A New York Supreme Court hearing last week resembled a horse-trading session of sorts when a judge divvied up how to sell off millions of dollars of jewelry that Ralph Esmerian, a collector and owner of jeweler Fred Leighton, used as collateral for a...
NEW YORK — A New York Supreme Court hearing last week resembled a horse-trading session of sorts when a judge divvied up how to sell off millions of dollars of jewelry that Ralph Esmerian, a collector and owner of jeweler Fred Leighton, used as collateral for a loan that went sour.
The result was that neither Merrill Lynch Mortgage Capital Inc., which claims it is owed $185.3 million, nor the collector, who also is facing a legal challenge from Christie's Inc., got entirely what they wanted. The case is ongoing and does not involve Fred Leighton.
Merrill Lynch, under pressure from tightening credit markets and turmoil on Wall Street, claimed Esmerian and related parties defaulted on the loan and wanted to auction off the collection of rare jewels through an auction at Christie's.
Each side contended through expert witnesses that it could get the most value out of the collateral. As the day in court wore on, Justice Helen Freedman began singling out pieces on which the two sides couldn't agree on value and indicated that Esmerian would have three months to try to sell them.
Howard R. Hawkins Jr., the Cadwalader, Wickersham & Taft attorney representing Merrill Lynch, said the financial company could not risk a fallout in the high-end jewelry market.
"They are in no position to bond that kind of exposure," he said.
Brushing aside such protests, the judge stood quickly with raised hands and said over the lawyers' voices, "Listen, it's commercially reasonable. I'm just giving them the chance to sell those items."
Afterward, Freedman and the two sides decided on 10 pieces Esmerian would have the opportunity to sell.
Freedman said Esmerian could either sell the pieces over the next few months or Merrill could "put them in the next auction."
At the hearing, Rahul Kadakia, the head of Christie's jewelry department, gave the collection a value of $35 million, but said the market was at a high and an auction next month could bring in more.
"The market is as good as it's ever been," said Kadakia, citing a bump in diamond prices in recent weeks and the falling dollar, which helps deep-pocketed foreign investors stretch their millions.
“I see things on the hanger and I’m, like, ‘I never knew that color worked on me.’ It’s things you necessarily wouldn’t choose to wear, but once you put them on, you see why Janie is who Janie is." — Lily Collins on working with former "Mad Men" costume designer, Janie Bryant on creating looks for her role as Celia Brady's in Amazon series, "The Last Tycoon." 📸@jilliansollazzo #wwdeye
EXCLUSIVE: Sarah Rutson has been tapped to Build New American Fashion Group. The parent of Joie, Equipment and Current/Elliott hired the merchant to rev up its brands and expand its portfolio into designer, beauty and lifestyle categories. Read more on WWD.com, link in bio. #wwdfashion
Michael Kors' $1.3B Jimmy Choo deal has the company squaring off with Coach Inc. as both seek to build American powerhouses. Coach bought Stuart Weitzman in 2015 and Kate Spade just two weeks ago, but Michael Kors' acquisition may be putting pressure on its rival in the new push for scale. #wwdnews (📷: George Chinsee)
Meet actress Lucy Boynton, who plays opposite Naomi Watts in the recently released Netflix series "Gypsy." Boynton stopped by WWD to talk about her upcoming projects and her nomadic lifestyle. Get all the details on WWD.com. #wwdeye (📷: @dandoperalski)