http://www.blakes.com/english/view.asp?ID=5700

I just cut/pasted our part, seems as though it covers old stuff but affirms what we have been discussing so far. Gives an overview of the way the canadian court is handling cases / DIP

B. OTHER RECENT DIP FINANCING CASES
In addition to the cases discussed above, which considered Re Indalex, other recent decisions which considered DIP financing and other priority charges provide further guidance into the appropriate scope and terms of DIP financing in CCAA cases.

Re Crystallex – Scope of Interim Financing
Crystallex International Corporation (Crystallex) is a Canadian mining company, whose principal asset, an undeveloped gold deposit in Venezuela, had been expropriated by the Venezuelan government. As a result of the expropriation, Crystallex commenced an arbitration proceeding against the Venezuelan government seeking US$3.4-billion in damages. The arbitration is expected to be concluded in November 2012 and the arbitration claim is the only significant asset of Crystallex.

In December 2011, Crystallex obtained CCAA protection from the Ontario Court. Crystallex also sought authority to conduct a DIP auction to secure DIP financing which would provide it sufficient liquidity to, among other things, fund the balance of the arbitration proceedings. A group of noteholders opposed the proposed bidding procedures for the DIP auction on the basis that Crystallex was inappropriately seeking financing in excess of amounts required in advance of when a compromise or plan of arrangement could be made to creditors. After the DIP auction was approved over the noteholders' objections, a group comprising 77% of the noteholders submitted a bid to provide the DIP financing.

Crystallex rejected the bid from the noteholder group on the basis that the amount and term was insufficient and instead sought approval of a DIP facility from another creditor (Tenor). Substantially all of the creditors of Crystallex opposed the approval of the Tenor DIP facility. In particular, the noteholders objected to the amount and term of the Tenor DIP facility, arguing that the repayment date of December 31, 2016 was several years following the anticipated conclusion of the arbitration and would likely stretch beyond the end of the CCAA proceedings. Accordingly, it was submitted that the Tenor DIP facility did not represent "interim financing" as contemplated under the CCAA (the term DIP financing is not used in the CCAA; only the ability to approve interim financing is referred to).

The noteholders also objected to: the additional compensation to be received by Tenor equal to 35% of the net proceeds of any arbitral award (subject to certain conditions); the governance rights in favour of Tenor which would continue after Crystallex exited from CCAA protection; and, Tenor's approval rights to certain terms of any plan of arrangement or compromise put to creditors of Crystallex in the CCAA proceedings. The noteholders argued that these terms of the Tenor DIP facility represented a plan of arrangement or compromise in and of themselves which had not been approved by creditors of Crystallex. The noteholders argued that the Tenor DIP facility was beyond the scope of interim financing that the Ontario Court had the authority to approve under the CCAA.

The Ontario Court rejected the arguments of the noteholders. The Ontario Court found that the length of time during which a debtor is expected to be subject to CCAA proceedings is not a determinative factor in approving DIP financing under the CCAA. Instead, the Ontario Court found that the Tenor DIP facility would enhance the prospects of a viable compromise or arrangement, notwithstanding the added complexity that the consent rights would introduce.

The Court of Appeal for Ontario affirmed the lower court's decision, holding that while the primary purpose of section 11.2 of the CCAA is to secure interim financing required by the debtor while it is expected to be subject to proceedings under the CCAA, a further purpose is to enhance the prospects of a successful plan of compromise or arrangement and continuation of the debtor company. The Court of Appeal found that, although the Tenor DIP facility represented at least, in part, exit financing, it furthered the remedial purpose of the CCAA, and the granting of the order should be affirmed on that basis.

The arbitration is expected to be concluded in November 2012 what does that mean?