Declan Ganley, chief executive of Rivada Networks, could be ordered by a New York judge to disclose who is paying his legal bills as a bitter dispute over a $20 million (€19.2 million) default debt judgment continues to escalate.
Mr Ganley has also been criticised in court papers for his “pleas of poverty” while his “social media postings display that he continues to lead a life of luxury”.
It comes on foot of another court application by lawyers for Rivada shareholder David Shuman, with whom Ganley has been involved in a long-running dispute over a default debt judgment that is estimated to stand at more than $20 million.
Mr Ganley has been ordered by judge Jennifer Schecter of the supreme court of the state of New York to appear in court on January 14th to explain why he should not be held in contempt “for failing to pay civil contempt sanctions” as previously ordered by the court.
The Irish businessman will also have to show why he should not be forced to “produce information regarding the source of his funding for legal fees since the issuance of the judgment” more than three years ago.
The judge’s ruling also requires Mr Ganley to “show why an order should not be made ... ordering that a warrant be issued for [his arrest] until and unless his noncompliance is cured”.
The ruling was made after a filing by Mr Shuman’s lawyers complaining about Mr Ganley’s “continuing refusal or wilful neglect to comply with the orders” of the court, and what they characterised as his “flagrant efforts to collaterally attack the judgment”.
They also take issue with Mr Ganley’s “pleas of poverty”, while his “social media postings display that he continues to lead a life of luxury”. They note that he was “in Rome on at least December 14th and 15th, just days after his Delaware filing where he claimed to be ‘impoverished’”.
The Schuman filings noted that the judge had “already considered multiple applications relating to [Mr Ganley’s] efforts to avoid collection”, including delayed payments and his “failure to auction or sell property” in Galway.
Mr Ganley has been hit with rising financial penalties related to the delays in paying down the judgment, and Mr Shuman’s lawyers stated in their filing that, on November 12th and December 11th, Mr Ganley had sent letters “indicating that he was not able to make the civil contempt sanction payments”.
In those letters, Mr Ganley’s representatives had explained that he was “continuing to work towards arranging funds to make this payment, but he has not yet been able to complete that process”.
Mr Shuman’s lawyers criticised Mr Ganley’s decision to initiate parallel legal proceedings in the US state of Delaware, where he claims he has been the victim of “breach of contract, fraud, civil conspiracy and unjust enrichment”. He has argued in those proceedings that Mr Shuman has been “waging battle against” him and against Rivada in order to “obtain relief by trickery and deceit”.
According to Mr Shuman’s lawyers, the Delaware case “seeks to undo the judgment” in New York and represents “yet another act in the continued pattern of efforts by the [Mr Ganley] to avoid collection”.
At the January 14th hearing, Mr Ganley will also have to show why he shouldn’t be blocked from “pursuing litigation against [Mr Shuman] regarding matters that could have been raised in defence of this case” in New York.
Comment was sought from Mr Ganley’s spokesman before publication.
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