A Manhattan federal court judge has confirmed an arbitration award holding the Julius Klein Group and four of its principals responsible for paying $209 million to LGC USA Holdings Inc.
Federal District Court Judge Jesse M. Furman on Monday entered judgment consistent with his opinion and order of Feb. 16 favoring LGC, an affiliate of the Leviev Group of Companies that is headed by Lev Leviev. In the final judgment, the judge noted that the arbitration award of June 30, 2016, was for $142.2 million, representing the face amount of the award of $111.9 million plus prejudgment interest at 9 percent from Feb. 15, 2014, up to Feb. 21, 2017. The federal court judgment also includes prejudgment interest in the amount of $27.9 million each day from Feb. 22 to Feb. 27, 2017, the date of entry of the final judgment.
Word first surfaced in September that Leviev’s firm had won an arbitration award in what was then called an ugly and bitter corporate divorce.
Leviev and the Julius Klein Group formed a joint venture in 2002 where Leviev said he had a 43.5 percent interest in KLG Jewelry. But the parties’ corporate divorce entailed much bickering. Given that the two are heavy hitters in the diamond district on 47th Street in Manhattan, the mudslinging that included allegations of threats to the arbitrators and theft and insurance claims wasn’t a surprise. Ultimately, the matter was submitted to arbitration and an Israeli panel in June issued its award in favor of LGC, which became the subject of a motion to have it “confirmed” as a judgment.
Under the federal court judgment, the Julius Klein Group is responsible for paying LGC $142 million immediately in addition to more than $66 million that has already been paid.
But given the history between the two parties, the legal matter might not be over yet. LGC still has to enforce the award and that could mean another messy round in the ongoing battle between the diamond titans.
Representatives at Julius Klein could not be reached for comment.
Charles Michael, a partner at Steptoe & Johnson, which represents the Leviev Group, said, “The Leviev Group will take all steps available, including seizing corporate and individual assets, to collect this judgment after the lengthy legal procedures [that] now have resulted in this final ruling.”