PROVO — One of CityDeals' largest creditors now owns the financially troubled discount coupon website, but it might have difficulty satisfying other vendors and customers left holding the bag.
Seven Peaks announced Thursday that it has bought CityDeals.com. Under terms of the agreement, it took on the struggling company's assets but not its liabilities. "However, we recognized immediately that having the merchants on board is paramount to moving forward," said Bruce Law, Seven Peaks vice president of marketing.
Law said that being one of CityDeal's largest creditors, if not the largest, was a factor in Seven Peaks buying the website. Seven Peaks runs water parks in Provo and Salt Lake and Trafalga Fun Centers in Orem and Lehi.
The abrupt shutdown of CityDeals.com last week left merchants wondering if they would get paid and consumers questioning whether the certificates and gift cards they bought were worthless. The website sold coupons for goods or services from businesses that hoped deep discounts would attract new customers who would then return again and again.
CityDeals owes Pleasant Grove chiropractor Geoff Moultrie about $1,700, said his wife, Mandy Moultrie.
"We would just like to get our money back and we would be happy. We just don't know who is liable," she said.
Seven Peaks has worked around the clock making arrangements to take care of merchants that have been waiting for payments from CityDeals, Law said. It also is working with businesses to ensure coupons sold on on the website to date are honored.
"Most everyone is willing to deal and is anxious to move forward," he said.
But Seven Peaks is not paying cash. How it will compensate vendors is unique to each situation, he said. One approach is to offer credits to its water parks and fun centers.
"I don't know what I'm going to do with $20,000 worth of credits to Seven Peaks over my lifetime," said Todd Elkins, owner of Sharper View Window Cleaning.
CityDeals didn't pay him in June and July. "There's nothing besides them paying what's rightfully mine for me to have any interest in them."
Regarding debts of that size, Law said, "Those are the calls that Gary Brinton is taking." Brinton owns Seven Peaks.
Both Elkins and Moultrie say they have contacted attorneys to help them get their money back.
Mandy Moultrie also bought coupons on CityDeals.com. And whether they're still good or not, she said she won't redeem them out of deference to vendors who are owed money.
"I feel bad using them," she said.
The Utah Division of Consumer Protection launched an investigation into CityDeals last week after receiving as many as 30 consumer complaints a day.
Division director Traci Gunderson said typically when people complain about not being able to redeem coupons they're out $10 or $25. But in this case, she said, most people are out $700 to $1,500.
"The amount in controversy is surprisingly high," she said.
The consumer protection division doesn't have jurisdiction over business-to-business transactions, but Gunderson said she hopes the move is a step in the right direction and that Seven Peaks can work things out.