Case Not Quite Closed
Lazare Kaplan International has settled its court case with its insurers, but its legal battles over an alleged $100 million in lost diamonds are far from over.
In spring 2010, the New York City diamond manufacturer sued Swiss Re International, the Marine Insurance Company, and several other insurers, charging they failed to reimburse LKI for diamond losses incurred from 2007 to 2009. In a settlement announced July 6, LKI said it would be paid $32 million, on top of a previously announced payout of $28 million. That is substantially less than the $640 million the company originally asked for, not to mention the $140 million it claimed in losses. However, LKI retains the right to pursue recovery of assets against third parties.
Due to legal issues and ensuing “material uncertainties,” the publicly traded company has been unable to file financial statements since 2009, leading to its June 2010 delisting from the New York Stock Exchange. LKI is currently reviewing whether it has resolved the uncertainties and is able to finalize its statements.
And LKI is still locked in litigation with Antwerp Diamond Bank. In December 2009, ADB declared it was terminating the $25 million and $45 million facilities it granted LKI. In March 2010, ADB sued LKI in the Antwerp Court of Commerce, seeking payments it claims were owed under the $45 million facility. LKI denies owing anything to ADB.
Now LKI is threatening to countersue. A stunning assertion lies at the heart of its case: In early 2010, LKI contacted ADB’s parent company over the loss or theft of certain LKI assets and “potential involvement of ADB and senior members of ADB’s management.” Neither LKI nor ADB could be reached for comment.
Blame It on Rio
One-third of the Argyle Semper Suite
Rio Tinto Diamonds announced the launch of its highly anticipated Argyle Pink Diamonds Tender 2011 collection on July 13. The collection features 55 pink diamonds, weighing 47.61 cts. Among this year’s rare treasures is the Argyle Semper Suite, which comprises three matching fancy intense heart-shape diamonds, and the Argyle Alanya, a 1.06 ct. fancy vivid purplish-pink oval-shape stone. The collection will be previewed around the world from August through October.