Ira Rennert

Ira Leon Rennert (born May 31, 1934) is an American billionaire businessman, and the chairman and CEO of Renco Group.

Rennert's parents were immigrants from Poland and Romania.

He graduated from Brooklyn College in 1954, and earned his master's degree from New York University's Stern School of Business in 1956, where he later was on the Board of Overseers.

Rennert started his career as a credit analyst on Wall Street in 1956.

He also served as a partner at Rubin, Rennert & Co. before launching his own business, I. L. Rennert & Co., in 1962.

At this time he was censured by the National Association of Securities Dealers for operating with insufficient capital.

It occurred again in 1963, and as a result, his license was revoked on November 29, 1964, effectively banning him from the securities industry.

According to a company spokesman, Jon Goldberg: "Due to market conditions, the firm found itself in violation of the net capital rule and Rennert raised capital and put it into the firm to bring it into compliance. However, the firm once more fell beneath the net-capital requirements and he shut the company down."

Michael Milken—as a bond trader for Drexel Burnham Lambert—was successful in selling high-risk, high-yield bonds issued by struggling or undercapitalized companies.

In 1988, Renco bought a Warren (Ohio) steel company from its bankrupt parent, LTV Steel Co., for a price tag of $140 million.

This company then became WCI Steel Inc., and Rennert was able to ultimately sell bonds totaling $300 million, paying $108 million of the proceeds as a dividend to Renco.

Integrated Resources raised $2 billion in junk bonds financed by Milken but ultimately collapsed amid scandal and defaulted on $1 billion of bond debt in May 1989 (see the 1991 book Den of Thieves about the junk bond scandal).

As an outside board member, Rennert was not dragged down by the collapse and began to raise junk bonds on his own behalf to finance acquisitions for the Renco Group.

Rennert's strategy for building Renco was to acquire all the shares of struggling companies and to finance the acquisition by issuing junk bonds.

Along the way, he paid substantial dividends out of the business to himself.

In 1989, Renco acquired the U.S.'s largest magnesium producer in Utah.

Removing minerals from the water of the Great Salt Lake, Magnesium Corp. uses chemicals to refine the magnesium used in products ranging from bombs to bicycles.

His purchase of AM General in 1992 was bought with a down payment of just $10 million.

In 1994, Fluor Corp. of Los Angeles sold the Doe Run Company to Renco, with the latter paying $52 million in cash, and approximately $60 million in debt payable over an eight-year period.

In a series of junk bond issues since 1995, Renco's subsidiaries have borrowed an estimated $1.1 billion and transferred $322 million (29 percent) to Renco Group, according to documents filed with the U.S. Securities and Exchange Commission (SEC).

Backed by blue-chip mutual funds and hedge funds such as John Hancock Funds LLC and Putnam Investment Management LLC, Rennert now didn't have to invest much of his own money.

In 1996, Renco established Renco Metals, Inc. as a holding company for Magnesium Corp. and issued $150 million in bonds.

Just like WCI, the company paid Renco $90 million in dividends by the year end.

In 1997, Doe Run went on to pay $247 million for a similarly environmentally troubled lead smelting complex from the Peruvian government, as well as borrowing more money to service its Fluor Corporation debt.

And in 1998, Doe Run sold $305 million in junk bonds for financing its Peruvian acquisition as well as more lead mines in Missouri (according to Doe Run filings with the SEC).

Since 1998 most Renco financings have been bank debt.

In 1998, Renco Steel Holdings Inc. was created to serve as a holding company for WCI.

The holding company then sold $120 million in junk bonds, this time paying an additional $100 million dividend to Renco.

At the time of the bankruptcy, if the pension plan had been terminated, the Pension Benefit Guaranty Corporation calculated a $117 million shortfall.

Despite losing the company, Renco agreed to assume responsibility for the existing pension plan, with ongoing support from WCI.

Newspaper reports speculated that the Pension Benefit Guaranty Corporation had threatened to put a lien on Rennert's personal estate in order to ensure the steelworkers' benefits.

Harbinger sold the business to Severstal, a steelmaker based in Russia.

In 2001, the Department of Justice filed suit against Magnesium Corp. for multiple violations of hazardous waste law, and also it cited Rennert's removal of money from Magnesium Corp. through the bond issue, "leaving the companies insolvent and unable to pay their bills".

The initial lawsuit DOJ filed on behalf of EPA in 2001 claimed U.S. Magnesium was not following regulations promulgated under the Resource Conservation and Recovery Act of 1976, which dictates how waste byproducts must be disposed.

Renco continues to operate the business under the name US Magnesium.

At this point, US Magnesium is the only magnesium producer in the United States.

The suit went on until 2007, when a judge ruled in favor of Renco and against the DOJ.

The EPA published its proposal to place the US Magnesium facility on the National Priorities List (NPL, a "Superfund site" under CERCLA) in the Federal Register on September 3, 2008.

The National Priorities List (NPL) is a list of places, commonly known as "superfund sites," considered national priorities for environmental remediation because of known or threatened releases of hazardous substances.USM filed its petition for review of the listing in the United States Court of Appeals for the District of Columbia Circuit on November 5, 2009.

On August 17, 2010, a 10th Circuit Court of Appeals ruling overturned a District Court judge's October 17, 2007, decision that the U.S. Magnesium facility in Rowley, Utah was not illegally disposing five wastes.