STATE-OWNED Anglo Irish Bank has proposed to the bank’s former chief executive David Drumm that he commit to repaying loans of €8.3 million in full from future earnings in a counter-offer to settle its legal action against him.
The Commercial Court was told on Monday that the bank had rejected a series of proposals from Mr Drumm aimed at settling the action against him but had offered a counter-proposal on July 14th.
The bank is thought to be intent on securing the full amount due by Mr Drumm and is unwilling to settle the legal action against him for a sum less than the full amount outstanding to the bank.
As part of the proposal, the bank is seeking a detailed and independently verified statement of Mr Drumm’s affairs showing his assets and liabilities – a request that has predated the issuing of proceedings last November.
Counsel for Anglo told Mr Justice Peter Kelly that unless a settlement arose from the counterproposal, the hearing of the action against Mr Drumm would proceed as scheduled on October 26th.
Mr Drumm’s counsel said his client had sought clarifications on matters in the counterproposal.
Anglo’s counsel said the decision-making process in relation to the proposals involved a considerable number of parties.
The court directed that it be informed of Mr Drumm’s response to Anglo’s proposal on July 30th so a date in the court’s schedule need not be retained for a case that may be settled.
The former bank chief had offered Anglo his pension as part of his rejected settlement proposal along with the withdrawal of his claim for €2.6 million in salary, pension and deferred bonus payments, and damages for distress caused by the bank’s actions.
Mr Drumm resigned as chief executive of Anglo in December 2008 after the bank disclosed that it had concealed loans held by Anglo chairman Seán FitzPatrick at the bank over eight years.
Mr Drumm claims the bank’s loan repayment demands had breached his loan agreements and that his employment was not validly terminated in early 2009.
He has claimed that he only stepped down as chief executive in December 2008 but remained an employee of the bank after that.
He claims that he is entitled to a notice payment equal to his annual salary of €1.2 million; 12 months’ pension payments of €715,000; 12 months’ benefits of €44,000; and a deferred 2006 bonus of €661,000.
Mr Drumm is arguing that in light of his seniority and the normal practice when a chief executive’s contract of employment is ended, he is entitled to payment of “reasonable notice monies from my employer”.
He has also claimed, based on conversations he had with former senior executives at Anglo, that the bank had been instructed by the Department of Finance to take legal action over his loans “regardless of the consequences”.
