* Rennert accused of using company as ATM machine
* Lawsuit stems from AM General deal
* Rennert company says claims are baseless
June 20 Billionaire investor Ira Rennert
unjustly enriched himself by causing a company he controls to
lend his struggling Renco Group $109 million, according a
lawsuit by a Ronald Perelman-affiliated company.
A unit of Perelman's MacAndrews and Forbes Holding Inc,
which invested in the company that made the loans, sued Rennert
to force Renco for repayment.
The lawsuit stems from a 2004 agreement in which MacAndrews
bought a majority stake in truckmaker AM General, a company best
known for bringing military-style Hummers to consumers in 1992
before GM bought the brand name.
Private equity firm MacAndrews is the holding company for
Perelman's investments, which also include cosmetics maker
The 2004 agreement involved forming three limited liability
companies in which firms affiliated with Rennert and MacAndrews
The lawsuit accuses Rennert of using one of those companies,
Ilshar Capital LLC, to provide three below-market loans to
Renco filed its RG Steel business into bankruptcy on May 31
and the lawsuit said Rennert's U.S. lead business is the subject
of numerous government investigations.
MacAndrews' lawsuit accused Rennert and one of his
affiliated companies of using Ilshar "as a convenient drive-thru
teller to which they pull up and ask themselves for as much
money as they like."
A Renco spokesman said the "facts will show the claims by
MacAndrews & Forbes are baseless and completely without merit."
Rennert, who is listed as the 55th richest person in the
United States by Forbes, was unavailable for comment.
A spokeswoman for MacAndrews and Forbes declined to comment.
The lawsuit also said Ilshar had violated agreements with
the MacAndrews unit by investing with Ezra Merkin, who has been
accused of steering client money to Ponzi schemer Bernie Madoff.
Those investments led to large losses, according to the lawsuit.
The case is AM General Holdings LLC v The Renco Group, Ira L
Rennert and ILR Capital LLC, Delaware Court of Chancery, No.