Order over Drumm home continued

AN order restraining the wife of former Anglo Irish Bank CEO David Drumm from certain dealings with the couple’s former family home in Co Dublin has been continued at the Commercial Court for another two weeks.

Mr Justice Peter Kelly has also deferred, pending the outcome of developments in the US where Mr Drumm last month filed for voluntary bankruptcy, decisions on whether and how the action by Anglo against Mr Drumm over unpaid loans of some €8 million may proceed in the Irish courts.

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

Anglo, as Mr Drumm’s largest creditor, was seeking in the US courts yesterday to have its own nominee replace Kathleen Dwyer as the official dealing with Mr Drumm’s US bankruptcy, Paul Sreenan SC, for Anglo, said.

Anglo was also awaiting the High Court decision whether to grant an “order in aid” to the US Trustee, counsel said. If such an order was granted, and the US Trustee consented to orders being sought by Anglo in the Drumm proceedings, that would be of assistance, he said.

In those and other circumstances, the judge consented to Mr Sreenan’s application to defer consideration as to what should happen to Anglo’s proceedings here against Mr and Ms Drumm.

The judge also granted Anglo’s application to contine for another two weeks an injunction granted to the bank last month restraining Ms Drumm proceeding with her proposal to re-transfer the Drumms’ former family home at Abington, Malahide, back into the couple’s joint names.

While Ms Drumm had offered to give an irrevocable undertaking to the same effect as the injunction, Anglo said it wanted the injunction because it provided stronger security for the bank.

Anglo, in its proceedings against the couple, 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.

Mrs Drumm’s agreement to re-transfer has nonetheless effectively ended the proceedings by Anglo here against Ms Drumm but 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 but he denies liability and has counter-claimed for some €2.6m in salary, pension and deferred bonus payments, He also wants damages, including for “mental distress”.