Saturday 24 June 2017

Bankruptcy official in bid to stop Drumm's wife defending $2m deal

COURTS

Donal O'Donovan

Donal O'Donovan

THE wife of former Anglo chief David Drumm could be blocked from defending a secretive $2m property deal, if the bankruptcy official running the Drumm case in the US gets her way.

Mr Drumm filed for bankruptcy in Boston in October 2010 after moving to the US. It came after he failed to reach a settlement with Anglo Irish Bank over loans of €8.5m.

His bankrupt estate is being managed by Kathleen P Dwyer, a court-appointed bankruptcy trustee.

As part of her recovery of assets, the bankruptcy trustee wants to break up a legal "trust" that owns a $2m house, Wellesley, in Massachusetts.

Until recently, it was home to the Drumms. Ms Dwyer wants the house sold and any cash raised to go towards settling Mr Drumm's debts.

In September, the trustee took a case against Mr Drumm, his wife Lorraine and the manager of the trust, Anne Marie Greenberg, in an effort to have the trust dissolved.

Mrs Drumm is a beneficiary of the trust known as Epiphany. In her court papers, she said she has sought to work with the trustee and has put the property up for sale, and she said she was seeking to protect her property rights.

Ms Dwyer claims cash from the house should be used to help pay off Mr Drumm's debts, because she alleges that the property was bought using money that only made its way to the trust through fraudulent asset transfers from Mr Drumm in the first place.

Back in August, Ms Dwyer filed a lawsuit against Mr Drumm that could block him from exiting bankruptcy. She said Mr Drumm failed to disclose numerous property and financial transactions involving his wife when he entered the US Chapter 7 bankruptcy process.

The Drumms deny those allegations and Mrs Drumm has asked for a chance to defend the trust in court.

'Sham'

In papers just filed with the Boston court, the trustee said she was opposed to that request.

"This position is frivolous given that the trust is a 'sham' trust," according to the document lodged with the court.

Mrs Drumm has been in discussions to sell this house.

Separate documents filed with the Boston court also show that Ms Dwyer has hired an expert to estimate the value of fixtures and fittings at the house.

Mr Drumm has denied a series of allegations levelled against him since the bankruptcy case began, from both the bankruptcy trustee and from Anglo.

If the allegations against him are proved, it could block Mr Drumm from exiting his bankruptcy with a clean slate -- giving Anglo a second chance to try to recover money owed.

A Boston judge will decide on the issues at a trial.

Irish Independent

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