Court Opinion

ID: 2969940
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:00:55.497162+00
Date Added: 2024-06-11T11:43:27.167620
License: Public Domain

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
     &DPSEHOOY&R\OH                           1R                   3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

                                                                         (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU

DQGDIILUPWKHGHQLDORIKDEHDVFRUSXVEDVHGRQWKLVFODLPRI                        )LOH 1DPH DS

HUURU
      &KDOOHQJH WR WKH WHVWLPRQ\ RI WKH VHURORJLVW DERXW   81,7('67$7(6&28572)$33($/6
        XQW\SHGEORRGWKDWZDVIRXQGRQ&DPSEHOOjVVKRHV
                                                                                   )257+(6,;7+&,5&8,7
  &DPSEHOOjV HLJKWK FODLP RI HUURU FKDUJHV WKDW KLV                           BBBBBBBBBBBBBBBBB
FRQVWLWXWLRQDOULJKWVZHUHYLRODWHGE\WKHWHVWLPRQ\RI'HQLVH
&DUJR WKH VHURORJLVW ZKR VWDWHG WKDW WKH EORRG IRXQG RQ
&DPSEHOOjVVKRHVZDVKXPDQEORRGHYHQWKRXJKLWVW\SHZDV           s(520( &$03%(//                 ;
QHYHU GHWHUPLQHG  7KH GLVWULFW FRXUW FRQFOXGHG WKDW WKLV             3HWLWLRQHU$SSHOODQW 
DUJXPHQWZDVVLPSO\DFKDOOHQJHWRWKHSUREDWLYHZHLJKWRI                                             
WKH HYLGHQFH QRW LWV DGPLVVLELOLW\  %HFDXVH mWKH 6WDWH                                         1R
SURGXFHGRWKHUVXIILFLHQWHYLGHQFHRIJXLOWlWKHGLVWULFWFRXUW              Y                      
FRQFOXGHG WKDW mWKH EORRG HYLGHQFH DQG WHVWLPRQ\ GLG QRW                                        !
                                                                                                       
KDYHDVXEVWDQWLDOLQIOXHQFHRQWKHYHUGLFWl:HDJUHHZLWK         5$/3+ &2</(:DUGHQ              
WKHGLVWULFWFRXUWjVFRQFOXVLRQDQGWKHUHIRUHZHDIILUPWKH                5HVSRQGHQW$SSHOOHH 
GHQLDORIKDEHDVFRUSXVEDVHGRQ&DPSEHOOjVHLJKWKDQGILQDO                                          1
FODLPRIHUURU
                                                                          $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
                     ,,,&21&/86,21                                    IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&LQFLQQDWL
                                                                       1Rn6DQGUD6%HFNZLWK'LVWULFWsXGJH
  )RU DOO WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 WKH
MXGJPHQWRIWKHGLVWULFWFRXUW                                                     $UJXHG'HFHPEHU
                                                                                'HFLGHGDQG)LOHG$XJXVW
                                                                     %HIRUH5<$1%2**6DQG*,/0$1&LUFXLWsXGJHV
                                                                                       BBBBBBBBBBBBBBBBB
                                                                                            &2816(/
                                                                    $5*8('  sRVHSK ( :LOKHOP 38%/,& '()(1'(5j6
                                                                    2)),&( 2+,2 38%/,& '()(1'(5 &200,66,21
                                                                    &ROXPEXV 2KLR IRU $SSHOODQW  sRQDWKDQ 5 )XONHUVRQ
                                                                    2 ) ) ,& (  2 ) 7 + (  $ 7 7 2 5 1 ( <  * ( 1 ( 5 $ /
                                                                    &255(&7,216/,7,*$7,216(&7,21&ROXPEXV2KLR
                                                                    IRU$SSHOOHH21%5,()sRVHSK(:LOKHOP'DYLG+
