A lot of errors in documents, admits David Drumm

David Drumm claimed he was "devastated" when it became clear that there were "voluminous" errors in financial statements made to bankruptcy lawyers.

The former Anglo Irish Bank CEO also insisted yesterday that he was joking during an email exchange with his then Boston bankruptcy lawyer Stewart Grossman, when he wrote “it never pays to co-operate right?” in reference to the efforts of trustee Kathleen Dwyer to work through the bankruptcy process with the former banker.

Mr Grossman had said he had concerns over the payments which were made in money, property, and vehicles over two years to Lorraine Drumm. More than €830,000 was transferred to the wife of the former banker between September and December 2008 alone.

This email exchange was highlighted as part of the second day of his trial in Boston as he attempts to discharge himself from bankruptcy and claim a fresh financial start in the US bankruptcy court.

Prosecuting lawyer John Hutchinson, acting on behalf of Irish Bank Resolution Corporation, formerly Anglo, completed his cross- examination of Mr Drumm yesterday at which point defence lawyer David Mack questioned his client until after lunch.

Mr Hutchinson reiterated his assertion that there were a “staggering number of omissions” in Mr Drumm’s filings as both the IBRC and the creditors’ trustee, Kathleen Dwyer’s attempt to ascertain the legality of the total transfer of €1.2m in cash and property into the name of his wife Lorraine.

After a correspondence was combed through claiming that Mr Drumm wanted the trustee to “get the big picture”, including his income from 2004 to 2009 — estimated in court at $18m (€13m) and confirmed by Mr Drumm — the 47-year-old agreed he had provided no specifics of when transfers were made to his wife.

In January 2011, it was put to Mr Drumm, Mr Grossman promised him that he would amend the schedules. He replied “I don’t remember that”, but an email was then shown, sent from Mr Grossman to him, saying: “We didn’t get a chance to amend the schedules because of the Christmas vacation. We’ll do that this week.”

“Does that now refresh your recollection?” asked Mr Hutchinson to which Mr Drumm acknowledged that it did.

The prosecuting lawyer exclaimed “you don’t recall all these things Mr Drumm?” to which he replied: “I know there were several conversations… Mr Grossman said he’d revise schedules but it kept getting kicked on.”

It was part of an increasingly testy exchange that culminated in Mr Hutchinson charging that Mr Drumm had failed “miserably” to disclose the transfer of proceeds from the sale of properties.

“After announcing changes you intended to make… you swore under oath in April 2011 that your financial affairs would be accurate,” said Mr Hutchinson reminding him of the penalty of perjury.

It was outlined that the amended statement of financial affairs and schedules continued to purport to a loan to Mrs Drumm just as with the original schedules and continued to characterise his interest in a Wellesley property as “zero”.

“It was the advice of counsel to characterise it that way,” said Mr Drumm.

Mr Hutchinson told the defendant that it was his job alone to make sure his affairs were in order.

“You failed miserably to do that,” he added. “There were a staggering number of omissions, can we agree on that?”

“That’s your word,” replied Mr Drumm.

“Voluminous errors?”

“Whatever you like,” countered Mr Drumm, “there were a lot of errors.”

Mr Hutchinson concluded on the line from the email to Mr Grossman written two days before he declared bankruptcy in late 2010: “it never pays to be co-operative right?”

“You would have us believe that this was a joke?” asked the lawyer.

“Very much so… it’s just a comeback… it’s just a joke really… Stewart and I have those to-and-fros.”

Mr Hutchinson then charged that the flippant nature of that email applied to “all aspects of this bankruptcy”, a claim strenuously denied by Mr Drumm.

The trial continues today in Boston and is expected to run until next Wednesday.

More in this section

Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.

Puzzles logo
IE-logo

Puzzles hub

Visit our brain gym where you will find simple and cryptic crosswords, sudoku puzzles and much more. Updated at midnight every day.