The only stated reason for the plan is the implied threat of the officers and directors to leave the company if their demands are not met. But instead of saying they will leave the company if their demands are not met, they just imply it. Why not put their feet to the fire and require them to say under penalty of perjury that they will leave the company if they cannot achieve the goal of their blackmail? After all, if they will not say this, and if they in fact say they will not leave, then why pay the blackmail? Why pay them anything additional unless they can swear this is what they will do if not paid? Let them swear to it and let the whole world see Fung and his henchmen for what they really are. But they don't have the guts to do it. It would be too embarrassing to swear to this just as it ostensibly is too embarrassing to mention the names of the three or so people who will receive the benefits of this plan whose names are blacked out. What they did to avoid this embarrassment was to have their attorneys in their engagement letter to the so-called neutral party (attorney Jay Swartz) state that "[d]uring the course of re-financing discussions potential financing sources [who are of course un-named] have expressed the desire to have management and directors sufficiently financially aligned with the corporation to incentivize them [meaning to do the jobs for which they have been so handsomely paid] to remain with Crystallex and pursue the arbitration vigorously." Incentivize? Didn't they mean blackmail?

Before proceeding further, just a side note. Do you know the deal that the noteholders had proposed to the company to extend the due date on the notes? According to the engagement letter from the company's attorneys to Swartz, it was as follows: 80% of the equity in Crystallex or 80% of the arbitration award to the noteholders with the other 20% to be split between the directors/management and the shareholders. A fat 10% to us.

If the Directors and management are entitled to this incentive plan, then so are the directors and management of Gold Reserve, Exxon, and every other company that has filed for international arbitration, but have you seen Doug Bellanger or anyone else with any other company blackmailing the shareholders? Is this situation any different because the company has sough CCAA protection? I don't see why. Moreover, the efforts of the Directors and management here are directed not at the bankruptcy at all but, rather, at the arbitration. If management here is entitles to tens of millions of dollars, you would then think that this is normal for every company that files for international arbitration to receive such sums. But it's not and there is nothing different here from those situations except that management here is threatening to leave the company unless it gets what it wants.

Unless I misread the documents, the so-called neutral party (attorney Jay Swartz) who was solicited to make an independent determination as to the fairness of the plan was solicited eight months ago - on June 6, 2011 according to the date on the engagement letter that KRY's attorneys sent him. But he did not make his determination until eight months later - on March 14, 2012. It didn't take eight months to make that determination. Something is wrong here. The other thing that is wrong is that in the engagement letter from KRY's attorneys to Mr. Swartz they talk about retaining him to "negotiate" the terms of the compensation plan for management's "ongoing duties" (not "past and future duties)(and note their request is to compensate them for their "duties." Does negotiating the terms of a compensation plan sound like being hired to determine the fairness of a compensation plan, in other words, being hired to determine whether any compensation plan at all is justified. The engagement language in other words sounds like a forgone conclusion that the Directors and management are entitled to additional money. And the attorney who is engaged (Swartz) uses the same language in his letter to KRY confirming his engagement. Were these slips of the tongue or am I misreading the letters?

What management is doing here is trying to bypass the shareholders in determining, and voting on, a plan to reward the them for extraordinary services and instead use what they perceive as a more friendly forum (the CCAAA judge) to do that. Shouldn't this determination be made by the shareholders and not by the judge, as good a man as I think he is. And isn't the time for voting on such a plan after there has been an arbitration award and we can see what has been accomplished. Of course, there is a committee that can decide not to pay a portion or conceivably all of the potential monies under the plan, but the so-called Compensation Committee consists of three members of the present BOD of Crystallex who have held this position for years and who are clearly not neutral. They are endeared to management and the payment of the huge sum of money under this plan is being set up as a foregone conclusion. Interestingly, these directors are referred to in the MIP as "independent" Directors whereas they have always been referred to in the company's official documents and on its website merely as "Directors" without the use of the word "independent", which apparently is now being added to give some sense of neutrality and legitimacy to three men who are no more neutral than Fung is.

Regarding the idea that the Directors and management need incentive not to leave the company, I submit that they have bee paid for years to do their duties and if they leave the company now and refuse to cooperate, I see that as a violation of their fiduciary duties to the shareholders. In other words, I see those duties as extending beyond their active service with the company. Legally, this could be a close call. But if they threaten now to leave the company unless given a big cut of an arbitration award, then any threats are being made while they are still employed by the corporation and hence a violation of their fiduciary duties. But admittedly they have not made any threat yet. Rather, they have used their attorneys to make an implied threat, thus sparing them from admitting in essence to this violation.

If you are concerned and want to do something, fax a letter to Judge Newbould and let him know how you feel. Also, ask him to appoint an attorney to be paid for by the company to represent the shareholders' interests in asserting their opposition to the plan, and ask him to continue the April 5 hearing at least as to a ruling on the compensation plan.

Never forget what Peter Finch yelled out the window in "Network".