                                                                    %RGLNHU 3DPHOD 3UXGH6PLWKHUV 38%/,& '()(1'(5j6
                                                                    2)),&( 2+,2 38%/,& '()(1'(5 &200,66,21

                                                                                                 
     &DPSEHOOY&R\OH                              1R       1R                            &DPSEHOOY&R\OH        

&ROXPEXV 2KLR IRU $SSHOODQW  sRQDWKDQ 5 )XONHUVRQ          GLUHFWDSSHDOWRWKH2KLR&RXUWRI$SSHDOV%HFDXVH2IILFHU
2 )),& (  2 )  7 + (  $ 7 7 2 5 1 ( <  * ( 1 ( 5 $ /              &DPGHQ ZDV DSSDUHQWO\ GRLQJ QRWKLQJ PRUH WKDQ
&255(&7,216/,7,*$7,216(&7,21&ROXPEXV2KLR                        VXPPDUL]LQJKLVFRQYHUVDWLRQZLWK&DPSEHOOZHDJUHHZLWK
&ODXGH1&URZH$66,67$17$77251(<*(1(5$/                           WKHGLVWULFWFRXUWjVFRQFOXVLRQWKDWWULDOFRXQVHOjVIDLOXUHWR
&LQFLQQDWL2KLRIRU$SSHOOHH                                        REMHFWWRRUDSSHDOWKHDGPLVVLRQRIWKLVWHVWLPRQ\ZDVQRW
                                                                       GHILFLHQWXQGHU6WULFNODQG:HWKHUHIRUHDIILUPWKHGHQLDORI
                     BBBBBBBBBBBBBBBBB                                 KDEHDVFRUSXVEDVHGRQ&DPSEHOOjVVL[WKFODLPRIHUURURQ
                                                                       DSSHDO
                         23,1,21
                     BBBBBBBBBBBBBBBBB                                      &KDOOHQJHWRWKHDOOHJHGO\IDOVHVWDWHPHQWVE\&ODUG\
                                                                              DQG5RVHPDQWKDWWKH\UHFHLYHGQRFRQVLGHUDWLRQIRU
  521$/' /(( *,/0$1 &LUFXLW sXGJH  3HWLWLRQHU                         WKHLUWHVWLPRQ\
sHURPH &DPSEHOO ZDV FRQYLFWHG LQ  RI DJJUDYDWHG
PXUGHUDQGVHQWHQFHGWRGHDWKE\DMXU\LQ+DPLOWRQ&RXQW\               &DPSEHOOjVVHYHQWKFODLPRIHUURUFKDOOHQJHVWKHIDFWWKDW
2KLR7KH6XSUHPH&RXUWRI2KLRDIILUPHGKLVFRQYLFWLRQRQ            DFFRUGLQJWRKLPWKHVWDWHZLWKKHOGLQIRUPDWLRQWKDWVKRZV
GLUHFW DSSHDO  &DPSEHOOjV WZR SHWLWLRQV IRU VWDWH SRVW       WKDW WKHVH WZR LQIRUPDQWV GHVSLWH WKHLU WHVWLPRQ\ WR WKH
FRQYLFWLRQ UHOLHI ZHUH DOVR XQVXFFHVVIXO  +H WKHQ ILOHG D    FRQWUDU\UHFHLYHGGHDOVZLWKWKHVWDWHDVFRPSHQVDWLRQIRU
SHWLWLRQ IRU D ZULW RI KDEHDV FRUSXV LQ WKH 8QLWHG 6WDWHV    WKHLUIDYRUDEOHWHVWLPRQ\DVWR&DPSEHOOjVJXLOW,IFRUUHFW
'LVWULFW&RXUWIRUWKH6RXWKHUQ'LVWULFWRI2KLR:KHQWKH            VXFKZLWKKROGLQJRIHYLGHQFHZRXOGEHDYLRODWLRQRI%UDG\
GLVWULFW FRXUW GHQLHG WKH ZULW &DPSEHOO DSSHDOHG  )RU WKH   Y0DU\ODQG86(YHQLIWKHVWDWHGLG
UHDVRQVVHWIRUWKEHORZZH$)),50WKHMXGJPHQWRI WKH                ZLWKKROG VXFK HYLGHQFH KRZHYHU KDEHDV FRUSXV PD\ EH
GLVWULFWFRXUW                                                        JUDQWHGRQO\LImWKHUHLVDµUHDVRQDEOHSUREDELOLW\jWKDWKDG
                                                                       WKHHYLGHQFHEHHQGLVFORVHGWRWKHGHIHQVHWKHUHVXOWRIWKH
                      ,%$&.*5281'                                   SURFHHGLQJZRXOGKDYHEHHQGLIIHUHQWl.\OHVY:KLWOH\
                                                                       86
$ )DFWXDOEDFNJURXQG
                                                                          7KHGLVWULFWFRXUWUHMHFWHGWKLVFODLPRIHUURUFRQFOXGLQJ
   2QWKHQLJKWRI'HFHPEHU+HQU\7XUQHUD              WKDWWKHUHLVQRUHDVRQDEOHOLNHOLKRRGWKDWWKHDOOHJHGO\IDOVH
\HDUROGUHVLGHQWRI&LQFLQQDWL2KLRZDVPXUGHUHGE\DQ              WHVWLPRQ\ FRXOG KDYH DIIHFWHG WKH MXU\jV MXGJPHQW
LQWUXGHULQKLVDSDUWPHQW7XUQHUEOHGWRGHDWKDIWHUEHLQJ           )XUWKHUPRUH &DPSEHOOjV FKDUJH RI IDOVLW\ LV FRQVLGHUDEO\
VWDEEHG ILYH WLPHV E\ D NQLIH WDNHQ IURP KLV RZQ NLWFKHQ    GLPLQLVKHG E\ WKH IDFW WKDW ERWK &ODUG\ DQG 5RVHPDQ
