Daily Dicta: Cravath Challenges Man Who Says PG&E Owes Him $280M for Giant Emerald Lost in Fire
Hey c'mon—who doesn't have a 500 pound emerald worth hundreds of millions just lying around the house?
November 20, 2019 at 12:52 AM
5 minute read
Burned-out homes and vehicles stand in Paradise, California, U.S., on Monday, November 26, 2018. The nation's deadliest wildfire in a century known as the Camp Fire that killed at least 85 people and burned over 14,000 homes has been fully contained after burning for more than two weeks, authorities said Sunday. Photographer: David Paul Morris
When all that's left is a pile of ashes, who's to say exactly what was lost?
Maybe you had a handbag from Target. Or was it a Hermès?
Maybe you had some costume jewelry. Or perhaps it was a 500-pound emerald worth $280 million that you just, um, had lying around the house.
A man whose home in Paradise, California was destroyed in the Camp Fire last year submitted a $280 million claim to PG&E for compensation for the Beleza Emerald—a "solid block of black schist and quartz with green crystals."
PG&E lawyers from Cravath, Swaine & Moore are understandably skeptical. In a letter to U.S. District Judge James Donato of the Northern District of California, they requested permission to seek "documents establishing that the claimant was the legal owner and in possession of the subject emerald at the time of the Camp Fire, documents sufficient to show efforts undertaken by the claimant to secure and protect the emerald and documents showing that the emerald was damaged or destroyed."
Cravath partner Kevin Orsini also requested supporting documents from six other claimants that PG&E suspects of filing "duplicative and/or exceptionally large monetary claims, which appear suspicious"—though none of the others come anywhere close to claim number 3705 for the emerald.
BakerHostetler partner Kimberly Morris, counsel to the Official Committee of Tort Claimants, pushed back that it's premature to probe the merits of any individual claims.
"Any potential objections PG&E wishes to raise must be raised in the bankruptcy claims objection process. Doing so now, as part of claims estimation, should not be permitted," she argued.
Still, $280 million? That would definitely skew the average payout. You can't blame PG&E for wanting more information pronto.
The claim was submitted by Larry Biegler, who according to online records lived in Paradise with his wife Alysia at 5240 Edgewood Lane in a home with an assessed value of $460,000.
Prior stories in the Los Angeles Times and Wired do establish that Biegler has a history with at least one similar-sounding emerald, the 752-pound Bahia.
According to the Los Angeles Times, the giant Bahia gem (described as "a massive black schist with nine protruding emerald crystals") was discovered in 2001 in Brazil. It had a convoluted chain of ownership, winding up at one point in New Orleans, where it was submerged during Hurricane Katrina.
In a lengthy 2017 feature on the stone in Wired headlined "The Curse of Bahia Emerald, a Giant Green Rock That Ruins Lives," Elizabeth Weil reported that Biegler allegedly got involved with gem around 2005. Working with the then-owner, he was supposed to find a buyer, and in return would get 50% of the proceeds.
At one point, Weil reported, the gem was for sale on eBay with a minimum bid of $19 million and a "buy now" price of $75 million. (The lone bid for $19 million was rejected.)
It gets weirder.
Weil wrote that in June of 2008, "Biegler disappeared. He had staged his own supposed kidnapping by a Brazilian warlord."
His business partner Jerry Ferrara paid his ransom and then "pieced together the truth: He learned that Biegler was not nearly as polished and rich as he pretended to be. In fact, he was really the proprietor of a business called B & B Plumbing in Citrus Heights, California. "I got taken by a damn plumber! Can you believe that?" Ferrara told me. B & B Plumbing even had lousy Yelp reviews. ('Hired Larry to install a dishwasher. He took my $125 and left …' 'NO SHOW!!' One star.)"
In 2009, Biegler reported the emerald missing from a vault in Los Angeles County. Sheriff's investigators found it in Las Vegas and held it until its rightful owner could be ascertained.
In 2015, a Los Angeles County Superior Court judge determined that the emerald belonged to a holding company owned by three businessmen (none of whom are Biegler), the Los Angeles Times reported.
Then the Justice Department on behalf of the Brazilian government jumped in to claim that the emerald was illegally exported and actually belongs to Brazil. The case is currently stayed before U.S. District Judge Rosemary M. Collyer in the District of Columbia. And the emerald, presumably, is still being held by the sheriff's department in Los Angeles. Safe from any fires started by PG&E.
In the meantime, did Biegler maybe get himself a new giant emerald that got destroyed in the Camp Fire?
If so, I'm pretty sure the Cravath team is going to want to see hard proof.
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