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Court File No.

: CV-11-9532-00CL

ONTARIO
SUPERIOR COURT OF JUSTICE
COMMERCIAL LIST

IN THE MATTER OF THE COMPANIES’ CREDITORS


ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED

AND IN THE MATTER OF A PLAN OF COMPROMISE OR


ARRANGEMENT OF CRYSTALLEX INTERNATIONAL CORPORATION

NOTICE OF MOTION

THE MOVING PARTIES, Edesio Biffoni, Gerald Cantwell, Robert Danial, Justin

Fine, Steven Kosson, Colin Murdoch, Grant Watson, David Werner (collectively the “Ad-

Hoc Committee”), will make a motion to the Court on a date to be set at a 9:30 scheduling

attendance, at 330 University Avenue, Toronto, Ontario.

PROPOSED METHOD OF HEARING: The motion is to be heard orally.

THE MOTION IS FOR:

(1) An Order granting leave to bring this motion;

(2) If necessary, an Order that the time for service of the Notice of Motion and

the Motion Record is hereby abridged and validated so that this Motion is

properly returnable on the hearing date, and that further service on any

interested party may be dispensed with;

(3) An Order lifting the stay of proceedings herein to allow the Ad Hoc

Committee to commence and continue the claims below with respect to

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oppression of the shareholders of Crystallex International Corporation

(“Crystallex”) and a breach of the criminal interest rate provisions in the

Canadian Criminal Code, all as set out in the draft statement of claim

attached to the affidavit of Justin Fine, or a substantially similar pleading;

(4) An Order varying the following Orders of the Honourable Justice Newbould

to the extent necessary to permit the claims to be commenced and

continued:

(a) the Order dated June 5, 2013 approving the terms of the Second

Credit Agreement dated June 5, 2013 (the “Second DIP Approval

Order” and the “Second DIP Loan”)

(b) the Order dated April 14, 2014 approving the terms of the Third

Credit Agreement Amendment dated April, 2014 (the “Third DIP

Approval Order” and the “Third DIP Loan”); and,

(c) the Order dated December 18, 2014 approving the terms of the

Fourth Credit Agreement Amendment dated December, 2014 (the

“Fourth DIP Approval Order” and the “Fourth DIP Loan”); and,

(d) the Order dated December 18, 2014 approving the Net Arbitration

Proceeds Transfer Agreement among the Applicant, the DIP Lender

(as defined below), Robert Fung and Marc Oppenheimer; and,

(5) such further and other relief as this Honourable Court may deem just.

THE GROUNDS for the motion are:

Leave for Motion

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(1) By Order of the Honourable Justice Newbould dated June 5, 2013 (the

“Stay Extension and Standstill Order”), this Court directed that no party

bring a motion in these proceedings without leave of the Court, such leave

to be sought after consultation with the Monitor concerning any proposed

motion;

(2) By endorsement dated June 7, 2016, the Honourable Justice Newbould

further directed that any party seeking to bring a motion in these

proceedings was to provide the motion materials in draft to counsel for the

Applicants and request that counsel for the Applicants make arrangements

to appear at a chambers appointment to address the scheduling and

hearing of the motion (the “Motion Protocol”);

(3) The Ad Hoc Committee has provided its draft motion materials for this

motion, including a draft of its statement of claim, to counsel for the

Applicant and has requested a scheduling attendance, all in compliance

with the Motion Protocol;

(4) The Crystallex shareholders have an economic interest in the Applicant in

view of the US$1.202 billion arbitration award (“Arbitration Proceeds”)

made in favour of Crystallex against the Bolivarian Republic of Venezuela

(“Venezuela”) as a result of Venezuela’s expropriation of Crystallex’s

valuable mining rights and in view of the pre-filing creditor claims against

the Applicant, which creditor claims were valued at approximately US$112

million by the Monitor in January, 2012;

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(5) The Honourable Justice Hainey approved a contract of Transaction and

Settlement dated November 15, 2017 between the Applicant and

Venezuela, which contract the Monitor of Crystallex described in paragraph

27 of its Twenty-Second Report as providing “significant value to the

Applicant over time beyond the quantum of asserted creditor claims against

the Applicant”;

(6) As particularized in the draft statement of claim, shareholders’ interests

have been diluted such that they currently represent a very small

percentage of the net Arbitration Proceeds, which are the only remaining

asset of the Applicants;

(7) The dilution of shareholders’ interests has been caused or effected by DIP

lending arrangements conferring ever-increasing percentages of net

Arbitration Proceeds on Luxembourg Invest Company 31 S.a.r.l., the

current holder of the DIP loans advanced to the Applicant (the “DIP

Lender”). These arrangements were approved by the Court without any

effective notice to shareholders and in circumstances in which the

Applicants, their directors and the DIP Lenders acted in a manner that was

oppressive, unfairly prejudicial to and in unfair disregard of the interests of

shareholders;

(8) Unless leave to bring this motion is granted to allow the claims as set out in

the Statement of Claim to proceed, the shareholders will have no

opportunity to be heard in relation to the severe dilution of their interests

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and will lose very significant value, potentially in the hundreds of millions of

dollars;

(9) The shareholders will be denied access to justice if the Ad Hoc Committee

is not granted leave to bring this motion;

Lift Stay re Oppression Claim

(10) The Ad Hoc Committee seeks to issue and proceed with a claim which

alleges, among other things, that the granting of compensation to the DIP

Lenders in the form of percentage interests in the net proceeds of the

Arbitration Award (“NAA”), which interests now total almost 90% of the

NAA, was oppressive, in unfair disregard of, and unfairly prejudicial to the

interests of shareholders (the “Oppression Claim”);

Lift Stay re Breach of Criminal Interest Rate

(11) The Oppression Claim further alleges, among other things, that the

compensation provided to the DIP Lender is in breach of the provision of

the Criminal Code of Canada

Vary Orders to Allow the Claim to be Brought

(12) section 11 of the CCAA;

(13) rules 2.03, 3.02, 37 and 59 of the Rules of Civil Procedure;

(14) section 138 of the Courts of Justice Act; and

(15) such further and other grounds as counsel may advise.

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THE FOLLOWING DOCUMENTARY EVIDENCE will be used at the hearing of

the motion:

(1) the Affidavits of Justin Fine and Gerald Cantwell, to be sworn;

(2) such further and other evidence as counsel may advise and this Honourable

Court may permit.

GOWLING WLG (Canada) LLP


Barristers & Solicitors
1 First Canadian Place
100 King Street West, Suite 1600
Toronto ON M5X 1G5

Clifton Prophet
Tel: 416-862-3509
Fax: 416-862-7661
clifton.prophet@gowlingwlg.com

David Cohen
Tel: 416-369-6667
Fax: 416-862-7661
david.cohen@gowlingwlg.com

Nicholas Kluge
Tel: 416-369-4610
Fax: 416-862-7661
nicholas.kluge@gowlingwlg.com

Delna Contractor
Tel: 416-862-4322
Fax: 416-862-7661
delna.contractor@gowlingwlg.com

TO: THE ATTACHED SERVICE LIST

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