7KHUHZHUHWZRZRXQGVLQKLVFKHVWRQHLQKLVFKLQRQHLQ            LQGHSHQGHQWO\UHFDOOHGVSHFLILFGHWDLOVFRQFHUQLQJWKHPXUGHU
KLVWKXPEDQGRQHLQKLVZULVW7KHZRXQGWRWKHWKXPEZDV           VXFK DV 'RQQD 5REHUWVjV REVHUYDWLRQ RI &DPSEHOO RQ WKH
GHVFULEHGE\WKHFRURQHUDVDmGHIHQVLYHZRXQGl7XUQHUjV             QLJKW LQ TXHVWLRQ  7KHVH DUH GHWDLOV WKH\ ZRXOG QRW KDYH
ERG\ZDVIRXQGZLWKWKHNQLIHVWLOOVWXFNLQKLVZULVW7KH           NQRZQDERXWXQOHVVVRWROGE\&DPSEHOO7KHGLVWULFWFRXUW
ERG\ZDVGLVFRYHUHGRQ'HFHPEHUE\DQRWKHUWHQDQW             DOVRSRLQWHGRXWWKDWHYHQLIWKHWHVWLPRQ\RIERWKRIWKHVH
RIWKHDSDUWPHQWEXLOGLQJ/HRQ&DOOLQVDQHLJKERUZKRKDG            MDLOKRXVHLQIRUPDQWVKDGEHHQUHMHFWHGE\WKHMXU\DOWRJHWKHU
YLVLWHG7XUQHUWKHQLJKWEHIRUH                                       WKHHYLGHQFHRI&DPSEHOOjVJXLOWZDVVRRYHUZKHOPLQJWKDW
                                                                       WKHUHZDVQRUHDVRQDEOHSUREDELOLW\WKDW&DPSEHOOZRXOGKDYH
  $FFRUGLQJWR&DOOLQV7XUQHUjVDSDUWPHQWZDVXVXDOO\NHSW            EHHQDFTXLWWHG:HDJUHHZLWKWKHGLVWULFWFRXUWjVDQDO\VLV
QHDW DQG FOHDQ EXW WKH FRQGLWLRQ LQ ZKLFK KH IRXQG WKH
     &DPSEHOOY&R\OH                               1R       1R                             &DPSEHOOY&R\OH        

HYLGHQFHWRFRQYLQFHWKHMXURUVEH\RQGDUHDVRQDEOHGRXEWRI             DSDUWPHQWWKHQH[WPRUQLQJZDVQRWWKHZD\KHKDGVHHQLWWKH
HYHU\ HVVHQWLDO HOHPHQW RI WKH FULPH FKDUJHG LQ WKH              QLJKWEHIRUH7KHNLWFKHQGRRUDSSHDUHGWRKDYHEHHQSULHG
LQGLFWPHQWl%HFDXVHWKHWULDOFRXUWKDGFRUUHFWO\VWDWHGWKH           RSHQ WKH UHIULJHUDWRU KDG EHHQ PRYHG WKH GRRU WR WKH
HOHPHQWVRIDJJUDYDWHGEXUJODU\HOVHZKHUHLQLWVLQVWUXFWLRQV           EHGURRP ZDV GDPDJHG DQG WKH EHGURRP ZDV LQ GLVDUUD\
DVZHOODVWKHUHTXLUHPHQWWKDWWKHMXU\PXVWILQGWKDWHDFK             7XUQHUZKRZDVNQRZQWREHDORFDOERRWOHJJHUKDGDOLTXRU
HOHPHQWZDVSURYHQEH\RQGDUHDVRQDEOHGRXEWWKHGLVWULFW               FDELQHW LQ KLV OLYLQJ URRP WKDW ZDV IRXQG RSHQ DQG WKH
FRXUW FRQFOXGHG WKDW FRXQVHOjV IDLOXUH WR REMHFW ZDV QRW         WHOHYLVLRQLQWKDWURRPKDGEHHQWXUQHGRQLWVVLGH&DOOLQV
FRQVWLWXWLRQDOO\GHILFLHQW:HDJUHHZLWKWKLVKROGLQJ7KH             WHVWLILHGWKDWZKHQKHKDGYLVLWHG7XUQHUWKHSUHYLRXVGD\WKH
GLVWULFW FRXUWjV GHFLVLRQ WR GHQ\ &DPSEHOOjV KDEHDV FRUSXV        OLTXRUFDELQHWKDGEHHQFORVHGDQGORFNHGoWKHZD\LWZDV
FODLPEDVHGRQWKLVFODLPRIHUURULVWKHUHIRUHDIILUPHG                mDOZD\Vl NHSW o DQG WKH WHOHYLVLRQ KDG EHHQ XSULJKW DQG
                                                                         WXUQHG RQ  &ODUHQFH &DHVDU D FULPLQDO LQYHVWLJDWRU ZKR
      &KDOOHQJHWR2IILFHU&DPGHQjVWHVWLPRQ\                          WHVWLILHGDWWULDOJDYHKLVRSLQLRQWKDWWKHDSDUWPHQWKDGEHHQ
                                                                         IRUFHIXOO\HQWHUHGE\WKHDVVDLODQW
  &DPSEHOOjVVL[WKFODLPRIHUURULVEDVHGRQWKHIROORZLQJ
WHVWLPRQ\E\2IILFHU&DPGHQ                                               2QH RI WKH SROLFH RIILFHUV LQYHVWLJDWLQJ WKH FULPH VFHQH
                                                                         5RQDOG&DPGHQTXHVWLRQHG7XUQHUjVQHLJKERUV$PRQJWKH
  , PDGH WKH VWDWHPHQW WR KLP WKDW , IHOW WKDW KH KDG         SHRSOHTXHVWLRQHGZDV'RQQD5REHUWVDZRPDQZKROLYHGLQ
  FRPPLWWHG EXUJODULHV EHIRUH ZLWK SHRSOH LQ WKH KRXVH            WKHEXLOGLQJQH[WWRWKHRQHLQZKLFK&DOOLQVDQG7XUQHUOLYHG
  DVOHHS$WWKDWSRLQWKHVD\Vµ\HDK,GLGj$QGWKHQKH              5REHUWV WROG 2IILFHU &DPGHQ WKDW VRPHWLPH ODWH LQ WKH
  VDLG o KH VDLG KRZHYHU WKDW KH EHOLHYHG WKDW KH ZDV        HYHQLQJRQ'HFHPEHUVKHZDVZDONLQJWRZDUGKHU
  FRPPLWWLQJEXUJODULHVLQWKLVFDVHWKHRQO\GLIIHUHQFH                DSDUWPHQWEXLOGLQJZKHQVKHZDVVWDUWOHGE\DPDQOHDQLQJXS
  ZDVoQR,WROGKLPWKHRQO\GLIIHUHQFHZDVoLVWKDWWKLV            DJDLQVWDQHDUE\YDFDQWEXLOGLQJ6KHWHVWLILHGWKDWKHZDV
