Bankruptcy bid came as pension deal loomed
Published 16/10/2010 | 05:00
ANGLO Irish Bank's former chief executive David Drumm filed for bankruptcy in the US as the Revenue Commissioners was about to grant approval for a deal that would see Mr Drumm's pension rights surrendered to Anglo to help pay off his debts of almost €8.5m.
Actuarial, tax and legal experts had been engaged by the bank over the summer to unlock Mr Drumm's pension. It had never been tried before in Ireland.
The proposed settlement also involved the transfer to the bank of Mr Drumm's half-share of his home in Malahide, which was the subject of a second action by the bank, and the transfer of his mansion on Cape Cod in Massachusetts.
Efforts to surrender Mr Drumm's pension to the State were plagued by difficulties relating to property rights, the fund's long-term value and tax liabilities arising from any transfer, but a proposed structure had been placed before Mr Drumm and the Revenue Commissioners.
"We (the parties) were very, very close to a deal, but the Chapter Seven filings means that all sides have lost control," said a source familiar with the planned tax arrangements.
Despite the intensive negotiations, records seen by the Irish Independent indicate that Mr Drumm was already planning his bankruptcy as Anglo awaited his approval of a last-chance settlement.
Exactly a week before Thursday's dramatic event, Drumm received a 'certificate of counselling', a document required under US law in advance of a person filing for bankruptcy
The bankruptcy bid has the potential to derail Anglo's proceedings against Mr Drumm in the Commercial Court here.
This is because the filing of the Chapter Seven "liquidation" bankruptcy has triggered a worldwide postponement on any proceedings involving him