Declan Ganley, who started Rivada Networks, has been deemed in contempt of court amid an intense legal tussle involving a shareholder, David Shuman from New York. New York’s Supreme Court Judge, Jennifer Schecter, issued the contempt declaration against Mr. Ganley this week, indicating in her verdict that his actions obstructed Mr. Shuman’s “access to funds to somewhat meet the court-ordered and agreed judgment.”
Previously this year, Mr. Ganley was mandated by the court to settle a debt of approximately $20 million to Mr. Shuman, resulting from a default debt verdict given in the US. As directed by the court, he was to surrender control of several businesses and also to make $20,000 in monthly payments to Mr. Shuman until the complete debt was squared off.
In addition, he was required to put up for auction specific personal assets located in Ireland. These included vehicles, a four-acre farmland that was purchased for €47,000, and a nearby pub which he acquired for €210,000 with the intention of reopening as the Edmund Burke pub, in honour of his admired philosopher.
The court’s decision clarified that it was undeniable that Mr Ganley failed to sell the property as per agreement and also missed out on making two monthly payments as ordered by the court. Nevertheless, the daily penalty could be waived if the property is sold and the profits are obtained by the plaintiff by the end of September in 2024.
According to Judge Schecter, Mr. Ganley could be charged with contempt of court if he could not provide a valid reason for the delays, with the consequences potentially comprising a monetary fine, imprisonment, or both. While her latest ruling did not include any mention of incarceration, she highlighted that if the sale was not completed by the given deadline, the plaintiff has the liberty to apply for an increase in the daily fine and request further penalties.
A representative for Mr Ganley confirmed that all necessary monthly payments have been fulfilled, emphasising their persistent efforts to adhere to the judicial decisions. He mentioned that an appeal against the contempt ruling is about to be lodged even as they are seeking methods to fulfil the judge’s decree.
Mr Shuman accused Mr Ganley of ‘negligence in auctioning or selling property’ and of ‘non-fulfilment of monthly instalments’ when he lodged a contempt of court request in July. Court documents revealed Mr Ganley missed his initial obligated payment due June 1, which was eventually paid two days late by the company Karl Rove and Company. Karl Rove, a renowned Republican Party strategist, lobbyist and a shareholder in Rivada, made the payment.
The papers also indicate that Mr Ganley delayed transferring funds associated with the sale or auction of the Irish property. Although a sale was agreed upon, buyers were securing a mortgage, as stated by Mr Ganley’s legal team.
Meanwhile, Mr Ganley is trying to generate billions of dollars to create a personal, invulnerable satellite-driven internet communications system – the OuterNet. Mr Ganley stated in recent press interviews that he has secured orders from over 100 clients worth nearly $15 billion in total, and collected investments from over 70 contributors, including a Middle Eastern sovereign wealth fund and billionaire Peter Thiel.
Nonetheless, Terran Orbital, a satellite producer creating Rivada’s satellites, indicated in a recent stock market revelation that its decision to be acquired by aerospace titan Lockheed Martin was partially due to ‘doubts’ about Rivada’s ‘payment capability’ for a $2.4 billion order of 300 satellites.
Terran’s directors stated in the filings that the ‘doubts about Rivada’s payment capacity significantly worsened the company’s cash projection’.