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COOK COUNTY RECORD

Thursday, November 7, 2024

Bike Rental Company Sues Software Partner Over Alleged Contract Breach

Federal Court
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In a dramatic turn of events, a prominent Illinois-based bike rental company has filed a lawsuit against its long-time software partner and two other entities, accusing them of breaching their service agreement and engaging in unfair competition. Go.Play.Everywhere. LLC (GPE) lodged the complaint in the United States District Court for the Northern District of Illinois on July 11, 2024, targeting Checkfront, Inc., Rezdy, LLC, and Regiondo.

According to the complaint filed by GPE, Checkfront was initially a trusted business partner providing essential reservation software for GPE's web-based bike rental operations. However, GPE alleges that Checkfront exploited this relationship to enter into direct competition with them. The plaintiff claims that Checkfront conspired with Rezdy and Regiondo—companies it merged with in June 2023—to misappropriate GPE’s business relationships and revenue streams. The lawsuit accuses the defendants of presenting GPE with an ultimatum: either transition their customers to become Checkfront customers under unfavorable terms or face the removal of critical software functionalities necessary for their business operations.

The filing details how GPE entered into a Service Agreement with Checkfront on March 22, 2011, which was extended through December 31, 2024. This agreement included non-solicit and non-compete clauses designed to protect GPE's market position. "Checkfront assured GPE that it would not usurp GPE’s customers or enter into competition while the parties were doing business," reads the complaint. However, in May 2023, Checkfront's CEO Jason Morehouse admitted that his company had been working with at least 70 bike operators in violation of this agreement.

The allegations extend beyond mere contractual breaches; they also include claims of professional negligence and misrepresentation. According to GPE, Checkfront failed to notify them about improvements in their reservation system software that could have significantly benefited their operations. When these features were requested by GPE after discovering them independently, they were allegedly not provided timely due to claimed technical difficulties by Checkfront.

On March 18, 2024, matters escalated when Checkfront sent an email ultimatum stating they would not renew their contract with GPE and planned to remove essential functionalities from their platform by June end unless all accounts were moved off within 120 days—a timeline deemed impossible by GPE due to the impending functionality shutdown.

GPE is seeking multiple forms of relief from the court: preliminary and permanent injunctive relief enforcing the restrictive covenants outlined in their Service Agreement; an order requiring defendants to continue providing services without modifying platform functionalities until January 1, 2025; cessation of services offered by defendants to any bike-related businesses; monetary damages including attorney fees and costs; and an accounting of all monies received by defendants in violation of Paragraph 2 of the Service Agreement.

Representing Go.Play.Everywhere LLC is Bryan P. Sugar from Lewis Brisbois Bisgaard & Smith LLP. The case is presided over by Judge [Name] under Case ID: 1:24-cv-05878.

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