Business Irish

Wednesday 7 December 2016

Drumm trial to proceed as bankruptcy bid thrown out

Brendan Lynch In Boston

Published 13/01/2012 | 05:00

Former Anglo Irish Bank chief David Drumm. Photo: Frank McGrath
Former Anglo Irish Bank chief David Drumm. Photo: Frank McGrath
Kathleen Dywer, who accused Drumm of being 'deceitful'

FORMER Anglo Irish Bank chief executive David Drumm has failed in a US court bid to get a bankruptcy discharge, which would have allowed him to walk away from debts and get a fresh financial start.

  • Go To

Lawyers representing the disgraced banker attempted to have a case blocking his bankruptcy thrown out on a technicality.

However, a Boston judge ruled that the case could proceed, with a full trial now likely to take place in the summer.

Mr Drumm, who has been living with his family in Massachusetts since quitting the failed bank in December 2008, owes creditors more than €10.2m.

He filed for bankruptcy in 2010 after claiming he was unable to repay €8.5m in loans he took from his former employers.

However, efforts to get bankruptcy protection have not run smoothly, with the court official overseeing his case refusing to allow him to be discharged as a bankrupt.

The official, Kathleen Dwyer, filed a lawsuit against Mr Drumm to prevent his discharge, accusing him of being deceitful and fraudulently failing to disclose details of cash and property assets.

Mr Drumm's legal team sought to have Ms Dwyer's case thrown out of court yesterday, claiming she had missed a deadline to file documents on the case by 51 minutes.

However, at a hearing yesterday morning, Judge Frank Bailey rejected Mr Drumm's argument.

"She could reasonably have believed she had more time," said Judge Bailey.

Mr Drumm's lawyers had argued that since Ms Dwyer didn't have her objection submitted to the clerk of courts by 4.30pm, the time the court building closed on August 31 last year, the case against him should be dismissed.

Mr Drumm's lawyers argued such deadlines were important to keep debtors from being prejudiced against, and from being blindsided.

However, Judge Bailey said Ms Dwyer could reasonably have expected to submit the filing later that day.

Neither Mr Drumm nor Ms Dwyer attended yesterday's hearing.

Anglo, now know as the Irish Bank Resolution Corporation (IBRC), has launched a similar lawsuit to the one lodged by Ms Dwyer.

Its lawyers have claimed Mr Drumm transferred large sums of money to his wife, Lorraine.

The allegation has been denied by Mr and Mrs Drumm.

A lawyer acting for Mr Drumm yesterday characterised the pursuit of him by the IBRC as "a David and Goliath battle", claiming it was spending $2,000 (€1,500) an hour on US legal representatives.

Gardai are continuing to seek Mr Drumm's assistance in relation to inquiries into huge irregularities during his tenure at the bank. However, he has refused to return home for questioning.

Ms Dwyer has forced Mr Drumm to sell a €2.8m home on Cape Cod to help clear some of his debts. She also recently hired a real estate firm to sell the Drumms' €2m Malahide home.

Moves are being made to sell the property where Mr Drumm now lives, a €1.5m house in the upmarket Boston suburb of Wellesley.

What happens to the proceeds from this sale is likely to be decided in the courts as Mrs Drumm claims she is entitled to half of any potential amount.

Irish Independent

Read More

Promoted articles

Editors Choice

Also in Business