Hey everyone, itsbeen a while.

On the eve of the latest GRZ news, one has to wonder whats going to happen to crystallex and their arbitration claim. Are we going to get a settlement before decision? Value of deal? etc.

What I want to know, if anyone on the board can provide concrete numbers, is what percentage is left over for shareholders (up to this point) of any net arbitration proceeds? I've seen the motions stating its around 12%, but i would like to know what the actual numbers are i.e. Tenor %, MIP % (lump sum or sliding scale %)? etc.

I'mtrying to find the info, but everything seems to be redacted.

Thanks in advance.

FK

All parties are good with extending the stay until December 2014 as long as,

1) Tenor gets another 15% of net arbitration proceeds for continuing the flow under the current DIP facility, and adding another 11 million to be drawn down.

2) the noteholders have settled on getting all their interest accrued and some other fees they incurred along the way (approx another 10 million), to bring the total prinicipal outstanding as of May 20, 2013 to $124 million. But now, their interest rate effectively goes up to 20% per year, (9.375+++) accruing from the beginning of the standstill agreeement on May 20, 2013 until the end of the standstill agreement date (December 2014, or later if the parties agree to extend).

3) managment still gets their up to 10% MIP, which seeing how greedy they've been up until now, is likely going to be the full 10%. Plus, oppenheimer wants a raise for bringing us into bankruptcy.

4) and shareholders get the rest, whatever that may be. I guess we should be happy we may get something in the end, but I feel management and Tenor have been all to chummy in this whole process, and well, the noteholders were greedy, but not as greedy as Tenor and managment.

So, roughly calculating, on a $500 million dollar settlement (base case, and assuming all other debt and expenses are paid out of current loans):

Debt repayment:

Tenor gets: $55 million debt and interest (by the time this is done say Dec 2014).

Noteholders get: $165 million (full principal repayment plus accrued interest on 123 million starting May 20, 2013).

Which leaves $280 million left to be split up.

Tenor Gets: 50% or $140 million (or $160 million if I read correctly that the net arbitration proceeds now exclude the extra interest to the noteholders).

Mgmt gets 10% or $28 million

and shareholders are left with $92-112 million or $0.22-$0.28 cents / share

keep in mind, this is based on $500 million settlement, which I feel is way too low, but I just wanted to show an base case. I'm looking more in the $800 million dollar range at least, at which case we can expect a share price of $0.63 cents per share.

These are just rough calculations, but at least the picture looks a little more clearer for us shareholders.

Cheers,

FK.

maybe one of our legal experts here can chime in:

Does this filing mean that all parties involved aggreed to have the stay extended to a point in time going forward that is 7 days after any of the parties files a motion with the courts?

To me, this can only indicate that all parties are finally in serious negotiations at this time, and might be close to a resolution that will get us out of CCAA.

Cheers,

FK

I agree with JJ,

I don't like any of the parties (besides us shareholders) involved in trying to take money out of my pocket, but I think this is a case of better the devil you know (management), than the one you don't (bondies).

Furthermore, this is all high stakes negotiation here. We know what bondies want since they took it public in their last motion. They wanted everyone to think they are now being reasonable compared to what they first asked, which they still aren't, not in this case. We just don't know what crystallex is offering them. Is it principal + interest, or is it less.

For those who have read the transcript of the cross examination of Robert Fung in January, it is clear to see that there is a lot of bad blood between the bondies and management. The bondies have taken their offer public to see if they can get more support from all parties to push their plan forward. While managment is threatening (from what it seems in the transcipt) to invalidate bondie claims (or at least delay their attempt to make claim) based on insider trading/breach of confidentiality allegations. Hence all the talk about getting bondie trading records. I don't know what kind of delay that would cause, but I assume it can be stretched for another year.

I think both sides have a lot of dirt on each other, no doubt, and they'll come to agreement before the shit hits the fan. My guess, bondies get principal + interest accrued, and if they're lucky, 5% of arb proceeeds. Otherwise, they can wait until the case is over. Furthermore, I'm sure the judge will take into consideration what the rest of the claims ($7 million or so, some secured?) are going to settle for. If they are going to settle for their principal + interest, then why should the bondies get more then that? (regardless of the amounts owed)

And as for tenor, well, push come to shove, I don't see them having a problem sucking more percentage out of us for a bit more money. Lets see, they already invested 35 million for 35%. I can see them giving us another 5 million + interest for another 5%. So, I wouldn't be too worried about the running out of money part. Because we won't need much more. After the case is finally heard, all expenses should come down considerably.

