Billionaire Rennert, U.S. pension agency settle RG Steel lawsuit

NEW YORK (Reuters) - The billionaire Ira Rennert has settled a lawsuit in which a U.S. government agency accused his holding company Renco Group Inc of trying to evade $70 million of pension obligations for its bankrupt RG Steel unit.

In a letter filed on Tuesday in Manhattan federal court, lawyers for Rennert and the U.S. Pension Benefit Guaranty Corp said they reached an agreement in principle to end the three-year-old case.

Terms were not disclosed, and the lawyers said they plan to work out a settlement agreement by Feb. 19.

The accord followed a week-long, non-jury trial last month before U.S. District Judge Richard Sullivan. He had yet to issue his findings.

A lawyer for Renco did not immediately respond to requests for comment. The PBGC declined to comment.

Renco had been sued by the PBGC for $97 million over the New York-based company’s January 2012 sale of a 24.5 percent stake in RG to private equity firm Cerberus Capital Management LP.

The PBGC said it became burdened with RG’s pension liabilities after deciding not to terminate the company’s pension plans based on Renco’s assurance that no sale was imminent, only to have Renco go ahead with the transaction four days later.

RG Steel filed for bankruptcy in May 2012.

Created in 1974, the PBGC uses employer insurance premiums, investment earnings and other funds to pay retiree benefits.

Rennert, 81, is worth about $4.8 billion, Forbes magazine said on Tuesday.

He and Renco are appealing a separate $213 million award after a federal jury last February found them liable for looting the former Magnesium Corp of America to build a 21-bedroom mansion on the east end of Long Island, New York.

The case is Pension Benefit Guaranty Corp vs Renco Group Inc et al, U.S. District Court, Southern District of New York, No. 13-00621.

Reporting by Jonathan Stempel in New York; editing by Grant McCool