4 ms·

Digital River runs dry, hasn't paid developers for sales since July

127 points by newaccount74 2y ago

AlexandrB 2y ago
Some crazy details in here: > In a post to LinkedIn three weeks ago, Lorant Barla, CEO of Romania-based Softland, said, "Digital River is automatically 'pre-signing' contracts in your MyCommerce account without your approval. The new MSAs [Master Services Agreements] stipulate additional platform fees and payments delayed for up to 60 days (we are still waiting for the payment from July)." And: > One of the vendors who has been asking to be paid showed The Register a note received from Digital River's law firm, New York-based Mintz & Gold, in response to payment inquiries. > The law firm says that Digital River presently doesn't consider merchant debt claims to be valid obligations. Seems like a total meltdown. Hopefully merchants get to recoup at least some of their losses from this fiasco.
blackeyeblitzar 2y ago
Reading about this situation here and elsewhere, I have to wonder how much of this is even legal. Pre signing contracts? Refusing to accept terminations? Not making payments but taking in money? Do they not care because they’ll get to dismiss all these in a bankruptcy proceeding? It also seems like these shutdown CEOs may be running the company in a deceptive way towards a shutdown. Is that really legal? Can’t they face criminal charges for that, and wouldn’t that remain even with a bankruptcy case?
- adamc 2y ago
  One would hope they would be prosecuted for fraud.
- kayodelycaon 2y ago
  It’s called fraud. Now, will anyone charge them with it? I doubt it. I am not a lawyer but bankruptcy isn’t a get out or jail free card. If you intentionally use bankruptcy to defraud customers, the court would be more likely to deny your request for bankruptcy. And you can’t use a company to shield from all liability. A court can “pierce the corporate veil” and rule the parent company or company stakeholders are liable.
  - mistrial9 2y ago
    in Romania ?
    - deleted 2y ago
      [deleted]
    - kayodelycaon 2y ago
      Digital River is based in the US. Anyone outside wouldn’t be able to file a lawsuit in the US.
      - staticautomatic 2y ago
        If a treaty could be found that was violated, the Alien Tort Statute would allow it.
      - jkaplowitz 2y ago
        Lots of contracts with a sufficient link to the US allow access to US courts, even with a foreign plaintiff. This is especially true for state courts, but sometimes federal courts are available too. Suing a defendant based in the US for a breach of contract resulting from acts committed in the US, for a contract that doesn’t force arbitration or specify a foreign venue for litigation, would very likely allow a US lawsuit. Naturally I haven’t looked at the specifics of the situation beyond what the linked article states, so this wouldn’t be legal advice even if I were a lawyer, which I’m not. I presume all the vendors whom the article says are contemplating a class action lawsuit are already getting proper legal advice from their lawyers.
        grujicd 2y ago
        Problem is majority of affected vendors are small fish, with reported (on kvr forum, LinkedIn, etc) losses of 20-30k. Individually, that's not enough to launch any kind of legal response, especially in a foreign country. Even more if there's a little chance of collecting anything from a (future) bankrupt entity. Someone mentioned on that forum that Germany doesn't have class action suits, and majority of us were working with DigitalRiver Gmbh, because we started with German based ShareIt once upon a time. There's a public 51 page document signed between Digital River and its subsidiaries and Cerberus Business Finance Agency, NY on 19 July, but it's too hard for layman to comprehend anything apart from that Cerberus is a creditor to Digital River and that it gets some extra rights from that point on. I'm just speculating since I'm out of my league here, but it's not impossible that they're using funds of small vendors who can't defend themselves to cover debt to a single large creditor armed with full legal team. If they drain all the funds and bankrupt the company, who can we realistically sue and expect to see some money? It's all legal, they were paying other creditor, money was not stolen for personal benefit. https://find-and-update.company-information.service.gov.uk/company/05788465/filing-history https://find-and-update.company-information.service.gov.uk/c...
- jsmith99 2y ago
  Sounds like wrongful or fraudulent trading. Many countries have laws about it. Eg in UK https://en.m.wikipedia.org/wiki/Wrongful_trading https://en.m.wikipedia.org/wiki/Wrongful_trading
srmarm 2y ago
That's a name I hear from time to time but have never quite understood what their purpose was. My last laptop purchased from the the Lenovo store and my subscription to Nvidia GeforceNow were processed via Digital River. You'd think both Lenovo and Nvidia would be big enough to manage their own ecommerce. I suspect their legal teams will see them get better treatment anyway.
- SirGiggles 2y ago
  To add on to your experience, my first encounter with Digital River was back around a decade a ago when I bought Battlefield 2142 from EA (pre-Origin)
  - cbsks 2y ago
    Mine was buying a Windows 7 license back in 2009.
pixelpoet 2y ago
Yet another case of companies getting away with stuff that would have landed you or I in jail on day one. Sure must be nice to get away with anything you like just because it's legally a company and not a person doing it, with all kinds of shady lawyers exploiting legalese loopholes. All of them will escape with full pockets and without punishment, and the moral of the story is: don't be poor, be a company and have lots of lawyers - the world is your oyster.
hermitcrab 2y ago
This is not the first evil thing they have done. I've always thought Digital River were scum. They bought up and wrecked lots of nice little payment processor companies. Everything they touch turns to shit.
fenesiistvan 2y ago
I am also affected. Can somebody suggest a good alternative?
- vsl 2y ago
  Paddle. FastSpring.
  - grujicd 2y ago
    2checkout (used them in the past, switched again since last month). Some people recommend PayPro Global (don't misread it as PayPal like I did at first).
- p0nce 2y ago
  itch.io
- paypro_global 2y ago
  [dead]
rekabis 2y ago
Vampire/vulture capitalism strikes again! Looks like stakeholders have managed to bleed the company - and both customers and clients - dry. My bet is that they are now preparing to break it up and sell it off.

