Drumm says US business struggled because of previous Anglo association

Thursday 22 May 2014 22.19
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David Drumm described his devastation when he discovered that he should have disclosed substantial transfers of cash to his wife
David Drumm described his devastation when he discovered that he should have disclosed substantial transfers of cash to his wife
Lawyers for IBRC arriving at the Boston Bankruptcy Court today
Lawyers for IBRC arriving at the Boston Bankruptcy Court today

Former Anglo Irish Bank CEO David Drumm has told a US bankruptcy court that his business in the US struggled because of his prior association with Anglo Irish Bank.

Giving evidence for a second day, Mr Drumm said that he filed for bankruptcy in the US because he was facing the prospect that Anglo Irish Bank would never settle over the €8.5m loan he owed them.

Mr Drumm spent another long day in the witness box, but today he was mostly questioned by his own legal team.

The court heard explanations from Mr Drumm about why certain asset transfers were left out of his official bankruptcy statements of financial affairs.

He said that he had provided detailed information and bank statements to his advisers but that they did not seem to have been passed onto the court-appointed trustee.

He also described his devastation when he discovered that he should have disclosed substantial transfers of cash to his wife.

Mr Drumm began today admitting that there were a "lot of errors" in the statements he provided to the bankruptcy trustee examining his financial affairs.

He admitted that he left out transfers of assets and other property-related transfers to his wife and also confirmed that he had sworn under oath, at risk of perjury, that statements were true and correct.

He said he provided bank statements and notice of certain transfers to his various advisers, and has said he expected them to prepare the full statements of financial assets.

He also said he overlooked other transfers because of difficulties he had getting copies of his bank statements from Anglo Irish Bank after he had resigned.

He described the period after he had stepped down as the bank's CEO. He said it was a tough time; he had just lost his job, which the court heard carried a salary of €1.2m, and did not know what he was going to do.

He said he was getting a lot of attention after he had resigned and it was placing a bit of a strain on his marriage.

He said his family went away to France for Christmas so he could think about his options and discuss them with his wife.

He said he was biased towards moving to the US because he had such success there previously, when he moved in 1998 to set up Anglo Irish Bank's US presence.

In January 2009, Mr Drumm said he went on a "fact-finding mission" to Boston with a view to setting up a new company, buying and selling distressed property.

Ultimately, he was granted an investor E2 class visa, and he moved his family to the US and set up this business.

He said the business did not work out as planned.

The reason for this, he said, was that it was late 2009, things were getting worse and worse in Ireland, with NAMA, and he said a lot of his US customers "had exposure to the Irish bank, it became increasingly difficult for me to consummate anything with them because of his prior association".

Mr Drumm was also asked why he did not want to be declared bankrupt in Ireland.

He said that was because of the bankruptcy laws in Ireland at the time.

He said these had now "thankfully changed" but at the time it was like "a debtors' prison". It was "pretty brutal", he said, and he described being declared bankrupt in Ireland as "a total disaster".

He said he was in the US, his children were in the US and his ability to earn was in the US, so there was no way he could manage a 12-year bankruptcy in Ireland.

The court has adjourned for today and will resume tomorrow morning.