Get out the popcorn: minerals magnate Ira Rennert is accused of bilking $100M out of Magnesium Corporation of America to build his giant Sagaponack house, Fair Field. According to bankruptcy trustees for MagCorp, the company sold $150M of junk bonds back in 1996 and passed $100M of it back to its parent company, Renco, which then passed it to Rennert. A few months after the bond sale, Rennert paid $11M for 63 oceanfront acres in Sagaponack. In 2001, with magnesium prices tumbling, MagCorp, the nation's largest magnesium producer, filed for bankruptcy.
The trustees say that at least $41M that should have been used to fund capital improvements at MagCorp was used to build Fair Field. The trustees want $118M back from Rennert, plus interest, plus punitive damages. Stay tuned.
· The house that Ira Rennert built [Crain's]
· Man With Many Enemies [Forbes]
· All posts about Rennert [CH]