127 points by newaccount74 2y ago

Some crazy details in here: > In a post to LinkedIn three weeks ago, Lorant Barla, CEO of Romania-based Softland, said, "Digital River is automatically 'pre-signing' contracts in your MyCommerce account without your approval. The new MSAs [Master Services Agreements] stipulate additional platform fees and payments delayed for up to 60 days (we are still waiting for the payment from July)." And: > One of the vendors who has been asking to be paid showed The Register a note received from Digital River's law firm, New York-based Mintz & Gold, in response to payment inquiries. > The law firm says that Digital River presently doesn't consider merchant debt claims to be valid obligations. Seems like a total meltdown. Hopefully merchants get to recoup at least some of their losses from this fiasco.

blackeyeblitzar 2y ago

Reading about this situation here and elsewhere, I have to wonder how much of this is even legal. Pre signing contracts? Refusing to accept terminations? Not making payments but taking in money? Do they not care because they’ll get to dismiss all these in a bankruptcy proceeding? It also seems like these shutdown CEOs may be running the company in a deceptive way towards a shutdown. Is that really legal? Can’t they face criminal charges for that, and wouldn’t that remain even with a bankruptcy case?

adamc 2y ago
One would hope they would be prosecuted for fraud.
kayodelycaon 2y ago
It’s called fraud. Now, will anyone charge them with it? I doubt it. I am not a lawyer but bankruptcy isn’t a get out or jail free card. If you intentionally use bankruptcy to defraud customers, the court would be more likely to deny your request for bankruptcy. And you can’t use a company to shield from all liability. A court can “pierce the corporate veil” and rule the parent company or company stakeholders are liable.
- mistrial9 2y ago
  in Romania ?
  - deleted 2y ago
    [deleted]
  - kayodelycaon 2y ago
    Digital River is based in the US. Anyone outside wouldn’t be able to file a lawsuit in the US.
    - staticautomatic 2y ago
      If a treaty could be found that was violated, the Alien Tort Statute would allow it.
    - jkaplowitz 2y ago
      Lots of contracts with a sufficient link to the US allow access to US courts, even with a foreign plaintiff. This is especially true for state courts, but sometimes federal courts are available too. Suing a defendant based in the US for a breach of contract resulting from acts committed in the US, for a contract that doesn’t force arbitration or specify a foreign venue for litigation, would very likely allow a US lawsuit. Naturally I haven’t looked at the specifics of the situation beyond what the linked article states, so this wouldn’t be legal advice even if I were a lawyer, which I’m not. I presume all the vendors whom the article says are contemplating a class action lawsuit are already getting proper legal advice from their lawyers.
      - grujicd 2y ago
        Problem is majority of affected vendors are small fish, with reported (on kvr forum, LinkedIn, etc) losses of 20-30k. Individually, that's not enough to launch any kind of legal response, especially in a foreign country. Even more if there's a little chance of collecting anything from a (future) bankrupt entity. Someone mentioned on that forum that Germany doesn't have class action suits, and majority of us were working with DigitalRiver Gmbh, because we started with German based ShareIt once upon a time. There's a public 51 page document signed between Digital River and its subsidiaries and Cerberus Business Finance Agency, NY on 19 July, but it's too hard for layman to comprehend anything apart from that Cerberus is a creditor to Digital River and that it gets some extra rights from that point on. I'm just speculating since I'm out of my league here, but it's not impossible that they're using funds of small vendors who can't defend themselves to cover debt to a single large creditor armed with full legal team. If they drain all the funds and bankrupt the company, who can we realistically sue and expect to see some money? It's all legal, they were paying other creditor, money was not stolen for personal benefit. https://find-and-update.company-information.service.gov.uk/company/05788465/filing-history https://find-and-update.company-information.service.gov.uk/c...
jsmith99 2y ago
Sounds like wrongful or fraudulent trading. Many countries have laws about it. Eg in UK https://en.m.wikipedia.org/wiki/Wrongful_trading https://en.m.wikipedia.org/wiki/Wrongful_trading

srmarm 2y ago

That's a name I hear from time to time but have never quite understood what their purpose was. My last laptop purchased from the the Lenovo store and my subscription to Nvidia GeforceNow were processed via Digital River. You'd think both Lenovo and Nvidia would be big enough to manage their own ecommerce. I suspect their legal teams will see them get better treatment anyway.

SirGiggles 2y ago
To add on to your experience, my first encounter with Digital River was back around a decade a ago when I bought Battlefield 2142 from EA (pre-Origin)
- cbsks 2y ago
  Mine was buying a Windows 7 license back in 2009.

pixelpoet 2y ago

Yet another case of companies getting away with stuff that would have landed you or I in jail on day one. Sure must be nice to get away with anything you like just because it's legally a company and not a person doing it, with all kinds of shady lawyers exploiting legalese loopholes. All of them will escape with full pockets and without punishment, and the moral of the story is: don't be poor, be a company and have lots of lawyers - the world is your oyster.

hermitcrab 2y ago

This is not the first evil thing they have done. I've always thought Digital River were scum. They bought up and wrecked lots of nice little payment processor companies. Everything they touch turns to shit.

fenesiistvan 2y ago

I am also affected. Can somebody suggest a good alternative?

vsl 2y ago
Paddle. FastSpring.
- grujicd 2y ago
  2checkout (used them in the past, switched again since last month). Some people recommend PayPro Global (don't misread it as PayPal like I did at first).
p0nce 2y ago
itch.io
paypro_global 2y ago
[dead]

rekabis 2y ago

Vampire/vulture capitalism strikes again! Looks like stakeholders have managed to bleed the company - and both customers and clients - dry. My bet is that they are now preparing to break it up and sell it off.