Former Anglo Irish Bank chief David Drumm has told a US court that he was “absolutely devastated” to learn that $1.2m in cash transfers to his wife should have been included in his bankruptcy forms.
The transfers were mistakenly not included under the heading of “property transfers” filed in 2010, the Boston court was told.
“There were a lot of errors,” Mr Drumm said yesterday.
Under cross-examination from John Hutchinson for IBRC, which has challenged his entitlement to bankruptcy, Mr Drumm agreed that papers he filed in April 2011 as part of the process were not “accurate and complete”.
He agreed that he had sworn on oath that the papers were accurate.
He explained that when he wrote to one of his advisers “it never pays to be cooperative” in an email produced in court it was meant as a joke.
Asked later for his reaction on learning that the omission from his original forms of transfers to his wife was a problem, the former Anglo Irish Bank boss he said: “It was just a total disaster. I was absolutely devastated.”
Details of all of the transfers between Mr Drumm and his wife Lorraine in the two years before he sought bankruptcy were provided to the bankruptcy trustee overseeing the case from the very beginning, he said, despite not featuring in the forms.
The transactions were included in two binders of personal financial information submitted alongside the original papers.
The former banker spent most of yesterday being cross-examined by David Mack, his own lawyer.
He has now been in the witness stand for two days at a US federal bankruptcy court at the David W McCormack Post Office and Court House in Boston’s financial district.
The case is to decide whether the former bank chief can emerge debt-free from a Chapter 7 bankruptcy which he applied for in 2010 after moving to the US the previous year.
IBRC, the former Anglo Irish Bank, and the bankruptcy trustee managing the case have objected to Mr Drumm being discharged from bankruptcy, something that would allow him a fresh financial start.
They claim cash and property transfers and errors in his original bankruptcy filing amount to fraudulent transfers and make him inelligible to emerge debt-free.
Mr Drumm told the court that he applied for bankruptcy in the US after an attempt to reach a settlement with Anglo Irish Bank over his €8.5m debt to the bank failed.
The US bankruptcy option was a “fall back” he said.
The potential outcome of going bankrupt in Ireland was viewed as something that would be a “total disaster” for Mr Drumm the court was told.
“At the time it was a 12-year process,” He said.
In Boston, Mr Drumm said the use of a trust to buy a family home in the suburb of Wellesley was to make it harder for the media to find the Drumms, not in order to hide assets.
The case continues.