Embattled Restaurant.com sold to uBid
Arlington Heights-based online dining gift certificate company Restaurant.com has been sold to the owners of uBid.com.
Atlanta-based uBid Holdings, Inc., owner of online auction websites uBid.com and skyauction.com, acquired Restaurant.com earlier this month for an undisclosed amount.
“We are delighted that Restaurant.com is going to be part of our uBid family and (the acquisition) solidifies our long-term strategy in becoming a significant online e-commerce platform,” said uBid CEO Ketan Thakker.
uBid Holdings describes itself as “a diversified holding company whose strategic plan is to acquire interests in emerging businesses and [provide] financing, advice, and guidance to assist them in realizing their potential.”
The sale comes as Restaurant.com is embroiled in a lawsuit filed by two company shareholders, who claim CEO Dr. Kenneth Chessick and his wife, Ellen Chessick of Chicago, ran the company in “self-interested and disloyal conduct” for years, resulting in a decline in revenue.
Adnan Adamji, who lives in the Chicago area and was once the company's Chief Information Officer, and Steven Schnall of New York, allege breaches of fiduciary duties and wrongful conduct in the lawsuit. In addition to unspecified damages, Adamji and Schnall want the Delaware Chancery Court to fire the Chessicks from the board of directors at Restaurant.com, strip them of their corporate titles, and make them give back “unjustly obtained compensation, expense reimbursement, and ill-gotten gains.”
According to uBid Holdings, Restaurant.com generated $10.6 million in revenue last year. However, in 2011, the company generated $63 million in revenue, according to the lawsuit filed last November in Delaware. Revenue fell 52 percent in CEO's first four years at helm, according to the complaint.
The shareholders say nearly 6,000 participating restaurants left the program and company revenue dropped from $63 million in 2011 to $44 million in 2012, $41 million in 2013, and about $30 million in 2015.
In responses filed with the court on March 5, Chessick denied most of the lawsuit's allegations and says he has “striven at all times to ensure financial success for the company.”
Chessick says that from 2013 through 2017, he loaned the company more than $1.3 million to help it meet operating expenses and “avoid financial collapse,” but none of the loans were to him, personally.
Restaurant.com did not respond to numerous requests for comment.
• Content reprinted with permission of Loop North News, www.loopnorth.com.