Lazare Kaplan Insurers Turn Down Claims

Late last week Lazare Kaplan International (LKI) was informed by insurers and underwriters that they will not pay the company claims made by LKI. The company did not disclose why it filed the claims or for how much, however, it did file a lawsuit against insurance companies just days before their claim was rejected. The lawsuit also resulted in the resignation of a board member.

The insurers of the company and underwriters were to reach a decision by May 3 as to whether LKI has coverage under certain of its insurance policies in regards to the claims it made and, if so, the amount of payment.

The insurers decided that LKI “has not met its burden to show that the Underwriters are obligated at this time to make a payment.”  

LKI, which has failed to file its latest financial results due “material uncertainties,” added that now it cannot resolve the material uncertainties that prevent it from completing the 2009 audit or the unaudited financial statements for the subsequent interim periods.

On April 30, LKI filed a $140 million lawsuit against a number of its insurers. At press time, it’s not clear if the two cases are related. LKI claimed that it lost $94 million on sales that were not paid for. The remaining $46 million are part of a “physical loss (…) resulting from the cutting and polishing operations in the Namibia manufacturing facility, Rough Diamond Trading China operations, and the DTC Sight operations,” according to court papers.

Following the filing, LKI board director Robert A. Del Genio announced his immediate resignation due to a potential conflict of interest, the company said. Some of the insurance companies sued by LKI are represented by Del Genio’s law firm, Conway Del Genio, Gries & Co., LLC.