CedarCreek Systems and BirchStreet Systems Head to Trial Over Reseller Agreement Dispute

Following a ruling denying BirchStreet's motion to dismiss CedarCreek’s lawsuit, the Orange County Superior Court has set a date of June 9, 2025, for a jury trial.

SANTA ANA, Calif.--(BUSINESS WIRE)--CedarCreek Systems, a reseller specializing in Procure-to-Pay (P2P) solutions for the club and resort industry, announced today that the Orange County Superior Court has set a trial date of June 9, 2025, for its ongoing lawsuit against BirchStreet Systems. The lawsuit, filed by CedarCreek in September 2023, accuses BirchStreet, a leader in P2P software for the hospitality industry, of violating their longstanding exclusive reseller agreement.

According to CedarCreek, the agreement, established over 12 years ago between CedarCreek's founder Nicholas Wilhelm and BirchStreet's founder Sushil Garg, granted CedarCreek the rights to resell BirchStreet's P2P solutions within the club and resort industry. This partnership has played a significant role in BirchStreet's expansion into the private club market both in the United States and internationally.

The lawsuit outlines several alleged breaches of the reseller agreement that occurred after private equity firm Parthenon Capital acquired BirchStreet in 2021. These allegations include arbitrary price increases, failure to provide agreed-upon rebates, the abdication of customer support responsibilities, and refusal to deliver core software functionality for CedarCreek and its customers.

CedarCreek claims BirchStreet has deactivated active clients without prior notification to either CedarCreek or the clients themselves, which has resulted in some customers terminating their contracts. BirchStreet has stated that these deactivations were requested by CedarCreek; however, CedarCreek disputes this claim and no documentation has been provided to indicate the deactivations were authorized.

The lawsuit further alleges that BirchStreet has engaged directly with CedarCreek’s customers, bypassing CedarCreek's role as the reseller, and has attempted to poach current CedarCreek customers. Behavior of this kind has persisted since the filing of the suit, according to CedarCreek CEO Wilhelm.

“Recently, BirchStreet and Hilton Supply Management attempted to persuade one of our high-profile club clients to align directly with BirchStreet and Hilton Supply Management and end their relationship with CedarCreek,” Wilhelm said. “We will be adding an investigation of this latest violation to the discovery process.”

BirchStreet’s actions have continued despite CedarCreek making hundreds of thousands of dollars in payments to BirchStreet in 2022, with payments extending through the first quarter of 2023.

“We are committed to upholding the terms of our agreement to meet our obligations to our customers and to maintain our reputation as a business,” Wilhelm said. “Unfortunately, Parthenon appears to have prioritized short-term financial gains over the long-term health and reputation of BirchStreet, disregarding our decade-long partnership and all that it has meant for both companies’ success in the process.”

Wilhelm pointed out that Parthenon’s questionable business decisions were not limited to its relationship with CedarCreek. In March, BirchStreet acquired ReactorNet Technologies, a provider of business spend management software for hospitality companies. The acquisition was quickly followed by reported layoffs affecting both their U.S. and India teams.

Said Wilhelm: “In a recent conversation with an unnamed resource within BirchStreet, I was informed that with the exception of staff reductions forced by Covid, BirchStreet had not implemented a reduction in force in its two-decade history prior to the Parthenon acquisition.”

As the trial date approaches, CedarCreek Systems maintains its commitment to delivering high-quality services to its clients and seeks a resolution to the dispute that aligns with the initial terms of the reseller agreement.

BirchStreet serves a global clientele, including major hotels, casinos, airports, and restaurants such as Hilton, Marriott, Four Seasons, Hyatt, and Wynn Resorts.

About CedarCreek Systems

CedarCreek is the leading end-to-end inventory, invoicing, and payment solution in the club and resort industries. Cloud-based since its inception, CedarCreek has the largest integrated supplier network in hospitality, ranging from F&B, agronomy, retail, housekeeping, and maintenance/engineering. CedarCreek deploys solutions tailored to the operation’s size, with the universal goal of improving controls, reducing costs, and establishing efficiencies.