Anglo Irish Bank Corp.’s (ANGL) failure helped push Ireland to the brink of insolvency. Now, the country may get some payback as the six-bedroom mansion belonging to the lender’s bankrupt former chief executive, David Drumm, goes on sale.
The Regency style, double-fronted house in an affluent Dublin suburb is being sold on behalf of the trustee appointed by a U.S. bankruptcy court to wring as much as possible out of Drumm’s property to pay creditors, including now government- owned Anglo Irish. Drumm, 55, filed for Chapter 7 protection in Boston 15 months ago, citing $14.2 million owed to creditors and assets valued at $13.9 million.
Anglo Irish, renamed the Irish Bank Resolution Corp., claims Drumm owes it about 8 million euros ($10.5 million). Ireland has spent about 30 billion euros bailing out the bank, which was nationalized in January 2009 after the real-estate market imploded. Though Drumm left for the U.S. as things fell apart, his three-story, 5,167-square-foot (480-square-meter) house remained well kept.
“The house is in very good condition as it was well minded,” said Simon Stokes, a director at North’s Property, which is offering the house for 1.65 million-euros. The property has been shown to 15 or 20 potential buyers since North’s put it on the market last month, he said.
The rise and fall of Drumm and Anglo Irish mirrors the country’s. Under the stewardship of Drumm and former Chairman Sean Fitzpatrick, Anglo Irish bankrolled many of the property developers behind the Celtic Tiger boom that drove economic growth to an average 6 percent in the first half of the 2000s.
Anglo Irish’s strategy unraveled as credit evaporated in the wake of Lehman Brothers Holdings Inc. (LEHMQ)’s bankruptcy in September 2008. Drumm resigned three months later and subsequently left for the U.S., leaving behind the house near the coastal village of Malahide.
Malahide, with its marina and chic boutiques, is one of Ireland’s wealthiest towns. Georgina Byrne, daughter of former Irish Prime Minister Bertie Ahern lives in the area with her pop star husband Nicky Byrne of Westlife. U2 guitarist David Howell Evans, better known as The Edge, and the group’s bassist Adam Clayton went to primary school there.
The ground floor drawing room includes two small chandeliers, and features wood flooring and a marble fireplace. There’s a large 12-light crystal chandelier in the main reception room leading to a long, winding timber staircase that runs to six bedrooms on the second and third stories, each with wood floors heated from underneath. The house comes with three reception rooms, a tiled kitchen with a marble worktop and a so- called Belfast sink and four bathrooms.
Those looking for signs of the Drumms may be left disappointed. Aside from some children’s toys and a Powakaddy golf trolley left in the detached double-garage, there are few to be found.
Off the ground floor drawing room is a study with a fireplace and library-style shelving. Empty unmarked folders fill an unlocked filing cabinet.
Stokes said he’s optimistic about getting the offer price for the house, even in “slow market,” saying that not everybody lost out in the Irish property bubble. The former ownership of the property “is not something that people have raised when looking at it,” he said.
“I see houses being sold at over 1 million euros all the time,” Stokes said. “There are people out there who have cash reserves and who sold when the market was stronger.”
Ireland, however, is still trying to clean up the mess left by Anglo Irish. The country was forced to seek a bailout from the European Union, International Monetary Fund and European Central Bank in 2010 as its banking crisis became too big to handle alone.
Police are investigating the circumstances behind Anglo Irish’s collapse, though no one has been charged and Drumm denies wrongdoing. The bank is suing him in the U.S. in connection with money he allegedly borrowed from it.
Francis C. Morrissey of Morrissey, Wilson, & Zafiropoulos, LLP, Drumm’s bankruptcy lawyer, declined to comment.
The bankruptcy trustee, Kathleen P. Dwyer, sold Drumm’s waterfront house in Chatham, Massachusetts, on Cape Cod for about $3.9 million. He paid $4.6 million for that property in March 2008, according to documents obtained from the Barnstable County Registry of Deeds.
Irish Justice Minister Alan Shatter has introduced legislation to give police greater powers in banking investigations after what he said was “insane lending.”
“Property values were substantially overblown in the boom market that developed, which was fueled by the financial institutions holding hands with developers,” Shatter said in a Feb. 10 interview.
The government is seeking European help to refinance the 30 billion euros of bonds used to help rescue Anglo Irish.
For Ireland to get out of the bailout program, “we will need to find a new arrangement to replace the Anglo promissory notes,” Irish Transport Minister Leo Varadkar said on Feb. 10. “We are in a hole, but slowly we are clawing our way back out.”
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