Jailed former Anglo Irish Bank chief executive David Drumm has consented to a judgment against him for €7.5m in favour of his former employers.
The debt relates to loans Drumm got from Anglo to buy shares in the bank prior to its collapse in 2009.
Drumm is currently serving a six year sentence for his role in a €7.2bn fraud perpetrated at the peak of the banking crisis in 2008.
He resigned from the bank in December 2008, a month before it was nationalised.
In late 2009 Anglo began legal proceedings against him seeking to recover loans of around €8.3m and to stop him from transferring a house in Malahide, Co Dublin into his wife’s name.
Drumm filed a counterclaim for €2.6m against the bank over termination of his employment and lost bonuses.
But the proceedings stalled after Drumm filed for bankruptcy in October 2010 in Massachusetts, where he had moved with his family. This meant there was an automatic worldwide stay on enforcement proceedings.
The bankruptcy process only concluded in 2018 and the matter returned to the big money Commercial Court in Dublin today.
Solicitor Karyn Harty of McCann Fitzgerald, representing Anglo’s successor IBRC, applied for the title of the proceedings to be amended to substitute IBRC in special liquidation as the plaintiff.
She briefly took Mr Justice David Barniville through the history of the case.
Although the US bankruptcy proceedings concluded in August 2018 with a Boston court approving the trustee’s final report, there was a slightly unusual application by IBRC to bar Drumm’s discharge from bankruptcy, Ms Harty said.
This application was successful and, as a result, he remained indebted to the bank after the bankruptcy, she said.
Ms Harty said the orders being sought with the consent of Drumm were to deal with the remaining indebtedness.
She sought orders entering judgment in the amount of €7,520,140 against Drumm in favour of IBRC, striking out the proceedings and the counterclaim, and the vacating of all costs and other orders.
She also asked for a stay to be placed on the execution and registration of the judgment, with the parties being given liberty to apply to the court in the event “something comes to light” in relation to the agreement reached.
Solicitor Michael Staines, for Drumm, confirmed the orders could be made on consent and they were granted by Mr Justice Barniville.
The likelihood of IBRC seeking to enforce the judgment any time soon would appear slim given Drumm’s bankruptcy.
A US trustee recovered just €6.25m from the sale of assets Drumm owned or co-owned. The former Anglo chief executive had overall debts of €12.75m.
He was extradited from the US to Ireland in 2016 to face charges related to events at Anglo in the run up to the bank’s collapse.
In 2018 he was jailed for six year for conspiracy to defraud and false accounting in relation to transactions of €7.2bn.
The same year he was given a suspended sentence of 15 months for giving illegal loans to ten developers to prop up Anglo's share price in 2008.
Drumm ran Anglo for four years prior to his resignation.
He earned €12.15m during that time, making him Ireland's best-paid banker.