Former Anglo Irish boss files for bankruptcy in the U.S.

The former Anglo Irish Bank boss, David Drumm, now based in Cape Cod, Massachusetts, has filed for bankruptcy in the United States.

It is thought that this move could have implications for legal proceedings against him in Ireland. Currently Anglo Irish Bank suing Drumm as they are looking for him to return $11.25 million in loans to the bank.

His case is scheduled to be heard in the Commercial Courts on October 26, in Ireland. It has been said that if Drumm returns to Ireland he will be wanted for questioning by the police and various authorities over a number of issues to do with transactions in Anglo Irish Bank.

On Thursday the High Court in Dublin were told, by Brian O’Moore, Drumm’s lawyer, that Drumm filed for bankruptcy in Massachusetts at 3pm (Irish time). He filed for bankruptcy voluntarily which will divest all his assets worldwide and vest them in the Trustee in Bankruptcy in the U.S.

Now the US Trustee will take over Drumm’s defense. O’Moore pointed out that the logical step would be for Drumm to discharge his lawyers and council in Ireland. He also pointed out that what happens next is now out of Drumm’s hands. This may or may not disrupt the planned upcoming proceedings which were to take place at the end of the month.

The lawyer for Anglo Irish Bank, Barry O’Donnell said that this new information was “quite an extraordinary turn of events”. He said that he and his client would have to consider the matter before the date in court next week.

When O’Moore suggested that Drumm had “bent over backwards” to reach a compromise, according to the Irish Times report. The Anglo Irish lawyer said that it was “a bit rich” for Drumm to take the “high moral ground” now.

In December 2008 Drumm resigned as the chief executive of Anglo Irish Bank. He is now being pursued by the bank for $11.25 million in unpaid loans.

Drumm claims that the banks demands for repayment were in breach of the loan agreements and counter claimed that the termination of his employment was not dealt with in the correct way. He estimates that the bank owes him $3,691,228 in salary, pension and bonus payments and damages for “mental distress”.

Anglo has also sued Drumm and his wife for fraud on creditors. Drumm switched the family home in Abbington, an estate nicknamed ‘Millionaires Row’ in Malahide, north county Dublin into his wife, Lorraine’s, name. The couple claimed they made this switch due to tax reasons.

O’Moore said that on September 24 Drumm has offered Anglo all his assets, except for personal effects. He also offered them his house in Abbington. However, Anglo refused his offer on October 8.