Former Anglo Irish Bank chief executive David Drumm says he transferred hundreds of thousands of euro to his wife in the autumn of 2008 as the banking crisis deepened because his marriage was "seriously strained" and she insisted on "money of her own" in case something happened to him.
Mr Drumm's lawyers make the claim in new filings in his US bankruptcy case, in which he and his former bank, now Irish Bank Resolution Corporation, summarise their cases before a trial starts on May 21st to decide whether he can emerge from bankruptcy free of debt. He owes €8.5 million to State-owned IBRC.
The bank argues that Mr Drumm’s “nefarious transfers” of cash and property to his wife shielded assets from creditors and that these undisclosed transfers along with false claims made in his bankruptcy proceedings in October 2010 should not entitle him to a discharge from bankruptcy.
“Together, they prove a pattern of self-serving conduct and Drumm’s fraudulent intent,” it argues. “Drumm has played fast and loose with his creditors, the trustee and this bankruptcy case.”
'Honest mistakes'
Mr Drumm's side claims that most transfers fell outside the year leading up to his bankruptcy, blocking any fraudulent claim against him, and that any failure to disclose information and the value of assets in his bankruptcy statements were not intentional but "honest mistakes".
He and his wife, Lorraine, will be witnesses in the trial, marking his first public appearance in the case since two former colleagues at Anglo were convicted of illegal lending in the “Maple 10” share support scheme. The trial is due to last five days but could be heard in three, the filings state.
IBRC and Mr Drumm’s bankruptcy trustee claim that as Anglo faced almost certain financial ruin, Mr Drumm began transferring cash of €641,281 to his wife from September 2008 until a week before he resigned from Anglo in December 2008 and that he later failed to disclose these transfers.
“At this critical juncture for IBRC and Drumm personally, Drumm began actively seeking to shield assets from creditors [namely IBRC] by shifting them to his wife,” they said.