  WLPH7XUQHUZRNHXSDQGKHNLOOHGKLP                                 VFDUUHG RQ KLV IDFH DQG ZDV ZHDULQJ GDUN SDQWV  $IWHU
                                                                         JUHHWLQJKLPVKHFRQWLQXHGRQKHUZD\WRKHUDSDUWPHQW
  &DPSEHOOFKDOOHQJHVWKLVWHVWLPRQ\RQWZRJURXQGV)LUVW
KHFODLPVWKDWWKLVHYLGHQFHFRQVWLWXWHGLPSHUPLVVLEOHRSLQLRQ              5REHUWVDOVRVDLGWKDWWKHPDQZDVIDPLOLDUWRKHUDQGWKDW
WHVWLPRQ\RQDQLVVXHWKDWWKHMXU\PXVWGHFLGH6HFRQGKH             VKHDQGRWKHUVZKRNQHZKLPUHIHUUHGWRKLPDVmVFDUIDFHl
DUJXHV WKDW WKLV WHVWLPRQ\ ZDV SURIIHUHG DV LPSHUPLVVLEOH         6KH ODWHU LGHQWLILHG WKLV PDQ DV &DPSEHOO  $FFRUGLQJ WR
FKDUDFWHUHYLGHQFHWRVKRZ&DPSEHOOjVSURSHQVLW\WRFRPPLW               5REHUWVVKHKDGUHFRJQL]HGKLPIURPZKHQKHKDGIRUPHUO\
WKHFULPHFKDUJHG                                                      OLYHG LQ WKH VDPH EXLOGLQJ DV 7XUQHU DQG &DOOLQV  $IWHU
                                                                         WDONLQJWR5REHUWVDQGRWKHUUHVLGHQWVRI7XUQHUjVEXLOGLQJ
  7KH2KLR6XSUHPH&RXUWDIWHUILQGLQJWKDW&DPSEHOOGLG                2IILFHU&DPGHQOHDUQHGWKDW&DPSEHOOKDGSUHYLRXVO\OLYHG
QRW REMHFW WR WKLV WHVWLPRQ\ DW WULDO FRQFOXGHG WKDW KH KDG   RQ WKH WKLUG IORRU RI 7XUQHUjV EXLOGLQJ DQG IXUWKHU WKDW
ZDLYHGWKLVLVVXH$FFRUGLQJO\WKHGLVWULFWFRXUWKHOGWKDW            &DPSEHOOjVIDFHZDVVHYHUHO\VFDUUHGZLWKEXUQPDUNV
WKLV FODLP ZDV SURFHGXUDOO\ GHIDXOWHG SXUVXDQW WR0DXSLQ
 )G DW   :H DJUHH ZLWK WKH GLVWULFW FRXUWjV             7KH SROLFH FRQWLQXHG WR TXHVWLRQ DOO ZKR KDG DFFHVV WR
FRQFOXVLRQ                                                              7XUQHUjVDSDUWPHQWDQGDOOZKRPLJKWKDYHYLVLWHGKLP$W
                                                                         WKH VDPH WLPH &DHVDU WKH FULPLQDO LQYHVWLJDWRU ZLWK WKH
  7KHGLVWULFWFRXUWDOVRUHMHFWHG&DPSEHOOjVFODLPWKDWKH              &LQFLQQDWLSROLFHLGHQWLILHGDSDOPSULQWDERYHWKHORFNRQ
ZDVSURYLGHGZLWKLQHIIHFWLYHDVVLVWDQFHRIFRXQVHOZKHQWKLV            WKHGRRUOHDGLQJIURPWKHKDOOZD\LQWR7XUQHUjVDSDUWPHQWDV
FODLPRIHUURUZDVQRWSXUVXHGE\KLVFRXQVHODWWULDORURQ
       &DPSEHOOY&R\OH                            1R       1R                              &DPSEHOOY&R\OH        

ZHOODVDILQJHUSULQWRQDOLJKWEXOEWKDWKDGEHHQO\LQJRQWKH             &KDOOHQJH WR WKH MXU\ LQVWUXFWLRQV EDVHG RQ
IORRURXWVLGH%RWKSULQWVEHORQJHGWR&DPSEHOO                             &DPSEHOOjV FODLP WKDW WKH WULDO FRXUW LPSURSHUO\
                                                                              GHILQHGmDJJUDYDWHGEXUJODU\lDQGmWKHIWRIIHQVHl
  %DVHG RQ DOO RI WKLV LQIRUPDWLRQ &DPSEHOO EHFDPH WKH
SULPHVXVSHFWLQ7XUQHUjVPXUGHU2Q'HFHPEHU                 ,Q KLV ILIWK FODLP RI HUURU &DPSEHOO FKDOOHQJHV WKH
2IILFHU&DPGHQDQGVHYHUDORWKHURIILFHUVDUULYHGDWWKHKRPH          IROORZLQJMXU\LQVWUXFWLRQ
RI 3DPHOD &DPSEHOO &DPSEHOOjV VLVWHU ZKHUH WKH\
GLVFRYHUHGDQGDUUHVWHG&DPSEHOO3DPHOD&DPSEHOOJDYH                  3XUSRVHWRFRPPLWDWKHIWRIIHQVHLVDQHVVHQWLDOHOHPHQW
WKHRIILFHUVSHUPLVVLRQWRVHDUFKKHUDSDUWPHQW)URPWKLV              RIDJJUDYDWHGEXUJODU\
VHDUFKWKH\VHL]HGDKDOIIXOOERWWOHRI%DFDUGLUXPDSDLURI         
KDQGFXII NH\V DQG D SDLU RI J\P VKRHV ZLWK WKH OHIW KHHO     $WKHIWRIIHQVHLVFRPPLWWHGZKHQVRPHRQHZLWKRXWWKH
PLVVLQJ7KHVKRHVZHUHVWDLQHGZLWKZKDWDSSHDUHGWREH                FRQVHQWRIWKHRZQHUNQRZLQJO\REWDLQVRUH[HUWVFRQWURO
EORRG                                                                   RYHU WKH SURSHUW\ RI DQRWKHU ZLWK >WKH@ SXUSRVH WR
                                                                         SHUPDQHQWO\GHSULYHWKHRZQHURIVXFKSURSHUW\8QGHU
   )ROORZLQJWKHVHDUFK2IILFHU&DPGHQTXHVWLRQHG&DPSEHOO              2KLRODZDJJUDYDWHGEXUJODU\LVDWKHIWRIIHQVH
