The former chief executive of Anglo Irish Bank, David Drumm, has filed for bankruptcy in the United States.
An action by Anglo Irish Bank seeking to recover a debt of more than €8m from Mr Drumm was due to get underway in the coming weeks
Lawyers for Mr Drumm told the Commercial Court this evening that Mr Drumm had made a settlement offer to the bank by letter on September 24, offering all his assets excluding his clothes and jewellery.
His lawyers said this offer included his pension rights and pension accruements. It involved the transfer to the bank of his half-share of his home in Malahide, which was the subject of a second action by the bank, and the transfer of his home in Cape Cod, Massachusetts, where he now lives.
The bank responded last Friday, rejecting the settlement. At 3pm today, the court heard, Mr Drumm presented a Massachusetts court with a voluntary petition for bankruptcy. Mr Drumm's assets will now be divested by a court-appointed official in the US.
Lawyer Barry O'Donnell, for Anglo Irish Bank, said this was a quite extraordinary turn of events. The case will be mentioned again next Tuesday.
Senior Counsel Brian O'Moore, for Mr Drumm, said Mr Drumm had been bending over backwards to try to settle the case. Mr O'Donnell said it was 'a bit rich' for Mr Drumm to try to take the high moral ground.
It is understood that Mr Drumm believes the value of the settlement offered by him exceeded the amount he owed to Anglo by more than €2m. It is also understood that Anglo will now not have access to Mr Drumm's pension, which he had offered as part of the settlement.
The case will come back before Mr Justice Peter Kelly, who has been case managing the proceedings, in the Commercial Court next Tuesday.