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Renco loses challenge to trustee’s sale of $26.2M stake

The trustee of defunct Magnesium Corp. of America was free to sell a slice of its $213 million judgment against billionaire industrialist Ira Rennert and his Renco Group Inc. for driving MagCorp into bankruptcy, a New York federal court said Tuesday, rejecting claims the sale had been unfair.

The ruling signals the beginning of the end for MagCorp Chapter 7 trustee Lee Buchwald’s largely successful 15-year crusade against MagCorp owners Renco and Rennert, who is accused of looting the ailing MagCorp’s coffers, in part to pay for a $200 million mega-mansion in the Hamptons.

Rennert’s actions left the magnesium producer defenseless against the environmental litigation and market headwinds that later crippled it, according to court documents.

Buchwald obtained the $213 million judgment in 2015, but with less than $1 million in the bank and the risk of an adverse appeal ruling looming on the horizon it turned around and sold a $50 million stake in the judgment to litigation funder Gerchen Keller [later acquired by Burford Capital] for $26.2 million.

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