There are a lot of lessons one could draw from the drama currently playing out in Manhattan federal court over billionaire Ira Rennert’s funding of his Hamptons estate. Rennert is accused of looting one of his companies out of $118 million in the late 1990s — or more than $600 million now, including interest — forcing the business into bankruptcy and using the funds to build a 100,000-square-foot compound.
Lesson No. 1: It’s hard to stay out of the headlines if you build a humongous limestone mansion on 63 acres of beachfront property in the glitzy Hamptons. The 62,000-square-foot main house has 29 bedrooms, 39 bathrooms, a 164-seat theater and a 100 car garage. The main house is adjacent to a 10,000-square-foot “playhouse” with two bowling alleys, a squash court and billiards room, amongst other amenities.
The sorry details of the fate of MagCorp, a polluting magnesium producer that went bankrupt in 2001, would be unlikely to generate quite so much interest on their own.
The trustee representing the creditors of the bankrupt MagCorp brought the lawsuit. The reclusive, Brooklyn-born Rennert, now 80, spent six hours being grilled in court last Thursday about details of MagCorp transactions that go back to 1996. Rennert is the founder of Renco Group, a private holding company that Vanity Fair once called “the biggest private polluter in America.” Forbes put Rennert’s net worth at $6.3 billion.
Rennert’s lawyers say MagCorp failed due to the recession, but was in fine shape when it floated bonds that financed millions in dividends that went to Rennert.
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