Declan Ganley found to be in contempt of US court in ongoing legal dispute

Businessman had been ordered to turn over control of a number of companies and make monthly payments of $20,000 to investor David Shuman

Declan Ganley. Photograph: Brenda Fitzsimons

Declan Ganley, the founder of Rivada Networks, has been found in contempt of court in the latest development of a bitter legal battle with New York investor David Shuman, one of the company’s shareholders.

Judge Jennifer Schecter of the Supreme Court of New York made the finding of contempt against Mr Ganley this week, writing in her judgment that he impaired Mr Shuman’s “rights to obtain funds to partially satisfy the judgment as ordered and stipulated”.

Mr Ganley was earlier this year ordered to make payments to Mr Shuman, to whom he owes about $20 million arising out of a default debt judgment secured in the US.

In order to satisfy the debt judgment, he was ordered by the court at various times to turn over control of a number of companies and to make monthly payments of $20,000 to Mr Shuman until the debt was fulfilled.

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He was also ordered to auction off certain assets he owned here in Ireland, including some vehicles, four acres of farmland that cost €47,000, and a pub near his house which he bought for €210,000 and planned to reopen as the Edmund Burke pub, as an homage to his favourite philosopher.

The court ruled that “it is undisputed that he [Mr Ganley] still has not sold the property as agreed” and that “he did not timely make two monthly payments” as the court had ordered.

Mr Ganley can “purge the daily sanction if the sale occurs and plaintiff receives the proceeds by September 30, 2024″.

Judge Schecter had previously warned Mr Ganley that he could face a contempt of court charge if he could not explain the delays, with the punishment potentially including “a fine or imprisonment or both”.

Her ruling this week made no mention of any imprisonment, though she noted that if the sale “has still not occurred by then [September 30] plaintiff may make an application to increase the daily sanction and seek other coercive sanctions”.

A spokesman for Mr Ganley said all required monthly payments have been made and that every effort was being made to comply with the judge’s rulings.

“We are imminently filing an appeal on the finding of contempt even as we seek ways to satisfy the judge’s order,” he said.

Mr Shuman made an application for a contempt of court ruling in July, in which he accused Mr Ganley of “failing [to] auction or sell property” and of “failing to make monthly instalment payments”.

Court filings showed that Mr Ganley did not make his first mandated payment on the scheduled date of June 1, and that when it was received on June 3 the payment had been made by Karl Rove and Company. Mr Rove is a well-known Republican Party strategist and lobbyist, as well as a shareholder in Rivada.

The filings also show that Mr Ganley had been late in remitting money related to the sale or auction of the Irish property. A sale had been agreed but the buyers were in the midst of obtaining a mortgage, Mr Ganley’s lawyers explained at the time.

It comes as Mr Ganley attempts to raise billions of dollars to build a private, unhackable, satellite-based internet communications system called the OuterNet.

He has said in media interviews recently that he has booked orders with more than 100 clients worth close to $15 billion in total, and raised funding from more than 70 investors, including a sovereign wealth fund from the Middle East and billionaire investor Peter Thiel.

However, a recent stock market disclosure by Terran Orbital, a satellite maker which is making Rivada’s satellites, outlined how its decision to sell itself to aerospace giant Lockheed Martin was partly down to “uncertainty” over Rivada’s’ “ability to pay” for 300 satellites it ordered in a $2.4 billion deal.

In the filings Terran’s director’s said that “uncertainty about Rivada’s ability to pay significantly deteriorated the company’s cash forecast”.