When It Comes to Running the Business...
Company calls all of the business decision shots in CCAA. Big glaring example is the DIP loan terms agreed upon. Comparatively speaking, other, seemingly better for commons, available terms were through the Bondies. Initially, that business decision was questioned by the judge, but all business decisions go to the company in CCAA. Bondies proposal did have a clause to give commons a guaranteed portion of the arbitration proceeds.
Tenor KRY Cooperatief U.A. (the contractually arranged "Lender of Choice") has become, "Bondies 2.0," like the newer T-1000 Terminator in the Arnold movies. And, who knows, maybe the older T-800 Bondies will come back to "protect" commons for a paltry 15% and end up being a hero of sorts, like in the movies. Bondies, and their needs being met to agree on a Plan of Compromise/Arrangement may be commons only hope at this point. Just speculation on a possible turn-around of who is evil in this story.
Terminator Fantasy aside, it really appears new equity will be issued to replace old equity. My DD shows this to be common in CCAA. Someone (likely the "Lender of Choice") must step forward to inject liquidity into Crystallex, and if not in exchange for "new" equity, then for a piece of the arbitration proceeds. Either way, commons get more take-aways.
Excerpts/Copy&Paste from some DD:
In the eyes of past CCAA decisions and CCAA amendments, once a company becomes insolvent, the shareholders no longer possess any meaningful interest in it. Why should white knight investors be forced to share the equity in a company that they financed?Through the restructuring process, a going concern may emerge and might prove to be profitable. This does not mean pre-existing shareholders should reap any benefit from this “phoenix” entity. Some may view CCAA's treatment of shareholders in restructuring proceedings as oppressive. CCAA courts have ruled that plans, which provide for the elimination of existing shares and the removal of the holders’ voting rights, are fair and reasonable.
Regardless, judges do not take sides. Even if they did, this judge showed no compassion to commons when he Ok'ed cancellation of the AGM. Were Crystalex being forthright, they would have filed 2012 fins, then filed a Form 15 to withdraw their registration, and gone dark. Then the "saving money" excuse would have been reasonable. Being revoked is the worst thing Crystallex could have let happen to shareholders.
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