Anglo secures costs orders against wife of ex-boss

ANGLO Irish Bank has secured costs orders against Lorraine Drumm, wife of its former chief executive David Drumm, arising from the effective settlement of proceedings against her over the transfer of the Drumm’s former family home in Malahide, Co Dublin, into her sole ownership.

The costs orders were made by Mr Justice Peter Kelly at the Commercial Court yesterday on the application of Paul Sreenan, for Anglo, with the consent of Gary McCarthy, for Ms Drumm, who is living in the US with her husband and family. The judge also placed a stay on the costs orders for seven days.

Mr Drumm filed for voluntary bankruptcy in the US last month and the effect of that move has been to impose a worldwide stay on legal proceedings against him. The High Court here has reserved its decision whether to recognise the US proceedings via an “order in aid”.

Mr Sreenan asked yesterday, pending the outcome of the High Court decision, to continue for another two weeks an injunction granted to the bank last month restraining Ms Drumm from certain dealings in relation to the former family home at Abington. The judge did so. In the circumstances, Mr Justice Kelly again deferred decisions on whether and how the action by Anglo against Mr Drumm over unpaid loans of €8m may proceed in the Irish courts.

Anglo, in its proceedings against David and Lorraine Drumm over the Abington transfer, had claimed the May 2009 transfer was “a fraud on creditors” of Mr Drumm while the couple insisted it was for “taxation reasons”.

Despite Ms Drumm’s agreement last month to re-transfer, a final order setting aside the May 2009 transfer cannot yet be made because of Mr Drumm’s action in filing for bankruptcy as he is also a party to the transfer arrangement.

The US Trustee in Bankruptcy is now involved by virtue of all Mr Drumm’s assets worldwide being vested in the trustee and all legal actions involving Mr Drumm are stayed.

Ms Drumm’s agreement to re-transfer nonetheless effectively ended the proceedings by Anglo here against Ms Drumm although the bank’s cases against her husband remain outstanding.

Mr Drumm, who resigned in December 2008 as Anglo CEO, is being separately pursued by Anglo for €8m over unpaid loans. He denies liability and has counter-claimed for €2.6m in salary, pension and deferred bonus payments, He also wants damages, including for “mental distress”.