Declan Ganley has alleged that he has suffered “significant harm — personal, financial, and reputational”, from a bitter legal dispute with one of the shareholders in his telecommunications company, Rivada Networks.
He claims he has been the victim of “breach of contract, fraud, civil conspiracy, and unjust enrichment” as part of a complex personal loan deal he executed in 2017.
The claims were made in a lawsuit filed this month in the US state of Delaware against David Shuman, a private equity investor in New York.
The lawsuit is the latest development in a long and increasingly bitter dispute between Ganley and Shuman stemming from a 2017 loan agreement with a third-party lender, Worth Capital.
Ganley had borrowed money from Worth Capital, in which he put up the shares as collateral, on which Shuman also agreed to serve as guarantor.
The loan was defaulted on, and Shuman took control of both the debt and the shares amid a welter of litigation in New York, Texas and Delaware.
Ganley claims that Shuman took control of the shares as part of “a scheme to defraud Mr Ganley concerning an agreement made between Mr Ganley and Mr Shuman that involved the return of Mr. Ganley’s shares of Rivada”.
Ganley is seeking “compensatory damages ... in an amount to be proven at trial, in the tens of millions of dollars”, as well as punitive damages, legal fees, and any further relief that “the court deems just and equitable”.
Ganley’s legal filings state that he has suffered “significant monetary harm” arising out of a “wrongfully obtained” default debt judgment issued by a court in New York, which stands at more than $21 million (€20 million).
He also says that he has been “impoverished” by the loss of 134,779 shares in Rivada, which he had put up as collateral in the loan.
The legal dispute has cost him “significant legal fees associated with the multijurisdictional litigation battles”, as well as “reputational harm to both Mr. Ganley and his business interests in the U.S. and abroad,” the filings state.
Ganley insists that the original debt was repaid in August 2020 by way of fresh funds raised from investors and that “Shuman is attempting to double — or triple — recover”.
He also claims that Shuman’s registering of a default debt judgment in New York — which Ganley has appealed and which the court has upheld — was “wrongfully obtained”.
He claims that Shuman has been since then “waging battle against” him and against Rivada in order to “obtain relief by trickery and deceit”.
He alleges that Shuman’s “goal was to acquire property he could hold as ransom to attempt to extort Mr. Ganley” and that he should have the shares returned to him.
He claims Shuman has “vigorously pursued his collection” of the debt, including attempts to “force the sale of Mr. Ganley’s real property located in Ireland, and to seek the turnover of personal property in Ireland and the United States.”
As part of that case in New York, Ganley has been found in contempt of court by a judge, who recently wrote in a judgment that he had impaired Mr Shuman’s “rights to obtain funds to partially satisfy the judgment as ordered and stipulated”.
When contacted by The Irish Times, Shuman’s lawyer, Richard Schoenstein of Tarter Krinsky and Drogin said: “The New York judgment against Mr Ganley is now worth over $21 million and remains unpaid. Mr Ganley is behind on court-ordered payments but somehow manages to have lawyers file new claims rehashing his tired allegations.”
He said that Shuman had “prevailed in every court thus far, in New York, Delaware, and Texas, in both trial and appellate courts”.
He also said, in relation to the shares, that there was “a separate Delaware case pending for more than a year, and Ganley has failed to produce any documents that support his allegations”.
“We defy Ganley to produce documents supporting his allegations. They do not exist, and my clients will continue to prevail in the courts,” he said.
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