Drumm bankruptcy trial hears closing statements

Wednesday 04 June 2014 21.56
It is alleged that David Drumm intentionally did not disclose transfers of assets to Lorraine Drumm
It is alleged that David Drumm intentionally did not disclose transfers of assets to Lorraine Drumm

Lawyers for IBRC and a court-appointed trustee have appealed to a Boston court not to discharge David Drumm from his debts during the final day of his bankruptcy trial.  

They said the former Anglo Chief Executive had shown an "extraordinary" level of "disdain and indifference to the rules".

However, Mr Drumm's lawyer told the court his client had made honest mistakes and had been subjected to a "witch-hunt".

David Drumm and his wife Lorraine arrived together early this morning for this sixth, and final day, of public hearings.

With all the evidence presented last week, due to courtroom scheduling, today was the day for the legal teams to give their closing arguments.

First to sum up was John Hutchinson for IBRC and the court-appointed trustee Kathleen Dwyer.

He argued that Mr Drumm should be refused bankruptcy because he had shown intent to defraud, and there were "numerous and repeated acts of concealment" in the asset transfers to his wife.

He said Mr Drumm's advisers simply were not able to keep up with all of his misstatements.

Mr Hutchinson asked the judge to deny the discharge due to the alleged "numerous and repeated acts of concealment".

The lawyer spent almost 50 minutes going through the evidence that is claimed "shows intent to defraud" the bankruptcy process as well as creditors.

Mr Drumm could end up being forced to hand over a share of his income for the rest of his career in order to repay the approximately €10.5m owed to those creditors, €8.5m of which is owed to IBRC.

Mr Hutchinson said Mr Drumm had shown a "truly extraordinary" "level of disdain, unquestionable recklessness and indifference to the rules".

The prosecution alleges that the financial statements Mr Drumm filed on 29 October 2010 as he was declaring bankruptcy in the US included both "material misstatements and material omissions". 

Mr Hutchinson reiterated that charge during his closing statement.

Immediately following him David Mack argued in David Drumm's defence, saying IBRC and the trustee had engaged in a "witch-hunt" against Mr Drumm, and were trying to "portray him as a serial liar".

The case against the former Anglo Irish Bank CEO, he said,  was "long on rhetoric and short on substance" with plaintiffs trying to convince the judge that Mr Drumm was "controlling information ... with his evil black hat on".

Mr Mack's rebuttal shifted the blame principally to those acting on behalf of Mr Drumm, acknowledging that it was a "big blunder" to exclude cash transfers from a Statement of Financial Affairs in late 2010.

There was "no evidence he was tryng to hide anything" claimed the lawyer, adding that his client "understood that if and when he filed for bankruptcy, the trustee would be looking hard at transfers".

Pointing out that Anglo Irish Bank was as an "extraordinarily aggressive creditor", he said his client was all the more aware that he had to disclose everything. 

He said if David Drumm could go back in time he would … but that the case was not as the bank and trustee were portraying it.

Mr Mack said Mr Drumm understands he made a mistake and he had not been trying to hide anything but had "relied on trained professionals".

Judge Frank Bailey set a deadline of 15 July for both sides to submit their proposed findings.

He will consider these and publish his decision some time after that, possibly in late summer.