Legal representatives for former Anglo Irish Bank chief executive David Drumm had not responded to proposals from the bank before he filed for bankruptcy in the United States, the Dáil heard today.
Minister for Finance Brian Lenihan told the House that although Mr Drumm made settlement proposals, “what was offered to the bank would have left a severe shortfall in the region of €4 million to be borne by the taxpayer, which was not acceptable to the bank. Its priority throughout has been to ensure that Mr Drumm discharges the full amount due, even if that was spread over a number of years.”
He added: “Beside the settlement of the bank debts, the bank was also seeking to ensure Mr. Drumm's full co-operation with the various investigations ongoing into the previous regime at the bank”. The bank also wanted to ensure that, “where there was a shortfall between the value of his assets and the debts outstanding, future earnings could be used to repay those debts”.
Mr Lenihan said: “The bank sent its latest offer on 8 October. Mr Drumm's representatives had not responded to this counter offer when he decided to file for bankruptcy in the US. It is now a matter for the bank and its legal team to assess this latest development and take whatever action is necessary to protect the bank and taxpayers' interests.
"The bank remains in contact with the National Treasury Management Agency on the issue as it progresses it and is keeping the latter briefed on the various proposals.”
In court yesterday, Anglo secured a temporary court injunction restraining Mr Drumm's wife from transferring the couple’s former home in Co Dublin from her sole ownership back to the joint ownership of her husband and herself.
Anglo chief executive Mike Aynsley said he believed the intention of the re-transfer, proposed in a letter from Lorraine Drumm’s solicitors to the bank on Monday night, was to put the property at 20 Abington, Malahide, “beyond reach” of Anglo and the US Trustee in Bankruptcy following Mr Drumm’s unexpected decision last Thursday to file for bankruptcy in Massachusetts.
Lawyers for Mrs Drumm denied the claim and said the re-transfer was proposed in an effort to settle Anglo’s court case against the couple, in which Anglo claims the original May 2009 decision of Mr Drumm to transfer his half share of Abington into his wife’s name, leaving her the sole owner, was a fraud on creditors.
At the Commercial Court yesterday, Mr Justice Peter Kelly said he was satisfied to grant an interim injunction restraining the proposed re-transfer and returned that matter to next Tuesday, when he will also deal with issues as to whether or when Anglo’s legal actions against the Drumms will proceed.
Mr Drumm, who resigned in December 2008 as Anglo chief executive, is being pursued by Anglo for €8 million over unpaid loans. He has claimed the demand breached loan agreements and has also counter-claimed his employment was not validly terminated in early 2009.
He also claimed Anglo owes him some €2,620,695 in salary, pension and deferred bonus payments and sought damages, including damages for "mental distress".