Drumm blames lawyers for failure to disclose asset transfers

Former Anglo CEO files appeal submission in bankruptcy case

Former Anglo Irish chief executive David Drumm has blamed his lawyers for his failure to disclose to a court the fact he had transferred cash and property to his wife.

Mr Drumm is appealing the decision of a US judge to deny him the opportunity under American bankruptcy law to walk away from €10.5 million in debts, the majority of which is owed to the State-owned Irish Bank Resolution Corporation (IBRC).

His allegation against his former counsel forms a major part of his appeal to overturn a ruling blocking a write-off of his debts.

In January, US bankruptcy judge Frank Bailey denied the former Anglo boss a discharge from bankruptcy that would have allowed him to avoid repaying his debts.


In a damning 122-page ruling against Mr Drumm, the judge said Mr Drumm was “not remotely credible;” his conduct was “knowing and fraudulent,” and his statements to the Boston bankruptcy court were “replete with knowingly false statements, failures to disclose, efforts to misdirect and outright lies.”

However, in a 57-page appeal submission filed to the Massachusetts District Court late on Wednesday, Mr Drumm said many of the court's findings were "clearly erroneous".

Through his new lawyer Tracey Miner, Mr Drumm said the court blamed him for not declaring the fact he had transferred cash and property to his wife when he had followed the advice of his then counsel.

Ms Miner replaced the two Massachusetts lawyers who led the failed defence of the action taken by the bank and Mr Drumm’s bankruptcy trustee who sought to make him liable for his debts.

The new submission says it was undisputed that Mr Drumm made transfers of cash to his wife and that he told his lawyers and accountants about them.

“As the record overwhelmingly demonstrates that Mr Drumm consistently made full disclosures to his counsel and consistently followed their advice as to how, when and where to make the disclosures in his bankruptcy case, the Bankruptcy Court’s denials of discharge should be reversed,” the submission said.

“Even accepting the Bankruptcy Court’s findings that disclosures were omitted and wrongly characterised on Mr Drumm’s bankruptcy schedules... there is no dispute that all disclosures were made through respected, qualified bankruptcy counsel and on their advice. Indeed, counsel testified at trial and acknowledged their responsibility for the decisions at issue, virtually admitting malpractice.”

“It is clear that many of the key findings on which it (the court) based its decision to deny Mr. Drumm a discharge are inconsistent with and contrary to the evidence and therefore are clearly erroneous,” the submission said.

Mr Drumm is facing financial ruin on the basis of the January judgment. Lawyers for IBRC have a month to reply to the statements of appeal.

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist