ANGLO IRISH Bank’s former chief executive David Drumm filed yesterday for voluntary bankruptcy in the US, a move likely to have implications for legal proceedings here against him.
An action in which Anglo had sought the return of €8 million loans from Mr Drumm, now living in Cape Cod, Massachusetts, was listed for hearing before the Commercial Court on October 26th and legal sources suggested that had Mr Drumm returned here for that case various authorities may have sought to question him about a number of issues.
The High Court in Dublin was told at 3.45pm yesterday by Brian O’Moore SC, for Mr Drumm, that at 3pm Irish-time yesterday Mr Drumm had gone to the bankruptcy court in the US state of Massachusetts and filed a voluntary petition for bankruptcy which would divest him of all of his assets worldwide and vest them in the trustee in bankruptcy in the US.
This action had a number of effects and Mr Drumm’s Irish lawyers thought it necessary to bring it to the attention of the court, counsel told Mr Justice Brian McGovern.
Mr O’Moore said the action would have the logical effect of discharging Mr Drumm’s solicitors and counsel here as it seemed inevitable the US trustee may take over the defence of the proceedings and prosecution of Mr Drumm’s counterclaim in those proceedings. These events may or may not disrupt the trial of the action but that was out of Mr Drumm’s hands, counsel added.
Barry O’Donnell, for Anglo, said this was “quite an extraordinary turn of events” of which his client had only just become aware in the last few moments. His client needed to consider what had occurred in the US and wanted the matter mentioned in court early next week. When Mr O’Moore suggested that Mr Drumm had “bent over backwards” to try and compromise the proceedings here, Mr O’Donnell said it was “a bit rich” for Mr Drumm to seek to take the “high moral ground”.
The judge told the sides disputes about the rights and wrongs of the case should not be ventilated and he listed the matter for mention before Mr Justice Peter Kelly, who has been case-managing the proceedings involving Mr Drumm.
Mr Drumm, who resigned in December 2008 as chief executive of Anglo, was being pursued by Anglo for some €8 million over unpaid loans but he claimed the demand breached loan agreements and also counter-claimed his employment was not validly terminated in early 2009. He also claimed Anglo owed him €2,620,695 in salary, pension and deferred bonus payments and sought damages, including damages for “mental distress”.
Anglo had also sued Mr Drumm and his wife Lorraine to set aside Mr Drumm’s transfer of the family home at Abbington, Malahide, Co Dublin, to his wife. Anglo claimed the transfer was a fraud on creditors and it was entitled to a half-share of the property but the couple insisted it was for “taxation reasons”.
Yesterday, Mr O’Moore said there had been attempts for some time on an open basis to settle the case. In a letter from Mr Drumm’s solicitors on September 24th last, he had effectively offered all his assets , except his personal effects such as clothes and jewellery, but including his pension rights which could not have been taken from him even if he lost the court proceedings here.
Mr Drumm had also offered the half share of the Abbington property and his property in Cape Cod and Anglo had refused that on October 8th last, counsel added.
