Drumm house transfer overturned

A High Court judge has made formal orders overturning the controversial transfer by former Anglo Irish Bank chief executive David Drumm of his half share of his former family home at Malahide, Co Dublin, into the sole ownership of his wife Lorraine.

In proceedings against the couple, Anglo had sought to overturn the May 2009 transfer of ownership of the property at Abington, Malahide, arguing it was a fraud on creditors. The Drumms insisted it was for taxation reasons.

After several court hearings, Lorraine Drumm last month gave an irrevocable consent to the transfer being quashed and the property reverting into the joint ownership of the couple meaning applications could be made to have Mr Drumm's share of the property realised for the benefit of his creditors. The property has been valued at €1.2 million.

However, no formal order could be made in the case arising from Mr Drumm having filed for voluntary bankruptcy in the US last October, just days before proceedings were due to be heard against him and his wife in the Commercial Court.

After Ms Justice Elizabeth Dunne granted High Court orders providing for the Irish courts to assist the US Trustee, Ms Kathleen P Dwyer, in administering Mr Drumm's bankruptcy and vesting ownership of the Abington property in the Trustee, the cases against the Drumms came back before the Commercial Court today.

Mr Justice Peter Kelly said he was anxious for some finality in the case over the house transfer.

After hearing from Bernard Dunleavy, for the Trustee, the judge made an order setting aside ab inito (from the beginning or as if it had never happened) the May 2009 transfer of the property from the joint ownership of David and Lorraine Drumm into the sole name of Mrs Drumm.

The judge also continued an order restraining Mrs Drumm from any dealings in relation to the Abington property pending the lodging of appropriate documents concerning the property with the Property Registration Authority so as to give effect to the orders of Ms Justice Dunne. Once those documents are lodged, the order should be lifted, he directed.

Those orders bring to an end the court proceedings against the couple over the house transfer, Anglo already having secured the costs of those proceedings against Mrs Drumm by agreement.

When Mr Justice Kelly asked about the US Trustee's attitude to those proceedings, Bernard Dunleavy, for the trustee, said she takes the view that both the Anglo claim and Mr Drumm's counter-claim should be dealt with in the US bankruptcy and was not proposing to get involved in proceedings here.

Mr Justice Kelly noted, because of the worldwide stay on proceedings against Mr Drumm as a result of his filing for bankruptcy in the US, Anglo could prejudice its claim if it chose to go ahead now with its case here as it would be in breach of the stay.

Paul Sreenan SC, for Anglo, said the bankruptcy had not progressed to the extent where the bank could make an informed decision in relation to the Irish proceedings and he wanted to adjourn those proceedings for a time.

Mr Justice Kelly said he would adjourn the matter to February 22nd.

Anglo's Commercial Court action against Mr Drumm over €8 million unpaid loans, and his counterclaim for €2.6 million, remains outstanding. He is counter-claiming for some €2.6 million in salary, pension and deferred bonus payments and damages, including for "mental distress".