Organizer Calls for Documentation of $100K Fundraised by Dadekian for West Park Food Hall
Monday, March 11, 2019
Questions emerged last week about the project that was kicked off by Dadekian and Kleyla in 2017 and raised more than $123,000 via a Kickstarter campaign.
Now, Kleyla has issued a statement from her lawyer that questions the status of more than $100,000.
The statement says that when the account for the project was transferred to her, that there was only $14,500 in the account and that she is requesting an accounting from Dadekian.
The following statement was sent by Kleyla from her legal counsel, Mary Welsh McBurney at Hanson Curran, on Sunday.
Statement on Split
Katie Kleyla was an employee of David Dadekian’s company, Eat Drink RI, from February 2015 until October 2018. During her employment, she had no control over the finances of Eat Drink RI or the West Park Food Hall at any time. When Ms. Kleyla’s employment with Eat Drink RI concluded, she entered into a settlement agreement with Mr. Dadekian, the terms of which are confidential. In connection with the confidential settlement, she concluded her employment with Eat Drink RI and took on ownership of West Park Food Hall. The transfer of ownership is still in process.
Prior to that time, Ms. Kleyla had no ownership interest in West Park Food Hall and no control of its finances or access to its financial records. At the time that Ms. Kleyla took control of West Park Food Hall, only $14,500 of the Kickstarter funds remained in the West Park Food Hall bank account that was transferred from Mr. Dadekian’s control to Ms. Kleyla. Ms. Kleyla has requested documentation from Mr. Dadekian, through his legal counsel, to explain his use of the Kickstarter funds and received the response, “David says he has no other information to provide.” Mr. Dadekian’s grant from the Rhode Island Foundation was his alone. Ms. Kleyla has never had any involvement with the Rhode Island Foundation grant funds.
One package for a $3,000 pledge was described as the following.
"El Rancho Grande: In-Home Experience -- Enjoy a multi-course dinner in your home for you and 7 of your friends by two of RI's best, Chef Maria Meza and Joaquin Meza, co-owners of El Rancho Grande. Maria will prepare her always delicious food and Joaquin will provide a Mezcal pairing. Date to be determined, 21 years or older."
The most expensive package was a pledge of $7,500 or more for "birch & Oberlin: In-Home Dinner for 8."
"Enjoy a multi-course dinner for eight prepared in your home by RI's only James Beard Best Chef: Northeast nominee, Chef Benjamin Sukle, co-owner of birch and Oberlin in Providence. Sukle and his restaurants have received numerous accolades over the years, including Bon Appetit naming both restaurants a Best New Restaurant in the Country the years they were opened and most recently a full New York Times review naming Oberlin as a NYT Critic’s Pick. Dinner will be paired with adult beverages, date to be determined, 21 years or older."
No one purchased the birch & Oberlin package according to the Kickstarter page.
Last week, Dadekian told backers he has had no involvement with the project since September of 2018. Despite Dadekian's claims that he is no longer involved, the corporation filed documents with the state in October 2018 for the food hall in Providence -- after the time Dadekian claimed he was no longer involved in the project. Presently, the company is under his exclusive control and he is the single shareholder, according to documents filed with the RI Secretary of State’s office.
Dadekian Email Distancing Himself from West Park Food Hall Project
Thank you for your support of the West Park Food Hall Kickstarter campaign. After receiving some messages from backers I feel it is incumbent upon me to let everyone know that I and Eat Drink RI haven’t been part of that project since September 2018. My former partner, Ms. Katie Kleyla, took over the entire scope of that project last fall, including any Kickstarter funding. Any and all inquiries and correspondence should be sent to her. Eat Drink RI continues to pursue the Central Market project at India Point with the state’s Division of Environmental Management. Thank you again.
Eat Drink RI
Food will help Rhode Island grow. ®
Questions about Kickstarter Campaigns
Somewhere around ten percent of crowdsourcing campaigns never materialize.
In 2015, the New York Times chronicled a failed espresso machine company funded through a Kickstarter campaign, but the company never launched its product.
"It had been three long years of gradual disappointment since the 1,500 or so supporters of ZPM Espresso — otherwise known as the PID-Controlled Espresso Machine project on the crowdfunding platform Kickstarter — each put a few hundred dollars, or some $370,000 in total, into the campaign, and eight months since the last communiqué from the project’s creators. Now, with Update 57 in January, ZPM Espresso announced that it was winding itself down. For the backers who expected a ZPM machine for their pledge, there would be neither fulfillment nor refunds. All accumulated moneys, the update said, were dispersed on the nonrecoverable engineering costs involved in ZPM’s failed attempt to manufacture an inexpensive commercial-grade espresso machine for the home market."
The Federal Trade Commission has investigated and taken action against a number of failed crowdsourcing campaigns which did not deliver. Product Hype gives suggestions on how to judge a questionable crowdsourcing project.