Sunday 11 December 2016

Drumm bought six homes in the US over last 10 years

Published 18/11/2010 | 05:00

FORMER Anglo Irish Bank boss David Drumm was involved in the purchase of at least six properties in the US over the past decade, the Irish Independent has learned.

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Records reveal the former bank chief executive, who claims to be broke, made profits on a number of house sales in Massachusetts.

The disclosure comes as Anglo is seeking court approval to question Mr Drumm (44) under oath about his property dealings as part of bankruptcy proceedings in Boston.

The bank, which says it is owed €8.5m by Mr Drumm, has disputed the accuracy of financial information provided by him and is trying to uncover any undeclared assets, investments or cash deposits.

It is also seeking a court decision on whether it can force the replacement of Kathleen Dwyer, the trustee presiding over Mr Drumm's bankruptcy petition, after she claimed Anglo had behaved fraudulently in changing conditions attached to loans it gave to Mr Drumm.

Dubliner Mr Drumm began buying US property after moving to Massachusetts in the late 1990s to expand Anglo's business in the northeast of the US.

Records show a home he bought in Sudbury, on the outskirts of Boston, for around €430,000 in 1999 was sold four years later at a profit of close to €180,000.

A profit of almost €200,000 was made on a house at Watchhill Way, in Chatham on Cape Cod, which was bought for €1.3m in 2006 and sold a year later for around €1.5m.

Mr Drumm was involved in two other properties, both on Cross Street in Chatham, with a business partner.

One of those was bought for €1.9m in 2008, but was sold a year later at a loss of around €160,000. Sale records in relation to the second Cross Street house were unavailable.

Another Chatham property, a mansion on Stage Neck Road, was bought for around €3.4m in 2008, and was the family home until earlier this year.

Mr Drumm claims the house, which has a swimming pool and a private dock for a yacht, has since increased in value to €4.3m.

Even though it is not his principal residence anymore, Mr Drumm took out a declaration of homestead on the property, a US legal instrument which protects €367,000 of its value from creditors.

Buyer

The Cape Cod Five Cents Bank is owed over €850,000 in connection with the property, but Mr Drumm claims he can pay off the debt if he finds a buyer.

The sixth property Mr Drumm was involved in is his new home in old Colony Road, Wellesley, an affluent commuter town on the outskirts of Boston.

This was purchased through a trust for €1.4m earlier this year. Mr Drumm has a 50pc interest in the trust, but this cannot be touched by his creditors.

Mr Drumm resigned as Anglo chief executive and fled to the US in December 2008 following the disclosure that chairman Sean FitzPatrick had hidden up to €100m in loans from shareholders.

He filed for bankruptcy last month after talks with Anglo over the repayment of loans broke down without agreement.

While at Anglo he borrowed millions of euro from his employers to buy bank shares. But these are now worthless following Anglo's nationalisation and the bank is pressing for the sale of his assets to pay off some of the debt.

Mr Drumm has so far refused to return to Ireland to be questioned by gardai investigating irregularities at the bank and declined to comment when approached by the Irish Independent in Boston this week.

Meanwhile, Anglo was told yesterday it would have to wait up to three weeks for a decision on its application to have Ms Dwyer dropped from the case.

The decision will be crucial as it will have a huge bearing on whether Anglo can pursue the money it says it is owed.

As interim trustee, Ms Dwyer has filed a lawsuit against Anglo claiming the bank behaved fraudulently in changing the conditions attached to the loans it made to Mr Drumm so he could buy shares in the bank.

Eric Bradford, a senior trial attorney at the United States Trustee's Office for Massachusetts, said that a judge would decide on whether Ms Dwyer would be removed within the next 20 days.

If the judge sides with Anglo, it can put in place its own trustee, who may have a different opinion on the legality of the loan condition changes.

Irish Independent

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