Provisional liquidators have been appointed to the Irish arm of a global ecommerce service provider that faces a working capital shortfall of more than $100 million after talks with secured lenders fell through.
Digital River Ireland Limited, which is part of the US-based Digital River group, petitioned the High Court for the appointments on Friday as it said it is cash flow insolvent and cannot secure funding from alternative lenders.
Founded in 1994, the Digital River group provides ecommerce payment services to businesses but says it has faced challenges in recent years primarily due to the loss of large customers and the “rapid growth of low-cost competition” in the sector, the court heard.
Earlier this week, a global meeting was held with the group’s employees, including those of the Irish arm, to inform them of preparations to wind down operations.
In legal documents, Digital River Ireland said it generated about 31 per cent of the group’s global revenue and, following redundancies and turnover in 2024, has 14 employees principally involved in the finance roles. The company has an office in Shannon, Co Clare, but its staff mainly work remotely.
It said a turnaround plan for 2025 was put in place for the group and, as recently as last November, the group appeared to have access to $150 million in funding.
However, the secured lenders decided to withdraw funding and support at the start of the year. On January 2nd, they issued a notice of default and termination of an earlier forbearance agreement.
Digital River Ireland said it is a guarantor for the group’s secured debt obligations, which stand at $45.7 million.
It said some clients could be “catastrophically impacted” by an immediate collapse of the group, as the company’s ecommerce system is their primary route to market and also holds their customers’ data. It has been negotiating with clients in an effort to secure an orderly wind-down of business, and it hopes the provisional liquidators can assist with this.
As well as being cash-flow insolvent, the company is also balance sheet insolvent, as some €402 million recorded as an asset is an intercompany receivable that is not unlikely to be recoverable in any material way, it said.
The application was presented to the court by barrister Stephen Brady, instructed by William Fry Solicitors. Mr Brady said there are also petitions related to two other companies within the group – DigRiv Ireland Ltd and Digital River Technology Limited.
Mr Justice John Jordan was satisfied he could appoint Kieran Wallace and Andrew O’Leary, of Interpath Ireland, as joint provisional liquidators of Digital River Ireland.
He scheduled for the winding-up petition to be heard on February 27th.
