Paau would like you to believe that shareholder actions caused KRY to go into CCAA and that we are now acting out of greed to fight for what was always rightfully ours. This is utterly false and it is actually Tenor and KRY BOD who are the greedy ones as clearly outlined in Mr. Adrianza’s recent letter to Judge Stark.

Perhaps some have not the letter, so below are some key takeaways mixed in with some of my own comments.

KRY’s DIP lender, Tenor is in the loan-to-own business. We are not the only victim of this company’s predatory strategies in collusion with company’s BOD to eliminate shareholder interest during ICSID Arbitrations. Eco Oro Minerals shareholders were successful in protecting their rights in the British Columbia Supreme Court against Tenor (Trexs Investments). Under CCAA we were never afforded a level playing field for any oppression claims.

KRY obtained permission from Ontario Securities Commission (OSC) to allow institutional investors to trade shares after our cease trade order was issued. Institutional investors held approx. 40% of the shares with the rest held by individual shareholders. Was this at Tenor’s request and if so, I wonder how much of that 40% they managed to buy directly or otherwise, perhaps with foresight they’d need those votes one day?

Shareholders need to stay united.

Through CCAA, KRY/Tenor is allowed to bypass the checks and balances built into laws and regulations like the Canadian Business Corporation Act (CBCA) and Canada Securities Act (CSA) under the priori presumption that shareholders no longer have an interest in the company once the company is declared insolvent.

The CCAA monitor is licensed and supervised by the Office of the Superintendent of Bankruptcies (OSB) and must comply with a Code of Ethics to the effect of acting honestly and with integrity as a neutral officer of the court.

Courts have noted that:

“…The monitor is to be the eyes and the ears of the court and sometimes, as is the case here, the nose.  The monitor is to be independent and impartial, must treat all parties reasonably and fairly, and is to conduct itself in a manner consistent with the objectives of the CCAA and its restructuring purpose.  In the course of a CCAA proceeding, a monitor frequently takes positions; indeed it is required by statute to do so.“

In our case, the monitor failed to properly inform the stakeholders as most pertinent information was always sealed at the request of KRY.

I also remember the Monitor stating in one of the reports that shareholders did have a voice at the time Mr. Antonio Reyes intervened. Reyes was later found to be an investor in Tenor. Conflict of interest?

The original $36M DIP loan was deemed enough to finance Arbitration costs. The average amount spent on 55 Arbitrations between 2011 – 2015 was $5.6M.  KRY spent $36M in less than a year and took out additional loans which increased Tenor’s share of the NAP from 35% to over 88%. $30M was spent on Venezuelan counsel alone – bribes? Meanwhile Fung and Oppenheimer protected their bottom line by securing a Compensation Agreement with Tenor that involved a transfer of an undisclosed percentage of Tenor’s 88% share of the NAP towards their MIP. What Fudiciary duties?

Tenor plans to make a mockery Section 347 – Criminal Interest Rate laws by depositing their share of the NAP into an escrow account owned by KRY for their exclusive benefit and make annual withdrawals not exceeding the 60% criminal interest rate until depletion. This is also why the recent Amended Settlement Agreement with Venezuela called for such as payment rationing mechanism by avoiding receipt of a large upfront collection – such as would have been the case with the Nomura attachment.

In mid-2017, KRY had an opportunity to obtain $710M cash from sale of VZ Notes held by Nomura but chose to give up on the sale in lieu of receiving a $25M from the first settlement agreement that was already in default at the time. The $710M would have been enough to pay off the DIP loan, all creditors, and fund further collection efforts, but hey why do that when under CCAA “protection” they can continue to scheme for greater rewards fully aware of the lack of regulatory enforcements.

Personally I stayed a shareholder because we had a a damage claim for $3.8 billion and I trusted in management to protect shareholder interests during the Arbitration proceedings, especially when Fung stated in of his affidavits that, “Successful conclusion or settlement of the arbitration will allow Crystallex to pay off all of its creditors with interest and retain substantial value for shareholders.”

And now we are called out as greedy Complaining Shareholders because we are concerned that we would receive pennies, if anything, per share, all the while the company has a legal claim to assets of $1.5B, $140M in debt and a $76M DIP loan..

No, the greed was demonstrated by Tenor and Management with all their orchestrated efforts to enrich themselves via shareholder dilution in secrecy afforded to them by unabated sealing and redaction of everything of importance to keep the stakeholders in the dark and without contest given Ontario’s two year statute of limitation.

The approval of the Credit Agreement was the first and the last time the Monitor disclosed openly the NAP share assigned to the DIP Lender and the shareholders. From that point onwards, most documents were sealed or redacted and made available only through legal counsel appointed by those who could afford to retain legal counsel for the duration of the CCAA proceedings.

Justice Haney denied a shareholder oppression claim to proceed because he stated that we ought to have known about the terms of the DIP loans as per Monitor’s reports or could’ve have obtained them from Crystallex.

In reality except for the original Credit Agreement, most of the terms and percentages involved were sealed or redacted and no ordinary individual shareholder could really access these as KRY required them to sign an NDA retain legal counsel for the duration of the CCAA proceedings, so once an order was issued there was no going back.

The shareholders have never been afforded a level playing field through this systematic denial of pertinent facts that warranted the pursuit of legal remedies.

The true extent of shareholder dilution was only learned in 2018, when a copy of an unredacted sealed document was filed in a court motion that shed some light on Tenor’s strategies for getting around the 60% criminal interest rate in addition for the ability to seize control of the company via converting their NAP into company’s voting common shares and claim the tax loss carry forward benefits (~USD 100M) to reduce their own tax obligations due on their own NAP earnings.

US Lawyers reviewed the case and concluded that US courts refuse to take jurisdiction over matters where there is a more appropriate forum available to the parties. This despite the fact that KRY filed for Chapter 15 protection in Delaware and that one of its main purposes is “to provide fair and efficient administration of cross-border insolvencies that protects the interests of all creditors and other interested parties, including the debtor”.

Canadian lawyers also weighed in on the outcome of Gowling's legal actions and concluded that, while there were legitimate and actionable basis to pursue legal remedies, these depended on the goodwill of a legal system that had long decided that none was due to the shareholders…

I'm sure there is some facts I missed, so everyone should just read the letter again.

https://www.scribd.com/document/400685190/Crystallex-International-Corporation-v-Bolivarian-Republic-of-Venezuela-Dedce-17-00151-0134-0