DIWHU JLYLQJ KLP WKH DSSURSULDWH 0LUDQGD ZDUQLQJV
&DPSEHOODGPLWWHGWKDWKHKDGSXUFKDVHGOLTXRUIURP7XUQHU             &DPSEHOOFODLPVWKDWWKLVODVWVHQWHQFHLQWKHDERYHTXRWHG
LQWKHSDVWEXWGHQLHGKDYLQJUHFHQWO\VHHQKLP'XULQJWKH          LQVWUXFWLRQGLUHFWHGDYHUGLFWRQDJJUDYDWHGEXUJODU\GXHWR
WULDO2IILFHU&DPGHQJDYHWKHIROORZLQJVXPPDU\RIZKDW               LWVDSSDUHQWFLUFXODULW\7KHLQVWUXFWLRQVHHPVWRVD\WKDWD
ZDVVDLGGXULQJKLVLQWHUURJDWLRQRI&DPSEHOO                         WKHIW RIIHQVH LV DQ HOHPHQW RI DJJUDYDWHG EXUJODU\ DQG
                                                                       DJJUDYDWHGEXUJODU\LVDWKHIWRIIHQVH
    $    ,PDGHWKHVWDWHPHQWWRKLPWKDW,IHOWWKDWKHKDG
         FRPPLWWHG EXUJODULHV EHIRUH ZLWK SHRSOH LQ WKH            1HYHUWKHOHVV&DPSEHOOjVDWWRUQH\VGLGQRWREMHFWWRWKHVH
         KRXVHDVOHHS$WWKDWSRLQWKHVD\Vm\HDK,GLGl           LQVWUXFWLRQVDWWULDO&DPSEHOOUDLVHGWKLVFODLPLQWKH2KLR
         $QG WKHQ KH VDLG o KH VDLG KRZHYHU WKDW KH         6XSUHPH&RXUWZKLFKKHOGWKDWWKHFODLPZDVZDLYHG,Q
         EHOLHYHGWKDWKHZDVFRPPLWWLQJEXUJODULHVLQWKLV            DGGUHVVLQJ WKLV FODLP RI HUURU WKH GLVWULFW FRXUW IRXQG WKH
         FDVHWKHRQO\GLIIHUHQFHZDVoQR , WROG KLPWKH         FODLP WR EH SURFHGXUDOO\ GHIDXOWHG EDVHG RQ WKH VDPH
         RQO\GLIIHUHQFHZDVoLVWKDWWKLVWLPH7XUQHUZRNH           UHDVRQLQJDVDSSOLHGWRWKHILUVWMXU\LQVWUXFWLRQGLVFXVVHGLQ
         XSDQGKHNLOOHGKLP                                         3DUW&DERYH:HDJUHHZLWKWKHGLVWULFWFRXUWjVFRQFOXVLRQ
    4    'LGKHGHQ\WKDW"                                             WKDWWKHPHULWVRIWKLVFODLPRIHUURUPD\QRWEHDGGUHVVHGRQ
    $    +HGHQLHGWKDW                                               IHGHUDOKDEHDVUHYLHZ
  &DPSEHOO FRPPXQLFDWHG IUHTXHQWO\ ZLWK KLV HVWUDQJHG                &DPSEHOO DOVR FODLPV WKDW KLV WULDO FRXQVHO ZHUH
JLUOIULHQG (VWHOOD 5RH SULRU WR KLV WULDO  'XULQJ WKHVH    XQFRQVWLWXWLRQDOO\LQHIIHFWLYHZKHQWKH\IDLOHGWRREMHFWWR
FRQYHUVDWLRQV E\ SKRQH DQG LQ SHUVRQ KH ZRXOG                 WKHVH LQVWUXFWLRQV  7KH GLVWULFW FRXUW UHMHFWHG WKLV FODLP
VLPXOWDQHRXVO\ DGPLW WR WKH PXUGHU DQG WKHQ GHQ\ KDYLQJ        ILQGLQJ WKDW LW ZDV QRW XQUHDVRQDEOH IRU KLV DWWRUQH\V WR
FRPPLWWHG WKH FULPH  &DPSEHOO DOVR UHSHDWHGO\ UHTXHVWHG        FRQFOXGHWKDWWDNHQDVDZKROHWKHMXU\LQVWUXFWLRQVGLGQRW
5RHWROLHIRUKLPE\WHOOLQJWKHSROLFHWKDWWKHWZRKDGEHHQ         WKUHDWHQ&DPSEHOOjVFRQVWLWXWLRQDOULJKWV,QLWVRSLQLRQWKH
WRJHWKHURQWKHQLJKWRIWKHPXUGHU+HDOVRZURWHDOHWWHUWR        GLVWULFWFRXUWSRLQWHGRXWWKDWSULRUWRWKHFLUFXODUWKHIWRIIHQVH
5RHDJDLQUHTXHVWLQJWKDWVKHOLHLQRUGHUWRFUHDWHDQDOLEL        GHILQLWLRQ TXRWHG DERYH WKH VWDWH FRXUW KDG mSUHYLRXVO\
                                                                       LQVWUXFWHG WKH MXU\ WKDW WKH 6WDWH ZDV UHTXLUHG WR SURGXFH
     &DPSEHOOY&R\OH                              1R       1R                             &DPSEHOOY&R\OH        

&DPSEHOO UHDOOHJHG WKLV FODLP RI HUURU  7KH GLVWULFW FRXUW    DQGGHWDLOLQJZKDWVKHVKRXOGVD\5RHWXUQHGWKHOHWWHURYHU
IRXQG WKDW WKHVH JURXQGV IRU UHOLHI ZHUH SURFHGXUDOO\            WRWKHSROLFHDQGXOWLPDWHO\WHVWLILHGDWWULDODVDVWDWHZLWQHVV
GHIDXOWHG
                                                                           :KLOH &DPSEHOO ZDV LQ MDLO DZDLWLQJ WULDO KH FDPH LQ
   :HDJUHHZLWKWKHGLVWULFWFRXUWjVFRQFOXVLRQWKDWWKH           FRQWDFW ZLWK WZR RWKHU LQPDWHV 5RQ\V &ODUG\ DQG $QJHOR
2KLR6XSUHPH&RXUWDFWXDOO\DSSOLHGDVWDWHSURFHGXUDOEDU             5RVHPDQ  $FFRUGLQJ WR ERWK RI WKHVH PHQ &DPSEHOO
WKH2KLR6XSUHPH&RXUWjVDSSOLFDWLRQRIWKHSURFHGXUDO              DGPLWWHG WR WKH PXUGHU RQ DW OHDVW WZR VHSDUDWH RFFDVLRQV
GHIDXOWZDVLQGHSHQGHQWRIIHGHUDOODZWKLVSURFHGXUDOEDU         &ODUG\ZKRZDVEHLQJKHOGSHQGLQJWULDORQDUREEHU\FKDUJH
