The former CEO of Anglo Irish Bank resigned his position in 2008 shortly before it was nationalized by the Irish government as it edged closer to bankruptcy. New Jersey readers may be interested to know he moved with his family to Massachusetts where he and his wife bought a house for more than $4.5 million. After the bank nationalization, the man sued the man in Irish court for millions of dollars in said to be outstanding debts, and he countersued. As those legal matters were heading to trial abroad, the man sought Chapter 7 bankruptcy protection in the United States in October 2010.
The Chapter 7 filing placed a hold on the Irish court proceedings, and a trustee was appointed. While the trustee sought and obtained the court’s approval for the sale of the Cape Cod home for less than $4 million to an executive with a privately held, New Jersey-based investment firm, she has also questioned the former executive’s finances. The dispute centers around assets in the wife’s name, who he asserted was one of his biggest creditors. The trustee has moved to deny the bankruptcy and recover money that was paid to the wife. A response is due from the executive by Nov. 11.
In the meantime, the sale of the Cape Cod property was approved in U.S. Bankruptcy Court, and the proceeds of that sale will be applied toward the man’s creditors. The executive’s wife has since purchased a home in Wellesley, Massachusetts, for $2 million. While it remains to be seen how the trustee will proceed and what the ultimate decision of the bankruptcy court will be, the Chapter 7 filing has provided for some breathing space to address issues and plan for the liquidation of assets to discharge debt in an orderly fashion.
The case demonstrates that the global financial crisis has affected all social and economic strata. Increasingly those who have encountered financial crises beyond their personal control have sought bankruptcy protection in an effort to right their economic ship. In New Jersey, those suffering from debt that is spiraling out of control may benefit from consulting an attorney experienced with bankruptcy law and procedure to assist in obtaining debt relief and planning for a fresh financial start.
Source: The Cape Cod Times, “Drumm’s Chatham home sold for $3.9 million,” Bryan Lantz, Oct. 18, 2011