$300k worth of former Anglo chief David Drumm’s furniture valued at just $10k
Question marks over the former Anglo chief’s valuation of household furniture at a luxury $5m seaside home in Chatham, Massachusetts, led to a protracted discussion as IBRC lawyer John Hutchinson attempted to ascertain how Mr Drumm registered a value of $10,000 for the expensive furniture when he filed his original schedules on October 29, 2010.
It is the prosecution’s case that this sworn testimony is false and includes “both material misstatements and material omissions”.
“Do you think the furniture lost 90% of its value between October 1 and October 29?” asked the lawyer of the former banker when pointing out that the furniture had been bought that same month
“Why didn’t you tell the trustee the following April?’ he continued.
“I don’t recall,” replied the defendant.
The lawyer then reminded Mr Drumm that leaving out assets is “where people get into trouble… civil or criminal” and could cause Mr Drumm to not get discharge from bankruptcy.
Mr Drumm had arrived at the courthouse early — about an hour before his bankruptcy trial began at 9.30am local time — driving a black SUV which was subsequently driven away by his wife, Lorraine.
In her absence, Mrs Drumm was as much a focal point of the proceedings as the disgraced former head of Anglo Irish Bank.
He denied making a “conscious decision to exclude transfers to his wife” in schedules. The fact that Mrs Drumm never held a bank account in her own name during their 17-year marriage until September 2008 will be one of the central themes of this five-day trial at the US Bankruptcy Court in downtown Boston.
The lawyer for the defendant reflected on this period as feeling like “the world was falling apart” — the “second half of September was Armageddon … (Anglo Irish Bank) faced liquidity pressure, plummeting share price, possibility of government intervention”.
“It was certainly a difficult time, a lot of unknowns,” Mr Drumm agreed.
While on the stand, Mr Drumm was pressed again and again by Mr Hutchinson on behalf of IBRC, reflecting on previous testimony he had made under oath that the bankruptcy papers he filed were true and complete, including schedules.
Either side of a short lunch break, a protracted back-and-forth between the defendant and the plaintiff’s lawyer centred around the purchases of the house in Chatham and another in Wellesley, Massachusetts, valued at $2m.
The defendant was low key and cautious as his finances were pored over, occasionally forgetful of testimony he had made at a previous deposition and even advised at one stage by presiding Judge Frank J Bailey to give his own lawyer, John Mack, a chance to raise an objection if needs be.
Mr Drumm was accused of being “deliberately evasive” at one point when the lawyer for the plaintiff went back over old testimony.
“You just don’t remember?” asked Mr Hutchinson. “Obviously not,” replied the defendant.
When quizzed about why Mrs Drumm would suddenly have 15 bank accounts in her own name, the former banker said: “I am the family book-keeper but I didn’t make every decision. That would be in consultation with my wife.”
Mr Drumm also claimed he forgot about a $6,000 loan he made to his brother over the course of a 10-day period in November 2010 and was forced to deny he was concealing the loan and making “a completely false statement”.
