I suggest you go to the E&Y site and read page 9 of the order. It says:
An amount equal to up to 10% of the first $700 million in net proceeds of the arbitration award and an amount equal to 2% of the net proceeds in excess of $700 million will be reserved as a retention pool for key management employees.
The amount to be retained in this pool is the amount remaining after payment of the outstanding principal and interest on the DIP loan, outstanding operating and professional expenses, the unpaid claims of noteholders and other stayed unsecured creditors, together with post-filing interest and all taxes payable by the company on the award.
The size of the poll shall not exceed 10% of the net proceeds of the arbitration award or one quarter of the amount that is available to shareholders of Crystallex after satisfaction of any additional compensation owing Tenor under the loan agreement.
On page 36 it also says: Crystallex advises that it will amend the MIP to provide that the value of any existing stock options ultimately realized by participants of the MIP will be deducted from the amount of any bonus awarded under the MIP on a tax neutral basis.
Both of these items makes sure us shareholders don't get screwed by the method of calculating the 35% and 10%.
The tenor percentage is covered on page 6 where it says: Tenor will receive additional compensation equal to 35% of the net proceeds of any arbitral award or settlement, conditional upon the second trache of the loan being advanced. Net proceeds of the award or settlement is defined as the amount remaining after payment of principal and interest on the DIP loan, taxes and proven and allowed unsecured claims against Crystallex, including the noteholders, the latter of which will have a special charge for the unsecured amounts owing.
This means the payments are not coming on our backs but before everyone bites the pie.
Something that hasn't been mentioned so far is that Tenor doesn't qualify for their 35% until the second trache of $12 million is advanced. If we add up what is owed right now it is less $150 million. We know that on a 1 billion settlement we end up with approximately 55% of $700 million or $385 million but what if management gets a settlement before the second loan amount is taken. Let say we settle for $600 million right away. we payoff the $150 million and have 90% of $450 million or $405 million which is more than what we get on a 1 billion dollar settlement after the second part of the loan.
Wouldn't it be nice now that we have a court decision barring appeal that tells VZ we will be able to see this trough to the end. I can see them be ready to fork over our costs plus something like 1.5 times our costs or $750 million. This would help them in their GRZ claim if we settled first for less than a billion.
Come RF make a call and see if we can't get out of this mess before the appeal is over.
JJ
