Former Rivada investor accused of fraud
October 10, 2023
By Chris Forrester
There’s an increasingly bitter dispute between Rivada Networks founder Declan Ganley and one of his investors, David Shuman. There are lawsuits running in New York, Texas and Delaware in an increasingly damaging series of allegations.
Rivada, headed by Ganley, is building a mega-constellation of 600 high-tech satellites.
Ganley is alleging that Shuman has committed fraud. The writs centre on loans or guarantees made by Shuman’s cousin, Rusty Holzer to Ganley. The major case in Delaware concerns a $16.2 million judgement for debt against Ganley and which grew from a $4.5 million loan organised in 2016 from Holzer’s Worth Capital secured against 235,000 Rivada shares, and with the loan stated to be guaranteed by Shuman.
In Ganley’s latest counterclaim filed in a Delaware court, the Rivada founder claims that Shuman promised to repay the loan to Worth and return the shares, but instead bought the debt obligation for himself with money provided Rivada investors. (according to The court filing says that Shuman “came into possession of the Rivada stock because he duped [Ganley] into believing that they were on the same side”, and further argues that Shuman is trying to keep the shares “by trickery and deceit”, and that he is “attempting to double – or triple – recover” what he is owed.
The documents filed into the court contend that Ganley arranged for repayment of the Worth Capital loans with funds from two Rivada investors. Shuman offered to act as the middleman, according to the brief, but instead pocketed the shares and tried to collect repayment of the loan a second time after acquiring the debt from Worth Capital using the Rivada investors’ money.
Ganley, according to a report in Ireland’s Business Post newspaper, claims that “Mr Shuman came into possession of the Rivada stock because he duped Ganley into believing that they were on the same side; instead, his goal was to acquire property he could hold as ransom to attempt to extort Mr Ganley”.
Recently a New York judge ruled that Ganley must hand over a pub he owns in Ireland to Shuman. On October 6th a Sheriff’s auction took place with 20,000 shares in Rivada sold by direction of a Delaware court. The 20,000 shares represent about 1 per cent of Rivada’s privately held shares.