(National Jeweler October 1994)

$20 Million Diamond Shatters at Cutters

Tel Aviv - One of the largest rough diamonds in the world shattered recently in a New York diamond manufacturing plant and is now the center of a heated court case.

The 445.9-carat diamond - "one of the largest rough diamonds in the world," according to court papers - was brought from a De Beers subsidiary by two brothers, Daniel and Benjamin Steinmetz, for about $20 million. It was sent to Rudolf Ehrenwalt's factory in New York to be sawn into three different stones.

But it never reached that stage. During a no-doubt heartbreaking moment, the diamond slipped out of the hand of one of the factory workers when he was on the way to the safe. It fell and broke into a number of pieces, making it considerably less valuable.

If all that wasn't enough, then the real problem began. After the break, the Steinmetz brothers informed the insurance company, an underwriter of Lloyds of London.

But the answer they received was not what they expected. The Lloyds underwriters said they wanted to investigate the claim and appeared reluctant to pay it. Now the Steinmetz brothers are suing Lloyds for $23.5 million (including $3 million in punitive damages) for the unilateral breaking of the insurance contract.

-Chaim Even Hohar