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. "Meet The Private Equity CEO Who's In Talks For His Own Reality Show," Julia La Roche, Business Insider, 8-16-2011. May 17-18, 2023 Hilton Tower Bridge, London, May 23-24, 2023 Convene 117 West 46th Street, New York, Get limited access to our industry news, analysis and data, plus regular email updates. Among those companies was Hamilton Scientific, the enterprise allegedly overrun by drug cartel members. A global investment manager with a local touch. [9] In 2006, OpenGate purchased OMMIC, a former division of Philips. The company was starting to be profitable. 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. . The younger Darden pleaded guilty to his own Maxim-related fraud charges in November and is cooperating with prosecutors in their pursuit of Newkirk. (Photo provided by Americans for Financial Reform). 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. 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. And employees became increasingly worried when PennySavers CEO, vice president of finance and the vice president of human resources all quit, Buckley said. At age 25, he moved to Paris to help open the firm's first European office. in Texas, Arkansas, and Wisconsin, who worked for the laboratory furniture company Hamilton Scientific. [28][29], Past closures also included PennySaver USA and Hamilton Scientific. Likewise, OpenGate itself has continued to raise millions since bankrupting its previous companies, enabling these practices to continue unabated. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Thanks for contacting us. [6] He was bullied in school for being short. 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. [6] Nikou graduated from William Howard Taft Charter High School in Woodland Hills, California, where he was active in the Persian community. Experience: Mr. Moazami is a Technology industry Senior Advisor to OpenGate Capital. [5] however, his actions have also drawn substantial criticism, including numerous lawsuits. In 2005, Nikou founded OpenGate Capital with $30,000 from his own savings. This spring, 166 workers in Janesville, Wisconsin awoke to a nightmare. Nikou increased OpenGate's pace of international acquisitions in the 2010s. Official press release ScioTeq - EN. [16], In 2012, through the firm's legacy, pre-fund investment process, OpenGate Capital acquired the Latin American operations of Getronics from the Dutch conglomerate, KPN. 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. This case was filed in Orange County Superior Courts, Civil Complex Center located in Orange, California. "Nicole Farhi Buyer OpenGate Set to Announce Three More Deals," David Altaner, Bloomberg, 3-15-2010. The cases that former employees have highlighted as OpenGate failures include: the shuttering of Golden Guernsey on a Saturday morning in 2013, with no notice to employees; the closure of Connecticut-based Fusion Paperboard shortly after it had received a state loan to stay put for 10 years; and the shutdown of OpenGates laboratory furniture business, Hamilton Scientific, after it discovered that a drug cartel had overrun its Mexico plant and it was evicted from its Texas facility. 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. OpenGate, which acquired PennySaver in 2013, specializes in buying units of larger companies and reselling them. [9], In 2019, OpenGate purchased the lock company Sargent and Greenleaf from Stanley Black & Decker. We need a new push to pass this law. In 2011, the firm acquired NorPaper Avot Valle, a specialty paper manufacturer based in France. But Pawluk said things deteriorated soon after OpenGate Capital acquired Hufcor, a family-owned company founded in Janesville 120 years ago. A native of California, Lauren attended Cal State Long Beach where she majored in journalism and political science. To me, you dont sign a six-year contract and decide to close a facility.. Nikou has received recognition for his business achievements. Why would we put in all that effort?. OpenGate Capital Group LLC et al v. . It said the once-popular magazine was losing money and is now profitable. This post was guest authored by Elisa McCartin. Founded in 1979, Chemsolv is a diversified distributor offering more than 1,000 chemicals including solvents, plasticizers, coolants . 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 . They had received no notice that the magazine would be shuttered. Then, their final checks bounced. Unless we do, Hufcor employees wont be the last to suffer at the hands of private equity and its ruthless profiteering. Employees of other OpenGate companies have suffered similar fates. A state claim for wages was filed in the dairys pending Delaware bankruptcy case. 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. of the Connecticut boxboard company Fusion Paperboard, and nearly. Were hiring an Advocacy & Political Manager. Dean Starkman previously covered Wall Street for the Los Angeles Times; he left in 2016. [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 would. 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. 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. The closure of PennySaver only reaffirmed the Connecticut state senators opinion of OpenGate. Weinbergs cash was to be held in escrow until stocks held by Darden Sr. were placed in a collateral account. OpenGate Capital is a private equity firm with offices in Los Angeles and Paris that strives to acquire and optimize lower middle market businesses throughout North America and Europe. Hamilton Scientific would pay employees once it got its funding together, according to the April PE Hub article. I find it to be despicable.. In February, the PennySaver building on Orbiter Street in Brea was sold for $14 million, according to public records. Similarly, employees at Golden Guernsey learned their company was closing when they showed up to work only to find the doors locked. OpenGate Capital, LLC, et al., Central District of California, Case No. 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. To date, the firm has completed more than 75 transactions, including . LOS ANGELES, October 13, 2022 -- ( BUSINESS WIRE )-- OpenGate Capital, a global private equity firm, today announced that it has exited its investment in . Later that year, Nikou led OpenGate Capital's bid for McGraw-Hill Companies BusinessWeek magazine, then withdrew from the bidding. 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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. In the May 2013 filing, OpenGate claimed it was misled into buying the division it later renamed Hamilton Scientific, and that site visits before the sale had been structured to avoid discovery of the hostile encroachment and occupation of the Reynosa facility by cartel members. Our Standards: The Thomson Reuters Trust Principles. 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. He has a passion for people and a knack for recognizing what is needed to help businesses in . 14 at 5-6; D.I. [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. . One of those businesses, like PennySaver, filed for bankruptcy. 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 . Most of my clients are in default. In 2010, Nikou was named a Top Dealmaker of 2010 by Mergers & Acquisitions magazine. Founded in 2005, OpenGate Capital is a private equity firm based in Los Angeles, California. OTHER FILED BY OPENGATE CAPITAL LLC ON 07/15/2015 [+] Read More [-] Read Less; 07/16/2015. 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. In December 2014, OpenGate Capital hired Realization Services, an East Coast company specializing in turnaround management. Please check your spam or junk folder just in case Opengate did not specify what damages it was seeking. 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. for a better future. OpenGate Capital Group LLC et al v. Thermo Fisher Scientific Inc, Court Case No. Not the case? 2 June 2015. She briefly lived in Santiago, Chile where she edited an online magazine and worked as a translator for doctors from Malaysia following Chile's 8.8 earthquake in 2010. I did NOT send that email [releasing the escrow 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. 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. 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. The lawsuit was dismissed in April 2016. It maintained operations during the worst of the pandemic and even. Wrong. They just care about lining their pockets with money. It maintained operations during the worst of the pandemic and even advertised $16 hourly wages and generous benefits as recently as January 2021. At a chaotic meeting four days after PennySaver closed, employees were handed their final pay. 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.
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