Two US law firms have this week submitted €1.2m claims for unpaid legal fees to the US bankruptcy court which is dealing with former Anglo CEO David Drumm’s bankruptcy, reports Simon Carswell who is back on his home-ground specialism in the Irish Times today, even if the Irish Times has bizarrely physically relocated him to Washington.
Given David owes about €10m in his bankruptcy already including a €8.5m loan from Anglo, and given David has sold his property at Abington, Malahide for about €1.4m of which half will go to his creditors, and his property at Stage Neck Road, MA – where Charlie Bird famously doorstepped David – “have some respect Charlie, I have my family in here” – was sold for just over €3m with half again going to the creditors, and there is still a property in Wellesley which has oddly been recently withdrawn from the market but was said to be worth €1.5m, and given these three properties are likely to be David’s main assets, you would be doubtful of his creditors even seeing anything like substantial repayment.
In total, David’s half share of the properties is worth less than €3m, David’s shares in Anglo were wiped out and his chattels including a couple of vehicles are unlikely to be worth more than €100,000. So (a) Anglo is facing a large loss on its loan and will be lucky to get 25c in the euro back and (b) the two US law firms acting on behalf of IBRC would appear to have a snowball’s chance in Hell of recovering their outstanding fees.
The two US law firms involved in the case on behalf of IBRC are New York’s Sidley Austin claiming USD 1.463 (€1.1m) and Boston’s Foley Hoag claiming USD 191,276 (€0.1m). It is not known how much these firms were previously paid before IBRC was placed in liquidation last week.
Minister for Finance Michael Noonan refused to even provide IBRC’s total legal costs in a response to a recent parliamentary question.
The claims lodged by IBRC’s lawyers this week are indicative, though not yet probative, of IBRC abandoning the case against David.
Separately, last year, claims for USD 628,000 (€0.5m) were submitted for work undertaken on behalf of the bankruptcy trustee, Kathleen P Dwyer.
Unless there is a belief that David has assets squirreled away – and the sorry truth appears to be that David shoveled his income, salary and bonuses into Anglo shares which were wiped out – then it would seem that this case has no further economic value to Ireland. Which begs the question, how much money should Minister Noonan now spend on pursuing David for what will be politically-motivated ends. The answer would appear to be zero, given the claims earlier this week.
David may still have to contend with the bankruptcy trustee, Kathleen P Dwyer, who hasn’t been happy with his conduct. And of course David also faces sanction from the Chartered Accountants Regulatory Body in Ireland. Whilst An Garda Siochana is said to want to speak to David, no attempts have been made to extradite David from the US, and David does not form part of the trio – Sean Fitzpatrick, Willie McAteer and Pat Whelan – who will face trial in Ireland at the start of 2014.
Looks like we might have uncovered another winner from the IBRC liquidation.