Restaurant.com Lawsuit: A Tale of Deception and Disloyalty
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Restaurant.com Lawsuit: A Tale of Deception and Disloyalty

Restaurant.com, once a popular online platform for purchasing discounted restaurant certificates, has been embroiled in a series of lawsuits alleging deceptive practices and mismanagement by its board of directors. These legal battles have shed light on the company’s troubled history and raised concerns about its future.

Allegations of Deception and Fraud

At the heart of the lawsuits against Restaurant.com lies the accusation that the company knowingly sold gift certificates for restaurants that were out of business or had significantly altered their menus. This practice, according to the plaintiffs, misled consumers and violated consumer protection laws.

One notable case involved a class action lawsuit filed in Florida in 2018. The plaintiffs alleged that Restaurant.com had sold them certificates for restaurants that were either closed or had changed their menus to exclude the discounted items. They further claimed that the company had failed to disclose these changes to customers.

Mismanagement and Breach of Fiduciary Duties

In addition to the consumer protection allegations, Restaurant.com has also been accused of mismanagement and breach of fiduciary duty by its board of directors. Two shareholders, Adnan Adamji and Steven Schnall, filed a lawsuit in Delaware in 2018 alleging that the company’s CEO and majority shareholder, Dr. Kenneth Chessick, and his wife, Ellen Chessick, had engaged in self-serving conduct that harmed the company’s financial performance.

The shareholders’ lawsuit claimed that the Chessicks had used their positions to enrich themselves at the expense of other shareholders and the company itself. They alleged that the Chessicks had awarded themselves excessive compensation, approved questionable business deals, and manipulated the company’s stock price.

The Impact of the Lawsuits

The ongoing lawsuits have taken a toll on Restaurant.com’s reputation and financial stability. The company’s stock price has plummeted, and it has faced numerous customer complaints. In 2019, the company was acquired by uBid Holdings, Inc., an online auction company, in a bid to salvage its struggling business.

Conclusion

The Restaurant.com lawsuits highlight the importance of corporate transparency and accountability. When companies engage in deceptive practices or mismanagement, they not only harm consumers but also risk damaging their own reputation and long-term viability.

FAQs

What were the main allegations in the Restaurant.com consumer protection lawsuits?

The plaintiffs alleged that Restaurant.com knowingly sold gift certificates for restaurants that were out of business or had significantly altered their menus.

What did the shareholder lawsuit against Restaurant.com’s board of directors allege?

The shareholders alleged that the company’s CEO and majority shareholder had engaged in self-serving conduct that harmed the company’s financial performance.

What impact have the lawsuits had on Restaurant.com?

The lawsuits have damaged Restaurant.com’s reputation and financial stability. The company’s stock price has plummeted, and it has faced numerous customer complaints.

What can be learned from the Restaurant.com lawsuits?

The Restaurant.com lawsuits highlight the importance of corporate transparency and accountability. Companies must be honest with their customers and operate in the best interests of their shareholders.

What is the future of Restaurant.com?

The future of Restaurant.com is uncertain. The company has faced significant challenges in recent years, and it remains to be seen whether it can recover from the damage caused by the lawsuits.

What are some tips for consumers to avoid being scammed by online restaurant certificate companies?

Consumers should carefully research companies before purchasing certificates, read reviews, and check the validity of the certificates before making a purchase.

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