Drumm's garda snub key to debt deal failure
And ex-Anglo chief's offer fell €4m short of bank's demand
Published 16/10/2010 | 05:00
FORMER Anglo Irish Bank chief David Drumm's unwillingness to give an assurance that he would co-operate with gardai was a key reason the bank rejected a settlement deal on his €8.5m debts.
Even though the bank and Mr Drumm were close to an agreement over the transfer of his pension, the total package he offered to settle his debts fell €4m short of what the bank would accept, the Irish Independent has also learned.
Mr Drumm has so far declined to make himself available to investigators examining key events in Anglo.
Banking and Government sources last night confirmed that recent settlement negotiations aimed at resolving Mr Drumm's €8.5m debt to Anglo included a condition that he "co-operate" with those investigations.
Probes by the gardai, the Office of the Director of Corporate Enforcement and the Banking Commission of Inquiry are ongoing.
Anglo also demanded that Mr Drumm give the bank an interest in his future earnings, to bridge the shortfall between his settlement payment and his €8.5m debts. But Mr Drumm surprised the bank by filing for bankruptcy in the US instead.
Mr Drumm cannot be extradited from the US by gardai for questioning -- such a warrant can only be granted if they press charges against him.
While Anglo's lawyers for Anglo were caught off guard by Mr Drumm's move last Thursday, it is now clear he had been planning this move for some time.
Records obtained by the Irish Independent reveal Mr Drumm obtained a 'certificate of counselling' one week previously on October 7.
The certificate, which shows that Drumm received credit advice from a government-approved organisation, is required under US law before a person can file for bankruptcy.
Court papers also filed by Mr Drumm indicate he is no longer living at his Cape Cod home in the town of Chatham, which he and his wife bought for $4.6m (€3.28m) in March 2008.
He is now giving an address at a much more modest house 160km away in Wellesley on the outskirts of Boston, which he is thought to be renting.
He was appointed as Anglo CEO in 2005 to succeed Sean FitzPatrick but resigned in December 2008 after the revelation that Mr FitzPatrick had been hiding loans of €87m at the bank from shareholders.
Lawyers for Mr Drumm had claimed that their client had "bent over backwards" to settle a long-running row over an €8.5m debt to Anglo, which has already put aside €6.7m to cover potential losses on the loans given to its former boss.
Mr Drumm's representatives said he had offered the bank all his assets, including a €5.4m pension pot, in a deal that would have seen Anglo get back €2m more than it was owed.
The address given by Mr Drumm in court documents in Wellesley, Massachusetts, is a colonial style house believed to be worth at least $1.8m.
No-one answered the door when a reporter for the Irish Independent called to the house, which Mr Drumm is believed to have rented.
The elegant house, built in 1938, has trees outside covered in Hallowe'en decorations. It is located in the town of Wellesley, in eastern Masschusetts.
Meanwhile, last night, Anglo Irish Bank Chairman Alan Dukes said Anglo "didn't think much" of Mr Drumm's offer to clear his €8.5m debts.
"We wouldn't agree that his offer was worth anything like that," he said.
And Mr Dukes said the bank will pursue Mr Drumm for as long as it can to try and recover as much of his debts as possible. "Anglo will keep acting in order to maximise the return to the bank," Mr Dukes told the Irish Independent.
Bankruptcy trustee Kathleen Dwyer was appointed yesterday by Massachusetts bankruptcy judge Frank Bailey to oversee the dispersal of Mr Drumm's assets to his creditors.
Mr Drumm will next come face to face with Anglo representatives in a Boston courthouse on November 16, when a creditors meeting is scheduled to take place.