LV FRQVLVWHQWO\ DSSOLHG DQG  &DPSEHOO KDV QRW SURYHQ        WHVWLILHGWKDWLQsDQXDU\RI&DPSEHOOGHVFULEHGLQGHWDLO
FDXVHDQGSUHMXGLFHWRH[FXVHWKHSURFHGXUDOGHIDXOW7KXV            WKH HYHQWV VXUURXQGLQJ 7XUQHUjV PXUGHU  $FFRUGLQJ WR
DFFRUGLQJWR0DXSLQY6PLWK)GWK&LU               &ODUG\&DPSEHOOWROGKLPWKDWRQWKHQLJKWRI'HFHPEHU
 &DPSEHOO PD\ QRW SXUVXH WKLV FKDOOHQJH RQ IHGHUDO        KHEURNHLQWR7XUQHUjVDSDUWPHQWWRRNDNQLIHIURPWKH
KDEHDVUHYLHZ:HWKHUHIRUHDIILUPWKHGLVWULFWFRXUWjVGHQLDO          NLWFKHQ DQG ZHQW LQWR WKH EHGURRP WR JR WKURXJK DQRWKHU
RIKDEHDVFRUSXVEDVHGRQ&DPSEHOOjVVHFRQGFODLPRIHUURU             OLTXRU FDELQHW ORFDWHG WKHUH  :KHQ &DPSEHOO NQRFNHG
                                                                        VRPHWKLQJRYHU7XUQHUDZRNH7XUQHUWKHQDWWHPSWHGWRJHW
      &DPSEHOOjVWULDOFRXQVHOGLGQRWSURYLGHLQHIIHFWLYH            DJXQEXWZDVVWRSSHGE\&DPSEHOOZKRVWDUWHGVWDEELQJ
        DVVLVWDQFHRIFRXQVHOZKHQWKH\IDLOHGWRREMHFWWRWKH         KLP&ODUG\DOVRWHVWLILHGWKDW&DPSEHOOUHFDOOHGKDYLQJVHHQ
        DERYHMXU\LQVWUXFWLRQV                                         DZRPDQRXWVLGHRIWKHDSDUWPHQWEXLOGLQJKHDGLQJIRUDEDU
                                                                        RQWKHQLJKWRIWKHPXUGHU
   ,Q&DPSEHOOjVWKLUGFODLPRIHUURUKHFKDOOHQJHVKLVWULDO
FRXQVHOjVIDLOXUHWRREMHFWWRWKHLQVWUXFWLRQVTXRWHGDERYH             5RVHPDQ ZKR ZDV DOVR EHLQJ KHOG LQ MDLO RQ D UREEHU\
ZKLFK KH DOOHJHV ORZHUHG WKH EXUGHQ RI SURRI RWKHUZLVH          FKDUJH UHODWHG D VLPLODU FRQYHUVDWLRQ WKDW KH KDG ZLWK
SODFHG XSRQ  WKH VWDWH UHJDUGLQJ SXUSRVHIXOQHVV  +H DOVR      &DPSEHOOLQsDQXDU\RI$WWULDO5RVHPDQWHVWLILHGDV
FKDOOHQJHV WKHLU IDLOXUH WR REMHFW WR WKH LQVWUXFWLRQ RQ WKH   IROORZV
FDXVDWLRQSURQJRIDJJUDYDWHGPXUGHUZKHUHWKHWULDOFRXUW
LQIRUPHG WKH MXU\ LQ HVVHQFH WKDW LW FRXOG FRQFOXGH WKDW       $    +HVDLGKHZHQWRYHUWRUREWKHJX\$QGZKHQ
7XUQHUjVGHDWKZDVDIRUVHHDEOHUHVXOWRI&DPSEHOOjVDFWLRQV                  KHJHWRYHUWKHUHGXGHZDVQjWJRLQJIRULWROGPDQ
$FFRUGLQJ WR &DPSEHOO WKLV LQVWUXFWLRQ XQGHUPLQHG WKH                   ZDVQjWJRLQJIRULW7KHVWUXJJOHFDPHKHKDGWR
UHTXLUHPHQWWKDWKHKDYHIRUPHGWKHVSHFLILFLQWHQWWRNLOOLQ                 WDNHKLPRXW([DFWZRUGVKHKDGWRWDNHKLPRXW
RUGHUWRVDWLVI\WKHPHQVUHDHOHPHQWRIDJJUDYDWHGPXUGHU               4    7DNHKLPRXW"
7KHVHFKDOOHQJHVZHUHUHMHFWHGE\WKHGLVWULFWFRXUWEHFDXVH             $    7DNHKLPRXW
HYHQLIWKHFKDOOHQJHVKDGPHULWDVWRWKHSDUWLFXODUODQJXDJH            4    :KDWGLG\RXSHUFHLYHKHPHDQWE\WKDW"
LQTXHVWLRQWKHLQVWUXFWLRQVDVDZKROHFRUUHFWO\GHVFULEHGWKH          $    7RRNKLPRXW.LOOHGKLP,JXHVV
HOHPHQWV RI SXUSRVHIXOQHVV VSHFLILF LQWHQW DQG FDXVDWLRQ         4    2ND\'LGKHVD\DQ\WKLQJHOVHDWWKDWSRLQW"
:HDJUHHZLWKWKHUXOLQJVRIWKHGLVWULFWFRXUWUHJDUGLQJWKHVH           $    7KHQKHVDLGoWKDWDIWHUKHWRRNKLPRXWDQGFDPH
LQVWUXFWLRQVDQGWKHUHIRUHDIILUPLWVGHQLDORIKDEHDVFRUSXV                RXWKHVDLGKHNQRZWKHJLUOGLGQjWVHHKLP7KDWjV
UHOLHIEDVHGRQ&DPSEHOOjVWKLUGFODLPRIHUURU                               ZKDWKHNHSWWDONLQJDERXWWKHJLUO+HVDLGWKDWjV
                                                                               WKHRQO\ZD\WKH\FRXOGJHWPHLVWKHJLUO,NQRZ
                                                                               VKHGLGQjWVHHPH$QGWKDWjVWKHRQO\WKLQJKHZDV
                                                                               ZRUULHGDERXWZDVWKHJLUOVHHLQJKLP
     &DPSEHOOY&R\OH                              1R       1R                              &DPSEHOOY&R\OH         

%RWK &ODUG\ DQG 5RVHPDQ WHVWLILHG DW WULDO WKDW WKH\ KDG      FORVLQJ DUJXPHQW DW WKH PLWLJDWLRQ SKDVH ZDV mJURVVO\
