FORMER Anglo Irish Bank chief David Drumm is likely to retain his €250,000 annual pension and a €500,000 share in his Cape Cod home on foot of filing for voluntary bankruptcy in the US.
Lawyers for Mr Drumm took Anglo by surprise yesterday when they told the High Court in Dublin that the bank’s former chief executive had gone to the bankruptcy court in Massachusetts and filed a voluntary petition for bankruptcy.
This would divest all of his assets worldwide and vest them in the Trustee in Bankruptcy in the US, an official assigned by the court to administer his estate.
It could mean that Mr Drumm may never face court proceedings here.
Mr Drumm has been locked in a court battle with his former employer in the High Court, where Anglo was seeking repayment of €8 million in loans.
It is understood that because Mr Drumm resides in Massachusetts, he can, under Massachusetts state law, retain his annual €250,000 pension when he reaches retirement age, as well as a share of up to €500,000 in value in his luxury €3.2m Cape Cod home. A bankrupt in Massachusetts remains so for three to five years, compared with 12 years under Irish law.
Barry O’Donnell, counsel for Anglo, told the court that this was “quite an extraordinary turn of events” of which his client had only just become aware.
However, Brian O’Moore, counsel for Mr Drumm, said his client had, as recently as three weeks ago, effectively offered all his assets to Anglo, except personal effects such as clothes and jewellery, including his pension rights, which could not have been taken from him even if he lost the court proceedings here — but the bank rejected the offer.
In addition, last Friday, Mr Drumm offered a half share of the family home at Abbington, Malahide, and his property in Cape Cod and again this was refused.
Mr O’Moore said the US action would have the logical effect of discharging Mr Drumm’s legal team here as it seemed inevitable that the US Trustee may take over the defence of the proceedings and prosecution of Mr Drumm’s counterclaim — for some €2.6m over the termination of his employment, loss of bonuses and damages including damages for “mental distress” — in those proceedings.
Court actions involving Mr Drumm and his wife Lorraine were fixed for hearing in the Commercial Court on October 26, with proceedings involving the Drumms to be heard immediately afterwards.
When Mr O’Moore said Mr Drumm had “bent over backwards” to try to facilitate the proceedings here, Mr O’Donnell said it was “a bit rich” for Mr Drumm to seek to take the “high moral ground”.
The judge listed the matter for mention before Mr Justice Peter Kelly on Tuesday.
Mr Drumm resigned as chief executive of Anglo in December 2008 after it emerged that the bank had concealed loans of up to €122m to its former chairman Seán FitzPatrick over eight years.
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