The lipstick saying could also be applied to the company.
Agreed. That is why I have said that I have no illusions about what KRY is doing as well. The only difference for me is that one side is saying they want the award and FU shareholders and the other side is saying they want things to stay the same so they continue to reap their salaries and options. At least Kry management isn't eliminating us.
Both wear lipstick but I will use another saying here: dance with the one who brought you! I wish Kry hadn't asked me to the dance but here I am. The note holders don't want us at the dance at all.
The note holders could have done lots of things to help them get their money back but their focus remains on the big prize.
They could have avoided going to court to take control of the company stating back in 2008 and told Kry they would be willing to settle for what they are owed on Dec. 23rd and not put up obstacles so they couldn't succeed. To do this they would have had to agree to allow Kry to secure the money to pay them off. This would have been done the same way as it is being done now with a percentage of the award.
The correspondence between Kry and the note holders lawyers on November 23, 2011 makes it clear in my opinion that the note holders wouldn't agree to this. Point 1 lays it out pretty clear.
1. The Indentures (and in section 6.7 and 6.8(a) contain general provisions against Crystallex incurring any indebtedness purporting to rank senior to the note (which includes secured debt). Crystallex must remain compliance of those provisions. We trust that Crystallex and its directors are also aware of Crystallex's limitations on its ability to incur further debt.
I look at this as the note holders saying they want their money on Dec. 23rd but we want to make sure you can't raise the money unless someone is as stupid as we were and offers $100 million plus unsecured debt (to a company that's only asset is a lawsuit) that ranks second to our debt.
In my opinion this is why Kry needed to file for CCAA to ensure the deal they had worked out to pay off the note holders would not cause the note holders to sue again. To secure the new debt Kry would be giving up 49% of the award. By filing for CCAA protection the court approval would eliminate Tenor or whoever form being sued.
JJ