LQGHSHQGHQWO\ FRQWDFWHG WKH SROLFH ZLWK WKH LQIRUPDWLRQ          VXEVWDQGDUGl)XUWKHUPRUHWKHRWKHUHYLGHQFHSUHVHQWHGE\
UHJDUGLQJWKHVHFRQIHVVLRQVDQGIXUWKHUERWKGHQLHGPDNLQJ           WULDO FRXQVHO UDLVHG WKHLU SHUIRUPDQFH DERYH WKH PLQLPXP
DQ\GHDOVLQH[FKDQJHIRUWKHLUWHVWLPRQ\                             OHYHORIFRPSHWHQFHUHTXLUHGE\6WULFNODQG
% 7ULDOSURFHHGLQJV                                                     :HWKHUHIRUHILQGWKDWWKHFRQFOXVLRQRIWKH2KLR&RXUWRI
                                                                       $SSHDOV o WKDW &DPSEHOOjV DWWRUQH\V GLG QRW SURYLGH VXFK
  2QsDQXDU\&DPSEHOOZDVFKDUJHGZLWKDJJUDYDWHG             VXEVWDQGDUG SHUIRUPDQFH DV WR YLRODWH WKH ILUVW 6WULFNODQG
PXUGHU SXUVXDQW WR 2KLR 5HY &RGH  % m1R              SURQJ  o ZDV QRW DQ REMHFWLYHO\ XQUHDVRQDEOH RQH
SHUVRQVKDOOSXUSRVHO\FDXVHWKHGHDWKRIDQRWKHUZKLOH          $FFRUGLQJO\ZHQHHGQRWDGGUHVVZKHWKHUWKH2KLRFRXUWjV
FRPPLWWLQJDJJUDYDWHGEXUJODU\RUEXUJODU\l+LVWKUHH        FRQFOXVLRQ DV WR WKH SUHMXGLFH SURQJ ZDV DOVR REMHFWLYHO\
GD\WULDOZKLFKFRPPHQFHGRQ0D\ZDVGLYLGHG                 UHDVRQDEOHZLWKLQWKHPHDQLQJRI86&7KH
EHWZHHQWKHJXLOWSKDVHDQGWKHSHQDOW\SKDVH$WWKHJXLOW           GLVWULFWFRXUWjVGHQLDORIKDEHDVFRUSXVEDVHGRQ&DPSEHOOjV
SKDVHRI&DPSEHOOjVWULDOWKHVWDWHFDOOHG&DOOLQV5REHUWV          IRXUWKFODLPRIHUURULVWKHUHIRUHDIILUPHG
2IILFHU&DPGHQFULPLQDOLQYHVWLJDWRU&DHVDU5RH&ODUG\
DQG 5RVHPDQ DV IDFW ZLWQHVVHV  ,Q DGGLWLRQ WKH VWDWH        ' 7KH GLVWULFW FRXUW GLG QRW HUU ZKHQ LW GHQLHG
SUHVHQWHGDVH[SHUWZLWQHVVHVDSDWKRORJLVWZKRGHVFULEHGWKH             &DPSEHOOjVSHWLWLRQIRUKDEHDVFRUSXVUHOLHIEDVHGRQ
QDWXUHRI7XUQHUjVZRXQGVDQGDVHURORJLVWZKRWHVWLILHGWKDW             KLVVL[UHPDLQLQJFODLPVRIHUURU
&DPSEHOOjV VKRHV KDG EHHQ VWDLQHG E\ KXPDQ EORRG  7KH
VHURORJLVWGLGQRWKRZHYHUGHWHUPLQHWKHEORRGW\SH                     &KDOOHQJH WR WKH MXU\ LQVWUXFWLRQV EDVHG RQ
                                                                              &DPSEHOOjV FODLP WKDW WKH WULDO FRXUW UHGXFHG WKH
   %HIRUHFORVLQJDUJXPHQWV&DPSEHOOjVFRXQVHOUHTXHVWHG                     VWDWHRI2KLRjVEXUGHQRISURRI
WKDW WKH MXU\ EH LQVWUXFWHG RQ LQYROXQWDU\ PDQVODXJKWHU DV
FRGLILHGLQ2KLR5HY&RGH  $m1RSHUVRQVKDOO                ,Q&DPSEHOOjVVHFRQGFODLPRIHUURUKHFKDOOHQJHGWKHWULDO
FDXVHWKHGHDWKRIDQRWKHUDVDSUR[LPDWHUHVXOWRIWKH          FRXUWjV MXU\ LQVWUXFWLRQV RQ WKH HOHPHQWV RI DJJUDYDWHG
RIIHQGHUjVFRPPLWWLQJRUDWWHPSWLQJWRFRPPLWDIHORQ\lDV           PXUGHUZKLFKGHVFULEHGSXUSRVHIXOQHVVDVIROORZV
D OHVVHULQFOXGHG RIIHQVH WR DJJUDYDWHG PXUGHU 7KH RQO\
GLIIHUHQFHEHWZHHQWKHWZRRIIHQVHVLVWKDWDJJUDYDWHGPXUGHU               $SHUVRQDFWVSXUSRVHIXOO\ZKHQWKHJLVWRIWKHRIIHQVH
UHTXLUHV SURRI RI D SXUSRVHIXO NLOOLQJ ZKLOH LQYROXQWDU\         LV D SURKLELWLRQ DJDLQVW FRQGXFW RI D FHUWDLQ QDWXUH
PDQVODXJKWHUGRHVQRW6HH6WDWHY7KRPDV1(G             UHJDUGOHVV RI ZKDW WKH RIIHQGHU LQWHQGV WR DFFRPSOLVK
2KLR7KLVUHTXHVWZDVGHQLHGE\WKHWULDOFRXUW            WKHUHE\LILWLVKLVVSHFLILFLQWHQWLRQWRHQJDJHLQFRQGXFW
$IWHU LQVWUXFWLRQ DQG GHOLEHUDWLRQ WKH MXU\ UHWXUQHG ZLWK D     RIWKDWQDWXUH
YHUGLFWRIJXLOW\RQWKHFKDUJHRIDJJUDYDWHGPXUGHUDQGWZR
FRXQWVRIDJJUDYDWHGEXUJODU\                                         +HDUJXHVWKDWWKLVLQVWUXFWLRQUHOLHYHGWKHVWDWHRILWVEXUGHQ
                                                                       RISURRIRQPHQVUHD)RUWKHVDPHUHDVRQKHDOVRFKDOOHQJHG
  $W WKH QH[W SKDVH RI WULDO WKH SHQDOW\ SKDVH &DPSEHOO     WKH LQVWUXFWLRQ WKDW VWDWHG WKDW mWKH SXUSRVH WR NLOO PD\ EH
SUHVHQWHGKLVVLVWHU3DPHOD&DPSEHOODQGDSV\FKRORJLVW            LQIHUUHGIURPWKHXVHRIWKHZHDSRQl
'U 'DYLG 0 &KLDSSRQH DV ZLWQHVVHV  &DPSEHOOjV VLVWHU
WHVWLILHGWRWKHIDFWWKDWDWDJHILYHERWKVKHDQGKHUEURWKHU         %HFDXVH &DPSEHOOjV DWWRUQH\V IDLOHG WR REMHFW WR WKHVH
