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SOMBA K'E/YELLOWKNIFE - The territorial government was in court on Friday to resolve the receivership of Arslanian Cutting Works Ltd., which dates back 2004.

"This appeal is being made to tidy things up," said John Hope, the lawyer representing the GNWT. "Things seemed to have slipped between the cracks."

The gem-cutting company, specializing in diamonds, chose to file for receivership instead of bankruptcy more than four years ago. Arslanian was appointed an interim third-party receiver by the Supreme Court on June 4, 2004 at the request of the territorial government. The company had received a $9.1 million loan from the Royal Bank, which was guaranteed by the territorial government.

Receivership, according to the Canada Revenue Agency, is a payment arrangement a company can make with creditors in order to prevent bankruptcy when it is unable to pay its debts. A receiver can be appointed by a court order.

Arslanian refinanced and dealt with the debt, however, the receiver was never formally excused by the government. Hope would not give any reasons as to why it has taken so long to formally release the receiver and finish off the matter. According to Hope, Arslanian has continued to operate and has been doing well.

"Everybody's happy and all the debts have been paid," said Hope.

Judge Virginia Schuler ruled that the interim receiver be excused for Arslanian, as Hope requested.

Once the company paid off the debt, control was returned to the owners and the company is running its own affairs.

The Montreal-based owner of Arslanian, Ron Basal, said the company is very happy with the territorial government's support.

"We want to double our production and we want the government to be as supportive as they were, as they are," he said.

Basal said the company was able to recover as they began to use more automated equipment for production.

"We went straight to the retailer to the store," with their product, Basal said.

He said they were also able to increase the demand for government certified diamonds.

Many diamond companies had financial trouble, including Deton Cho Diamonds, which was back in business in 2004 after failing due to an unstable workforce and uncertain markets. Sirius diamonds, which also had a cutting and polishing plant in Yellowknife, was also forced into receivership by the GNWT at the same time as Arslanian.