Investors are suing billionaire Ira Rennert for looting his own company to build a $110 million mansion

Ira Rennet Fair Field SagaponackWikipediaRennert’s Fairfield estate covers 63 acres of Long Island beachfront.

Ira Rennert, the hermetic billionaire and former friend of Bernie Madoff who made his fortune raiding companies through junk bonds, is now being sued for funelling money from a mining business to build his 110,000-square-foot Hamptons mansion.

Crains’ Aaron Elstein reported that Rennert was in federal court on Tuesday to face the defunct Magnesium Corporation of America’s creditors, who claim he siphoned off $US100 million from the ailing company.

Renco Group, Rennert’s holding company, acquired MagCorp back in 1989 and began issuing millions of dollars worth of bonds. But rather than being invested in the magnesium company, that money went directly to Renco Group, and, allegedly, into Rennert’s pocket.

The allegations get messier after that: Rennert then built a new company that bought up land — 63 acres, to be exact — for his gargantuan Hamptons home (dubbed Fairfield, it’s thought to be one of the largest mansions in America). Shortly afterward, the magnesium market began to crumble and MagCorp filed for bankruptcy.

Creditors are now seeking $US118 million, plus interest. Get ready for an entertaining trial.

Read the full story from Crain’s >>

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