Claims for €1.2m fees by IBRC side in Drumm case

Lawyers acting for the now defunct Irish Bank Resolution Corporation against former Anglo Irish Bank chief executive David Drumm in his US bankruptcy proceedings have filed claims for expenses and fees of $1.6 million (€1.2 million).

The claim for the fees, which represent almost a sixth of the money Mr Drumm owes the bank he previously ran, was made just days after the Government passed emergency legislation to liquidate IBRC.

Court filings submitted to the US bankruptcy court in Massachusetts earlier this week show IBRC’s attorneys, New York law firm Sidley Austin, made a claim for $1.463 million in unpaid fees and expenses, while Boston law firm Foley Hoag, where one of its attorneys Ken Leonetti also acted for the State-owned bank in the Drumm case, sought the payment of unpaid fees and expenses totalling $191,276.

Mr Drumm owes Anglo more than €8.5 million and has overall debts of about €10 million. He filed for bankruptcy in Boston in 2010 after failing to reach a settlement agreement with the bank on his debts.

Last year, lawyers and financial advisers acting for the trustee, Boston lawyer Kathleen Dwyer, who is liquidating his assets, applied to the Boston court for fees totalling $628,000 coming from the cash proceeds from the sale of the assets.

Ms Dwyer’s Irish solicitors sought fees of $68,000 and expenses of $22,000 for representing her in the action taken against Mr Drumm by what was then Anglo in the High Court in Dublin. New York financial advisers CRG Partners, which carried out work for the trustee, sought fees of $68,000 last May.

IBRC never disclosed how much it paid in legal fees and expenses in challenging Mr Drumm’s discharge from bankruptcy and it is not clear how the bank’s action to prevent his discharge will be affected by IBRC’s liquidation last week.

Chief executive Mike Aynsley, who lost his job following the liquidation, told The Irish Times last September some of the bank’s civil actions against former executives may not be worth pursuing from a commercial view given the cost but ending the cases was a matter for Minister for Finance Michael Noonan.

The trial to determine whether Mr Drumm should be prevented from walking away from bankruptcy with a clean financial slate is scheduled to take place in Boston in June.