1% Feuds: The Hampton Helicopter Spat
Billionaire Ira Rennert is having a long, hot summer. First he was sued by a business partner. And now he’s battling wealthy neighbors in the Hamptons over his helicopter commutes.
Rennert, the New York financier who owns a conglomerate of mining, metals and smelting firms, has long been in the news for battling environmental groups and government regulators.
But last month, his business partner and fellow billionaire Ronald O. Perelman sued Rennert over a company in which they both hold stakes.
The suit, filed by a unit of Perelman’s MacAndrews & Forbes Holdings Inc., claims that a company owned by Rennert borrowed millions of dollars with overly favorable terms from a business set up as part of a deal for truck maker AM General. Perelman's company bought a majority stake in AM General in 2004.
The lawsuit claims that Rennert’s company has borrowed a total of $109 million from Ilshar Capital LLC since 2009. Rennert’s company used Ilshar as a “a convenient drive-thru teller to which they pull up and ask themselves for as much money as they like,” according to the suit.
The suit claims the loans are unsecured and require no payment until the fifth year.
Rennert has since filed a countersuit claiming Perelman diverted as much as $175 million that should belong to Renco. The suit says that Perelman’s companies also took loans on overly favorable terms.
A spokesperson for Perelman said the Rennert suit is “baseless because our conduct was consistent with the parties’ agreements and their course of conduct for almost 10 years.”
Meanwhile, Rennert is catching heat from neighbors at Fair Field, his 63-acre waterfront estate in Sagaponack in the Hamptons. At more than 43,000 square feet, the home is one of the largest residential compounds in America.
Fair Field caused an uproar in neighborhood when it was built in the late 1990s and inspired a novel called “The House That Ate the Hamptons.”
According to an article in Mother Jones, Rennert often travels to and from Fair Field on a Sikorsky S-92, a helicopter usually used to carry a dozen or more passengers.
The flights have become so noisy that neighbors are complaining. A group of local homeowners has formed the “Quiet Skies Coalition” to try to divert chopper traffic to another area of the Hamptons.
Frank Dalene, a luxury homebuilder-turned-anti-chopper-activist, told Rennert in an email that burdening residents with chopper traffic was like “throwing your garbage on the side of the tracks for us poor folks to live with.”
A spokesman for Rennert said that: "Singling out Mr. Rennert in this manner is unfair. Mr. Rennert is but one of numerous corporate executives, as well as many Hamptons residents, who travel by helicopter. Mr. Rennert’s crew takes the utmost care not to exceed height and noise restrictions and to follow all flight regulations.”
Still, as one wealthy Hamptons resident told me, “Rennert always feels like he has to be bigger than anyone else. The house, the helicopter. He’s become the symbol of excess here.”
In the Hamptons, that’s an achievement.
-By CNBC's Robert Frank
Follow Robert Frank on Twitter: @robtfrank