Judge upholds bulk of damages awarded against Sagaponack billionaire Ira Rennert

A Manhattan federal judge Thursday upheld $117 million of a $118 million February jury verdict against billionaire Ira Rennert for looting a magnesium company he controlled to allegedly help finance his palatial residential compound in Sagaponack.

Rejecting a series of legal arguments from Rennert's lawyers, U.S. District Judge Alison Nathan confirmed a judgment, including pre-verdict interest, of $213 million against Rennert and his closely held Renco Group investment firm for stiffing creditors.

Rennert, now 81, is estimated to be worth $6.1 billion by Forbes magazine, and the $250 million mansion is the largest home in the United States. The lawsuit was filed by Magnesium Corporation of America's bankruptcy trustee, who claimed Rennert siphoned money out while the business was insolvent.

Nathan eliminated only a $1 million punitive damages verdict, concluding that a punitive award was not available under Delaware law, which applied in the case.

The Sagaponack home -- which at more than 64,000 square feet is large enough to fit the White House in its walls -- was built in the 1990s from one of the last oceanfront potato fields on the South Fork.

Named "Fair Field" by Rennert, the mansion includes 29 bedrooms, 39 bathrooms, a 164-seat movie theater and a 200-car garage. The 63-acre estate also includes 3 swimming pools, 2 indoor tennis courts and a basketball court.

The magnesium corporation went bankrupt in 2001. Lawyers for Rennert and Renco argued that it was because of a drop in magnesium prices and an economic downturn, but the jury found them liable for making fraudulent conveyances and breach of fiduciary duty.

The defense asked Nathan to overturn the verdict because the jury's findings were inconsistent on different counts, and represented a compromise. The judge found that jurors had behaved properly.

After the ruling, Renco and Rennert signaled they would appeal. "We remain firmly resolved in the strength of our case," the company said in a statement.