Drumm email: It never pays to be co-operative
FORMER Anglo Irish Bank boss David Drumm told an adviser, "it never pays to be co-operative" in an email before he filed his court financial statements, his US bankruptcy hearing was told.
But Mr Drumm insisted that it was meant as a joke and was "absolutely not" a reflection of his attitude to the process.
The former bank chief also insisted he was "absolutely devastated" to learn that cash transfers of $1.2m (€879,000) to his wife should have been included in bankruptcy forms he filed in December 2010.
The cash transfers were not included under the heading of "property transfers" in official forms, but this was a mistake, he told the court.
"There were a lot of errors," Mr Drumm admitted, as the process was outlined for the court in Boston.
The court yesterday heard about the email exchange between Mr Drumm and an adviser Stewart Grossman in October 2010 as Mr Drumm was preparing financial statements for the possible bankruptcy process.
The court heard how Mr Drumm wrote "it never pays to be co-operative", a statement which he claimed was a joke.
John Hutchinson for the former Anglo Irish Bank, now IBRC, referred to this exchange as he asked Mr Drumm whether it summed up his approach to the bankruptcy process.
Mr Drumm replied: "Absolutely not."
Mr Drumm insisted that he intended to co-operate with the bankruptcy process and did not intend to conceal anything.
Under cross-examination from Mr Hutchinson, Mr Drumm agreed that later papers he filed in April 2011 were not "accurate and complete".
Mr Drumm also agreed that he had sworn on oath that the papers were accurate.
Later, asked for his reaction on learning that cash transfers to his wife should have been included in his original bankruptcy papers, the former Anglo Irish Bank boss said: "It was just a total disaster."
"I was absolutely devastated," he told the court. "I had a sick feeling in my stomach that we had this ginormous mistake."
It was the second day of Mr Drumm's bankruptcy hearing at the David W McCormack Federal courthouse in Boston's financial district.
The case is to decide whether the former bank boss can emerge debt-free from a Chapter Seven bankruptcy he filed for in 2010, after he had moved to the US.
IBRC and the bankruptcy trustee managing the case have objected to the bankruptcy, and claim cash and property transfers to his wife before his bankruptcy that were not listed in his original filing make him ineligible to emerge debt-free.
Mr Drumm insisted that details of all the transfers between him and his wife Lorraine in the two years before he sought bankruptcy were provided to the bankruptcy trustee despite not featuring in the forms.
The former banker spent most of yesterday being cross-examined by David Mack, his own lawyer.
Mr Drumm told the court that he applied for bankruptcy in the US after an attempt to reach a settlement with Anglo over his €8.5m debt failed.
The potential outcome of going bankrupt in Ireland was viewed as something that would be a "total disaster" for Mr Drumm, the court was told.
"At the time it was a 12-year process," Mr Drumm said – one that was "pretty brutal" and based on an old "debtors' prison" type attitude.
David Drumm said that after leaving Anglo Irish Bank he moved to the US in 2009 to go into business advising investors in distressed real estate assets.
"I didn't feel I had great prospects in Ireland," he told the court.
In the US he had previously built up a multi-billion-dollar business from scratch, he said.
But his "prior association" with Anglo was a hindrance, and former clients who he hoped to to business with were heavily exposed to Ireland.
The case continues.