Drumm gave wife cash as Anglo teetered

FORMER Anglo Irish chief executive David Drumm transferred hundreds of thousands of euro in cash to his wife, just as it became apparent the bank was in trouble.

Mr Drumm told a bankruptcy hearing in Boston that he transferred the cash in 2008, some of which was later used by him to start a debt restructuring business in the US. He claims to owe his wife $210,000 (€159,681) which she loaned to him to start up the business in Massachusetts. She is listed as one of his largest creditors in bankruptcy documents filed with a court in Massachusetts.

According to papers filed by Mr Drumm, his wife loaned him $260,000 (€200,000) in total and he has already paid her back $50,000. However, the former banker admitted his wife, Lorraine, did not have any other income apart from money he gave her. He transferred cash to her just as Anglo Irish was beginning its rapid decline to near collapse.

The admission came at a hearing in Boston yesterday, the latest to take place as part of the bankruptcy protection proceedings that began in October.

Mr Drumm was answering questions from Kathleen Dwyer, the trustee appointed to oversee the bankruptcy proceedings and to find out how much money the ex-Anglo executive has to pay to creditors.

Lawyers for Anglo Irish are also set to question Mr Drumm, which is likely to happen later this month. The bank wants to know exactly what Mr Drumm did with all the money he earned up to the end of 2008, when he was ousted from his position as chief executive. The lawyers may also ask about his wife’s income and about how exactly he obtained an E2 investor visa which allowed him to set up business in the US in February 2009.

Mr Drumm filed for bankruptcy in October, listing debts of more than $14m and assets of about $13.9m, which includes millions in wages and bonuses he claims are owed to him by Anglo Irish.

His assets include a house in Cape Cod in Massachusetts and in Malahide. Both will be sold to help pay off creditors, the largest of which is Anglo Irish.

Mr Drumm also transferred his Malahide home but following a High Court action he agreed to put it back in his own name so it can be sold and the proceeds divided among creditors.