Tuesday 23 January 2018

Taxpayer-owned IBRC to recoup just a fraction of €10.6m owed by Drumm

David Drumm
David Drumm
Shane Phelan

Shane Phelan

The former Anglo Irish Bank has been offered just €1.6m of the €10.6m owed to it by ex-chief executive David Drumm.

A bankruptcy trustee in the US, where Mr Drumm is currently fighting extradition proceedings, has revealed that several creditors, including the taxpayer-owned Irish Bank Resolution Corporation (IBRC), will get around 15pc of what they are owed.

The trustee, Kathleen Dwyer, said Mr Drumm's bankruptcy estate amounted to just $2.3m (€2.01m) following the sale of assets he owned or co-owned and a legal settlement involving his wife Lorraine.

It is unclear at this stage if any further funds can be recovered for creditors.

Court documents also reveal Lorraine Drumm received $1.64m (€1.47m) from her share of the enforced sale of personal property and two homes the couple owned in Cape Cod, Massachusetts and Malahide, Co Dublin. However, she also had to pay $1.3m (€1.16m) to the bankruptcy estate to settle a lawsuit over allegations that assets worth around €1m were fraudulently transferred to her by her husband.

In court filings, Ms Dwyer has sought approval from the US Bankruptcy Court in Boston to make dispersals to IBRC and other creditors.

Although significantly more than the $2.3m currently left in the estate has been recouped since Mr Drumm filed for bankruptcy five years ago, much of the additional cash has been eaten up by lawsuits and investigations into his affairs.

Those probes and legal actions are expected to cost up to $1.4m (€1.28m) when all fees charged by the trustee, lawyers and a forensic accountant are paid.

It also appears from the court documents that the couple's €1.75m home on the outskirts of Boston is not being seized.

Mr Drumm's massive debts arose after he borrowed almost €9.8m from Anglo while he was chief executive.

Most of the cash was used to buy shares in the bank, which became worthless following nationalisation.

Mr Drumm resigned from Anglo in December 2008 and has been living in the US with his family since June 2009.

The bank sued for the repayment of the loans later that year, but he filed for bankruptcy.

In the court filings, Ms Dwyer revealed the Cape Cod mansion was sold for almost $3.9m (€3.46m), while personal property was sold for an additional $150,000 (€134,000). The total net proceeds from the sale was approximately $2.4m (€2.14m).

The trustee said Ms Drumm had initially resisted a co-operative sale of either the mansion in Malahide or their current home in Wellesley, near Boston. Ms Dwyer initiated legal proceedings to sell the Malahide home and to recover the €1m in assets allegedly transferred to Ms Drumm by her husband.

Ms Drumm later agreed to the Malahide sale, which netted €1.4m, and, following the payment of the $1.3m settlement, the fraudulent transfer lawsuit was dropped.

The Wellesley property was never sold and Ms Drumm continues to live there.

Ms Dwyer also revealed she is seeking $154,000 (€137,600) in fees and expenses for work on the case. The filings show a law firm acting on her behalf, Murphy and King, has charged $872,000 (€779,500) in fees for its work on the case. Irish-based lawyers have also earned $134,000 (€119,700).

Mr Drumm has been in custody in the US since October. His extradition hearing has been scheduled for March 1. If extradited, he faces 33 charges related to his time at the Anglo helm, including ones for fraud and false accounting.

Irish Independent

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