Drumm 'clearly showed an intent to defraud', lawyer tells US bankruptcy court
FORMER Anglo Irish Bank chief David Drumm "clearly showed an intent to defraud" by failing to include a string of financial dealings in his bankruptcy filings, a lawyer working to recover more than $10m (€7.3m) in debts told a bankruptcy court.
John Hutchinson, attorney for the IBRC, formerly Anglo, said in closing arguments at the US court that Mr Drumm failed to report the transfer of more than $1m to his wife, obscured his ownership of a $2m home, and deliberately underestimated the value of $500,000 worth of furniture purchased for a summer home on Cape Cod and his family's home outside Boston.
He also failed to include the sale of two cars valued at $120,000 in his bankruptcy filing, he told the court.
Mr Drumm blamed those errors on his bankruptcy advisors, Mr Hutchinson said.
"He would have you believe he didn't know what (bankruptcy) debtors are required to know," the lawyer said.
But he pointed out that at the time, Mr Drumm had 16 years' experience as a banker and consultant on real estate, mergers and acquisitions.
However Mr Drumm's attorney, David Mack, called the case against his client "nothing but a witch hunt".
He said Mr Drumm included all of the money transfers to his wife in a draft filing, but those figures never made it to the final bankruptcy paperwork, even though they were reviewed by a team of bankruptcy advisors he hired.
"There is no evidence – none – to suggest that Mr Drumm recognised these errors and omissions," said Mr Mack. He added that a lawyer and accountant who were advising Mr Drumm were aware of the transfers, but also didn't notice they weren't included in the final bankruptcy filing.
Also omitted from that filing was the purchase of a $2m home outside of Boston, which Mr Drumm transferred into his wife's name the same day the couple purchased the property.
"It was a perfect storm," Mr Mack said of the omissions. "Three individuals perceived things differently."
It was the final day of Mr Drumm's bankruptcy hearing at the David W McCormack Federal courthouse in Boston's financial district.
The bulk of the case took place in May where Mr Drumm and his wife were among those giving evidence about their financial affairs over the course of five days.
The case is to decide whether the former bank boss can emerge debt-free from a Chapter Seven bankruptcy he filed for in 2010 after he had moved to the US.
Mr Drumm's wife, Lorraine, testified last week that the money transfers came at a time when her marriage was falling apart and were meant to secure the future for herself and her two daughters.
Mr Drumm later used $250,000 of that money, which he characterised as a "loan", to start a business that allowed him to gain residency status in the US for himself and his family.
Mr Drumm also claimed he loaned her tens of thousands more during the two years before claiming bankruptcy.
US Bankruptcy Court Judge Frank J Bailey will study the more than 200 exhibits in the case before making a decision within the next few months whether to release Mr Drumm from his bankruptcy claim.