Anglo Irish Bank’s former chief executive David Drumm has until Friday next to file a statement of his assets and liabilities in his bankruptcy proceedings in the US, the Commercial Court in Dublin heard today.
Mr Justice Peter Kelly adjourned Anglo's actions against Mr Drumm and his wife as a result of Mr Drumm's unexpected decision earlier this month to file for voluntary bankruptcy in the US.
Under US law, all of Mr Drumm's assets worldwide have been vested in US Bankruptcy Trustee Kathleen Dwyer, who has yet to decide if she wishes to become involved in the Irish cases.
The effect of Mr Drumm's bankruptcy move has been to impose a worldwide stay on legal proceedings against Mr Drumm and the trustee will ask the Irish High Court bankruptcy judge next Monday to recognise the US proceedings.
Her counsel Bernard Dunleavy said, while Mr Drumm had filed for bankruptcy in Massachusetts on October 14th last, the trustee was not made aware until October 18th of the legal actions against him in Ireland and that was why she had not appeared before the Irish courts sooner.
The trustee had instructed solicitors and counsel and would be applying as soon as possible, hopefully on Monday, to have the US bankruptcy recognised under Irish law, Mr Dunleavy said.
Counsel said Mr Drumm has yet to file a statement of affairs in the bankruptcy and has until Friday next to do so.
The trustee needed to see if the counter-claim in the Anglo proceedings was included in that statement, if there was any merit to Mr Drumm's claim and whether it was possible/prudent for the Trustee to pursue it here.
The trustee has also to decide whether she will apply to have Mr Drumm's interest in his former family home at Abington, Malahide, registered. The trustee may, if she procured the co-operation of Ms Lorraine Drumm, seek to sell that property for the benefit of creditors, counsel added.
In the circumstances, Mr Justice Kelly said he would adjourn for three weeks Anglo's legal action against Mr Drumm for €8 million over unpaid loans, in which Mr Drumm is also counter-claiming for some €2.6 million for salary, pension and deferred bonuses, plus damages, including for alleged mental distress.
The judge also adjourned for the same period Anglo's proceedings against Mr Drumm and his wife aimed at setting aside the May 2009 transfer by Mr Drumm of the couple's former family home at Abington into the sole ownership of Ms Drumm. Anglo claimed that transfer was a fraud on creditors while the couple insist it was for taxation reasons.
Anglo, given the bankruptcy proceedings, had sensibly taken the view it would be unwise and inappropriate to proceed with the trial of the action against Mr Drumm here as there was no point in the bank either jeopardising its position in the US or as a creditor of Mr Drumm, the judge said.
Anglo's case against Mr Drumm over the unpaid loans included a counter-claim by Mr Drumm and that was vested in the Trustee, the judge added. The Trustee had to decide if there was any value in that counter-claim and whether she should get involved.
Dealing with the separate proceedings against Mr and Mrs Drumm over the May 2009 Abington transfer, the judge noted Mrs Drumm indicated to the court last week she was prepared to give her "irrevocable consent" to the setting aside of the transfer, with the effect the property would revert, at a time dependent on the conclusion of the legal proceedings here, into the joint names of herself and her husband.
However, because Mr Drumm was also a party to the transfer and the couple are outside the jurisdiction, Anglo had asked the judge last week to continue an interim order effectively restraining any dealings with the property.
The bank asked the judge to further continue the order but Gary McCarthy SC, for Ms Drumm, said there was no need for an order given his client's irrevocable consent to the transfer being set aside at the appropriate time.
Stressing his decision was not a criticism of Ms Drumm, the judge said it was preferable to continue the injunction pending the final outcome of the action as it had the benefit of being registered on the property's file and also restrained others interfering with it. An undertaking did not have the same effect.
He also adjourned the proceedings over the house transfer for three weeks.
