The High Cost of Ransomware: Stoli Group USA's Bankruptcy Filing

How did the Ransom Attack Destroyed Business

This case - is a good reminder about how devastating are cyberattacks to any business, the iconic vodka maker Stoli Group’s U.S. subsidies have filed for bankruptcy following the series of challenges they faced in 2024. With $84 million in debt and their operations disturbed by a ransomware attack in August 2024, Stoli Group and Kentucky Owl (KO) are now seeking Chapter 11 protection to recover from the damage.

Ransomware Attack and Its' Impact

“In August 2024, the Stoli Group's IT infrastructure suffered severe disruption in the wake of a data breach and ransomware attack,” Caldwell said in the filing.

The Ransomware incident has caused widespread disruption to the company’s IT infrastructure, which resulted in stopping such critical processes as accounting into manual operations and leaving Enterprise Resource Planning (EPR) systems offline, until at least 1Q of 2025. This could indicate a potentially bad Business Continuity Plan (BCP) and Disaster Recovery Plan (DRP).

Moreover, the attack caused issues with Stoli Group’s ability to meet its debt payment obligations. The cyber incident reportedly prevented the company from supplying up-to-date financial data to its lenders, leading to accusations of default on its debts.

It is interesting, that no ransomware group has claimed to be responsible for the attack, also the parent company did not respond to requests for comment about who is behind it. However, some believe that the ransom attack was paid by the Kremlin since there are

ongoing conflicts between the company and the Russian government.

Who Requested the Chapter 11 Protection and What is it?

Stoli Group USA and Kentucky Owl recently filed for Chapter 11 bankruptcy protection, since they face $84 million in debt, of which the filing aims to provide the companies with the necessary time to recover from the cyberattack and restructure their obligations while safeguarding jobs, as outlined in court documents submitted last Friday.

Chapter 11 protection, under the U.S. Bankruptcy Code, allows businesses to reorganize their operations and debts while continuing to operate. It provides a company with the opportunity to restructure its financial obligations, develop a plan to become financially stable, and negotiate with creditors.

How to Protect Your Business from Such Accidents?

Even though it is still unclear what happened how the Ransomware Attack occurred, and what it has done in the aftermath (e.g. Data Breach), we still can recommend some solutions that would potentially help in this case.

• Antivirus and Anti-Malware Solutions

  Installing and maintaining reputable antivirus and anti-malware software is a critical step in defending against malicious attacks. These tools work by detecting, isolating, and preventing malware before it can execute on your systems.

• Access Controls

  Restricting user access rights to files, directories, and systems is a fundamental security measure that can significantly reduce the impact of ransomware attacks. Access should be granted based on the specific needs of each user’s role, following the principle of least privilege.

• Patching and Updating Systems

  With the rapid development of new technologies and the continuous growth of applications and software, the likelihood of discovering flaws increases. New vulnerabilities are disclosed daily, making it essential to maintain up-to-date software—not only on critical infrastructure but across all systems.

• Business Continuity and Disaster Recovery Planning

  Creating a robust BCP ensures the organization can sustain operations during disruptions, whether from cyberattacks, natural disasters, or system failures, while a DRP will benefit in the quick restoration of IT systems and data after an incident.

How Cytopus Can Help My Business?

• Continuous Monitoring and Threat Detections: At Cytopus we provide centralized security monitoring solutions to detect unusual activities across your systems and networks, reducing the risk of data breaches and fast responses to unauthorized accesses.

• Business Continuity and Disaster Recovery Planning: Cytopus helps you design and implement robust plans to ensure uninterrupted operations during cyberattacks or other disruptions. We also create and test comprehensive disaster recovery strategies tailored to your infrastructure.

• Incident Handling Readiness and Post-Incident Investigation: We can assess your company's preparedness to manage and respond to ransomware incidents effectively. In addition to that, we would investigate an attack to identify weaknesses and prevent future incidents.

• Compliance and Regulatory Alignment: We help your business to stick to essential standards like the General Data Protection Regulation (GDPR), the Cyber Resilience Act (CRA), and industry-specific frameworks such as the Health Insurance Portability and Accountability Act (HIPAA). Moreover, our experts conduct thorough compliance audits to identify gaps and vulnerabilities within your security practices.

• Vulnerability Management and Risk Assessment: Regular assessments ensure vulnerabilities in your IT landscape are identified and addressed before attackers exploit them. Furthermore, we assist in developing strategies like patch management and access segmentation to reduce attack surfaces.