Dear Team,
As you 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 and tax obligations, have impacted our ability to sustain operations.
In response to our constrained financial position, we began exploring strategic pathways. As of January 2, 2025, Digital River became unable to tap into advanced funding of our revolving credit facility. In response, we engaged in discussions with our lenders and largest customers to source additional funding or determine an alternate solution to sustain our operations.
Despite our best efforts, we have been unable to identify a path forward that would allow Digital River to continue operating. It is with a heavy heart that we have made the incredibly difficult decision to initiate the wind down of the business, which will occur pursuant to each foreign jurisdiction’s requirements. This process began with the suspension of services to the majority of our global customers. As part of the global wind down process, today, Digital River filed an application to initiate insolvency proceedings for our German entities at the Cologne Insolvency Court. As such, a Court-appointed Preliminary Insolvency Administrator will assess the operational viability of German operations.
Globally, we expect a substantial reduction in our workforce as part of the wind down process, which will also impact our independent contractors. While some employees may remain to assist with the transition, no specific decisions have been made at this time. You will receive further information regarding the wind down process specific to your individual jurisdiction in the coming days, including details about your employment status and any other region-specific considerations. Please be assured that we do not anticipate any interruptions to current wages or benefits during this time.
Please note that we have already communicated with our customers to inform them of the wind down process. We are in ongoing conversations with certain customers to facilitate a smooth transition, which may drive variability in the duration of the wind down process for certain of our teams. We ask that you continue to escalate all inquiries from customers to your ELT lead, and refrain from commenting on the wind down or insolvency processes.
We know this news may be difficult to process. Please know that this decision was not made lightly, and it in no way reflects the immense dedication, talent, and effort each of you has contributed to Digital River. You have been the driving force behind everything we’ve achieved, and for that, we are deeply grateful.
In the days ahead, we ask for your continued professionalism and focus as we navigate this transition. We will be holding a global town hall meeting later today to provide further information and address your questions. In the meantime, if you have immediate concerns or questions, please don’t hesitate to reach out to your ELT lead directly.
Thank you for everything you have done for Digital River.
Sincerely,
Barry Kasoff