"The cash burn is surprisingly high for a company without active business operations," Mr. Hope said.

All this, the investors say, means Crystallex will default on its notes when they come due in 2011. "At the highest conceptual level, you have to ask yourself whether creditors have to stand by when a company that's driving towards a cliff that it knows is there decides to continue navigating in that direction," Mr. Bell said. "At a certain point, surely, 'no' means 'no.' "

The lawsuit aims to preserve the remaining cash by having the court declare continued expenditures "oppressive." Investors also hope to recover the balance owing on the notes by way of equipment sales and the proceeds of an international arbitration they believe the company should institute against the Venezuelan government.

The case may present an opportunity for the courts to clarify the Supreme Court of Canada's 2004 decision in Peoples Department Stores Inc. v. Wise. There, the high court ruled that directors and officers do not owe a fiduciary duty to creditors of a corporation, even when it is insolvent or on the verge of insolvency.

"But the Supreme Court left wide open the possibility of unpaid creditors asserting claims based on the oppression remedy and the duty of care that exists in the Canada Business Corporations Act," says Arthur Peltomaa of Bennett Jones.

The oppression remedy, the court observed, was the broadest redress of its kind in the common law world. Still, the duty of care did not demand "perfection" from directors and officers, who were entitled to the benefit of the "business judgment rule."

Still, the court did state that creditors' interests increase in relevancy as a corporation's finances deteriorate. Similarly, determining the best interests of the corporation from time to time may involve consideration of a broad range of stakeholders.

"While the Supreme Court has emphasized that directors' fiduciary duty is to the corporation and not to a single group of stakeholders, creditors can continue to insist that the directors act in a manner that recognizes the economic reality of those whose interests are most at risk when a corporation is in financial trouble," said lawyer Kevin McElcheran of McCarthy Tetrault in Toronto.

A hearing to establish the trial schedule is set for the end of July, and the case could begin in August.