Lazare Kaplan anticipates that second-quarter revenue fell 25 percent year on year to $21.6 million for the three months that ended on November 30, 2011, Rapaport reported.
The decrease was the result of weaker rough diamond trading during the period and from the preceding quarter, the company explained. Net sales for the fiscal half year declined 4.8 percent to $58 million.
Lazare Kaplan also notified the Securities and Exchange Commission (SEC) that its quarterly report for the period would be late. The company has been unable to resolve a material uncertainty concerning the collectability and recovery of certain assets, and its potential obligations under certain lines of credit and a guaranty.
Lazare Kaplan entered into a settlement agreement with certain banks in October 2010, which resolved certain aspects of the material uncertainties that have prevented filing official financial statements. It also entered into a release and settlement agreement on July 1, 2011 with certain insurance companies.
In December, the company sued Atwerp Diamond bank and its parent KBC Bank for in excess of $500 million in damages as part of an effort to resolve remaining material uncertainties. The suit claims that the two banks funneled proceeds from Lazare’s diamond sales through numerous shell companies controlled by Erez Daleyot, owner of D.D. Manufacturing, across Europe, the Middle East and Asia.
Lazare Kaplan has been unable to finalize its financial statements for its most recent quarter as well as the 2009, 2010 and 2011 fiscal years.
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