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Tuesday 2 September 2014

David Drumm’s former legal adviser treated as hostile witness in US bankruptcy case

Donal O'Donovan

Published 23/05/2014 | 16:43

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David Drumm's former legal adviser can be treated as a "hostile witness", a US court ruled today on day three of the former bank chief's US bankruptcy hearings.

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Attorney Stewart Grossman has been called as the second witness in the former Anglo Irish Bank chief executive's Boston bankruptcy case.

The case is to decide whether Mr Drumm can emerge debt free from bankruptcy after IBRC, the former Anglo Irish Bank, and bankruptcy trustee Kathleen Dwyer have objected to his Chapter 7 discharge. They claim omissions from his initial bankruptcy papers, in particular in relation to cash transfers of $1.2m made to his wife Lorraine Drumm make him ineligible for the fresh start available under the American system.

Mr Grossman's firm Looney Grossman acted as a legal advisers to Mr Drumm during the early stages of his application for a Chapter 7 bankruptcy in the US.

Today the court was shown emails between David Drumm and Mr Grossman dating to the start of January 2011 "Have you put any thought into where the landmines are buried at Wednesday's 3417 (a meeting that is part of a bankruptcy process)? I need help preparing for it," Mr Drumm asked.

In response, Mr Grossman said the "Lorraine transfers are the only major concern of mine."

John Hutchinson, acting for IBRC, said the exchange indicated that Mr Grossman was at the time unaware that forms filed by David Drumm in October 2010 did not include the transfers, because he anticipated the information being an issue.

Mr Grossman is giving evidence the case at the David W McCormack Federal court house in Boston’s financial district.

The court said John Hutchinson could treated Mr Grossman as a "hostile witness" meaning he has greater leeway to ask leading questions. That was  because he was a previous adviser to David Drumm and because the court was told Mr Grossman met lawyers for Drumm earlier in the day, before taking the stand.

Mr Drumm was the first witness called in the case, where he was questioned about two documents he filed after applying for bankruptcy known as a  Statement of Financial Affairs (SOFA) 10, and a Schedule of Assets.

John Hutchinson, lawyer for IBRC, arrives at the courthouse in Boston where former Anglo Irish Bank chief David Drumm's trial is ongoing. (Photo by Bizuayehu Tesfaye/ Irish Independent)
John Hutchinson, lawyer for IBRC, arrives at the courthouse in Boston where former Anglo Irish Bank chief David Drumm's trial is ongoing. (Photo by Bizuayehu Tesfaye/ Irish Independent)
Former Anglo Irish Bank chief David Drumm kisses his wife Lorraine outside court in Boston today. (Photo by Bizuayehu Tesfaye/ Irish Independent)
Former Anglo Irish Bank chief David Drumm kisses his wife Lorraine outside court in Boston yesterday. (Photo by Bizuayehu Tesfaye/ Irish Independent)

Mr Drumm has accepted that there were omissions on the statement of financial affairs originally filed with the bankruptcy court in 2010, but says that in part was because of advice from his then lawyers.

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