Fair Field, a mansion on Daniels Lane in Sagaponack owned by Ira Rennert. Photo by Stephen J. Kotz.
Ira Rennert, the owner of Fair Field, the colossal mansion on Daniels Lane in Sagaponack, did not play fair, a federal jury in New York ruled last week.
Mr. Rennert, reported to be a billionaire several times over, and his company, Renco, were found guilty of misdirecting funds from the Magnesium Corporation of America to pay for the mansion, by far the largest house on the East End and one of the largest in the United States.
Mr. Rennert was found liable for $16.2 million and Renco liable for $102 million plus interest, which could add several hundred million dollars to the total, by a jury after a three-week trial. The suit was brought by the trustee for the Magnesium Corporation of America, which Mr. Rennert’s company purchased and controlled until it went bankrupt in 2001. The suit seeks the return of the money to other investors in the company.
According to media reports, Mr. Rennert and Renco borrowed the money from the company shortly after acquiring it in the mid-1990s and used the proceeds to purchase what had been a 60-acre oceanfront farm field and for the construction of the sprawling mansion and related outbuildings and gardens that now occupy the site.
The estate, which has been valued by Southampton Town at approximately $248 million, includes an estimated 100,000 square feet of buildings, including the main house, a huge garage and a recreation building.
The Magnesium Corporation of America declared bankruptcy in 2001 after the federal government sought more than $900 million in penalties for pollution. The trustee in the bankruptcy charged that Mr. Rennert and his company had borrowed money against the company’s value and instead of using that money to take care of its environmental problems, used it for the house instead.
Renco has said it will appeal. In a statement issued last week, it said it was disappointed by the ruling. “Clearly the jury was swayed by a passionate, but wholly unsupported, argument by trustee’s counsel,” it said. “The evidence unambiguously showed that MagCorp’s bankruptcy was caused by the economic downturn and the illegal dumping of magnesium by China. Renco and the management of MagCorp always acted properly and did not engage in the acts of which the trustee wrongly accused them.”