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2015
PLAINTIFF EXPERT(S)
DEFENDANT(S)
TRIAL LENGTH
TRIAL DELIBERATIONS
Malcolm Loeb; Beus Gilbert PLLC; Phoenix, AZ, for Lee E. Buchwald Robert O. Stirling; Beus Gilbert PLLC; Phoenix, AZ, for Lee E. Buchwald
John Veranth ; Environmental Engineering; Salt Lake City, UT called by: for Leo R. Beus Scot C. Stirling Malcolm Loeb Robert O. Stirling Jason Frank ; Valuation; Northbrook, IL called by: for Leo R. Beus Scot C. Stirling Malcolm Loeb Robert O. Stirling
Robin Adams ; Pricing; Seattle, WA called by: for Leo R. Beus Scot C. Stirling Malcolm Loeb Robert O. Stirling
Douglas Allen ; Conservation; Burlington, MA called by: for Leo R. Beus Scot C. Stirling Malcolm Loeb Robert O. Stirling
Keith Sabel, Renco Group, Lee R. Brown, Roger L. Fay, Ron L. Thayer, Todd R. Ogaard, Michael C. Ryan, Howard I. Kaplan,
Ira Leon Rennert, Justin W. D’Atri, Michael H. Legge, Dennis
A. Sadlowski, KPMG Peat Marwick LLP, K. Sabel Holdings Inc., Cadwalader, Wickersham & Taft LLP, Donaldson, Lufkin & Jenrette Securities Corp., Houlihan Lokey Howard & Zukin Financial Advisors Inc.
3 weeks 3 days
In July 1996, Renco Metals executed three transactions that directly benefited Renco Group. Renco Metals redeemed $8.5 million of preferred stock that had been held by Renco Group; it paid a Renco Group dividend that approximated $75 million; and it funded $5.3 million of bonuses that compensated officers of Renco Group. The transactions were largely funded by $150 million of bonds that Renco Metals had issued. Similar transactions followed, and the transactions continued until October 1998.
In August 2001, Magnesium Corporation of America and Renco Metals declared bankruptcy. The bankruptcy’s trust was assigned to plaintiff Lee Buchwald. Buchwald claimed that the bankruptcy stemmed from improper and fraudulent payments that were delivered to Renco Group and its officers and directors.
Buchwald sued Renco Group; the company’s primary shareholder, Ira Rennert; the company’s officers, Lee Brown, Howard Kaplan, Michael Legge, Todd Ogaard and Ron Thayer; several of the company’s directors, Justin D’Atri, Roger Fay, Michael Ryan and Dennis Sadlowski; a Renco Group subsidiary, K. Sabel Holdings Inc.; K. Sabel Holdings’ principal, Keith Sabel; a firm that audited transactions that were executed by Magnesium Corporation of America and Renco Metals, KPMG Peat Marwick LLP; a banking firm that underwrote Renco Metals, Donaldson, Lufkin & Jenrette Securities Corp.; a banking firm that advised Renco Metals, Houlihan Lokey Howard & Zukin Financial Advisors Inc.; and a law firm that represented Renco Group and Renco Metals, Cadwalader, Wickersham & Taft LLP. Buchwald alleged that Brown, Kaplan, Legge, Ogaard, Renco Group, Rennert and Thayer executed, aided and/or abetted fraudulent conveyances; that Brown, D’Atri, Fay, Kaplan, Legge, Ogaard, Renco Group, Rennert, Ryan, Sadlowski and Thayer committed, aided and/or abetted a breach of fiduciary duty; and that the remaining defendants were negligent in their approval, execution and/or oversight of an offering that funded Renco Group’s issuance of a dividend.
Keith Sabel and K. Sabel Holdings were dismissed, and plaintiff’s counsel discontinued the claims against Donaldson Lufkin & Jenrette Securities, Houlihan Lokey Howard & Zukin Financial Advisors, and Cadwalader, Wickersham & Taft. The matter proceeded to a trial against the remaining defendants.
Plaintiff’s counsel claimed that Renco Group forced a series of inadvisable and fraudulent transactions that ultimately bankrupted Magnesium Corporation of America. They claimed that Renco Group knew that the transactions would ruin Magnesium
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FACTS & ALLEGATIONS On Dec. 8, 1995, plaintiff’s trustor Magnesium Corporation of America, a Rowley, Utah-based producer of molten magnesium, issued a dividend that stemmed from a previous public debt offering. The dividend was issued through the corporation’s Salt Lake City-based holding corporation, plaintiff’s trustor Renco Metals Inc. The dividends continued through May 1996, and the recipients included New York- based Renco Group Inc., which was the parent of Magnesium Corporation of America and Renco Metals.
TOP VERDICTS OF NEW YORK
Charles J. Moxley, Jr.
New York State Bar Association, Dispute Resolution Section Benjamin N. Cardozo School of Law
COMMERCIAL ARBITRATION TRAINING
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Edna Sussman
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