He was once one of Ireland’s most powerful and wealthy bankers, making decisions that influenced his country’s economy and the lives of countless ordinary citizens.
But the circumstances were very different in a Boston courtroom Wednesday. It was former Anglo Irish Bank chief executive David K. Drumm’s turn to wait for someone to render a decision about his financial fate.
Drumm, 47, sat with his arms crossed as lawyers made their closing arguments in his bankruptcy case. Now US Bankruptcy Judge Frank J. Bailey will decide how Drumm should settle the $12 million debt he still owes his former bank.
Bailey’s decision is not expected for several months, leaving tensions to simmer in a case being followed with intense interest in Ireland. Some see Drumm as a symbol of the excesses that felled Ireland’s financial system, prompting severe austerity measures and causing widespread pain. Drumm largely escaped those repercussions when he moved to the Boston area in 2009.
Wednesday’s closing arguments often focused on legal technicalities, but the passions of the case bled through repeatedly as the parties accused each other of lying and manipulating financial documents to protect their bottom lines.
“Mr. Drumm is really asking this court to adopt what I call the former CEO in bankruptcy defense,” said John G. Hutchinson, a lawyer for Drumm’s former bank, the nationalized Irish Bank Resolution Corp. He argued Drumm showed “utter disdain” for the bankruptcy process and tried to hide millions of dollars in assets from the bank and other creditors.
Drumm’s lawyer, David B. Mack, accused the bank of feeding off popular sentiment to concoct trumped-up claims against its former chief executive. “In the end, this case is nothing but a witch hunt,” Mack said. “The bank is out to get Mr. Drumm.”
Drumm was the chief executive of the bank in September of 2008, when its finances unraveled in the global financial meltdown. He relinquished his post later that year, following disclosures that chairman Sean FitzPatrick had received $115 million in hidden loans from the bank.
Facing inquiries from Irish authorities and intense public scrutiny, Drumm fled to the Boston area, living in a $5 million estate on Cape Cod. Later, he moved to a $2 million home in Wellesley.
In the bankruptcy case, Drumm’s former bank has accused him of secretly transferring his financial interest in those homes to his wife to shield the assets from creditors. The bank also accused him of failing to disclose $1.2 million in cash transfers to his wife, as well as the proceeds of the sale of additional property in Ireland and luxury vehicles.
Hutchinson argued Wednesday that Drumm deliberately omitted the asset transfers in his bankruptcy filings and then tried to blame the lapses on paperwork problems or a failure to understand disclosure requirements.
“There was no mistake here, no textual misunderstanding,” Hutchinson said. “There was deliberate concealment and deliberate false oaths regarding that concealment.”
Mack argued that the bank and Hutchinson have attempted to play “gotcha” with Drumm by picking apart financial disclosures and parsing his testimony to make him look dishonest. He said Drumm and his former legal advisers made a “big blunder” when they failed to properly disclose asset transfers, but blamed it on a paperwork misunderstanding.
“There is no evidence to support even remotely the portrayal of Mr. Drumm as a dishonest debtor who knowingly lied,” Mack said.
After the closing arguments, the judge ordered lawyers to submit post-trial documents by July 15. A decision in the case is expected later this summer.