Drumm arrives to testify at US bankruptcy court
Three-and-a-half years after bankruptcy filing, ex-Anglo boss will be first witness
Former Anglo Irish Bank chief executive David Drumm has arrived at a Boston court to testify before a US bankruptcy judge in a long-anticipated case to decide whether he can have a fresh financial start.
Mr Drumm (47) is appearing as the first witness in the Boston trial more than 3½ years after he filed for bankruptcy in the US with debts of more than €10 million, including €8.5 million due to his former bank. Most of this debt relates to money he borrowed to buy shares in the now defunct lender.
The State-owned bank, now called Irish Bank Resolution Corporation, and the court-appointed official overseeing his US bankruptcy, are seeking to prevent Mr Drumm’s discharge from bankruptcy and stop him walking away with a clean financial slate in a legal action he is vigorously contesting.
They claim that he hindered, delayed and defrauded creditors by transferring $1 million in cash to his wife Lorraine, mostly between September and December 2008, as Anglo was edging towards collapse.
They claim in a court submission filed on Monday itemising the list of fraud allegations that he also made false oaths in bankruptcy statements by failing to disclose these transfers to his wife, including a half-share in a $2.4 million (€1.7 million) house in Cape Cod, a seaside resort north of Boston.
According to the bank and trustee, among the items Mr Drumm failed to disclose in his original bankruptcy filings were a 50 per cent interest in a trust used to buy their family home in a Boston suburb and the sale of two cars in 2009, a Range Rover and a BMW, for a total of €56,000
Marriage strained Mr Drumm claims he transferred money to his wife in autumn 2008 because their marriage was “seriously strained” and his wife was worried given the long hours he was working at the height of the banking crisis, and she wanted money of her own in case something happened to him.
The former banker, who moved to the US in June 2009 six months after resigning from Anglo, will argue most transfers fell outside a one-year limit during which a fraudulent claim can be made against him and any transfers that took place during this one-year period in fact benefited his creditors.
Any false statements made in his bankruptcy submissions to the court were not intentional and were “honest mistakes” by him or the professionals who advised him, he will claim .
The trial before US bankruptcy judge Frank Bailey is scheduled to last five days, running into Tuesday and Wednesday of next week. The judge was told last week that Mr Drumm will be the first witness in the trial. His wife is also listed to be called as a witness.