Costs awarded to Anglo in Drumm home-transfer action

 

ANGLO IRISH Bank has secured costs orders against Lorraine Drumm, wife of its former chief executive David Drumm, arising from the effective settlement of proceedings against her over the transfer of the Drumms’ former family home in Malahide, Co Dublin, into her sole ownership.

The costs orders were made by Mr Justice Peter Kelly at the Commercial Court yesterday on the application of Paul Sreenan, for Anglo, with the consent of Gary McCarthy, for Mrs Drumm, who is living in the US with her husband and family. The judge also placed a stay on the orders for seven days.

Mr Drumm filed for voluntary bankruptcy in the US last month and the effect of that move has been to impose a worldwide stay on legal proceedings against him. The High Court here has reserved its decision on whether to recognise the US proceedings via an “order in aid”.

Mr Sreenan asked, pending the outcome of the court decision, to continue for another two weeks an injunction granted to the bank last month restraining Mrs Drumm from certain dealings in relation to the former Malahide family home. The judge did so.

In the circumstances, the judge also again deferred decisions on whether and how the action by Anglo against Mr Drumm over unpaid loans of some €8 million may proceed in the Irish courts.

The bank, in its proceedings against the Drumms over the house transfer, had claimed the May 2009 move was “a fraud on creditors” of Mr Drumm while the couple insisted it was for “taxation reasons”.

Despite Mrs Drumm’s agreement last month to retransfer, a final order setting aside the May 2009 transfer cannot yet be made because of Mr Drumm’s action in filing for bankruptcy as he is also a party to the transfer arrangement.

The US Trustee in Bankruptcy is now involved by virtue of all Mr Drumm’s assets worldwide being vested in the trustee and all legal actions involving Mr Drumm are stayed.

Mrs Drumm’s consent to retransfer effectively ended proceedings by Anglo here against her although the bank’s cases against her husband remain outstanding.

Mr Drumm, who resigned in December 2008 as Anglo chief executive, is being separately 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. He also wants damages, including for “mental distress”.