The Irish Mail on Sunday
The banker with a million things not on his mind
David Drumm experiences memory failure at US bankruptcy hearing
FOR a supposedly financially savvy banker, David Drumm showed a remarkable knack for forgetting key events this week when he was grilled in court about his financial affairs.
On more than a dozen occasions he claimed memory loss during his Boston bankruptcy hearing, or tried to correct statements previously given to the court.
His memory problems seemed obvious during the much-anticipated appearance in the witness box by the former Anglo chief executive, who is seeking a Chapter 7 bankruptcy discharge.
A key part of his testimony has involved being questioned about allegedly fraudulent cash and property transfers to his wife prior to his bankruptcy filings.
IBRC and bankruptcy trustee Kathleen Dwyer, who took the stand on Friday, believe Drumm has not been forthcoming in his financial disclosures and are challenging his application.
She testified on Friday:
‘The information had to be drawn out from him over time and a series of requests made. So it was tedious.’
Drumm admitted in testimony that he had failed to disclose the transfer of proceeds from two car sales to his wife’s accounts and the transfer of a 50 per cent share of a Chatham, Massachusetts property to his wife. He also failed to disclose a loan to his brother and an equity interest in the purchase of a home in the posh Boston suburb of Wellesley.
But his explanation for some of these omissions was that they simply weren’t on his ‘radar’ at the time. He also told the hearing he ‘forgot’ that it was his name that was on the deed of the property in Chatham, and that he simply didn’t recall transactions with his wife when preparing paperwork for the court.
The court had required Statements of Financial Affairs (SOFAs) and schedules from him, but more than $1million in transfers to his wife, Lorraine, were absent from these. Both Drumm and his lawyer, Stewart Grossman, said he had been warned about the consequences of leaving
‘It never pays to be cooperative, right?’
transactions out of his filings. But Grossman also claimed memory loss – insisting he did not recall certain conversations with Drumm, the date of a meeting or whether he had stayed for the duration.
Despite his admissions in court, Drumm seemed unperturbed during the week, chatting amicably with his legal team and even entering the media room to grab a table and enjoy a salad for lunch. But the court was easily reminded of his sometimes laddish attitude, reminiscent of the infamous Anglo tapes, when an IRBC lawyer read an email exchange between Drumm and Grossman.
The lawyer warned Drumm that they must be very careful in what they said in documents.
Drumm replied: ‘Good advice. Never pays to be cooperative, right?’
The email was sent two days between the filing of his SOFA and schedules.
Drumm testified that the statement was ‘a joke’. He also claimed to be ignorant of US bankruptcy laws and reliant on the advice of his counsel – although Grossman claimed Drumm ranked among the most financially savvy clients he has represented.
Ms Dwyer, too, testified to Drumm’s financial background. ‘Given his educational background and the description of his work history, I concluded that he was very sophisticated in financial matters,’ she said.
When asked if she had ‘any difficulty communicating with him’ during creditors’ meetings, she said that he appeared knowledgeable about his statements and financial affairs.’