The noteholders likely appealed for several reasons. Their action was not "frivolous," however was very unlikely to succeed IMO, but they obviously do not agree and appeal always brings a small chance for them.

Their appeal also delays the payment of legal fees and the cost of an appeal is much less than the original action. My Hold'Em analogy would be the big blind calling a small raise with weak cards pre-flop since they already have some cash in the pot.

Finally, and perhaps most important, the appeal buys them time to negotiate further with Crystallex, albeit from a weaker position than before the trial result -- perhaps Fung reaches an agreement with them on extending the maturity date and delaying interest payments. Originally, my understanding was that the noteholders wanted too much to make a deal possible. Now that they have been smacked down they may become more reasonable.