By Ray Downs
By Lindsay Toler
By Danny Wicentowski
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By RFT Staff
By Lindsay Toler
By Allison Babka
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Across the thousands of pages of court documents filed since SecureAxis Software's meltdown, only once does a company founder refer to the other as a "friend." The term "fucking Jew cocksucker," however, appears four times.
To outsiders, SecureAxis was just a small St. Louis start-up in the network-security field. But in the hearts of founders Jim Kalishman and Chris Elbring, who launched the outfit in 2005, it felt like a mountain of cash, ideas and dreams.
When that mountain began to crumble in late 2008, it loosed an avalanche of ferocious court filings that came to employ fourteen lawyers in three separate lawsuits and one criminal prosecution.
The big ideas at SecureAxis came from software "architect" Chris Elbring of Kirkwood — a tall, lean 41-year-old with a cool demeanor and a fondness for target shooting. The big money came from Ladue resident Jim Kalishman, 43, scion of a rich and prominent Jewish family. With a top-tier education and plump investment trust, he held himself out as a savvy investor.
Together, they set out in 2005 to make software that prevented information theft. Ironically, within four years, they would be accusing each other of stealing. And now, in St. Louis County Circuit Court, they're locked in a vicious battle with no truce in sight.
To his legal adversaries, Elbring is an anti-Semite who used ties to Russian programmers to embezzle thousands of dollars. Kalishman, meanwhile, is portrayed in court documents as an insecure know-it-all who used his great wealth and influence to destroy a former business partner rather than admit failure.
Even attorneys embroiled in the conflict marvel at it. Says First Assistant United States Attorney Michael Reap, who led the criminal prosecution: "The purpose of lawyers on the planet is to solve problems. I don't know that anything we did solved the problem. I think we might have only made matters worse.
"In my opinion, this thing has grown exponentially from a smaller lawsuit to a monster situation that is out of control."
The late Jerome "Jerry" Kalishman was a tough act to follow.
Already a respected attorney, he cofounded a company in 1982 that licensed a method for fixing pipes without digging. By the mid-'90s, it had grown into the publicly traded Insituform Technologies Inc. — earning Kalishman a fortune. He became president of the elite Westwood Country Club and showered donations on Washington University, Jewish groups and various charities.
Soon after Jerry's death in 1998, his sons Tom and Jim launched a venture of their own. They called it Maverix. The idea was to provide high-speed Internet to Midwestern businesses. With $42.5 million in raised capital ($2 million from the brothers themselves), they leased a swanky office in downtown Chicago and boasted of plans to serve 30 cities in short order.
But Maverix flopped. Badly. The brothers filed for bankruptcy on its behalf in January 2001, leaving creditors short several million dollars. Disgruntled former employees kvetched publicly about the difficulty of getting final checks from the wealthy Kalishmans, as the St. Louis Business Journal reported. Even a former executive defending their character conceded their "naiveté, pride and lack of management experience."
Yet Jim Kalishman still had a lot going for him. Not only did he have an MBA from the Kellogg School of Management, the highly ranked business school at Northwestern University, he also had accesss to an investment trust set up by his parents. (Through his lawyer, Kalishman declined repeated requests for an interview with Riverfront Times.)
Sniffing around for a new opportunity in 2004, Jim Kalishman was introduced to Chris Elbring.
"He was nice enough," recalls Elbring. Both men were in their mid-thirties at the time. "He seemed like he'd been a rich kid, one of these guys who claimed to know a lot of stuff and have tons of connections."
Elbring's own background was unusual: He'd lived in Russia for five years, doing marketing for a firm that quarried white marble. There, he'd grown intrigued by information technology. Now he was back, and he had ideas.
For example, Elbring pitched to his "angel investor": Wouldn't it be great to offer companies software that could thwart someone — say, a fired employee on her last day — from using a USB flash drive to download trade secrets or customer info?
Kalishman bounced the idea off some industry insiders. Within a few months, he was sold. He agreed to start a company with Elbring and invest an initial $500,000 through his trust — in installments, to ensure certain benchmarks were reached.
In early 2005, lawyers drew up the contracts. SecureAxis was born.
Over the next four years, the partners added staff and riffed on their original idea. They came up with "VeriPlay," software that would enable movie rentals on flash drives. The film would only be accessible for a limited time, and pirating would be impossible. But soon they changed course toward "OutProtect," which was designed to protect company data that's stored and processed online — a practice known as "cloud computing."
Success was mixed. The software worked well in tests, but early customers reported glitches. The partners quarreled over what to do next.
So in April 2008, they recruited a new CEO: Ted Briscoe, a former executive at AskJeeves .com and "a big deal in software," as Elbring described him at the time. Briscoe's task was to drum up funding and prepare for a commercial launch that autumn.