KATHLEEN DWYER, the court-appointed trustee in the David Drumm bankruptcy case, spent much of Mr Drumm’s fourth hearing yesterday asking the former chief executive of Anglo Irish Bank to produce documents that he had been ordered to provide by December 21st, 2010.
Mr Drumm again assured Ms Dwyer than he would obtain the overdue documents, which include details of the sale of properties in Massachusetts and Irish brokerage records. They will be examined at what should be his final bankruptcy hearing on March 7th or March 14th.
A separate, private process involving Anglo’s claims against Mr Drumm will continue for months, possibly years, even as Mr Drumm’s assets are liquidated.
The liquidation process has already started, with the attempt to sell the Drumms’ holiday home at Cape Cod for $5.5 million (€4 million).
Ms Dwyer expressed uncertainty over whether she possessed all statements from the Drumms’ accounts at AIB.
She complained that brokerage statements from NCB ended in the autumn of 2007. “I’ll have to request copies,” Mr Drumm said.
“I see July 2007, August 2006. It’s kind of mixed up,” the trustee said.
Confusion reigned, also, regarding the Drumms’ household bank accounts. “There are 20 to 25 accounts,” Ms Dwyer said. “Can you explain to me why it is necessary to have so many accounts?”
Mr Drumm said there were two reasons: “One is risk management. If you take the FDIC rules, the maximum amount covered to get the guarantee is $250,000.”
The other reason he said, was that Lorraine Drumm, his wife, wanted to take advantage of higher interest rates on term and money-market accounts.
Ms Dwyer noted that the $9,000 monthly salary which Mr Drumm is paying himself as the sole employee of his consulting firm “doesn’t appear to be paying enough to pay various mortgages”.
“Obviously, we’re burning savings,” Mr Drumm replied. “It does make an income, but not enough.”
His wife paid household bills from funds originally transferred from Ireland, he said.
“Is there any way to trace that – all the funds from Ireland to the US?” Ms Dwyer asked. “Is there a particular trail of money from Ireland? Do you recall the amount?”
“There were different amounts over different times,” Mr Drumm replied.
Ms Drumm was questioned recently by the trustee, but the contents of that session are held confidential.
The frustration of Anglo lawyers with Mr Drumm’s failure to provide documents was palpable in the motion they filed on January 31st demanding that he be compelled to appear for a deposition, which was taken in private on February 8th. The lawyers referred to “the debtor’s transparent attempt to simply further delay an examination of his conduct” and asked the court to find Mr Drumm “in contempt” for failing to co-operate.