For those wondering about my share price math previously. Just a rough calculation. Obviously this is going to change, just an illustration.

on $600 million award:

Debt and expenses:

Tenor (assuming another 2 years before payment) 35million + 10% compounded for 3 years = $47 million

Bondies (assuming we give them their 15% for 3 years since we went bankrupt) on top of what they are owed (104 million) = $150 million

Expenses =are currently being paid out of Tenors advances, but lets add on another $10 million for greedy management and follow through of the case after oral hearing. = $10 million

So, that leaves us with $393 million to split up now.

% of arb proceeds to parties involved

Tenor gets 35% or $138 million

Bondies get 15% or $59 million

Greedy management takes MIP of 5% or $20 million

Which leaves us shareholders with $176 million or $0.44 per share based of 400mm shares fully diluted. Keep in mind this number is 2 years away at least.

Anyway,

FK.

Well, at least things are starting to move along and get more realistic.

Finally, the noteholders have decided to start bringing down their demands and start some serious negotiations. They have to understand they aren't the only class of creditors in this CCAA restructuring, and in fact, not even the most senior class.

I can completely understand why Tenor would have an issue with their proposed offer. In case the unsecured noteholders have forgotten, Tenor, in addition to their principal and interest, also get a portion of arbitration proceeds (or equity) after all expenses/interest are paid. So, the higher the interest that the unsecured creditors ask for, the less of a windfall that Tenor gets at the end. I have a feeling they are even less generous then Crystallex management.

So, what happens next? who knows. Maybe crystallex counter offers with full principal and interest, and thats being generous. Then unsecured noteholders come back asking for full interest and 10% of the arb proceeds, and maybe we settle somewhere in the full inteest and principal and 5% of arb proceeds area. I think shareholders will be able to recoup some of their losses, adn those that have averaged down will be able to make money.

Even at the outrageous 15% interest + 15% arb proceeds that the unsecured noteholders are asking for now, a $600 million settlement, after all principal, interest, expenses, and arb proceeds giveaways, still leaves shareholders with about $0.30 at the current number of shares oustanding. and with higher rewards, we go higher. So, things are looking somewhat brighter for us.

Cheers,

FK.

whew,

This is great news. I wasn't too worried about the appeal being dismissed, but as they say, you never know. But at least now, the possible crumbs left over for shareholders just turned into a possible meal.

Why? Well, now the unsecured debtholders (the $100 million) are now second in line behind the DIP lenders in the event we are broken up.

What does this mean? Well, they are more likely to do a reasonable deal because well, if we are left in bankruptcy and forced to dissolve our assets, well, they'll most likely get zero. I mean, we already owe the DIP lenders $20 million or so, and our only asset is the arbitration case. The DIP lenders are the first in line in any liquidation, and will most likely get everything if that happens.

I'm curious as to what us shareholders will be left with. If I were to guess, i'd say the unsecured debtholders will most likly be offered a deal where they get their money and interest PIK, and probably somewhere in the area of 10-15% of the award. Maybe I'm just too optimistic.

Second, the upcoming elections. Do they matter to us? Yes and no. No, becasue we should get paid off regardless due ICSID rules, etc. But YES, because if Capriles wins, I think we have a possibility of a bigger settlement, and sooner. I don't think we'll get the property back, but we'll prob get more money back.

Election prediction?

I think Capriles wins, for the simple reason that all the polls are getting closer. Also, you have to think, the polls must be skewed towards Chavez because the people who are getting askedwho they'll vote for are more than likely afraid to admit the truth for fear of retribution. I'm sure most Venezuelans know by now that they probably have someone or something peeking over their shoulder at all times. maybe cuban intelligence helping?

Also, I think Chavez and the Chinese know that Chavez may be trailing, hence why they signed the deal in such a hurry before the elections. The Chinese aren't taking a chance with their loans.

and quite simply, I have a lot of latino friends, and they are prone to say Yes, Yes, Yes, Yes......until it comes time to actually do whatever it is asked, then they change their mind. I hope those that are voting for chavez are exhibiting this behaviour.

Cheers, and good luck to all, I think the stock price should rise in the next few days, and significantly rise when we finally have our deal with the noteholders and emerge from CCAA.

FK.