Cowen urges former Anglo chief to return to Ireland

Taoiseach Brian Cowen and Minister for Health Mary Harney today urged former Anglo Irish Bank chief executive David Drumm to …

Taoiseach Brian Cowen and Minister for Health Mary Harney today urged former Anglo Irish Bank chief executive David Drumm to return to Ireland to address his legal issues with the bank.

The High Court in Dublin was told yesterday that Mr Drumm, who lives in Cape Cod,

Massachusetts, has filed for bankruptcy in the United States. The move came after the State-owned bank rejected his proposal to settle its legal action over loans of €8.5 million.

Speaking in Dublin today, Ms Harney said the banks have the responsibility to pursue everybody who owes them money to minimise the exposure to the taxpayer.

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"The Government are very anxious the banks pursue those that owe them money so that the taxpayers are protected, and I would expect the banks to do that, even in this situation,” the Minister said.

“There already is a lot of public anger with what happened in our banking sector, reckless lending, irresponsible lending, which has caused major, major problems for this country. I believe and the Government believes that everybody who was responsible for that needs to be pursued.”

Asked if she wanted Mr Drumm to return to Ireland she said: “Yes, I would love that to be the case, yes.”

Speaking to reporters in Monaghan, Taoiseach Brian Cowen was asked if he supported Ms Harney’s call.

“That is what I think everyone would like to see happen,” he said. “One would hope that that would happen because it is such an important issue and in terms of the public confidence people would like to see that happen."

Labour finance spokeswoman Joan Burton said Mr Drumm’s actions will “add insult to injury” to Irish taxpayers.

Mr Drumm applied for bankruptcy in a Boston court in Massachusetts near his US home at 3pm Irish time yesterday in advance of Anglo’s case starting on October 26th.

Lawyers for Mr Drumm told the commercial division of the High Court in Dublin a short time later that Anglo had last Friday rejected a final settlement offer he had proposed on September 24th.

He had offered to hand over all assets to Anglo excluding personal effects such as clothes and jewellery, his lawyers said.

Anglo’s counsel told the Dublin court the US bankruptcy application was “quite an extraordinary turn of events” and that the bank had only just become aware of it.

Lawyers for Mr Drumm said he had “bent over backwards” to reach a settlement of the action. Counsel for Anglo said that it was “a bit rich” for Mr Drumm to seek to take the “high moral ground”.

It is understood that Mr Drumm claims that he proposed handing over assets to Anglo valued at €10.8 million to settle the action.

The 44-year-old former bank chief had offered to put up his €5.4 million pension, under which he is entitled to annual payments of €271,000 from the age of 55.

The assets on offer included half the proceeds – estimated at €1 million – from the sale of a house at Abington in Malahide, Co Dublin, and the transfer of another property in Cape Cod, Massachusetts.

He also offered to hand over €200,000 covering his half-share of a property in Boston that his wife bought from her own funds.

His lawyers had claimed in their September 24th settlement offer he was “frustrated with the un-commercial stance being adopted by the bank in relation to his proposals”.

Following his application, Mr Drumm may retain his €5.4 million pension and could emerge from bankruptcy within a much shorter period than in Ireland. An official appointed by the US court will now liquidate all his assets through forced sales in a move that may result in Anglo recovering a lower amount.

Under the shareholder agreement with the State-owned bank, Minister for Finance Brian Lenihan has control over the bank’s dealings on the loans with former directors.

It is understood the Minister instructed the bank to take whatever action necessary to secure full repayment of the debts. Anglo’s lawyers claimed in correspondence last July the Minister was aware of Mr Drumm’s attempts to settle.