The CEO of Rivada Networks, Declan Ganley, is seeking confirmation in a New York court that a debt judgment of several millions of dollars has been satisfied, fully compensated by Rivada share transfers which exceed the amount of the default judgment. In a long-term disagreement with Rivada investor David Shuman regarding a default judgment Mr. Shuman secured against him, Mr. Ganley has allegedly met the value of this debt, which is currently estimated to be approximately $20 million (€18.4 million), including interest.
A range of personal assets was ceded by Mr. Ganley towards the satisfaction of this judgment, including shares in Rivada, stakes in various enterprises, property in Galway as well as an assortment of vehicles inclusive of several Massey Ferguson tractors. The court documentation Mr. Ganley has submitted asserts that the judgment has been satisfied more than twice its amount. He is requesting a court order to establish that the default judgment is fully compensated, or alternatively, a hearing to examine the worth of the assets surrendered to date.
It is Mr. Ganley’s belief that “duplicated recovery from a single debt” is inadmissible in law, and that the approval of further claims from Mr. Shuman would result in substantial and unfair profits. Additionally, he argues that Worth Capital, the New York investment fund he first obtained the loan from and for which Mr. Shuman acted as guarantor, received repayment of $5.8 million, constituting the initial compensation of the debt. Court orders secured by Mr. Shuman regarding Mr. Ganley’s personal assets satisfy the debt further, as per Mr. Ganley’s assertions in the legal documents.
The filings also demonstrate that the primary compensation consisted of 20,000 Rivada shares Mr. Shuman acquired at an auction directed by the court. It’s argued by Mr. Ganley that these stakes were purchased by Mr. Shuman at a significantly discounted “fire sale” price of $20 per share, totalling $400,000, using the credit from the judgment to gain the shares.
According to his court documents, recent transactions involving the same stock have consistently garnered a minimum of £545.48 per unit, implying that the 20,000 units that Astraea gained through its credit bid have a value of at least £10.88 million. It is also inferred in the legal filings that there is room for more valuations of the shares. In a prior testimony, Mr. Ganley estimated Rivada’s total worth to be £8.65 billion. Therefore, each share of Rivada would cost more than £3,600, and the 20,000 shares owned by [Shuman] would be valued at over £72 million.
Simultaneously, Mr. Shuman has attempted to declare ownership of close to 150,000 Rivada Networks shares, which were part of the original loan’s collateral; a claim Mr. Ganley denies. According to Mr. Ganley, upon the settlement of the Worth loan, Mr. Shuman should have given back those shares. However, Mr. Shuman refutes that such a deal was ever made and no records of such a transaction exist. In the most recent filings, Mr. Ganley points to the existence of this deal by quoting “existing written communications, testimony, and endorsements from the involved parties.”
In a recently submitted affidavit, he accused Mr. Shuman of engaging in “extortion” and “fraud”. Court documents indicate a variety of potential valuations for Rivada’s shares. For instance, in the context of the collateral shares, Ganley’s legal counsel argues their worth “exceeds £82.9 million”, derived from a valuation of £545.48 per share.
According to another affidavit submitted with the recent motion, Douglas Lynn, Rivada’s CFO, stated that the company has issued shares at different prices over the past three years. Presently, Rivada is in the process of amassing billions to build a private, impenetrable, satellite-based internet communication system named the OuterNet. In 2022, it raised capital from an undisclosed number of investors at a price of £545.48 per share. Furthermore, “financing has majorly been in the form of convertible debt from high-profile investors who wish to remain unidentified, with conversion rates typically set between £555.30 and £597.45 per share, subject to certain terms and conditions”.
To date, the documents submitted offer no citation of the elevated share price of $5,000, as pointed out by Ganley during his testimony. Yet, at this rate, the aggregate value of the shares being contested by Ganley and Shuman may approach $750 million.
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