Bank hires two top US law firms in Drumm cash battle
Published 11/11/2010 | 05:00
ANGLO Irish Bank has retained two high-profile US law firms in its pursuit of money owed by former chief executive David Drumm, the Irish Independent has learnt.
The nationalised bank is seeking to recover as much as possible of the €8.5m owed to it by Mr Drumm (44), who has filed for bankruptcy in Massachusetts. International law firm Sidley Austin and Boston bankruptcy experts Foley Hoag have been retained to represent Anglo in the proceedings.
Bankruptcy lawyers from both firms are listed among the best in the US by the prestigious Chambers law directory.
Chicago-based lawyers from Sidley Austin applied earlier this week for clearance to work on the Drumm case in Massachusetts. Both firms are set to represent the bank at a creditors meeting being convened in Boston next week and are likely to make representations to bankruptcy trustee Kathleen Dwyer.
The bank is Mr Drumm's biggest creditor, having loaned him millions of euro to buy shares which are now worthless.
Mr Drumm has liabilities of €10.26m and claims to have a list of assets worth €9.99m.
However, the value of some of the assets could be in question and Anglo's lawyers may seek independent valuations.
Mr Drumm included on his list of assets a sum of €2.6m in unpaid salary, benefits and bonuses he says is due to him from Anglo even though the bank disputes this. He also included his pension pot of €3.7m as an asset. However, creditors would not be able to realise the full value of the pension as taxes would have to be paid when the money is drawn down. The values placed by Mr Drumm on properties he co-owns could also be subject to dispute. Despite the US property crash, Mr Drumm claims his house on Cape Cod, bought for $4.6m (€3.28m) in March 2008, has since increased in value and is now worth $5.9m (€4.2m).
Anglo would not comment on the appointment of the two law firms last night.
Mr Drumm moved to the US two years ago after resigning from the bank, following revelations that loans to former chairman Sean FitzPatrick had been hidden from shareholders.
Gardai want to interview him as part of their investigation in to major irregularities at Anglo, but he has so far refused to return home for questioning. Taoiseach Brian Cowen insisted in the Dail yesterday that there would be "no hiding place" for those being investigated.