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Monday 5 December 2016

Former Anglo boss David Drumm seeks to have bankruptcy discharged in US

Published 12/01/2012 | 08:04

David Drumm. Photo: Frank McGrath
David Drumm. Photo: Frank McGrath

FORMER Anglo Irish Bank chief David Drumm is today seeking to get a bankruptcy discharge in the USA by claiming that the court official appointed to his case has made an error.

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Trustee Kathleen Dwyer made a key filing 51 minutes late and Mr Drumm is arguing that this means her case against him should fail.



A bankruptcy discharge would mean that Mr Drumm could walk away from what he cannot pay and begin his business life in the US again.



Ms Dwyer is objecting and claims Mr Drumm was deceitful in his dealings with the court. A judge will decide in Boston later today.



Mr Drumm filed for bankruptcy in Boston in October 2010 after moving to the US. It came after he failed to reach a settlement with Anglo Irish Bank over loans of €8.5m.



His bankrupt estate is being managed by Ms Dwyer and as part of her recovery of assets, the bankruptcy trustee wants to break up a legal "trust" that owns a $2m house, Wellesley, in Massachusetts.



Until recently, it was home to the Drumms. Ms Dwyer wants the house sold and any cash raised to go towards settling Mr Drumm's debts.



In September, the trustee took a case against Mr Drumm, his wife Lorraine and the manager of the trust, Anne Marie Greenberg, in an effort to have the trust dissolved.



Mrs Drumm is a beneficiary of the trust known as Epiphany. In her court papers, she said she has sought to work with the trustee and has put the property up for sale, and she said she was seeking to protect her property rights.



Ms Dwyer claims cash from the house should be used to help pay off Mr Drumm's debts, because she alleges that the property was bought using money that only made its way to the trust through fraudulent asset transfers from Mr Drumm in the first place.



Back in August, Ms Dwyer filed a lawsuit against Mr Drumm that could block him from exiting bankruptcy. She said Mr Drumm failed to disclose numerous property and financial transactions involving his wife when he entered the US Chapter 7 bankruptcy process.



The Drumms deny those allegations and Mrs Drumm has asked for a chance to defend the trust in court.



'Sham'



In papers just filed with the Boston court, the trustee said she was opposed to that request.



"This position is frivolous given that the trust is a 'sham' trust," according to the document lodged with the court.



Mrs Drumm has been in discussions to sell this house.



Separate documents filed with the Boston court also show that Ms Dwyer has hired an expert to estimate the value of fixtures and fittings at the house.



Mr Drumm has denied a series of allegations levelled against him since the bankruptcy case began, from both the bankruptcy trustee and from Anglo.



If the allegations against him are proved, it could block Mr Drumm from exiting his bankruptcy with a clean slate -- giving Anglo a second chance to try to recover money owed.



A Boston judge will decide on the issues at a trial.

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