Monday 11 December 2017

Just €6.25m is recovered in David Drumm bankruptcy

David Drumm. Picture: Reuters
David Drumm. Picture: Reuters
Shane Phelan

Shane Phelan

Former Anglo Irish bank chief executive David Drumm's US bankruptcy trustee has recovered €6.25m from the sale of assets he owned or co-owned.

The sum, revealed in the trustee's final report, is roughly half the value Mr Drumm put on his assets when he filed for bankruptcy in Massachusetts in October 2010.

At the time he listed his assets as $13.9m (€12.4m) and liabilities at $14.28m (€12.75m).

The huge shortfall in what could be recovered will have the largest impact on Mr Drumm's largest creditor, Anglo's successor IBRC, now in liquidation.

It is likely to recover just one-sixth of the $11.9m (€10.6m) it had been pursuing him for.

Most of his debt owed to the bank related to funds loaned to Mr Drumm to buy Anglo shares before their value collapsed during the financial crisis.

The report outlined details of sums recovered from the sale of property in Ireland and the US and the value of a settlement made in favour of the trustee by Mr Drumm's wife Lorraine.

It also lists many small personal assets from which no cash was recovered.

The largest recovery was made from the sale of a lakeside mansion in Cape Cod which Mr Drumm had a 50pc interest in.

Some $3.8m (€3.4m) was recouped to the estate from the sale of the house in Chatham, Massachusetts, a property with a listed market value of €5.9m (€5.26m).

The sale of a house in the exclusive Abington estate in Malahide, Co Dublin, led to $1.8m (€1.6m) being recouped for the estate. Mr Drumm had a 50pc interest in the property, whose market value was listed as $2.95m (€2.6m)

The report said a settlement agreement between Lorraine Drumm and the trustee, approved in May 2012, amounted to €1.14m (€1m).

When he filed for bankruptcy, Mr Drumm had listed his Anglo defined benefit pension scheme as an asset worth €5.15m (€4.6m). However, the report said no funds from it had been recouped for the benefit of the estate.

Mr Drumm had also valued two legal claims he had planned to pursue against Anglo at $287,288 (€256,554) and $3.68m (€3.28m).

However, the report said the larger of the two claims, which related to alleged unpaid wages and pension obligations, was abandoned by Mr Drumm.

Small sums, ranging between $376 (€335) and $3,396 (€3,032), were recovered from a number of bank accounts in the US.

In his bankruptcy petition Mr Drumm valued books, CDs and iPods at $500 (€446), clothing at $200 (€178), a watch at $200, a wedding band at $200, a racing bicycle at $400 (€357), a set of golf clubs at €500 (€446) and computers and printers at $100 (€89).

A dog was also valued at $1.

However, the report indicates no cash was recovered in respect of any of these items.

The report shows Mr Drumm had a 2010 Sedan car and 2011 SUV valued at $47,000 (€41,960) and $64,000 (€57,130) respectively.

But no cash was recovered for the estate from their surrender.

Some €1.56m (€1.39m) of what was recovered was swallowed up in administrative expenses, including payments to lawyers, while $169,210 (€151,100) went on bank service fees.

A further $1.7m (€1.5m) was described as "non-estate funds paid to third parties".

The administration of the bankruptcy took six-and-a-half years to complete.

Lawyer Kathleen Dwyer originally administered the estate, but was later replaced by William Harrington, who filed the final report earlier this week.

Mr Drumm moved to Massachusetts following his departure from Anglo Irish Bank.

He had previously worked for the bank in the US.

The former banker in now back in Ireland awaiting a trial, which is scheduled to begin next January.

He faces two charges of conspiring to defraud depositors and investors at Anglo by "dishonestly" creating the impression that deposits in 2008 were €7.2bn larger than they were.

He faces one additional charge in relation to the EU transparency directive.

Mr Drumm has yet to enter a plea to the charges.

Irish Independent

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