“It’s my money, it’s my money”. This is what David Drumm’s wife, Lorraine, allegedly told a property lawyer who worked on their $2m Massachusetts house deal, a court has heard.
Former Anglo Irish Bank chief David Drumm said in an email to his advisors that transactions involved in the purchase of the Drumm family’s US home in the Boston suburb of Wellesely were not to be included on a list of transfers of property, claiming they were not transfers. This list was made in the two years before he filed for a Chapter 7 bankruptcy,
He also had references to his Mercedes car and a payment of private school fees deleted from his bankruptcy papers, the US court was told.
Those requests were made in emails to his former lawyer, Heather Zelevinsky, who helped prepare the paperwork filed on October 29, 2010, and shown to the court in Boston on Wednesday.
The court in Boston, hearing the case to decide whether Mr Drumm can be discharge form his bankruptcy, was told that the trust that purchased the Wellesely house was owned equally by David and Lorraine Drumm at the time of its purchase and that a subsequent Separate Property Agreement - a contract between the couple - put her ahead of him to be repaid if the house was ever sold.
Property lawyer Peter-Paul Covo, who worked on the house deal and structured the Separate Property Agreement, said the second agreement was not a property transfer, something he said which would require a change to property deeds.
He said he was asked to draw up the agreement between the Drumms because he was told Lorraine Drumm’s money was used for the purchase.
“She [Lorraine Drumm] kept saying; It’s my money, it’s my money, it’s my money,’” he said.
Earlier, Mr Drumm and his wife arrived at court together for what was expected to be the final day of a case to decide whether the former bank boss can emerge debt-free from his US bankruptcy.
The issues at the heart of the case are property deals between the couple and transfers of $1.2m in cash from Mr Drumm and from the couple’s joint bank accounts to Mrs Drumm in the two years before he sought bankruptcy.
Emails seen by the court showed that Mr Drumm’s then-lawyer, Heather Zelevinsky, was asked by his then- accountant, Donald Swanson, of Vertolino and Lowey in 2010 whether two deals involved in the purchase of the house through a legal vehicle called the Epiphany Trust needed to be included in the filing under the heading of “other property transfer”.
The question was passed on to Mr Drumm by Heather Zelevinsky, the emails showed. In his response he said: “The Wellseley home was purchased by Epiphany - there were no transfers.”
Lawyer Ken Leonetti, representing Bankruptcy Trustee Kathleen Dwyer, put it to Ms Zelevinsky that the emails showed Mr Drumm was involved in the detail of preparing his own bankruptcy papers in October, 2010.
Kathleen Dwyer and IBRC say the failure to declare the Epiphany Trust deals in his bankruptcy papers is one reason Mr Drumm should not be discharged from his bankruptcy. They say money used to buy the property ultimately came from Mr Drumm’s earnings.
In an October 26, 2010, email to Ms Zelevinsky Mr Drumm asked her to replace a reference to cars including a Mercedes surrendered at the start of the bankruptcy, replacing the luxury brand name with more generic terms.
“Can you leave it as sedan and SUV, if the trustee doesn’t care the media can go fish,” he said.
Mr Drumm also asked in an October 28, 2010, email for a reference to $34,200 of school fees paid for the 2010/2011 year by the Drumms to be removed from the paperwork, because they had been paid by his business not by himself individually.
US bankruptcy judge Frank Bailey set aside five days to hear the case, which is due to end today, but he’s not expected to hand down a verdict for several weeks.