UBid - History

History

uBid.com was formed and launched in 1997. Originally the platform was a subsidiary of PC MALL (MALL). The co-founding management team took the company public in 1998 and achieved a market capitalization value of over 1.8 billion dollars at one point. The company officially spun off from PC Mall with its co-founding management team in 1999. Ownership has changed multiple times over the years, including one involuntary bankruptcy petition with one of the previous owners. As of October 8, 2010, the uBid.com and Redtag.com platforms are owned and operated by uBid Holdings, Inc., and the company is headquartered in Itasca, Illinois.

CMGI acquired the company from its founders and shareholders in early 2000 for a reported $407 million. The company is still memorialized at the home of the New England Patriots, formerly CMGI Field, now Gillette Stadium, with the "uBid.com Entrance". CMGi was an internet conglomerate with ownership stakes in over 90 companies, including AltaVista, Navisite, Lycos, Talon, Sales Link, Yes Mail, Geocities-purchased by Yahoo, and Exchange Path to name a few. According to SEC filings CMGi once had a market capitilization of about 60 Billion dollars.

In early 2003, CMGi sold uBid to Takumi Interactive, a holding company formed to manage its purchase by Thomas Petters and the Petters Group of Minnetonka, Minnesota. Two uBid executives, Robert H. Tomlinson Jr. and Timothy E. Takesue, assumed executive leadership roles within Takumi Interactive. Tomlinson, previously uBid's Chief Financial Officer under CMGi ownership, had been named President of Takumi Interactive. Takesue, an original member of uBid's Founding Management team and the most recent Senior Vice President of merchandising under CMGi ownership, assumed the role of Executive Vice President, Merchandising. Mr. Takesue in January 2008 at the Consumer Electronics Show (CES) accepted the Consumer Electronics Daily News Direct Seller of the year award. The award was co-sponsored by consumer electronics manufacturers and distributors. In Petters' 2009 criminal trial on numerous Federal charges, Petters testified that uBid was profitable, which was untrue. According to SEC filings, uBid had never claimed to be a profitable corporate entity since inception. The new company to date retains only one of the original founders of the uBid platform as a senior executive. Petters, in prison since October 2008, is currently serving the remainder of a 50-year prison term in Leavenworth, Kansas, for multiple crimes associated with operating a multi-billion-dollar Ponzi scheme possibly going as far back as the late 1980s according to some press reports and trial transcripts. According to SEC filings and public press releases, The Petters Group divested their majority holdings status in uBid in 2005. The Petters Group once held positions in over a hundred companies, employing upwards of 3,000 people at one point, and partnered at various times, according to press releases, with companies including Bain Capital/Fingerhut, Polaroid/Chase Bank, and Sun Country Airlines/Whitebox Advisors,and Boeing/Petters Aviation, where they once owned minority, majority, or full ownership interests. An Ohio business school dean has agreed to return stock and $1.25 million in cash he says he earned as a consultant to Tom Petters before the Wayzata businessman was caught running Minnesota's biggest business scam. The settlement with Roger Jenkins, dean of the Richard T. Farmer School of Business at Miami University in Oxford, Ohio, was disclosed in October 2012 in a court filing by the receiver sorting through the Petters mess for funds to compensate fraud victims.

Under the settlement, Jenkins will return the cash and 22,200 shares in Internet retailer Enable Holdings Inc., a former operator-owner of websites uBid and RedTag. The over-the-counter stock traded for less than 1 cent on average in 2012.Dr. Jenkins work has been published in the Harvard Business Review. He is the recipient of the Harold Maynord award. Dr. Jenkins earned his undergraduate degree from Berea College, his MBA at East TN State and his PHD from Ohio State University. According to SEC filings, The Petters Group was listed as the company's largest single minority shareholder, until late 2008.

In September 2007, Jeff Hoffman, a founder of the Priceline family of companies and Walker Digital, joined the company as its CEO. Hoffman restructured the company into several units, and focused it on the liquidation of excess inventory. Hoffman immediately hired Lee Olsen as his COO to oversee the company; Olsen was previously, an executive with IBM. Hoffman obtained only the URL or domain name Redtag.com from Petters, and created a fixed-price liquidation site by that name. He also instituted liquidation sales at specific temporary sites - spearheaded by EVP Tim Takesue in early 2008 - bulk excess inventory liquidations via Dibu Trading Corporation, and "Commerce Innovations", a company that was being developed to sell auctioning technology software, while Executive Vice President and General Counsel Glenn Weisberger; Vice Presidents; Theo Brasch and Kirk Maier took over the merchandising roles that oversaw the uBid web site procurement process, procurement for Dibu Trading and Procurement for the Live events, and oversaw the management of the personnel that handled the listings of its third party sellers from early 2008 until their resignations. The new business model was well received in the financial community and the Board of Directors, which at the time included Mary Jeffries, CEO of Petters Group Worldwide and CEO of Polaroid and Director of various other public Companies including Dave's Barbeque, Petters Group Worldwide Chief Legal Counsel: David Baer named Minnesota 's Lawyer of the Year of 2006, Steve Sjoblad, former founder of FICO, Ken Roehring, Professor of Marketing at The University of Minnesota, and Casey Gunnell directed Hoffman to spend a large amount of capital the company held in reserve on these efforts, while scaling back its marketing and advertising efforts.

After Mr. Petters' arrest in the fall of 2008, uBid laid off a large portion of its workforce in an effort to contain costs. Management announced 12 initial layoffs, but ultimately about 31% of its workforce, or between 22–28 employees, were laid off. In the fall of 2008, the company also immediately accepted the resignations of Mary Jeffries and David Baer from its Board of Directors.

Subsequently, On December 2, 2008, the company received financing from Robert T. Geras and Theodore Deikel, on terms that essentially gave Mr. Geras, his wife and Mr. Deikel warrants for a majority controlling interest of the company, in exchange for a loan of approximately $1.5 million. In 2009, Mr. Geras resigned his position on the company's board of directors. Additional investor funds were also raised through a senior convertible debenture.

On December 22, 2009, Mr. Hoffman resigned from the company. uBid co-Founder Timothy E. Takesue was named interim CEO.

On March 1, 2010, Patrick L. Neville, a corporate turnaround specialist, became the company's official CEO, essentially following Mr. Hoffman's vision for uBid.com and RedTag.com. Neville filled two more Board of Director seats in 2010. Neville initially, started his role as day to day CEO early, on February 1, 2010, for no compensation, to try to immediately help the company. Neville officially resigned his position of CEO of Enable Holdings on October 15, 2010.