Declan Ganley’s assertion that the default debt judgment of around $20 million (€18.4 million) was cleared by surrendering his stake in Rivada Networks, his telecom firm, was denied by a New York judge. Jennifer Schecter, a Supreme Court judge in New York, stated in her verdict this week that Mr Ganley’s claim, that the payment of his debt had been settled by auctioning “20,000 Rivada shares” in October 2023, lacked “convincing evidence”.
A longstanding disagreement between David Shuman, a Rivada investor, and Mr Ganley has been noted wherein Mr Shuman acquired a default judgment against Mr Ganley, now believed to be worth $20 million post interest.
Mr Ganley suggested in recent legal documents that the 20,000 shares auctioned and procured by Shuman in a credit bid for $400,000 ($20 per share) had a possible worth of $755.55 per share, equating to more than $15 million in total. He further proposed that recent fundraising outings by Rivada could raise the shares’ value, presenting an upper price limit of over $5,000 per share, which amounts to more than $100 million overall. The court heard that this evaluation would peg Rivada at $12 billion.
However, Judge Schecter refuted these assessments, pointing to Mr Ganley’s admission during one court testimony where he disclosed his uncertainty of the share value and his failure in presenting an appraisal of their worth. She stated he presented no proof showing “transactions predating a public auction by over a year are trusted indicators of value at the auction date”.
In addition, she observed that he did not offer substantial evidence of the company’s activities since then, nor any financial records that could help the court determine value. She declared him having “no excuse” for his failing, asserting that he “could have put forth powerful proof of its worth, like an expert valuation rooted in a discounted cash flow analysis” considering his role as the firm’s founder and CEO.
Paradoxically, she mentioned in her verdict, Rivada opted not to outdo Mr. Shuman’s bid for the shares, offering only $320,000 itself, or approximately $16 per share.
The assertion that Mr Ganley declined an offer to purchase the shares for $336,000, equating to $16.80 per share, was conveyed by the woman. She concluded that any logical fact-finder would deem the claim of the shares being valued at $15 million as preposterous. She pointed out that given Rivada is privy to private information about its value, the company would not have bypassed a chance to rebuy its shares at such a reduced rate. She reached the conclusion that the only plausible hypothesis from the presented evidence was that the shares had a value of $400,000.
During legal proceedings, Mr Ganley has been required to hand over a significant number of personal possessions along with shares, in order to fulfil the ruling. The handed over property includes numerous businesses, a Galway public house, a four-acre property and various vehicles.
In his defense, Mr Ganley has contended through multiple files that Mr Shuman should not be eligible to chase the claim as the original debt has been settled. He brought up the “black letter law” notion, stating that a creditor is not entitled to double recovery from the same debt. He charged Mr Shuman with fraud and extortion over his unauthorized retention of an individual batch of 150,000 company shares.
In an independent development, Rivada is amassing billions to set up a private, invincible, satellite-supported internet communication structure, dubbed the OuterNet.
Upon being approached for a comment, Mr Ganley noted it curious that the fact that the debt has been settled and proven to have been so, is being overlooked. He affirmed their intent to appeal.