David Drumm accuses IBRC of personal attack

Former Anglo Irish Bank chief executive David Drumm has accused the bank of attacking him personally rather than his reasons for why he should be entitled to walk away from debts of €10 million.

In a US court filing, Mr Drumm challenged the assertion by Irish Bank Resolution Corporation, formerly Anglo, this month, that it "would be hard to imagine a more dishonest debt." He claims the bank failed to address the arguments directly on why he feels a bankruptcy judge wrongly ruled that he should not be given a fresh financial start.

His US lawyer argues that the majority of the factual findings upon which the bankruptcy judge denied him a discharge were "clearly erroneous and were influenced unduly by its intense dislike of Mr Drumm".

The former banker wants the ruling of Massachusetts Bankruptcy Judge Frank Bailey denying him a debt discharge to be overturned. He has blamed his lawyers for wrongly advising him not to disclose transfers of more than €1 million to his wife in his bankruptcy filings.

Mr Drumm said in a brief filed on Friday replying to IBRC’s objections in his appeal that Judge Bailey’s finding of his lack of credibility “does not give the court carte blanche permission to ignore the other evidence” supporting his case.

His lawyer pointed to evidence presented at trial which showed that one of his lawyers Heather Zelevinsky, not Mr Drumm, chose not to disclose to his bankruptcy trustee in 2010 transfers he made to his wife.

“Mr Drumm was entitled to rely on the advice and indeed, the legal determinations of his attorneys as to how, when and where to produce the schedule of transfers he prepared at their request,” his lawyer says.

Boston attorney Tracy Miner, for Mr Drumm, argues that the bank and his trustee, Kathleen Dwyer, in their objecting brief "do not attack directly the arguments made by appellant David Drumm but rather spend most of their argument attacking David Drumm personally."

The bank and trustee claimed in a filing made to the US District Court on May 15th that Mr Drumm fell far short of his disclosure obligations in the bankruptcy proceedings by intentionally omitting countless items and “engaging in evasive conduct.”

In Mr Drumm’s replying brief, Ms Miner argues that regardless of how the bank and trustee “attempt to vilify Mr Drumm, he is entitled to have his appeal determined on the merits.”

She continued: “Justice is meant to be blind, there to serve the unlikeable as well as the likeable, without bias between the two.”

Mr Drumm’s reply brief is aimed at addressing “some of their mischaracterisations and attempted obfuscations of the facts” contained in the brief submitted by IBRC and Ms Dwyer, she said.

She argues that they "ignore the undisputed fact" that he provided his attorneys with documents detailing all of his assets and transfers, including the transfers to his wife Lorraine.

In an attempt to defeat his defence that he relied on legal advice, the bank and trustee “continuously characterise Mr Drumm’s disclosure of information to his attorneys as deceitful, notwithstanding the fact that this characterisation was not supported by his attorneys,” she said.

Lawyers can seek a brief oral hearing to present argument before US District Court Judge Leo Sorokin, sitting in Boston who will rule on the appeal.

Mr Drumm faces financial ruin if Judge Bailey’s ruling stands, leaving him exposed to further action by the State-owned bank, now in liquidation, in the recovery of its €10 million debt from him.

In January Judge Bailey rejected Mr Drumm’s entitlement to a discharge from bankruptcy on 30 grounds in a damning ruling.

He concluded, following a trial last summer, that Mr Drumm systematically transferred the assets to his wife to hinder, delay and defraud creditors and that his conduct was “both knowing and fraudulent” and his statements to the court replete with “outright lies.”