Judge needs more time for Drumm ruling

A HIGH Court judge hopes to give a decision soon on whether to grant an order to assist a US official administering the bankruptcy proceedings of former Anglo Irish Bank chief executive David Drumm.

Ms Justice Elizabeth Dunne yesterday said she needed time to consider whether to grant an “order in aid” of those proceedings whereby all of Mr Drumm’s creditors will be entitled to join in the distribution of his assets.

The application was brought yesterday on behalf of Kathleen Dwyer, the US Bankruptcy Trustee dealing with Mr Drumm’s case in Massachusetts. Mr Drumm filed for bankruptcy there in October.

John Hennessy, counsel for his former employer and creditor, Anglo Irish Bank, told the court the bank will be seeking to have a new trustee appointed at a creditors meeting due to take place today in the US.

Mr Hennessy also said that as of yesterday the Drumm family home, Abington, Malahide, Dublin, had not formally re-transferred back into the joint names of Mr Drumm and his wife, Lorraine.

The property had been transferred to Ms Drumm’s name in May 2009, but following proceedings brought by Anglo Irish claiming this was a fraudulent conveyance, Ms Drumm gave a court undertaking setting aside the transfer, counsel said.

The couple claimed the transfer was for taxation reasons. Since then, Ms Drumm had consented to the re-transfer of the property back into joint names, but “as matters stand” this has not happened and the property remains in Ms Drumm’s sole name, Mr Hennessy said.

The Commercial Court is also due to deal today with an injunction preventing Ms Drumm from dealing in the property, counsel said.

Bernard Dunleavy BL, for the US trustee, told Ms Justice Dunne an “order in aid” will ensure all creditors can be dealt with on a equal footing in relation to Mr Drumm’s assets.

Although it appeared the majority of those are based in the US, there were also a number of assets within this jurisdiction which would have to be dealt with in the bankruptcy proceedings, counsel said.

Mr Dunleavy said there was an inherent jurisdiction in Irish courts to provide for an order in aid. There was an equivalence between the US bankruptcy code and the one that operates here, he said.

It was also undesirable that there should be multiples of bankruptcy proceedings, counsel said.

Mr Dunleavy also said that, if the injunction preventing Mrs Drumm from dealing in the family home was set aside, there would be a seamless transition of Mr Drumm’s interest in the property to the US trustee who would effectively “be stepping into Mr Drumm’s shoes”.

Ms Justice Dunne said she needed to consider the matter and would give her decision as soon as she could.