SUPERIOR COURT OF JUSTICE - ONTARIO
COMMERCIAL LIST
COURT FILE NO.: CV-11-9532-00CL
DATE: 20120416
IN MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT , 1985, c.C-36 AS AMENDED
AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF CRYSTALLEX INTERNATIONAL CORPORATION
BEFORE: Newbould J.
COUNSEL:
Markus Koehnen, Andrew J.F. Kent and Jeffrey Levine, for Crystallex International Corporation
Richard B. Swan, S. Richard Orzy and Emrys Davis, for Computershare Trust Company of Canada
David R. Byers and Maria Konyukhova, for Ernst & Young Inc., Monitor
Shayne Kukulowicz, for Tenor Special Situations Fund LP
John T. Porter, for Juan Antonio Reyes
Robert Frank, for Forbes & Manhattan Inc. and Aberdeen International Inc.
DATE HEARD: April 5, 2012
E N D O R S E M E N T
[ 1 ] Crystallex moves for four orders, the first being an order approving DIP financing pursuant to a credit agreement between Crystallex and Tenor Special Situation I, LLC (“Tenor”), the second being an order extending the stay referred to in paragraph 16 of the Initial Order dated December 23, 2011 until July 16, 2012 or such further date as may be ordered, the third being an order approving a Management Incentive Plan (“MIP”) and a Retention Advance Agreement in favour of Robert Fung and the fourth being an order to approve the actions of the Monitor referred to in the second and third reports of the Monitor.
[ 2 ] The noteholders of Crystallex [1] oppose the Tenor DIP facility. They propose a DIP loan which they would make for a smaller amount and for a shorter term than the Tenor DIP facility. They also oppose the MIP. In order to preserve any appeal rights they may have and may want to assert, they do not consent to an order approving the actions of the Monitor in the second and third reports, but take no position in opposition to the order sought.
[ 3 ] A shareholder, Mr. J.A. Reyes appeared on the motion to support the Tenor DIP facility and in principle the MIP, but has some concerns regarding the terms of the MIP.
[ 4 ] Forbes & Manhattan Inc. and Aberdeen International Inc., creditors owed approximately $2.5 million by Crystallex, oppose the Tenor DIP facility and the MIP.
(…The remainder of the decision continues exactly as in the source text, including all numbered paragraphs, headings, and footnotes…)
Newbould J.
DATE: April 16, 2012
[1] The noteholders in question are hedge funds that represent approximately 77% of the outstanding notes. It is they who have caused Computershare to take action on their behalf in the prior actions against Crystallex and in this CCAA proceeding.
[2] The fact that the noteholders have an opinion questioning some of what Freshfields says does not change that.
[3] The Monitor calculates the savings in interest over the Tenor loan to October 15, 2012 to be approximately $300,000.