Judge grants order to aid US in Drumm bankruptcy
Published 14/12/2010 | 05:00
A HIGH Court judge has granted an order to assist a US official administering the bankruptcy proceedings of former Anglo Irish Bank CEO David Drumm.
Ms Justice Elizabeth Dunne said it is in the interests of his creditors for the Irish courts to assist Kathleen P Dwyer in her administration of Mr Drumm's US bankruptcy proceedings.
Ms Justice Dunne yesterday granted the application for the "order in aid" sought by Ms Dwyer, the trustee administering the bankruptcy of Mr Drumm since he, in a surprise move, filed for voluntary bankruptcy in the US last October.
That move cast in doubt what was to happen to proceedings brought against Mr Drumm in Ireland, fixed for hearing just days after he filed for bankruptcy, in which Anglo sought repayment of loans of some €8m.
Anglo had also sued Mr Drumm and his wife Lorraine in the Commercial Court here over the transfer by Mr Drumm of his interest in the couple's former family home at Abington, Malahide, Co Dublin, into the sole name of Mrs Drumm. Anglo claimed that transaction was a fraud on creditors while the Drumms insisted it was for taxation reasons.
Mrs Drumm recently gave an undertaking to set aside the transfer into her name which would mean the Abington property, said to have a value of some €1.2m, would again become part of Mr Drumm's estate and could be sold for the benefit of his creditors.
In her judgment yesterday, Ms Justice Dunne noted the trustee, in seeking an order in aid, could not rely on the provisions of the Bankruptcy Act 1988 as the Irish government had not made any order applying the relevant order in aid provisions of that act to the US or other countries with which Ireland has many links.
The judge accepted arguments by Bernard Dunleavy, for the trustee, that there was an equivalence between the bankruptcy code in the US and Ireland. The judge noted universality of bankruptcy has long been an aspiration, if not always fully achieved, of UK law.
With increasing world trade and globalisation, many other countries have come round to the same view, she observed.
Issues relating to what is to happen to the Commercial Court proceedings against the Drumms in the Irish courts will be dealt with today by Mr Justice Peter Kelly.
Mr Drumm, who resigned in December 2008 as Anglo CEO, is being pursued by Anglo for €8m over unpaid loans but he denies liability and has counter-claimed for some €2.6m in salary, pension and deferred bonus payments.