David Drumm’s €1m liability to US bank repaid in full

Lender withdraws claims after proceeds from Cape Cod house sale used to repay debts

A Massachusetts bank has notified a US bankruptcy court that debts owed by former Anglo Irish Bank chief executive David Drumm totalling just over €1 million have been repaid in full.

The Cape Cod Five Cents Savings Bank was listed in his 2010 bankruptcy filings as being owed $965,000 (€835,000) on a mortgage on Mr Drumm's house at Stage Neck Road in the town of Chatham in Cape Cod, a resort south of Boston, and a further $200,000 secured on the seaside property. He valued the house at $2.95 million at the time.

The bank notified the Massachusetts Bankruptcy Court in filings that it was withdrawing its claims against Mr Drumm’s bankruptcy estate following the repayment of the debts.

Mr Drumm (48) bought the Stage Neck Road property in 2008 for $4.6 million. The house was sold for $3.88 million in 2011 pursuant to an agreement between Mr Drumm’s bankruptcy trustee and his wife.

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Under the agreement Lorraine Drumm paid almost €1 million to her husband's trustee in settlement of any claims against her arising from fraudulent transfers of assets from the former banker to his spouse.

Drumm appeal

The repayment of the US bank's claims leaves the vast majority of Mr Drumm's debts due to Anglo Irish Bank, now called Irish Bank Resolution Corporation. The bank is owed about €8.5 million.

Mr Drumm is appealing the ruling of a US judge earlier this month to deny him the chance to walk away with a fresh financial start through a declaration of bankruptcy and a discharge from his debts.

Judge Frank Bailey ruled earlier this month following a six-day trial last summer that Mr Drumm was "not remotely credible" and that his conduct was "knowing and fraudulent".

The judge found 30 reasonable objections to deny him a discharge of his debts after he was found to have systemically transferred more than €1 million in cash and property to his wife to defraud his creditors.

Mr Drumm moved to the US in 2009, six months after resigning as chief executive of Anglo. He filed for bankruptcy in a Boston court in 2010 after failing to reach a debt settlement agreement with the bank.

Simon Carswell

Simon Carswell

Simon Carswell is The Irish Times’s Public Affairs Editor and former Washington correspondent