Drumm bankruptcy trial postponed

The US bankruptcy trial of former Anglo Irish Bank chief executive David Drumm has been postponed, with no new hearing date fixed, following the surprise liquidation of the State-owned bank last month.

The trial to decide whether Mr Drumm should be given a fresh financial start was scheduled to have taken place between June 24th and 27th in a Massachusetts bankruptcy court in Boston.

Judge Frank Bailey cancelled these dates on Friday and said trial dates would be set only after a case status conference is held on May 8th. He extended the discovery of fact and expert evidence to July 19th.

‘Extenuating circumstances’

Mr Drumm is being sued by Irish Bank Resolution Corporation (formerly Anglo) and the court-appointed trustee. Both sides sought the postponement of the trial, citing “unexpected and extenuating circumstances” due to the liquidation of IBRC by the Government on February 7th.

They asked the court to reschedule the trial on or after October 14th, 2013.

In a motion filed last week, they told the judge the Government’s appointment of joint “special liquidators” to wind up IBRC meant the timetable of pre-trial requirements had to be extended.

“As a consequence of IBRC’s liquidation status, among other things, IBRC’s board of directors was dismissed, its chief executive left his position and its employees’ employment contracts were terminated and replaced with new contractual arrangements with the joint special liquidators or another Government agency,” the parties said in a joint motion to extend the “pre-trial scheduling order”.

“These changes have necessarily impacted the feasibility of the current scheduling order.”

Liquidators

Liquidators Kieran Wallace and Eamonn Richardson of KPMG have come on record in the case, taking over from IBRC banker Ciaran McAreavey.

This is the fourth time the schedule leading up to the bankruptcy trial has changed since last year.

Mr Drumm, who resigned as Anglo chief executive in December 2008 over Seán FitzPatrick’s hidden loans, filed for bankruptcy in October 2010 in Boston, where he was living at the time. He owes the bank more than €8.5 million, most of which is due on borrowings drawn to buy shares in the now defunct bank.

The trial judge will decide whether Mr Drumm should be allowed to walk away from any remaining liabilities following the sale of his properties and the liquidation of other assets by the trustee or whether the bank and trustee should be entitled to his future income until all his debts are repaid.