Declan Ganley, the chief executive of Rivada Networks, has been warned by a judge in New York that he faces a rising scale of daily penalties if he doesn’t sell a number of properties in Galway to pay down a $20 million (€18.3 million) debt.
Judge Jennifer Schecter of the New York Supreme Court made the order this week in which she warned that Mr Ganley remains in contempt of court for failing to sell the assets, which includes some farm land and a pub he intended to reopen as the Edmund Burke pub.
Mr Ganley was earlier this year ordered to make payments to a shareholder in Rivada, David Shuman, to whom he owes about $20 million arising out of a default debt judgment.
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.
In September Mr Ganley was found to be in contempt of court over delays in making certain court-ordered pavements.
The judge at the time wrote in her ruling that he had impaired Mr Shuman’s “rights to obtain funds to partially satisfy the judgment as ordered and stipulated”.
As well as a $20,000 a month payment to Mr Shuman, he has to sell off four acres of farmland that cost €47,000, and a pub near his house which he bought for €210,000.
In relation to the contempt of court ruling, Mr Ganley was also ordered to pay daily fines of $500 for as long as the payments were not made. The total value of those fines now stands at $13,000, according to the latest court filing.
Following further submissions from Mr Shuman’s lawyers, Mr Ganley has been ordered to make filings to the court by October 30th to show cause that further sanctions should not be imposed by the court.
The judge warned Mr Ganley that the fine could rise to $1,000 a day from October 8th, to $2,000 a day if the funds are not paid to Mr Shuman by November 22nd, and to $3,000 a day by January 6th.
In her order she wrote that “the purpose of this hearing is to punish the accused, Declan Ganley, for a contempt of court, and such punishment may consist of a fine, or imprisonment, or both according to law”.
Separately, Mr Ganley is working 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.
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.
A spokesman for Rivada said at the time: “We continue to work with Terran on the contract and expect to continue to do so during and after this transaction. Terran has been a great partner and we fully expect that to continue.”
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