Sodexho refutes lawsuit alleging Sears Tower losses

Nation's Restaurant News, Nov 13, 2006

CHICAGO -- Four restaurants in the Sears Tower here lost about $1.1 million in revenues during seven months of operation by Sodexho USA, according to a breach-of-contract lawsuit against the contractor by owners of the nation's tallest skyscraper.

The complaint, filed Oct. 13 in Cook County Circuit Court by Skokie, Ill.-based American Landmark Properties Ltd. and New York-based real estate investors Joseph Chetrit and Joseph Moinian, seeks to recover operating losses and other damages.

They accuse Gaithersburg, Md.-based Sodexho of poor management that allegedly resulted in frequent long delays, unclean restaurants and "institutional-quality food at prices that were significantly higher" than competitors' prices.

"Sodexho denies the material allegations of breach in the complaint and we expect to file a counter-claim," a spokeswoman said.

"We were very disappointed that we were unable to resolve the contract issues in a mutually agreeable fashion," she added.

Sodexho took over foodservice operations at the 110-story building in February from the Levy Restaurants arm of Charlotte, N.C.-based Compass Group. According to published reports, Sodexho had predicted a first-year operating loss of $26,000, but revised that to nearly $700,000 after a rough transition, and then raised the projection by another $400,000.

Sodexho's contract reportedly states that losses are to be borne by the landlords, which are said to have suffered tenancy declines at the Sears Tower because of post 9/11 fears about skyscraper vulnerabilities.