Tuesday 6 December 2016

Drumm's two-month default on credit card

Shane Phelan Investigative Correspondent

Published 10/11/2010 | 05:00

FORMER Anglo Irish Bank chief executive David Drumm defaulted on credit card debt just two-and-half months after opening a new account.

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US court filings show Mr Drumm, who earned €2.6m in 2008, failed to pay a $2,821 (€2,028) bill on a card he had received just 10 weeks beforehand.

The documents reveal that Mr Drumm applied to Discovery Bank for the credit card on August 1 -- at a time when he knew he may have to declare himself bankrupt.

The former bank executive subsequently filed for bankruptcy on October 14, owing creditors €10.26m while holding assets worth €9.99m.

It is unclear from documents filed whether Mr Drumm informed Discover Bank of his financial situation when he applied for the credit card.

Details of the application emerged after Discover Bank became the first of Mr Drumm's creditors to file documentary proof of how much it is owed.

Discover is one of four banks owed money by Mr Drumm from unpaid credit card bills. The total credit card debt is €35,000.

The rest of his creditors have until January 24 to provide documents proving the amounts they are owed.

In the meantime, Mr Drumm (44) is set to come face to face with his creditors next week when a meeting is convened at a Boston courthouse.

He had been negotiating with his main creditor Anglo about the repayment of €8.5m, but failed to reach an agreement. Most of the loans were issued so he could buy shares in the bank. Those shares are now worthless after the bank was nationalised.

Mr Drumm moved to the US in December 2008 after resigning from Anglo following revelations that the bank's then chairman Sean FitzPatrick had hidden loans of €87m from shareholders.

Mr FitzPatrick was declared bankrupt earlier this year and has also been questioned as part of a garda inquiry into major irregularities at the bank.

Gardai are also anxious to speak to Mr Drumm as part of the investigation. However, he has so far refused to return home to assist the inquiry.

Consultancy

He is currently living in a $2m (€1.4m) house in Wellesley, near Boston, and has set up a financial consultancy business, from which he says he earns $9,000 (€6,500) a month.

His new home is protected from creditors as its ownership, although half controlled by him, is vested in a trust.

A bankruptcy trustee will seek to sell off Mr Drumm's half share in mansions in Cape Cod and Malahide, Co Dublin, in a bid to repay creditors.

Despite the collapse in property prices in the US, Mr Drumm claims the house in Cape Cod is now worth more than when he and his wife Lorraine bought it two years ago.

Irish Independent

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