Until recently, David Drumm was the chief executive of Anglo Irish Bank, drove a €35,000 Land Rover and flipped vacation homes on Cape Cod.
Today he is bankrupt, drives a $1,000 used Ford Taurus and hopes a Massachusetts court will let him keep supporting family members. If a judge cuts off some payments, Mr Drumm told a court trustee today, one consequence would be "a very upset mother."
At a hearing today in the boardroom of a Boston law firm Mr Drumm was forced to testify under oath for the first time about his holdings as part of a complex bankruptcy process that puts at risk his remaining properties, vehicles and even his ability to buy gifts for his children.
In a court document, Mr Drumm has listed total assets and liabilities of $1 million to $10 million.
Now living in Massachusetts, where he once ran the Anglo's commercial lending operations, Mr Drumm filed for Chapter 7 bankruptcy in October as part of a bitter dispute with his former employer, which was nationalized in early 2009. Raised north of Dublin, Mr Drumm was named Anglo-Irish's CEO in 2004 when he was just 37.
But now the bank is suing Mr Drumm for the repayment of loans to him. Mr Drumm claims he is being made a scapegoat, and has faced talk of his being extradited back to Ireland as part of an ongoing investigation.
Separately, attorneys representing Mr Drumm's estate have charged that the bank fraudulently had Mr Drumm take on an unsecured $10.7 million liability in order to improve the appearance of the bank's books in early 2009.
It could be months - and tens of thousands of dollars in attorneys fees - before the claims are hashed out. Mr Drumm had already filed details of some of his assets with the court, such as the late model Mercedes sedan and SUV he surrendered in October, and loans on properties like the house where spends much of his time in the resort community of Chatham.
But the disclosures to date did not spare Mr Drumm the spectacle he faced on 21 floors above Boston Common today, where a trustee had his attention for two hours. The hearing was open to the media.
Clad in a dark suit and blue tie, his receding hair clipped close, Mr Drumm was unfailingly polite as he sat with his lawyers at a conference table disclosing the basic and mundane details of his financial life - a role reversal for any banker more accustomed to pressing borrowers for the same information.
Yes, Mr Drumm told the court, he has been charging his sister rent for a property he leases her. No, he has not bought his children any expensive gifts lately worth more than $500 - oh, except for some computers. It is correct that his wife has petitioned the bankruptcy estate for about $210,000, money Mr Drumm said represents her investment in the consulting business from which he now makes his living.
Also, the mortgage for another home in an upscale Boston suburb was arranged through a trust. "The purpose of the trust was privacy, in terms of the attention I received," Mr Drumm said.
Mr Drumm made no nod to irony as he described the work of his consulting business, Delta Corporate Finance, which he said focuses on debt restructuring and disposals. He draws a salary of $9,000 a month from the business, he said.
Mr Drumm and his attorneys left the hearing without commenting to reporters. An attorney for Anglo-Irish bank said he would not comment. Further hearings are scheduled, and the bank will get its own chance to press Mr Drumm for more details next month.
For Kathleen Dwyer, the bankruptcy trustee who conducted most of the day's questioning, the session was just another day in a career she estimated has included nearly 20,000 cases. But Dwyer could not recall the last case that involved such a high-profile debtor. "It's a changing world," she said.
Reuters