ANGLO IRISH Bank has said for the first time that it is likely to object formally to David Drumm’s debt to the bank being written off by a Boston court.
The disclosure is made in the bank’s latest filing to the US court in the bankruptcy proceedings being taken by its former chief executive.
To succeed in preventing Mr Drumm’s debt to Anglo being written off, it will have to demonstrate to the court that he has acted in bad faith. The bank says Mr Drumm owes it €8.5 million and it may submit further claims arising from Mr Drumm’s alleged misconduct and breach of fiduciary duty while he was chief executive of the bank. Any misconduct claim is likely to be huge considering the misconduct alleged includes matters that led to the bank being nationalised and to its issuing a number of very large loans on a non-recourse basis.
Anglo wants the court to direct Mr Drumm to hand over a recent report by special investigator John Purcell for the Chartered Accountants Regulatory Board. Mr Drumm, an accountant, has said the report was given to him in confidence, a claim the bank disputes. The report concludes there is a prima facie case that Mr Drumm is liable to disciplinary action in relation to a number of his actions while at the bank’s helm.
In a press statement issued in December 2010, the accountancy body said the Purcell report covers Mr Drumm’s role in the non-disclosure of loans former Anglo chairman Sean FitzPatrick had from the bank, and other matters.
The bank, in its filing in Boston, said the report covers four areas that will be covered by the bank’s breach of fiduciary duty claim and that will be “the likely subject of Anglo’s objection to the debtor’s discharge” from his Anglo debt.
The Boston court has told Mr Drumm to respond to Anglo’s latest filing.
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