David Drumm loses appeal against rejection of bankruptcy

Former Anglo Irish Bank chief executive David Drumm and his wife Lorraine Drumm. File photograph: Josh Reynolds/The Irish Times

A US court has rejected an appeal by former Anglo Irish Bank chief executive David Drumm against his failed bankruptcy bid, claiming that a judge made “no mistake” in denying him a fresh financial start.

US District Court Judge Leo Sorokin agreed with Bankruptcy Judge Frank Bailey that Mr Drumm’s failure to disclose his transfer of a €250,000 mortgage on a property in Skerries, Co Dublin in December 2008 to his wife amounted to “misdirection and dishonesty”.

The judge said the reasons given by the Dubliner (49) for his omission of information about a series of property and cash transfers to his wife Lorraine from his bankruptcy filings were “ever-changing”.

In a highly critical ruling, the judge said in a 22-page decision that the bankruptcy court’s determination that Mr Drumm’s failure to list assets was done to hinder or delay and was intentional and fraudulent was “wholly logical, plausible and supported by the record”.

“The record demonstrates convincingly that Drumm knowingly failed to disclose the 2008 mortgage on Skerries Rock, and the transfer of the proceeds to a newly opened bank account in Mrs Drumm’s sole name,” said Judge Sorokin.

Major setback
The ruling is a major setback for Mr Drumm, leaving him personally liable for $11 million in debts and facing financial ruin as he remains in custody in the US while he fights extradition to Ireland.

“This court is left with the most definite and firm conviction that no mistake has been committed by the bankruptcy court, let alone either an error of law or a clearly erroneously finding of fact,” said Judge Sorokin.

The former bank chief executive is in detention in New England and awaiting a ruling of another US District Court judge to decide whether he should be released on bail pending his extradition case.

Mr Drumm is wanted back in Ireland to face 33 criminal charges relating to transactions carried out while he was chief executive of Anglo as the bank was facing ruin during the 2008 financial crisis.

Judge Sorokin found that at a meeting with his bankruptcy trustee in December 2010, Mr Drumm provided “ambiguous and misleading answers” regarding the mortgage on the Skerries Rock property.

The record supports the conclusion that he attempted to obstruct the trustee’s search or information and failed to provide documentation and information related to Skerries Rock when requested, he said.

‘Full disclosure’
“Drumm knew he had to make full disclosure, including disclosing Skerries Rock,” said the judge.

There is no evidence, he said, that “even comes close to suggesting that he did not understand this simple fact or that it was otherwise not transparently plain” that the transaction concerning Skerries Rock had to be disclosed in Mr Drumm’s bankruptcy schedules to the court.

The judge said the former banker could not rely on blaming his financial advisers over his failure to disclose the Skerries mortgage transfer, as he could point to no testimony from where his advisers claim to have told him that he could omit the transaction.

“Drumm was not relying upon anyone’s advice when he failed to make disclosure of Skerries Rock, a point he conceded at trial,” said Judge Sorokin in his Massachusetts District Court ruling.

Mr Drumm filed for bankruptcy in October 2010 after failing to reach a settlement with his former bank on loans provided mostly to buy shares in the bank.

Irish Bank Resolution Corporation, formerly Anglo Irish Bank, objected to Mr Drumm’s discharge from bankruptcy on 52 counts and Judge Bailey sustained objections on 30 of those counts.

The bankruptcy judge said in a ruling in January that Mr Drumm’s statements to the court were “replete with knowingly false statements, failures to disclose, efforts to misdirect and outright lies”.

A US Attorney objected to the former banker’s release from custody earlier this month pending his extradition, citing the bankruptcy ruling and saying that it showed that Mr Drumm “cannot be trusted”.

Article from:- http://www.irishtimes.com




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