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Monday 15 September 2014

Drumm wife wanted own money because she 'feared he would die'

Donal O'Donovan in Boston

Published 29/05/2014 | 02:30

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The wife of former Anglo Irish Bank boss David Drumm needed her own money because she feared he could "drop dead from a heart attack" at the height of the banking crisis.

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Lorraine Drumm told a US court that her husband transferred close to €1m to her "because I asked him".

In September 2008, when she opened a bank account in her own name for the first time since she getting married 17 years before, Mr Drumm was working long hours at the bank, she said.

"The marriage was going through a really tough time, the world was going through a really hard time," she said at a bankruptcy hearing.

"I didn't know at that time if our marriage would survive. I didn't know if he was going to drop dead of a heart attack. For the first time I could see a future without him," she said.

She did not want money in her own name to keep it away from Mr Drumm's creditors, she said.

"My reason for wanting money was not about what was going on in the world, it was about what was going under my own roof," she told the court.

Lorraine and David Drumm leaving the Boston courthouse.
Lorraine Drumm leaves a US Courthouse during a break on the day she testiied in the bacruptcy trial of her husband, former Anglo Irish Bank chief executive David Drumm for what may be the final  day of Drumm's US bankruptcy court trial. Josh Reynolds for The Independant (O'Donovan,  freelance )
Lorraine Drumm leaves a US Courthouse during a break on the day she testiied in the bacruptcy trial of her husband, former Anglo Irish Bank chief executive David Drumm for what may be the final day of Drumm's US bankruptcy court trial. Josh Reynolds for The Independant (O'Donovan, freelance )
Francis Morrissey, lawyers for former Anglo Irish Bank chief executive David Drumm walks  to what may be the final  day of Drumm's US bankruptcy court trial. Josh Reynolds for The Independant (O'Donovan,  freelance )
Francis Morrissey, lawyers for former Anglo Irish Bank chief executive David Drumm walks to what may be the final day of Drumm's US bankruptcy court trial. Josh Reynolds for The Independant (O'Donovan, freelance )

Cash was transferred to Mrs Drumm from her husband's bank accounts and from their joint accounts because she wanted to be financially secure for herself and her daughters, she said.

"I wanted to control my own money," she said.

Earlier the court heard from a property lawyer who said Mrs Drumm kept saying "it's my money" when he was helping the couple deal with the purchase of a $2m (€1.47m) house in the US.

The court was shown emails suggesting that Mr Drumm had told his adviser not to include deals about his share in the house in his 2010 bankruptcy papers.

Mr Drumm asked his former lawyer to replace a reference to cars, including a Mercedes surrendered at the start of the bankruptcy, replacing the luxury brand name it with more generic terms.

"Can you leave it as sedan and SUV, if the trustee doesn't care, the media can go fish," he said.

Mr Drumm also asked in an October 28, 2010 email for a reference to $34,200 of school fees paid for the 2010/2011 year to be removed from the paper work, because they had been paid by his business, not by himself individually.

The former bank chief said in an email to his advisers that transactions involved in the purchase of the Drumm family's US home in the Boston suburb of Wellesely were not to be included on a list of transfers of property made in the two years before he filed for a Chapter 7 bankruptcy, claiming they were not transfers.

Property lawyer Peter-Paul Covo, who worked on the house deal, said he structured a Separate Property Agreement – a contract between the couple which put her ahead of him to be repaid if the house was ever sold – because he was told Lorraine Drumm's money was used for the purchase.

Transfer

She (Lorraine Drumm) kept saying, "It's my money, it's my money it's my money," he said.

Under cross-examination from lawyer Ken Leonetti, for Bankruptcy Trustee Kathleen Dwyer, Mrs Drumm said: "The simple answer was it was almost all of my money, my nest egg for my girls, it was almost cleaning out my bank accounts."

Mr Drumm's requests to exclude some details of his personal arrangements from bankruptcy documents were made in emails to his former lawyer, Heather Zelevinsky, who helped prepare the paperwork filed on October 29, 2010 and shown to the court in Boston yesterday.

The court also saw details of a transfer of €250,000 made Mrs Drumm to her husband so that he could start a US business and so that an immigrant visa was not "memorialised" with documentation. There were no terms such as a repayment date, but it was a "loan", not a gift, she said.

"Because it was coming out of my bank account and I wanted it back," she said.

Mr Drumm and his wife arrived at court together for the final day of a case to decide whether the former bank boss can emerge debt-free from his US bankruptcy.

Bankruptcy trustee Kathleen Dwyer and IBRC, the former Anglo Irish Bank, are trying to block the former Anglo Irish Bank chief executive's discharge from bankruptcy in the US.

They claim that a failure to document the transfers in his original 2010 bankruptcy filing was an attempt to defraud his creditors, including the bank.

In a surprise return to the witness stand last night, Mr Drumm said one of the controversial transfers to Lorraine Drumm in August 2009 that is disputed by the Bankruptcy Trustee and by IBRC had originated in an account of Mrs Drumm's alone.

Mr Drumm was the last witness to give evidence. Final arguments from lawyers for both sides had been due to be heard last night.

However, because the case ran later than expected, that will happen on June 4.

At the end of last night's session Judge Frank Bailey congratulated all sides on a well-argued case.

Irish Independent

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