Ira Rennert, the reclusive New York industrialist behind Renco Group, has agreed to pay $150 million to settle long-running claims that a lead smelter his company ran in La Oroya, Peru poisoned local children, according to court filings and plaintiffs’ counsel disclosed on Wednesday. The deal closes one of the most stubborn corporate-liability fights in recent American legal history — a case first filed in 2007 that took nearly two decades to reach a courtroom.

The lawsuit was brought on behalf of more than 1,000 Peruvians, most of them children when the smelter operated, who say lead and other toxins from the La Oroya Metallurgical Complex caused brain damage, developmental delays and lifelong illness. The lead plaintiffs’ attorney, Jerry Schlichter of St. Louis firm Schlichter Bogard, had told a federal jury in U.S. District Court for the Eastern District of Missouri that the operators went to an impoverished mountain town and sharply increased airborne lead. A “bellwether” trial — a test case meant to gauge how juries would treat the larger group — had been underway in front of Judge Catherine Perry when the settlement was reached.

Here is the background. Renco, Rennert’s family holding company, is the parent of St. Louis-based Doe Run Resources. Through a Peruvian subsidiary, Doe Run Peru, it bought the La Oroya smelter in 1997. The plant, which had been operating since 1922 and was run for decades by the Peruvian government, was already one of the most contaminated sites in the world. A 2005 study by Saint Louis University researchers found that roughly nine in ten children near the smelter carried blood-lead levels high enough to cause permanent injury. The plant went idle in 2009 after Doe Run Peru ran out of money during the financial crisis, and it later entered bankruptcy.

Rennert’s side has denied wrongdoing for years. His spokesman, Jim McCarthy, has argued that Doe Run Peru invested more than $300 million to modernize the facility and cut emissions in every category — more, the company says, than Peru’s government did over the previous 75 years. Rennert’s lawyers also fought for years to move the case to Peru and to have it thrown out, losing repeatedly. In 2020, the court sanctioned the defense more than $429,000 for handling discovery “willfully and in bad faith.”

The settlement matters well beyond one billionaire’s checkbook. For multinational companies, it is a reminder that liability for overseas operations can follow them home into U.S. courts, sometimes for decades. Schlichter had warned that a full loss at trial could have exposed Rennert and Renco to penalties topping $1 billion. Settling at $150 million caps that risk while still delivering a large payout to plaintiffs who have waited 18 years — many now adults.

It also lands as the La Oroya site inches back toward life. The complex passed to its worker-creditors after Doe Run Peru’s bankruptcy, and there have been repeated efforts to restart its lead, zinc and copper circuits. A restarted smelter would matter to the regional economy around La Oroya, a town of about 24,000 roughly 100 miles inland from Peru’s coast, where the plant was historically the dominant employer.

For Rennert, the deal adds to a long ledger of legal entanglements built around his leveraged buyouts of natural-resource businesses. In 2017, a federal appeals court ordered him to pay a $213.2 million judgment after a jury found he had drained his magnesium company to help fund a sprawling Hamptons estate. His Sagaponack compound, sometimes called “the house that ate the Hamptons,” has been described as worth $425 million.

Separately, Renco and the Peruvian government remain locked in international arbitration at the Permanent Court of Arbitration in The Hague over who bears responsibility for the cleanup — a dispute the Wednesday settlement does not resolve. Renco originally sought $800 million from Peru, arguing the country’s environmental demands forced the plant into bankruptcy.

The money question now turns to logistics: how the $150 million will be divided among the plaintiffs, and how quickly. For a group of young adults who spent their childhoods near one of the world’s dirtiest smelters, the settlement offers something the courts denied them for almost two decades — a resolution, and a check.

JBizNews Desk | New York
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