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Buyer Defaults on Pink Star Diamond, Sotheby's Takes Ownership

<p>What happens when the winning bidder at an auction can't pay for his purchase? Sotheby's now owns the Pink Star diamond.</p><p></p>
The Pink Star Diamond weighing 59.6 carat is displayed at Sotheby's. The auction house now owns the diamond after the buyer defaulted on his winning $83 million bid.
The Pink Star Diamond weighing 59.6 carat is displayed at Sotheby's. The auction house now owns the diamond after the buyer defaulted on his winning $83 million bid.Vincent Yu / AP file
/ Source: Reuters

Going, going, gone. Well not quite...

Sotheby's auctioned off the "Pink Star" diamond for a world-record price of $83 million in November. But the winning bidder couldn't pay up, so the auction house has acquired the rock for itself.

New York-based diamond cutter Isaac Wolf outbid three rivals to pay 76.3 million Swiss francs ($83.02 million) for the flawless pink diamond in an auction guaranteed by Sotheby's.

The Pink Star Diamond weighing 59.6 carat is displayed at Sotheby's. The auction house now owns the diamond after the buyer defaulted on his winning $83 million bid.Vincent Yu / AP file

But on Thursday, the auction house said it has reversed the related commission revenue on the sale as a result of the buyer's default and has recorded the pink diamond in its inventory at a value of about $72 million.

"We are currently in discussions with the buyer, while also considering other alternatives," Patrick McClymont, Sotheby's CFO said. "In the meantime, we are quite comfortable with our valuation, and see real value in owning the diamond at this price."

The world-record price for the 59.6-carat diamond, which had been renamed "The Pink Dream" after Wolf acquired it, had included a "buyer's premium," or commission fees. The diamond's pre-sale estimate was $61 million.

- Reuters