Declan Ganley, the Irish telecoms entrepreneur, has been found in contempt of court by a judge in New York over his refusal to hand over a number of Irish assets to help settle a near $20 million (€18.3 million) debt dispute.
Mr Ganley had failed to turn over assets including several vehicles, four acres of farmland and a pub near his home near Tuam in east Galway, which he intended to reopen as the Edmund Burke pub.
In legal filings, Mr Ganley argued that he has “more than satisfied the underlying monetary judgment entered against me”, and additionally that the assets in question did not fall into the category of “personal property” under New York law, and therefore could not be subject to turnover.
However, Judge Jennifer G Schecter of the Supreme Court of New York rejected what she characterised as Ganley’s “subjective belief that he has satisfied the judgment”.
“Under these circumstances, coercive sanctions are necessary to induce compliance,” she concluded.
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Judge Schecter found Mr Ganley to be in contempt of court and imposed a daily penalty of $25,000 until he either purged his contempt or fully satisfied the judgment against him.
The judge added that if there was no resolution of the matter, Mr Ganley would have to personally appear before the court for a civil contempt hearing on January 8th, at which point she would “determine whether further coercive sanctions are necessary to induce compliance”.
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The judge’s decision is the latest element in a long-running dispute between Mr Ganley and David Shuman, a New York private equity investor, which has been litigated in courts in New York, Delaware and Texas.
The dispute centres on a personal loan of Mr Ganley’s that Mr Shuman had guaranteed. Mr Ganley defaulted on the loan, with each blaming the other in court documents for the default.
Since then, Mr Shuman has secured a debt judgment against Mr Ganley in New York, which due to interest has now risen to about $20 million, Mr Shuman has claimed in court filings.
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 AG.
There continues to be a dispute between the parties over the value of the companies, with Mr Ganley claiming they fully satisfy the judgment debt, and Mr Shuman’s lawyers arguing that the value of the companies was “nominal”.
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When contacted by The Irish Times, Mr Ganley said in a statement that Mr Shuman was trying to “collect on a debt that has already been repaid” and that the matter was being appealed by him. “I remain confident that justice will be done in the end,” he added.
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