July 2 (Reuters) - Ronald Perelman enriched himself and his private equity firm by diverting as much as $175 million from Ira Rennert’s Renco Group, according to a lawsuit by Renco, deepening a dispute between the billionaire investors.
The legal fight stems from a 2004 agreement in which a unit of Perelman’s MacAndrews and Forbes Holding Inc bought a majority stake in truckmaker AM General, which had been wholly owned by Renco.
As part of that agreement, Renco retained all profits generated by an AM General business called General Engine Products LLC, which made diesel engines for Humvee military vehicles, according to the complaint, which was filed late Friday in Delaware’s Court of Chancery.
The lawsuit accused Perelman and his private equity firm of siphoning money from the engine maker through purported royalties, excessive management fees and unrelated development costs.
A spokeswoman for MacAndrews and Forbes declined to comment.
The Renco lawsuit echoes claims MacAndrews and Forbes made against Rennert’s firm last month. Perelman’s firm accused Renco of enriching itself at the expense of MacAndrews and Forbes through a separate jointly owned company that was created as part of the AM General deal.
The case is Renco Group Inc v MacAndrews AMG Holdings LLC et al, Delaware Court of Chancery, No. 7668.