New York Appellate Court Rules that Christie’s Must Halt Jewelry Auction

A New York court of appeals ruled Monday that Christie’s must cancel its “Rare Jewels and Gemstones: The Eye of the Connoisseur” auction, set to take place tonight (Tuesday), after jeweler Ralph O. Esmerian, who owns the items in the collection, filed an emergency motion to stop the sale.

The auction was engineered by creditor Merrill Lynch, which, according to Bloomberg, is owed $185 million by Esmerian due to a defaulted loan. Merrill Lynch is persevering in its efforts to push for the sale, but Esmerian has argued that the collection, made up of family heirlooms, including jewelry, would garner much higher prices if it were sold in private sales.

Christie’s estimated the auction would realize a total of $34 million.

Merrill Lynch spokesperson Bill Halldin said that the appellate division ruled that a New York state judge can still allow the sale to commence. “The appellate court has allowed further proceeding at the lower court, and we anticipate getting further guidance from Judge Freedman on Tuesday as to whether the auction can move forward.”

Esmerian used the funds taken out in a loan from Merrill Lynch to buy gem retailer Fred Leighton in 2006 for $100 million. He commented that he objects to liquidating the jewelry in a “commercially reckless” auction, which he compared to a fire sale.

The collection includes a few items of note, including a 14.23 carat rectangular cut fancy intense pink VVS2 diamond, with a micro pave-set pink diamond band, mounted in 18 karat rose gold, estimated to sell for between $10 and $15 million, and a circa 1855 diamond-encrusted brooch once owned by the Empress Eugenie, wife of Napolean III.