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A federal appeals court said billionaire Ira Rennert must pay a $213.2 million judgment after a jury found him liable for looting his now-defunct magnesium company to build one of the country’s most expensive homes, a 21-bedroom mansion in New York’s Hamptons.
The 2nd U.S. Circuit Court of Appeals on Wednesday let stand a jury verdict against the mining mogul and his holding company Renco Group Inc, and won by a trustee liquidating the bankrupt Magnesium Corp of America, known as MagCorp.
It rejected Rennert’s argument that the jury rendered an “irrational” verdict by awarding damages despite believing MagCorp was solvent at all relevant times.
Rennert belatedly challenged whether the verdict was internally inconsistent, and “cannot pursue a compromise-verdict claim because that would sneak a waived inconsistency claim in through the back door,” the Manhattan-based appeals court said.
The court also rejected Rennert’s argument that the trustee was not entitled to a jury trial, and that the trial judge made multiple errors.
Lawyers for Rennert did not immediately respond to requests for comment. Lee Buchwald, the MagCorp trustee, was not immediately available for comment.
Rennert, 82, is worth $4.1 billion, Forbes magazine said.
Jurors had in February 2015 found Rennert and Renco liable for $118 million to the bankruptcy estate of MagCorp, which had sought protection from creditors in 2001. The trial judge, U.S. District Judge Alison Nathan, later added interest.
Buchwald had contended that Rennert diverted money from MagCorp to help build his estimated 43,000-square-foot mansion, known as Fair Field, on 65 oceanfront acres in Sagaponack, on New York’s Long Island.
Rennert denied that allegation. The property was valued last March at $248.5 million, according to the Town of Southampton assessment roll.
Last March, Renco agreed to pay in full the pensions of about 1,350 retirees at its bankrupt RG Steel unit. That ended a lawsuit in which the U.S. Pension Benefit Guaranty Corp accused Renco of trying to evade $70 million of obligations.
The case is Buchwald v Renco Group Inc et al, 2nd U.S. Circuit Court of Appeals, Nos. 15-2671, 15-2962, 15-2971.
(Reporting by Jonathan Stempel in New York; Editing by Chris Reese)
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