Lawyer in Drumm bankruptcy case seeks costs

THE COURT-appointed trustee overseeing the bankruptcy of former Anglo Irish Bank chief David Drumm has sought the costs of her lawsuit against Mr Drumm, his wife and one of her friends.

Kathleen Dwyer, the Boston lawyer appointed to liquidate Mr Drumm’s assets in his bankruptcy case, has asked to have an application for the costs and expenses of her action against the parties, heard on January 12th.

The court is already hearing a motion that day filed by Mr Drumm’s wife, Lorraine, to answer claims on behalf of a trust set up by the couple to buy their house in the Boston suburb of Wellesley.

Ms Dwyer sued the Drumms and Mrs Drumm’s friend Anne Marie Greenberg, an estate agent, seeking to sell the property to recover money for his creditors.

She claimed the property was transferred fraudulently from Mr Drumm and that a “sham trust”, Epiphany Nominee Trust, of which Ms Greenberg is the trustee, was used to buy the house.

The Drumms have denied Ms Dwyer’s allegations, but have agreed to the sale of the property.

The house was purchased by the trust in January 2010 for $2 million (€1.5 million), including cash of $830,000 and a loan of $1.23 million from Boston Private Bank.

Mrs Drumm owns 50 per cent of the trust, giving her half-ownership of the house, but the trustee has applied to sell the property free of her interest in the house.

Ms Dwyer said, in court filings that became publicly available this week, that the sale of the property “free of the interests of Mrs Drumm outweighs the detriment, if any, to Mrs Drumm”.

The trustee is challenging a property agreement between Mr Drumm and his wife dating back to January 2010, which gives her a right to a share of the proceeds from the sale of the property.

Mr Drumm filed for bankruptcy in the Boston courts in October 2010 after failing to reach a settlement with Anglo Irish Bank, now Irish Bank Resolution Corporation, which is owed €8.5 million.

The court has already agreed to the sale of Mr Drumm’s home in Malahide, Co Dublin, which will be used to repay his debts to IBRC.

Another of his US properties, in the Cape Cod resort of Chatham, has been sold for $4 million.

IBRC and Ms Dwyer have taken lawsuits against Mr Drumm claiming he fraudulently failed to disclose property and money transfers to his wife, which he has denied. The lawsuits were taken to prevent Mr Drumm from walking away from bankruptcy in the US with a fresh financial start.