A longtime client of Minnetonka-based Digital River has hauled the once-prominent e-commerce firm and its former chief executive, Barry Kasoff, into court, accusing them of engineering a wind-down that left Kaspersky Lab short roughly $18 million. The civil suit, filed in Hennepin County, claims Digital River steered money to preferred creditors as it shut down, even as services were suspended and local workers were cut in early 2025.
Lawsuit Alleges $18 Million Went Missing
Kaspersky's Switzerland and Singapore arms allege in court filings that Digital River handled online sales for the cybersecurity company but did not pass along about $18 million in proceeds, according to the Star Tribune. The complaint portrays Kasoff as funneling cash to “favored equity holders and creditors,” naming Cerberus Capital Management among the beneficiaries, and accuses him of misleading customers about the firm's financial health. “Kasoff never had any intention of seeing Digital River survive,” the lawsuit states, as quoted in the report.
From Early E-Commerce Player to Private Equity Portfolio
Digital River emerged as an early outsourced e-commerce provider and went public in 1998, hitting its commercial stride in the mid-2000s, according to Wikipedia. In 2015, the company was taken private in a deal valued at about $840 million, led by investor group Siris Capital, per an announcement from Siris Capital Group. That deal shifted Digital River from a public company into a private equity holding, a structure critics say can sharpen the focus on rapid cuts and asset value over long-term stability.
Kaspersky Says It Tried to Work With Digital River
The lawsuit states Kaspersky had relied on Digital River since 2009, and that in 2021 the vendor booked nearly $10 million in revenue from Kaspersky sales on more than $140 million in gross sales, according to the Star Tribune. The filing says Kaspersky agreed in August 2024 to defer payments, but that Digital River then missed the first installment of roughly $1.42 million due on January 15, 2025. Services were suspended shortly afterward as the company began winding down. Kaspersky is asking the court to recover the unpaid proceeds and to hold Kasoff personally responsible for the transfers described in the complaint.
Kasoff's Turnaround Track Record Under the Microscope
Kasoff runs Realization Services Inc., a New York-based consulting outfit that focuses on distressed companies and turnarounds, according to corporate notices and filings. He previously served as chief restructuring officer at Imation in 2015 and was publicly nominated to Imation's board in connection with that role, per a Clinton Group/PR Newswire announcement. Some of his past restructurings have stirred controversy, and Kaspersky's attorneys point to that history as they press their case.
Local Layoffs and Lingering Questions
State records show that 122 workers in Minnetonka lost their jobs in late January 2025 as Digital River wound down operations. A WARN notice filed with Minnesota's Department of Employment and Economic Development lists the company's local address as 10380 Bren Road West, Minnetonka, MN 55343 (Minnesota DEED). The shutdown left merchants, shoppers, and staff wondering who would get paid and who would be left holding the bag. Kaspersky's lawsuit now seeks a full accounting of how money moved in Digital River's final months. The case will play out in Hennepin County District Court as both sides file briefs and jockey over scheduling.
What Minnesota Law May Let Creditors Claw Back
Kaspersky's claims lean on allegations of fraudulent or voidable transfers, civil theories under Minnesota's voidable transactions law that can allow creditors to have certain transfers undone or to recover their value. Minnesota spells out that framework in Chapter 513 of its statutes, which details when transfers can be voided and what remedies creditors may seek (Minnesota Statutes, Ch. 513). The case is likely to turn on dense financial records and could take months to sort out. Any payout will hinge on whether the transfers delivered reasonably equivalent value and whether Digital River was insolvent or intended to hinder creditors when the money moved.
