Business

New York court threatens to arrest Declan Ganley over failure to satisfy judgment

Telecoms entrepreneur’s lawyer cites lack of money and tax issues for failure to transfer assets but also promises legal challenge

Declan Ganley, whose lawyer told a New York court he 'simply doesn’t have the money to pay shippers and importers' for vehicles he has been ordered to hand over to meet a debt judgment. Photograph: Eric Luke

Barry J Whyte
Mon Jan 15 2024 - 16:45

A judge in New York has warned Declan Ganley, the Irish telecoms entrepreneur, that she “absolutely will ... issue an arrest warrant” if he doesn’t hand over a number of Irish assets to help settle a near $20 million (€18.26 million) debt judgment.

Mr Ganley appeared before judge Jennifer Schecter of the supreme court of New York in relation to an order to turn over the assets to his former business partner David Shuman, a private equity investor.

Judge Schecter said: “The last thing that I want to do is issue an arrest warrant, but I absolutely will do so unless I’m convinced that there’s been compliance with the judgment here.”

The assets in question include a number of vehicles, four acres of land and a pub near Tuam in east Galway which Mr Ganley planned to reopen as the Edmund Burke pub.

READ MORE

In court on Thursday, Mr Ganley’s lawyer, Jeremy Bressman, said he was “attempting to comply, but there are some obstacles”, including the fact that “Mr Ganley simply doesn’t have the money to pay shippers and importers” for the vehicles.

In relation to the property assets, Mr Bressman said Mr Ganley was concerned about the possibility of a 7.5 per cent transfer tax related to the transfer of the land and the pub, among other administrative matters.

Mr Ganley made a cash transfer equivalent to €7,000 before the hearing, though this was “not in time to be compliant with [the judge’s] order”.

Judge Schecter had found Mr Ganley in contempt of court in December over his failure to hand over the assets. She imposed a daily penalty of $25,000 until he either purged his contempt or fully satisfied the judgment against him.

During the hearing on Thursday, Judge Schecter said “this is the first time I see any movement” to transfer assets, having previously seen “zero real effort”.

She said she was giving Mr Ganley the chance to comply, saying: “I want to hear that things are coming so close and that there is real movement and that this is not just an effort, again, to defer, to waste time, to put off, to obstruct and not to comply.”

She also expressed some scepticism in relation to the explanations Mr Ganley’s lawyer provided for the delays to date, saying: “Mr Bressman, I wasn’t born yesterday ... I often hear difficulty to pay in these situations, and I struggle with the veracity in terms of the difficulty. I’m just putting it out there.”

[ Irish entrepreneur Declan Ganley found in contempt of court in New York over $20m debt dispute ]

Mr Ganley’s dispute with Mr Shuman centres on a loan to Mr Ganley for which Mr Shuman served as guarantor, with litigation in New York, Delaware and Texas.

To date, Mr Shuman has been paid about $3.1 million as part of the dispute, and has forced Mr Ganley to auction some of his shares in Rivada Networks, which Mr Shuman then bought. He has also taken control of two companies controlled by Mr Ganley – a British entity called Ganley International Ltd, and a Swiss asset management company called St Columbanus.

The court heard on Thursday that Mr Bressman would be issuing a motion in the coming weeks with what he described as “strong [and] competent evidence” that the judgment has already been fulfilled.

When contacted by The Irish Times, Mr Ganley said: “As we will shortly show the court, this debt was paid years ago. Even after all this time, this case has never been heard on the merits. We have faith that ultimately the courts in America will see justice done in this case.”

LATEST STORIES