March 15, 2020 – Embattled by lawsuits, consumer complaints, and declining revenue, Restaurant.com has been sold. The Arlington Heights company is led by two River North residents, Dr. Kenneth Chessick and his wife, Ellen Chessick.

uBid Holdings, Inc., owner of the online auction websites uBid.com and skyauction.com, says it has acquired Restaurant.com, which sells to consumers gift certificates good at thousands of restaurants nationwide.

“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 (left) on March 3.

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.”

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 a lawsuit against the Chessicks that was filed last November in Delaware, where Restaurant.com was incorporated.

Adnan Adamji (near right), who lives in the Chicago area and was once the company’s Chief Information Officer, and Steven Schnall (far right) of New York are suing Kenneth and Ellen Chessick, alleging years of “self-interested and disloyal conduct.”

Their shareholder complaint alleges breaches of fiduciary duties and wrongful conduct. 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.”

Revenue fell 52 percent in CEO’s first four years at helm, says complaint

Revenue at Restaurant.com climbed steadily, says the complaint, from $6.3 million in 2005 to $63 million in 2011. In 2012, Kenneth Chessick became its CEO and, according to Adamji and Schnall, “instituted drastic changes” to the company’s business model, “despite the fact that he did not understand the company’s business and never intended to devote sufficient time to the company to maintain the success of its business.”

Because of the changes, 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.

Kenneth Chessick (left) is the company’s largest shareholder. He and his wife comprise the company’s entire board of directors. In responses filed with the court on March 5, he 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.

He admits that the company’s gross revenue declined from 2011 through 2015, and the number of participating restaurants declined in 2012 and 2013. In 2019 and 2020, “in light of the company’s difficult and worsening financial position,” Chessick says the company did seek potential buyers and investors.

A temporary restraining order to which parties agreed on February 28 prevents the Chessicks and Restaurant.com shareholders from receiving any proceeds from the company’s sale to uBid Holdings until a motion for preliminary injunction is filed on or before April 8.

According to his LinkedIn profile, Adnan Adamji was Vice President of Technology for uBid.com from 1998 to 2003. He was Chief Information Officer for Restaurant.com from 2004 to 2016. Since 2016, he has been Chief Technology Officer for Xcelacore in Oak Brook, Illinois.

He and Schnall are represented by Douglas Cummings Jr. Citing a confidentiality order, Cummings declined to comment on the case.

The Chessicks are represented by Delaware attorney Alan Albert of the Chicago law firm O’Hagan Meyer. Restaurant.com has never responded to numerous requests for comment.

Along with a condominium unit in southwest Florida, the Chessicks own 15 condo units at Marina City in Chicago.