Anglo Irish asks U.S. court to deny ex-CEO protection
DUBLIN |(Reuters) - Anglo Irish Bank ANGIB.UL asked a U.S. court on Wednesday to deny its former chief executive David Drumm a discharge from United States bankruptcy laws as it seeks to recover debts of nearly $11 million from its former CEO.
In legal filings, the nationalized lender said Drumm had committed fraud during his tenure as CEO by altering the personal liability provisions on loans he and others had received from the bank to buy its shares.
The decision to give investors and directors loans to buy shares in the bank is the subject of ongoing investigations by authorities in Ireland.
"(The) Defendant's concealment and fraudulent acts were a desperate attempt to avoid serious financial risk to himself, the other directors, and the favored investors arising from AIBC's (Anglo Irish Bank Corporation) sharply declining share value at a time when the bank's very survival was rife with doubt," according to the complaints, copies of which were obtained by Reuters.
"These acts of fraud perpetrated by Drumm breached his fiduciary duties to AIBC, causing AIBC, its employees and shareholders, and, ultimately, Irish taxpayers millions of euros in losses, and were substantial contributing factors to a loss of confidence in the bank and its nationalization in January 2009," according to the documents.
Drumm's attorneys have charged that the bank fraudulently had Drumm take on an unsecured near $11 million loan in order to improve the appearance of the bank's books.
No one from Drumm's legal team was available to comment on the filings.
Once Ireland's largest bank and a stock market titan, Anglo Irish has been nationalized, and its new management aims to have the lender closed by 2020.
Ireland's government has spent 29 billion euros keeping the group afloat.
(Reporting by Carmel Crimmins; Editing by Toni Reinhold)
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