MagCorp Creditors Seek $118 Million from Billionaire

Bloomberg reported that Magnesium Corporation of America creditors are seeking compensation  from billionaire Ira Rennert after he allegedly siphoned over $118 million from the company. Renco Group, Rennert’s holdings company, acquired MagCorp in 1989 and began issuing millions of dollars worth of bonds that were meant to be invested in the magnesium company. Instead the money went directly to Renco Group and MagCorp was forced into bankruptcy in 2001.

The allegations came to the forefront after Rennert built his 29-bedroom mansion in the Hamptons.

As quoted in the market news:

Rennert and his lawyers this week laid out their defense in a 12-year-old lawsuit brought by a trust for creditors of Rennert’s Magnesium Corp. of America, which went bankrupt in 2001.

Seeking as much as $700 million for bondholders and the U.S. Environmental Protection Agency, the trustee will have to prove MagCorp was insolvent, or close to it, in the 1990s when Rennert oversaw transactions that allegedly diverted $118 million to himself and other directors.

Click here to read the full Bloomberg article.