A High Court judge has reserved her decision on whether to grant an order to assist a US official administering the bankruptcy there of former Anglo Irish Bank chief executive David Drumm.
Miss Justice Elizabeth Dunne today said she needed time to consider whether to grant an “order in aid” of those proceedings under which all Mr Drumm’s creditors will be dealt with equally in relation to distribution of his assets. She would give her decision as soon as possible.
The application for the order in aid was brought yesterday on behalf of Kathleen Dwyer, the Trustee dealing with Mr Drumm’s case in Massachusetts where Mr Drumm filed for bankruptcy in October.
John Hennessy SC, for Anglo, said the bank will be seeking to have a new trustee appointed at a creditors meeting due to take place tomorrow in the US.
Mr Hennessy also said, as of today, the former family home of Mr Drumm at Abington, Malahide, Dublin, had not formally re-transferred back into the joint names of Mr Drumm and his wife Lorraine.
The property had been transferred by Mr Drumm into Mrs Drumm’s sole ownership in May 2009 in what Anglo claimed was a fraud on creditors but the couple insisted was for tax reasons.
Following proceedings by Anglo to set aside the transfer, Mrs Drumm had consented last month to the re-transfer of the property back into the joint names of the couple, Mr Hennessy said.
This re-transfer has yet to be finalised due to the bankruptcy proceedings in the US and the property remains in Mrs Drumm’s sole name, counsel added. The Commercial Court is also due to deal tomorrow with an injunction previously granted to Anglo which restrained Mrs Drumm dealing in the property, counsel said.
Bernard Dunleavy, for the US trustee, told Miss Justice Dunne an “order in aid” will ensure all creditors can be dealt with on a equal footing in relation to Mr Drumm’s assets.
Although it appeared the majority of those are based in the US, there were also a number of assets within this jurisdiction which would have to be dealt with in the bankruptcy proceedings, counsel said.
Mr Dunleavy said there was an inherent jurisdiction in Irish courts to provide for an order in aid. There was an equivalence between the US bankruptcy code and that which operates here and it was “undesirable” to have multiples of bankruptcy proceedings, he added.
If the injunction preventing Mrs Drumm dealing in the family home was set aside, there would be a seamless transition of Mr Drumm’s interest in the property to the US trustee.