The real question here is why Gowling picked up its marbles and left.

I am on the record for saying that the shareholders did not stand a chance with the action undertaken by Gowlings and that I did not join the opt-ins precisely because of that.

Some will attribute the Gowling's fiasco to malpractice. Others may come up with other theories. The fact is that they picked up their marbles and left the competition when they realized it was not as easy as originally thought; and that a contingent payment expected to be worth tens of millions of dollars based on success was no low-hanging fruit. And since they needed to up their game and spend real money and resources to do so (e.g. appeal to the Supreme Court), their revised calculous told them that picking up the marbles and leaving was their best bet. Easy money had became, all of the sudden, hard money.

Gowling's original erroneus calculous was based on an important input they miscalculated from the outset: the CCAA court, the monitor and the business around insolvency filings in Canada are not necessarily there to protect the insolvent company or its shareholders, but its creditors and lenders. This is the case even when it is self-evident, as it is in the KRY case, that there is collusion amongst the parties involved. 

Two examples here will make this crystal clear: the NAP sharing agreemenet between Tenor and the Fung / Oppenheimer duo and their plan from the outset to liquidate the company after the spoils are distributed, as proven by the waterfall in the credit agreement,

The Fung / Oppenheimer duo knew what Gowling thought they could overcome (i.e. the workings of the CCAA business model), and joined the expected victor long before the CCAA filing was done in December 2011. 

Ergo, the shareholders never had a chance to protect their rights and interests in Canada; and the U.S. judicial systems has always been the only opportunity to protect their rightfull share of the arbitration award. The reason for this is quite simple: the CCAA is a "flexible and evolving framework" which the CCAA court can use to shape a desired outcome. Just look at the CCAA's Article 11 and the power it confers on the CCAA court to "issue ANY ORDER".

The Bankruptcy Code, on the other hand, is a statute that delineates what the court can or cannot do, and sets forth the rights and obligations of each and every party involved. And while the court has some flexibility in shaping the outcome based on equitable grounds, it can only do so if justified by its fact-find process and conclusions. Although the Bankruptcy Court is a Court of Equity, its power in this regard is constrained by a legal maxim codified in U.S. laws that dates back centuries in the English laws: "equity follows the law". Therefore, it the statute deals with a legal issue, equity considerations cannot overrule it.