Drumm house transfer set aside

The wife of former Anglo Irish Bank chief executive David Drumm has agreed the controversial May 2009 transfer into her sole ownership of the couple's former home in Co Dublin should be set aside.

The agreement today effectively brings to an end legal proceedings here by Anglo against Lorraine Drumm, but the bank's cases against her husband remains outstanding.

Mr Justice Peter Kelly was told at the Commercial Court today Mrs Drumm is prepared to give her "irrevocable consent" to the setting aside of the May 2009 transfer of the ownership of the property at Abington, Malahide, from the joint names of the Drumms into her sole name.

Anglo - which claimed the May 2009 transfer was "a fraud on creditors" of Mr Drumm, while the couple insisted it was for "taxation reasons" - was prepared to accept that irrevocable consent, he was also told.

However, no final order setting aside the May 2009 transfer can be made yet because matters have been complicated by Mr Drumm's action in filing for bankruptcy in the United States last week and because he is also a party to the transfer arrangement, John Hennessy SC, for Anglo, said.

As the US Trustee in Bankruptcy was now involved - by virtue of all Mr Drumm's assets worldwide being vested in the trustee - a final order setting aside the transfer could not be made now, counsel said.

Instead, Mrs Drumm was giving her irrevocable consent to the setting aside of the May 2009 transfer whenever that could be done, and Anglo was accepting that in effective settlement of its action against her, listed for next Tuesday.

Counsel also asked that an injunction granted to the bank last Tuesday that restrains Mrs Drumm from proceeding with her proposal to re-transfer the property back into the couple's joint names remain in place until Tuesday next. While casting no aspersions on Mrs Drumm, the injunction provided stronger security for the bank than an undertaking being proposed by her, counsel said.

Gary McCarthy SC, for Mrs Drumm, asked that the injunction be lifted and replaced with an undertaking to the same effect from Mrs Drumm. He said there was never any intention on the part of Mrs Drumm, in proposing last Monday that the property be put back into the joint names of herself and her husband, to put the property beyond reach of creditors of Mr Drumm, as the bank had suggested earlier this week.

Mrs Drumm had believed, if the property was put back into the couple's joint names, that would have set aside the May 2009 transfer as Anglo had sought in its action against her, he said.

Mr Justice Kelly said he would leave the injunction in place. He noted the bank's arguments the injunction had been notified to the Property Registration Authority and was on the file related to the Abington property whereas an undertaking could not be registered.

Mrs Drumm was also out of the jurisdiction and, while casting no reflection on her, there would be obvious difficulty in enforcing the order if required. An injunction was also effective against other persons with notice of its existence while an undertaking was not. In the circumstances, he would continue the injunction until Tuesday, the judge said.

The judge also asked Mr Hennessy whether there was any indication from the US trustee whether she intended to appear at next Tuesday's listing of the Anglo proceedings against Mr Drumm over unpaid loans of €8 million. Mr Hennessy said he was only aware of media reports suggesting certain steps were being taken by the trustee.

The US trustee has applied to the courts there to instruct counsel concerning the action here against Mr Drumm, which had been scheduled for hearing next Tuesday but has been put on hold pending notification to the Commercial Court of the trustee's stance on the proceedings. Mr Justice Kelly has asked that the trustee inform him next Tuesday what position she intends to adopt.

Mr Drumm, who resigned in December 2008 as chief executive of Anglo, is being pursued by the bank for €8 million over unpaid loans, but he denies liability and has counter-claimed for some €2.6 million in salary, pension and deferred bonus payments and also wants damages, including for "mental distress".

The action against Mr Drumm was due to open next Tuesday at the Commercial Court with the case against Mr and Mrs Drumm over the Abington transfer to be heard immediately afterwards. Both cases were put on hold after Mr Drumm's filing for voluntary bankruptcy in the US last Thursday.