Former Anglo Irish Bank chief executive David Drumm will not know whether he can walk away from his debts until well into next year after his US bankruptcy trial was delayed again.
A US judge granted Mr Drumm and Irish Bank Resolution Corporation, which is trying to block his discharge from bankruptcy, more time to prepare their cases in the long-running legal battle.
The bank and the trustee liquidating Mr Drumm’s assets for his creditors are trying to stop his discharge from bankruptcy on the basis that he failed to disclose asset transfers to his wife.
At a hearing in the Massachusetts bankruptcy court, Judge Frank Bailey refused to allow a six-month extension to pre-trial deadlines as sought by lawyers for Mr Drumm and the defunct bank.
The judge granted a 90-day extension, which means the trial will not take place until well into next year, passing the five-year anniversary of Mr Drumm’s resignation as Anglo chief executive in December and the bank’s nationalisation in January 2014.
Refusing the longer-term extension, the judge said he understood that the case involved “substantial work” but that bankruptcy was “supposed to be a process that moves along quickly.”
He made his comments after lawyers for both sides and the bankruptcy trustee met privately with the judge for several minutes in a “sidebar” discussion, the details of which were not disclosed in court.
At a previous hearing in May the judge said that if the parties had progressed matters by this hearing he could schedule the trial for January 2014. The further extension means this date will not be met.
Judge Bailey scheduled the status hearing for October 22nd to discuss whether pre-trial orders are being met. Two previous dates for Mr Drumm’s bankruptcy trial, in January 2013 and June 2013, were already missed before the hearing.
Mr Drumm did not attend the hearing, which lasted less than 10 minutes. Lawyer Frank Morrissey represented the former banker, while attorney Kenneth Leonetti represented the bank.
The lawyers declined to comment as they left the bankruptcy court in Boston.
Mr Drumm filed for bankruptcy in October 2010 after he failed to reach an agreement with Anglo on debts of € 8.5 million, most of which relates to borrowings he used to buy shares in the bank.
The bank and trustee want Mr Drumm to repay his debts from future earnings, claiming that he should not be entitled to a discharge from bankruptcy because he failed to disclose the transfer of money and property to his wife during his bankruptcy.
Mr Drumm disputes the bank’s claims.
The delay in the trial means the criminal trial of his former colleagues Seán Fitzpatrick, Pat Whelan and Willie McAteer relating to providing unlawful financial assistance to individuals, including six members of the family of businessman Seán Quinn and the "Maple 10" customers of the bank to buy Anglo shares may proceed first. Their trial is scheduled to start in January.
