Rallying Vendors Affected by Digital River Payment Issues for a Class Action Lawsuit

[quikquak]

MyCommerce has gone. It looks like it was always the plan since last autumn. This lawsuit is reliant upon DR still existing. If they Chapter 7, then there won’t be anything left.

[sft234]

What someone posted earlier in this thread -
which now indeed became true on the promised date:

Original post:
viewtopic.php?t=614929&start=90

A bit more research has shown WHAT the guys at DigitalRiver Inc. likely plan to do:

In summer, Barry Kasoff has taken over DigitalRiver Inc from Siris capital. (both cooperated in other cases in past).
Barry’s special skill is the “dirty work” (breaking contracts, firing employees without severance, etc), he is renowned as a “Terminator” of companies.

The german “DigitalRiver GmbH” mainly runs the “MyCommerce” platform, reselling software of small to medium software developers.
Siris and Barry decided to terminate DigitalRiver GmbH, steal ~ 50 Mio Eur from their customers, thus making a huge profit out of it.
The tricky plan seems to be:
- Some years back in time, DigitalRiver GmbH guaranteed for 100 Mio USD which DigitalRiver Inc has borrowed, due January 31st 2025. DR Gmbh officially reported that in their last annual statement of 2022.
- DigitalRiver GmbH could never realistically pay it back, but it can officially "assume" that the mother company will re-finance it, therefore it can claim to be solvent and continue operating.
- In August, Barry purchased DigitalRiver Inc from Siris.
- Now, since August DigitalRiver simply stopped to pay any money they owed to software companies. This was on direct order of Barry. Thus, they keep some ~ 50 Mio Eur money (equalling roughly 3 months of transactions – as of course customers sooner or later run away…). This of course breaks all contracts, but it is not directly a criminal act (so its hard to go to jail for it).
- From August to January, on Barry’s order, they tell all kinds of lies to customers, playing for time (like “we’ll solve it soon” (a lie), “we’ll pay in 60 instead of 15 days” (a lie), “we will update you soon” (a lie), “we dispute we owe you money” (a lie, they gave us a credit note already), and so on.
- On January 31st, DigitalRiver GmbH will “unexpectedly” learn that the mother company did not refinance the 100 Mio USD. So they’ll use their 50 Mio Eur stolen from software companies to pay half of that debt. Directly afterwards, they will declare bankruptcy.
As a result, DigitalRiver GmbH and MyCommerce will be gone, and DigitalRiver Inc thus Barry and/or Siris will be richer by ~ 50 Mio. (borrowed 100 Mio, have to pay back only the left 50 Mio of it).

While its obvious that it should be illegal to steal 50 Mio this way, unfortunately the construction they chose will make it hard to make them liable for it. Even more, as they would surely spend millions to defend their loot, and their adversaries are only ill-defended small companies (hundreds of them).

Who would rob a bank, gain a 1 Mio but then go to Jail, if you could rob MyCommerce customers, gain 50 Mio and enjoy your life?

[sft234]

We just received this by email:

Dear Valued Customer,

As you may know, we have been navigating a challenging period in our business for some time now. While we’ve worked diligently to consolidate our operations and strengthen our focus on our Digital and Subscription businesses, unforeseen factors have intensified the strain on our financial resources. The rapid contraction of key customers, combined with the headwinds presented by new deals with shorter payment terms and U.S. trade policies that impacted one of our largest customers, have exacerbated the pressure on our available capital. These challenges, coupled with rising operational costs, have affected our ability to sustain operations.

As the crisis has intensified very recently, Digital River GmbH and Digital River Holding GmbH were unfortunately obliged to file for insolvency today. Moreover, we also suspended services to our customers for the time being. We apologize for any inconvenience this may cause.

Best regards,
Your MyCommerce team

[quikquak]

"...suspended services to our customers for the time being..." still implying this is all temporary?

I got 4 of these identical emails, despite saying they couldn't contact me before.
But that's just more lies from the past.

Goodbye MyCommerce, and good luck to all those that worked there.

[theProsecutor]

"...suspended services to our customers for the time being..." still implying this is all temporary?

I got 4 of these identical emails, despite saying they couldn't contact me before.
But that's just more lies from the past.

Goodbye MyCommerce, and good luck to all those that worked there.

Poor guy. He's actually honest this time. He is honestly thanking us for the tens of millions of dollars we've donated him since July. Let's thank him too and donate him some good years in prison too.


Let’s make sure these individuals are held accountable.

We need to make a clear distinction between civil liability and criminal liability.

Civil liability is confined to the company, and recovering anything from a company that has gone bankrupt and emptied its accounts is very unlikely. This is what they’re relying on. However, if this was done intentionally, we can look into criminal liability, but that will need to be proven.

We need to approach this from a different perspective.

We had a contract. But what they’ve been selling since July was not part of that contract. They lied to us and took our products and sold them without our consent, outside the contract. This is software piracy, theft, or another similar legal term. The prosecutors will determine the exact charges.

Imagine you have a contract with someone to sell 10 licenses or physical products you created. They sell those 10 products and pay for them. But at the same time, they steal another 10 products from you, sell them under their own name, and keep all the money without paying you anything. They didn’t break the contract, they committed theft.

