Billionaire Ira Rennert On Trial For Allegedly Looting Company To Build Sagaponack Estate - 27 East

Real Estate News

Real Estate News / 1412108

Billionaire Ira Rennert On Trial For Allegedly Looting Company To Build Sagaponack Estate

icon 2 Photos
The gardens at the home on Ocean Road in Bridgehampton.   DANA SHAW

The gardens at the home on Ocean Road in Bridgehampton. DANA SHAW

The Rennert estate in Sagaponack. PRESS FILE

The Rennert estate in Sagaponack. PRESS FILE

author on Feb 4, 2015

Billionaire Ira Rennert, famous in the Hamptons for his 63-acre estate in Sagaponack, is on trial in federal court in Manhattan, accused of pilfering almost $120 million from his ailing company to help fund construction of the estate in the late 1990s, which was at one point considered the largest occupied home in the country.

Lawyers for creditors of Utah-based MagCorp, a mining outfit that failed, contend that Mr. Rennert drove the company into bankruptcy by having MagCorp and Renco Metals pay more than $100 million in unlawful dividends and stock redemptions to parent company Renco Group, a holding company founded in 1975 by Mr. Rennert, between 1995 and 1998.

Mr. Rennert, they contend, was “unjustly enriched” by taking $150 million from MagCorp and using it to build his oceanfront mansion in Sagaponack, while ignoring the company’s increasing environmental, technological and competitive problems. In a civil lawsuit filed in 2003, MagCorp’s lawyers are seeking more than $600 million, including punitive damages.

“They didn’t set aside any money for that $150 million—not one penny,” Leo Beus, attorney for the bankruptcy trustee, said in his opening remarks in court this week. “No rainy day fund at all. They think they are going to refinance.”

“The financial projections used to justify some of the … payments were fanciful and unrealistic,” the trustees’ attorneys state in court documents. “Rennert personally approved and knowingly provided substantial assistance to cause each of the fraudulent conveyances, and caused damage to the debtors.”

Mr. Rennert’s attorneys, however, assert that there is no proof that money taken from MagCorp was for personal use, or that in doing so Mr. Rennert rendered the company insolvent. Rather, they contend, MagCorp’s failure was caused by difficult market conditions.

“This is a case about a strong company and a healthy company that performed well and did so until the time of bankruptcy,” said Peter Haveles, one of Mr. Rennert’s attorneys, in his opening remarks on Tuesday. The failure of the company, he said, was “all about global economy … The plaintiff attempts to make this case an indictment of Ira Rennert. That attack is unfair and false. Mr. Rennert is a hard-working and smart businessman. He grew up in the heart of Brooklyn, and he is emblematic of the American success story. He got there because of his hard work and diligence.”

Mr. Rennert paid $11 million for the land in Sagaponack and built his compound in the late 1990s, naming it “Fair Field.” The buildings on the Daniels Lane property, Mediterranean in design and reminiscent of old Italian villas, total more than 110,000 square feet and include a 57,700-square-foot main house with 29 bedrooms. A 10,000-square-foot “playhouse” sits adjacent to the main house and contains a squash court, two bowling alleys, an exercise room, lounge, billiards room, playroom, game room and outdoor terrace.

You May Also Like:

Getting Real With East End Real Estate: Putting A House To Work

The option that many white-collar workers have to work remotely and the continuing restrictions on ... 5 May 2021 by Brendan J. O’Reilly

New York State Eviction And Foreclosure Moratorium Extended Through End Of August

The New York State Legislature voted Monday, May 3, to extend the state moratorium on residential and commercial evictions and foreclosures through the end of August. The moratorium began by executive order in March 2020, and the State Legislature codified it in December. It’s been extended several times as the COVID-19 pandemic wore on, and it was most recently set to expire this past Saturday, May 1. This latest extension is retroactive to that date and gives tenants, homeowners and commercial building owners another three months of protection. In order to invoke the moratorium, residential tenants and homeowners must file ... 4 May 2021 by Staff Writer

Agency News: Adam Hofer Joins Michael Lorber Team

The Michael Lorber Team, one of Douglas Elliman Real Estate’s leading teams in New York ... by Staff Writer

Oceanfront Development Opportunity On Dune Road In Quogue Sells For $7.9 Million

A 2.8-acre oceanfront property in Quogue that was billed as a development opportunity has sold ... 3 May 2021 by Staff Writer

New Modern Farrell Home In Bridgehampton With Rooftop Putting Green Sells For $21 Million

A newly built modern with a rooftop putting green in Bridgehampton by Farrell Building Company ... by Staff Writer

East Hampton Residence of Late Life Savers Heiress Sells For $60 Million

A nearly 6-acre oceanfront property in East Hampton Village with a circa-1955 midcentury modern residence ... 30 Apr 2021 by Staff Writer

Tight Inventory, Quick Sales Define Hamptons Real Estate Market In First Quarter Of 2021

The runaway seller’s market in the Hamptons continued through the first quarter of the year ... 28 Apr 2021 by Brendan J. O’Reilly

Community Preservation Fund Breaks First Quarter Revenue Record

The Peconic Bay Community Preservation Fund had a record-breaking first quarter in 2021, bringing in ... by Staff Writer

Farmview Sagaponack Estate Sells For Nearly $11 Million

A farmview Sagaponack estate recently sold for $10.65 million, according to The Real Estate Report ... by Staff Writer

European-Style Farmhouse In Bridgehampton Sells For $6.5 Million

A European-style barn farmhouse on 5 acres in Bridgehampton recently sold for $6.5 million, just ... by Staff Writer

Welcome to our new website!

To see what’s new, click “Start the Tour” to take a tour.

We welcome your feedback. Please click the
“contact/advertise” link in the menu bar to email us.

Start the Tour
Landscape view not supported
Send this to a friend