Ken Drumm ordered to repay €167,843 to IBRC
Issues arose over default on loans and on hire purchase agreements related to cars
Connaught House, the Burlington Road headquarters of the Irish Bank Resolution Corporation. IBRC had sought judgment for some €234,000 over Ken Drumm’s failure to meet repayments on separate loan and hire purchase agreements. Photograph: Alan Betson
A brother of former Anglo Irish Bank chief executive David Drumm has been ordered to repay €167,843 to the bank, now IBRC, over default on loans and on hire purchase agreements related to vehicles including a 2005 BMWx5 car and a Mercedes.
However, a dispute over Ken Drumm’s liability for another sum of €51,733, arising from a loan for €50,000 made in 2008 and used to buy shares in Anglo, was sent to a full hearing after Mr Justice Daniel Herbert ruled he had an arguable defence on grounds Anglo, despite having “total control” over its share price, stood by while the shares fell to a zero value.
It was arguable, in choosing the time of sale of shares, that a mortgagee must exercise a reasonable duty of care, the judge said.
Mr Drumm had also raised an arguable defence as to IBRC’s entitlement to charge “penalty” interest on some of the sums outstanding, he found. Mr Drumm had no arguable defence to repayment of other sums totalling some €167,843.
IBRC, now in special liquidation, had sought judgment for some €234,000 over Mr Drumm’s failure to meet repayments on separate loan and hire purchase agreements he or his former company entered into with Anglo between 2006 and 2008.
One of the agreements, of January 2006, related to the hire purchase of a BMW car for Mr Drumm’s company, Shrewsbury Developments Ltd, which has since been struck off the Companies Register. Mr Drumm signed an indemnity making him personally liable for the debt which amounted to €91,190 when it fell into arrears in January 2010, IBRC claimed.
He used €50,000 from another loan to buy €75,000 in Anglo shares and IBRC alleged he was personally liable for that debt. He claimed Anglo officials told him there would be no personal recourse to him because security for the loan was in the shares themselves which Anglo retained control over in a nominee account.
IBRC argued there was no basis for Mr Drumm’s claims of interest overcharging and also argued the share-purchase loan was never a non-personal recourse loan and he was always meant to be liable regardless of what happened to the value of the shares.
Mr Drumm represented himself in the hearing but was not in court yesterday for the judgment. Jarlath Ryan said he was attending only for the purpose of taking judgment on behalf of Mr Drumm.