Court Orders Pluczenik to Pay $3M Broker Fees

RAPAPORT... Diamond manufacturer Pluczenik must pay $3.3 million to abroker that claimed the company breached a pact made almost 25 years ago, a courthas ruled. The case dates back to a 1994 oral agreement between broker WilliamNagel and Isaac Pluczenik, then CEO of Pluczenik. Nagel agreed to reduce hiscommission for services at De Beers' sights on condition Pluczenik retainedNagel as its broker for as long as it was a De Beers client. Chaim Pluczenik, who wasn't present at the time of the deal, tookover from his father Isaac after his death in 1997. He severed his relationshipwith Nagel in July 2013, after De Beers announced it no longer requiredsightholders to work through brokers. The case hinged on the wording of the verbal agreement.Pluczenik claimed it had promised it wouldn't hire a different broker - givingit the right to go broker-free when De Beers changed its rules. Nagel, however,maintained that Pluczenik had pledged to work with the brokerage as long as ithad a De Beers sight. The Court of Appeal for England and Wales sided with Nagelin a November 28 ruling, arguing that the distinction between retaining thefirm as a broker and not appointing another broker would not have occurred toanyone when they made the pact, as De Beers still required a broker at the time.That ruling upheld an earlier decision by the London Mercantile Court. Attorneys for Pluczenik did not respond to a request forcomment at press time. Image: A Pluczenik stand at a trade show. (Pluczenik)