In January 2024, Dominion Diamond Mines (DDM) and related entities underwent Companies’ Creditors Arrangement Act (Canada) (“CCAA”) proceedings, with a total case value of US$1.5 billion (approximately C$2.03 billion) and Second Lien Notes issued in the amount of US$550 million (approximately C$742 million, using an exchange rate of 1 USD = 1.35 CAD at the time). The proceedings were marked by a proposed “Equity Restructuring Transaction” from DDM’s principal shareholders, the Washington Group of Companies. This proposal included a shareholder stalking horse bid purchase agreement, a shareholder DIP loan, and a sales and investment solicitation process that would have enabled the Washington Group to acquire DDM’s assets, providing zero recovery to the Second Lien Notes while offering recoveries to creditors junior to the Second Lien Note Trustee. The Second Lien Note Trustee successfully opposed this proposal before the Court of King’s Bench of Alberta. As a result, the transaction was not completed, and a subsequent transaction led by certain Second Lien Noteholders—who also acquired the assets—prevailed, ultimately providing recoveries to the Second Lien Notes that would not have been available under the original restructuring plan.

Advisors involved in the matter included Dentons (counsel to Wilmington Trust, National Association, as Second Lien Note Trustee), Blake, Cassels & Graydon LLP (counsel to DDM and CCAA Applicants), FTI Consulting Inc. (court-appointed Monitor), Bennett Jones LLP (counsel to the Monitor), McCarthy Tetrault LLP (counsel to Diavik Diamond Mines (2012) Inc.), Cassels, Brock & Blackwell LLP (counsel to the Government of the Northwest Territories), Torys LLP (counsel to the Ad Hoc Group of Noteholders/Purchasers), Osler, Hoskin & Harcourt LLP (counsel to Credit Suisse, First Lien Agent), and Goodmans LLP (counsel to the Washington Group of Companies).