A Manhattan jury has found billionaire Ira Rennert liable for looting millions from a magnesium company he controlled -- money he allegedly used to pay for his $250 million residential compound in the Hamptons.
Jurors on Friday levied $118 million in damages against Rennert and his closely held Renco Group investment firm. Interest will add another $200 million to $400 million, lawyers said.
Rennert, 80, a mining magnate worth $6.1 billion according to Forbes, faced allegations that he funneled more than $100 million from Magnesium Corporation of America in the 1990s to line his pockets and build his Sagaponack mansion, the largest home in the United States.
MagCorp went bankrupt in 2001. Rennert's lawyers argued it was because of a drop in magnesium prices and the economic downturn of the early 2000s.
Jurors, though, found Rennert personally liable for $16.2 million and Renco liable for $101 million, and added $1 million in punitive damages against Renco.
"At the end of the day, they understood the evidence and returned a just verdict," said Scot Stirling, a lawyer for Lee Buchwald, the MagCorp trustee who brought the suit against Rennert.
Lawyers for Rennert said they would challenge the decision. Renco, in a statement, said the jury was "swayed by a passionate, but wholly unsupported argument" and the company "always acted properly."
At the center of the case stood Rennert's palatial Sagaponack home, a compound that sprouted in the 1990s from one of the last oceanfront potato fields on the South Fork and created a furor that changed the trajectory of development in the Hamptons.
At 64,389 square feet, the compound's main dwelling could fit the White House within its walls. It contains 29 bedrooms, 39 bathrooms, two bowling lanes, a 164-seat movie theater and a 200-car garage.
The 63-acre estate also has 30,519 square feet of outbuildings.
Rennert dubbed the compound "Fair Field." Neighbors who rose up to oppose its construction in the 1990s called it simply the "Big House," a symbol of excess that raised eyebrows even in Sagaponack, now the second most expensive ZIP code in the United States, according to Forbes.
"It was a symbol of avarice and things being out of control," said Steven Gaines, a Wainscott author who has written about the history of the Hamptons. "It happened in a very special place: the last of the picturesque, oceanfront potato fields, kind of a hallowed place."
A 1998 hearing on the property featured an appearance by the author Kurt Vonnegut, who had a house in Sagaponack.
"Such an establishment does not belong between us and the water," Vonnegut, who died in 2007, said of the compound. Other neighbors filed lawsuits seeking to halt its construction.
East Hampton and Southampton towns, in response to the controversy, later passed laws limiting houses to 20,000 square feet. Sagaponack residents, stung by their inability to stop the construction, in 2005 incorporated their community into a village that restricts homes to 12,000 square feet.
Neighbors have said over the years Rennert lives quietly in his Italianate compound. The industrialist, who rarely speaks or is seen in public, was forced to testify in the trial on topics such as alleged environmental violations by a MagCorp facility in Utah.
In 2013, Rennert stirred opposition again when he applied to add a Pilates studio, sauna and three extra bedrooms to one of the two pool houses on his estate. The application is pending, village officials said.
With Reuters and