contract we thought we were golden, but two months later they told us they were closing the place, Harrelle said. Nikou was not named as a defendant in the suit. Other emerging managers in . OpenGate Capital. Stanziale alleged that the dairy was insolvent in December 2011, more than a year before the hurried shutdown. By continuing to use this site, closing this banner, or clicking I Agree, you agree to the use of cookies. OpenGate Capital Group, LLC, OpenGate Capital Management, LLC and PennySaver Investors, LLC's (collectively, "OpenGate"), which seeks to dismiss the Complaint3 filed by Don A. Beskrone, Chapter 7 Trustee for the estates of PennySaver USA Publishing, LLC, et al. But OpenGate never got a dime after it lent the cash as the alleged fraud was uncovered. On 09/21/2021 Finsa Portafolios, S A de C V, filed a Property - Personal Property Fraud lawsuit against OpenGate Capital, LLC,. Contact the writer: 714-796-2286 or lwilliams@ocregister.com. 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. [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. 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. ScioTeq, a market leader and established name in visualization solutions for the Air Traffic Control, Avionics and Defense markets, is entering a new era as a standalone company as the result of the acquisition by Private Equity firm OpenGate Capital as of 01 July 2021. She sharply criticized OpenGate Capital for the closure. The legislation will end "the failed experiment of gutting Michigan workers' rights," said one lawmaker. [6] He was bullied in school for being short. OTHER FILED BY OPENGATE CAPITAL LLC ON 07/15/2015 [+] Read More [-] Read Less; 07/16/2015. OpenGate Capital General Information. In 2011, OpenGate Capital acquired a Connecticut-based boxboard manufacturer from Cascades Inc. and renamed it Fusion Paperboard. We have just sent you an email so you can verify your account. The closure of PennySaver only reaffirmed the Connecticut state senators opinion of OpenGate. And employees became increasingly worried when PennySavers CEO, vice president of finance and the vice president of human resources all quit, Buckley said. Your activity looks suspicious to us. In May of 2022, it was announced Thermo Fisher Scientific went to court to seek a dismissal of the lawsuit. Read our website privacy and cookies policy for more information. With a strategic international presence and a focus on corporate carve-outs and complex . The private equity firm claimed that the Reynosa, Mexico-based manufacturing facility, which it acquired as part of a larger deal from Thermo Fisher, had been regularly infiltrated by gangs from the Gulf Cartel since at least 2011, according to a copy of the complaint seen by Reuters. At OpenGate, we recognize the importance of building resilient infrastructure for our employees, portfolio companies and environment through responsible investing. 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 . [15] In 2018, OpenGate acquired the Italian stove and fireplace manufacturer Jotul from the European private equity group Ratos. Our Standards: The Thomson Reuters Trust Principles. 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, Sen. Tammy Baldwin of Wisconsin wrote on Facebook. 2019 - janv. And in 2010, OpenGate acquired Brazilian-based Philips Business Communications, since renamed Sopho which was merged into Getronics LATAM, and Finland-based KotkaMills, a laminating paper and wood business. Similarly, employees at Golden Guernsey learned their company was closing when they showed up to work only to find the doors locked. 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. Among those companies was Hamilton Scientific, the enterprise allegedly overrun by drug cartel members. 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. OpenGate Capital has a history of buying companies, only to close operations shortly thereafter, leaving communities across the country in the lurch. in Janesville, Wisconsin awoke to a nightmare. 2 June 2015. OpenGate sued Thermo Fisher for breach of contract, negligent and fraudulent misrepresentation, and other things. 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. (D.I. But there were no stocks because the elder Darden was never a part of the deal, it is alleged. 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. 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 . 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 is moving the plant to Mexico anyway. Opengate did not specify what damages it was seeking. 2023 NYP Holdings, Inc. All Rights Reserved, this week sits in the legal dock in Manhattan federal court, pleaded guilty to his own Maxim-related fraud charges in November, Woman has 'loud, full body orgasm' in the middle of LA concert, $76K NJ boarding school admits falling 'tragically short' in protecting teen who killed self after bullying, 'rapist' taunts, Meghan Markle's ailing dad says he refuses 'to be buried by her' in 'final ever' interview, Rihannas iconic Met Gala looks through the years, Fans question North Wests lavish pre-Met Gala gift for Kim Kardashian: No way, Perez Hilton: Boring Meghan and Harry need to give up and move back to UK, Elon Musk Tells Bill Maher Woke Mind Virus Is Dangerous On Real Time, Prince Harry's coronation role still a mystery as William's is revealed.

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