The entertainment company Seven Peaks has acquired CityDeals.com, which closed its virtual doors 10 days ago, leaving merchants out thousands of dollars and customers with discount certificates that could not be redeemed.
Bruce Law, Seven Peaks vice president of marketing and a CityDeals creditor said his company is contacting merchants to make arrangements soon for them to accept consumers' certificates.
Law said that in the purchase, whose terms were not announced, Seven Peaks did not accept CityDeals liabilities. But he added that some merchants have told him they are willing to work with Seven Parks to make consumers whole.
Law said his company, known for its waterparks, made the acquisition not only because it is a creditor, but because it uses deals-oriented services and thinks they have merit.
On Thursday, the CityDeals site was operational for the first time in several days since it was shut down in the midst of a contract dispute. Although users were told that telephone calls were not being accepted, the site advised customers to email inquiries. They were also told they could purchase new certificates, which like at other deals-oriented sites are purchased at a discount by consumers and redeemed for goods and services at a variety of businesses.
The site said that any certificate returns from earlier purchases would be processed in the order they were received, starting Monday.
"We will reach out to any customers requesting returns ... as we have found most customers have an interest in retaining the value of the purchase. Once confirmed, we will proceed with the request," the site said.
Before Thursday, answers to questions about CityDeals.com had been few and far between. The site was shuttered Aug. 31, apparently after a deal to acquire it by DealsThatMatter.com fell apart.
James Saccomano, executive vice president of DealsThatMatter.com, said last week that his company had been trying to acquire some of the assets of CityDeals from founder Jeff Stucki but rescinded the offer because of a "misrepresentation" or "omission" in the deal.
Stucki cast blame on DealsThatMatter.com, but neither side was talking Thursday because hours before the Seven Peaks announcement, CityDeals.com obtained a gag order in a sealed lawsuit it has filed against DealsThatMatter.com. The order, issued by 3rd District Judge Glenn Iwasaki, prevented anyone from speaking to the media, said Cheryl Snapp Conner, an outside public relations spokeswoman for CityDeals.
The parent company filing the legal action for CityDeals was Live Wire Media Inc., whose incorporation papers expired Aug. 15, two weeks before the acquisition deal unraveled.
Traci Gundersen, director of the Utah Division of Consumer Protection, said her agency has been receiving about 30 complaints a day from unhappy consumers since the CityDeals.com site was disabled. She added that the average loss reported by consumers ranged from $700 to $1,500.
"It's surprising how high these claims have been," Gundersen said. "Consumers should file a complaint, along with proof or evidence of transaction, such as a coupon or credit card receipt. In the past, we've usually been able to work out refunds."
The CityDeals' site collected money from the sale of the certificates and was supposed to distribute part of the proceeds to the merchants issuing them. But some merchants did not accept CityDeals certificates because they say the company failed to pay them as agreed.
How to file a complaint
• Consumers may file a complaint Utah Division of Consumer Protection at the following link: http://1.usa.gov/rskQ5Z
• Print out the form and submit it to the division along with copies of supporting documentation either by fax, by mail or in person.
• For more information, call 801-530-6601.