LOS ANGELES (CN) - With each hearing, it seems as though the ownership trial over the world's largest emerald creates more questions than answers. One of the most fundamental is the value of the 840-pound emerald at the heart of the dispute.
As Jeffrey Baruh with Adleson, Hess & Kelly Baruh examined Wayne Catlett, who heads a Silicon Valley company called Digital Reflections, it became clear that Catlett tried to use several different emeralds to use as collateral for a bank's high-yield investment program. Catlett says he first flew to Sao Paulo, Brazil in 2001 to see emeralds offered by Brazilian miners.
Upon closer inspection of the Bahia Emerald at the center of the trial, one piece of paper dated November 2001 estimated its value at $972 million. However, a second appraisal a year later gave its value as $372 million.
"Have you ever funded a commercial operation using jewelries?" asked Superior Court Judge John Kronstadt.
Catlett answered that Silicon Valley companies, such as his, traditionally look to venture capitalists for funding. Funding a company's finances through gems is a creative way of doing it.
"Why try to raise money in this unusual fashion?" Judge Kronstadt continued.
Catlett said that after the market crashed, there was no money coming from the venture capital group for his company, Digital Reflection Inc. "We just got caught in the trap that so many did and this was completely outside my expertise but at that stage, I was willing to try anything," Catlett answered.
Judge Kronstadt asked how the Brazilian miners Ruy and Elson benefitted by giving the emeralds to Catlett and his company.
Catlett answered that they were given exclusive rights to the emerald and would be paid upon enrollment in a high yield investment fund. He conceded that even if the enrollment had been successful, the miners would not have been paid if his company failed.
With each new facts and players, it is ever more unclear as to who the legal owner of the Bahia emerald is.
In addition to the main question this trial is trying to solve, another important question surfaces: How much is the Bahia emerald really worth?
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