FORMER Anglo Irish Bank chief executive David Drumm is resisting the bank’s bid for summary judgment orders for€8.3 million against him over unpaid loans and is counterclaiming for €2.6m over termination of his employment and loss of bonuses, the Commercial Court heard yesterday.
Mr Drumm, now living in Cape Cod, USA, has, in letters to Anglo, claimed he has sufficient assets to meet his liabilities to the bank but its demand for immediate repayment is premature and in breach of loan agreements with him. He also claimed he is being harassed.
The bank denies those claims and has alleged Mr Drumm has failed to date to file a statement of affairs.
Mr Drumm has also claimed he and his wife, Lorraine, have given undertakings relating to their former family home in Malahide, which has been transferred into Mrs Drumm’s name in whatAnglo alleges is a fraud on creditors but the couple claim was for “taxation reasons”.
Anglo has brought twolegal actions, one against Mr Drumm over non-repayment of loans and a separate action against the couple seeking to set aside the transfer of the Malahide property. Both sets of proceedings were transferred by Mr Justice Peter Kelly to the Commercial Court yesterday on the application of John Hennessy SC, for Anglo, and with the consent of Brian O’Moore SC, for Mr Drumm, and a solicitor acting for Ms Drumm, who is separately represented. Both defendants have an address at Stage Neck Road, Chatham, Massachusetts, US.
Mr Justice Kelly made directions for the exchange of legal documents in both cases and fixed the bank’s application for summary judgment against Mr Drumm for hearing on January 21 while the case against the couple was listed for further directions on February 25.
In the proceedings against the couple, Anglo is seeking orders to set aside their voluntary transfer for “natural love and affection” of the property at 20 Abington, Malahide, Co Dublin, which had been jointly owned by the couple, into Ms Drumm’s sole name.
Anglo claims this property was Mr Drumm’s main asset and the transfer is void as a fraud on creditors because it would mean the property cannot be used to reduce Mr Drumm’s liability to Anglo. The Drumms claim the transfer was “for taxation reasons” based on advice from US lawyers and was not intended or designed to protect the property from claims by creditors.
In the case against Mr Drumm, who resigned on December 19, 2008, the claim arises from loans on dates in May 2007 and January 2009. Most of the €8.3m sum sought relates to refinancing of a facility whereby Mr Drumm could invest in shares in Anglo.
Yesterday, Mr O’Moore said the main defence to the claims over the loans was set out in a letter of September 30 last from Mr Drumm’s solicitors referring to the loan facility letter entered into as being agreed between Mr Drumm, the chief executive of Anglo, Mr Quilligan, and endorsed by the chairman of the bank. That facility provided there would be no claim made under the loans until January 10, 2010, at the earliest. In those circumstances, the bank’s action was absolutely premature, counsel said.
Counsel said his client would also counter-claim for some €2.6m arising from the termination of his employment and a bonus payment. While this sum was considerably less than the monies claimed against Mr Drumm, it could be set-off, Mr O’Moore said.
Mr Hennessy said the bank would contend Mr Drumm’s claims could not succeed as the loans were clearly repayable on demand served at any time at the bank’s sole discretion.
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