Anglo Irish Bank begins US bankruptcy action against Drumm

Anglo Irish Bank has asked a court in the US to deny its former chief executive discharge under bankruptcy laws.

David Drumm could walk away owing more than €10m in debts to his former employer if declared bankrupt, which he filed for last year.

Anglo has confirmed it filed papers in the US objecting to his bankruptcy and urging the courts not to protect him.

If granted, it means Mr Drumm, who lives in the Boston suburb of Wellesley, Massachusetts, will still be liable for his debts.

It is understood Anglo claims its former chief committed fraud in connection with a loans for shares scandal involving 10 of its biggest clients.

A judge hearing the high-profile trial will have to decide if Mr Drumm will have to account the alleged fraud.

Mr Drumm moved to the US in December 2008, shortly before Anglo was nationalised.

In a statement, Anglo said it had filed a Complaint for Denial of Discharge under section 727 of the US Bankruptcy Code, which is an application to bar Mr Drumm’s discharge from US bankruptcy generally.

“The bank has further filed a Complaint to Determine Dischargeability pursuant to section 523 of the US Bankruptcy Code, which is a separate application to bar Mr Drumm’s discharge from debts owed to the Bank specifically,” it added.

“We understand that the US Bankruptcy Trustee is also filing a section 727 Complaint for Denial of Discharge.”

The bank recently revealed it has dramatically reduced losses to just over €100m, down from the record-breaking figures it suffered last year.

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