When it comes to providing software services, out of respect for those who want to use our products and to protect our reputation, we should continue offering the service. This also is what these individuals are relying on. But we have the right to stop providing that service at any time. The buyers didn’t purchase from us, they bought from a thief who stole our products. These individuals need to either refund the buyers or pay for the stolen products. And, of course, they must face criminal consequences for their actions.

That’s why, when we report this to the police, we need to shift the focus of the complaint. This will ensure personal responsibility for their actions.

The perpetrator will be the manager/owner of the company and the country where the criminal act was committed will be Germany.

This way, the complaint will no longer be rejected due to the lack of identification of a perpetrator, as we saw in a previous post, or due to jurisdiction.



Let’s file those reports and make sure these individuals face the consequences of their actions.



PS Please post again the details where the complaints can be filed so that more people can file or file again a complaint.

[nicklasbergfeldt]

We're also in on this!

We've lost a great deal of money to these bastards; where do we file this?
- No payout since july...

[alexcmn1]

All, make screenshots of your tickets asap, I guess they will try to eliminate evidences, and then claim in court that they never saw these tickets, emails, etc.

[ccw]

I also received this, does that mean Digital River CAN refuse to pay legally? Or can I sue the parent company of Digital River GmbH, i.e., Digital River US in Minnesota？

We just received this by email:

Dear Valued Customer,

As you may know, we have been navigating a challenging period in our business for some time now. While we’ve worked diligently to consolidate our operations and strengthen our focus on our Digital and Subscription businesses, unforeseen factors have intensified the strain on our financial resources. The rapid contraction of key customers, combined with the headwinds presented by new deals with shorter payment terms and U.S. trade policies that impacted one of our largest customers, have exacerbated the pressure on our available capital. These challenges, coupled with rising operational costs, have affected our ability to sustain operations.

As the crisis has intensified very recently, Digital River GmbH and Digital River Holding GmbH were unfortunately obliged to file for insolvency today. Moreover, we also suspended services to our customers for the time being. We apologize for any inconvenience this may cause.

Best regards,
Your MyCommerce team

[ccw]

I cannot login account.mycommerce.com any more:

Your access to the Control Panel has been deactivated temporarily. Despite repeated attempts, we were unable to contact you by e-mail. Please contact us, so that we can determine whether the address entered in the Control Panel is functioning properly. If you have switched e-mail addresses, please include your new address in the e-mail, and your access to the Control Panel will be reactivated immediately. We regret the inconvenience and appreciate your patience.

But can still login their solution center solutioncenter.digitalriver.com, so I save all the related tickets as below:

1. Use browser "Print" function to print them as .PDF files.
2. The printed version may has some distortions, so I make a video to capture the whole ticket(versy long) by moving the scroll bar during the capture.

I suggest everyone to do similar to keep evidences. I guess they will block us out of their solution center soon.

[sft234]

Yeah, it's for everyone the same - we've got the same text, although they never actually sent an email as they claim. It's all lies as all the time since mid of July.

But in our case all solution center tickets also were sent as email. So we have it all documented in text form already. This is important to prove that they pretended to be ok and it's all just a temporary issue which will be solved soon, although they were insolvent at the time already. This is a clear case of "Insolvenzverschleppung" which in German law is a crime which makes the limited liability of a GmbH fall away and makes the owner (so Kasoff) liable down to his personal assets.

Read here - I already posted this in thre other thread:

https://de.wikipedia.org/wiki/Insolvenzverschleppung

https://de-m-wikipedia-org.translate.go ... r_pto=wapp

Most important grounds for claims

If the person required to file the application continues to conduct the company's business despite insolvency, the conclusion of the company's business transactions often constitutes fraud, as payment for the services received is obviously no longer possible. [ 4 ] [ 5 ] For this, as well as for damages from other typical insolvency offenses, the directors are also liable under Section 823 Paragraph 2 of the German Civil Code. [ 6 ] Negligence is sufficient.

[quikquak]

Delayed insolvency is a great angle, but how do we prove it?
Also, does anybody have a copy of the changed contract? It was viewable through the website only, now presumably deleted.

[virtualdj]

Let’s make sure these individuals are held accountable.

This will need some good criminal lawyers to initiate anything, because I doubt the public prosecution will want to look at this without a strong case.
This will cost money.
We are ready to cover the financial part.
But we are not in Germany, so is there anyone on this forum, who's pissed off like everyone else, is based in Germany, and want to help getting this started?

[mycommerce-action]

Please see my post here regarding looking at forming a group to move legal proceedings forward:

viewtopic.php?p=9034496

Individually, we can do nothing. However, as a group, we may be able to do something if there are enough of us and if the total amount owed is large enough. If someone does create a page like this, and people actually sign up, I suspect there are enough of us and the total is large enough to get some proper interest from law firms in Germany and the US.

[buttermilk]

It's pretty obvious that the new CEO is good in his role...
Just check how many businesses still use the links to mycommerce/shareit store.
But nothing to worry, the big guys are affected too... Autodesk for example.
And they will not let it go like this.

[alexgn]

But nothing to worry, the big guys are affected too... Autodesk for example.
And they will not let it go like this.

we don't know if they are affected as well, or if they tried to steal money from "smaller" merchants only. This was all planned very well on their end. They know that bigger companies have much more resources to sue them than the smaller companies.