ZHUHYLFWLPVRIDKRXVHILUHWKDWZDVWKHVRXUFHRI&DPSEHOOjV         LQVWUXFWLRQVDWWULDOWKH2KLR6XSUHPH&RXUWUHMHFWHGWKHVH
VFDUUHG IDFH  'U &KLDSSRQH GLVFXVVHG &DPSEHOOjV                DUJXPHQWV DV ZDLYHG  ,Q KLV IHGHUDO KDEHDV SHWLWLRQ
    &DPSEHOOY&R\OH                               1R       1R                             &DPSEHOOY&R\OH        

   )LQDOO\ &DPSEHOO WDNHV LVVXH ZLWK KLV WULDO FRXQVHOjV        SV\FKRORJLFDOPDNHXSDQGGLDJQRVHG&DPSEHOODVHQJDJLQJ
GHFLVLRQWRIRUJRDOHQJWK\DQGWHFKQLFDODUJXPHQWWRWKHMXU\          LQSRO\VXEVWDQFHDEXVHKDYLQJDSHUVRQDOLW\GLVRUGHUDQG
DWPLWLJDWLRQEDVHGRQWKHSV\FKRORJLFDOHIIHFWVRIWKHILUHRQ         EHLQJmDQWLVRFLDOlmDQJU\lDQGmQDUFLVVLVWLFl)ROORZLQJWKLV
&DPSEHOOjVEHKDYLRU5DWKHUKLVDWWRUQH\VDVNHGWKHMXU\WR           WHVWLPRQ\ WKH MXU\ VHQWHQFHG &DPSEHOO WR GHDWK DIWHU
MXVWORRNDWKLVVFDUVDQGWRUHDFKWKHLURZQFRQFOXVLRQDVWR         GHWHUPLQLQJWKDWEH\RQGDUHDVRQDEOHGRXEWWKHDJJUDYDWLQJ
WKHHIIHFWWKDWVXFKFKLOGKRRGWUDXPDKDGXSRQKLP,QVWHDG            IDFWRUVRXWZHLJKHGWKHPLWLJDWLQJIDFWRUV
RIIRFXVLQJRQWKHWHVWLPRQ\RI'U&KLDSSRQH&DPSEHOOjV
WULDO FRXQVHO VXJJHVWHG WKDW HDFK MXURUjV FRPPRQ                  & 3RVWWULDOSURFHHGLQJV
XQGHUVWDQGLQJRIZKDW&DPSEHOOPXVWKDYHJRQHWKURXJKDV
DFKLOGVKRXOGLQIRUPWKHLUYHUGLFW                                    7KH2KLR6XSUHPH&RXUWDIILUPHG&DPSEHOOjVFRQYLFWLRQ
                                                                        RQ GLUHFW DSSHDO  6HH 6WDWH Y &DPSEHOO  1(G 
   7KLV VWUDWHJ\ &DPSEHOO FODLPV ZDV DQ REMHFWLYHO\             2KLR+LVILUVWSHWLWLRQIRUVWDWHSRVWFRQYLFWLRQUHOLHI
XQUHDVRQDEOH RQH  $V 6WULFNODQG SRLQWHG RXW KRZHYHU           ZDVVXEVHTXHQWO\GHQLHGE\WKHVWDWHWULDOFRXUWDGHFLVLRQ
mVWUDWHJLFFKRLFHVPDGHDIWHUWKRURXJKLQYHVWLJDWLRQRIODZ             WKDWZDVDIILUPHGRQDSSHDOE\WKH2KLR&RXUWRI$SSHDOV
DQG IDFWV UHOHYDQW WR SODXVLEOH RSWLRQV DUH YLUWXDOO\            6HH6WDWHY&DPSEHOO:/2KLR&W$SSsDQ
XQFKDOOHQJHDEOHl6WULFNODQG86DW(YHQLIWKH            &DPSEHOODOVRILOHGDVXFFHVVLYHVWDWHSHWLWLRQZKLFK
VWUDWHJLFFKRLFHVPDGHE\&DPSEHOOjVWULDOFRXQVHODUHVXEMHFW          WKH2KLRFRXUWVGHFOLQHGWRHQWHUWDLQ
WR FKDOOHQJH EHFDXVH WKHLU LQYHVWLJDWLRQ ZDV OHVV WKDQ
mWKRURXJKlZHFDQQRWVD\WKDWKLVODZ\HUVjGHFLVLRQWRDUJXH              2Q$XJXVW&DPSEHOOILOHGKLVSHWLWLRQSXUVXDQWWR
LQ OD\ WHUPV UDWKHU WKDQ UHO\LQJ XSRQ WKH WHFKQLFDOLWLHV RI    86&   IRU IHGHUDO KDEHDV FRUSXV UHOLHI  7KH
SV\FKRWKHUDS\ZDVDQREMHFWLYHO\XQUHDVRQDEOHRQH                     SHWLWLRQ ZDV WLPHO\ ILOHG  VHH  86&  G
                                                                        HVWDEOLVKLQJDRQH\HDUVWDWXWHRIOLPLWDWLRQVRQDOOKDEHDV
   &DPSEHOOUHOLHVRQD6HYHQWK&LUFXLWFDVH.XEDWY7KLHUHW         SHWLWLRQVDQGUDLVHGFODLPVIRUUHOLHI'LVFRYHU\ZDV
)GWK&LUWRVXSSRUWKLVFKDOOHQJHWRWKH           JUDQWHGE\WKHGLVWULFWFRXUWRQWZRRIKLVFODLPV)ROORZLQJ
VWUDWHJ\ RI KLV WULDO FRXQVHO  ,Q .XEDW WKH SHWLWLRQHU       D KHDULQJ RQ &DPSEHOOjV KDEHDV SHWLWLRQ WKH GLVWULFW FRXUW
TXHVWLRQHGKLVWULDOFRXQVHOjVUHIHUHQFHVLQFORVLQJDUJXPHQW           UHQGHUHG LWV GHFLVLRQ RQ 0DUFK    ,Q D SDJH
WR mYHQJHDQFHl mDQ H\H IRU DQ H\Hl WKH DOFRKRO WKDW WKH     H[KDXVWLYH RSLQLRQ WKH FRXUW UHMHFWHG DOO RI &DPSEHOOjV
GHIHQGDQW FRQVXPHG RQ WKH GD\ RI WKH PXUGHU DQG D             FODLPVIRUUHOLHIDQGGHQLHGKLVSHWLWLRQIRUDZULWRIKDEHDV
FRPSDULVRQEHWZHHQWKHGHIHQGDQWDQGWKHYLFWLP,GDW           FRUSXV
7KH6HYHQWK&LUFXLWDJUHHGZLWKWKHGHIHQGDQWKROGLQJWKDW
mWKLV JURVVO\ VXEVWDQGDUG DUJXPHQWl SOXV WKH ODFN RI               (LJKW RI &DPSEHOOjV FODLPV RI HUURU ZHUH FHUWLILHG IRU
SUHVHQWDWLRQRIDQ\RWKHUPLWLJDWLRQHYLGHQFHHYHQWKRXJK              DSSHDO DQG DUH DGGUHVVHG LQ WKLV RSLQLRQ  6SHFLILFDOO\
WKHUHZHUHILIWHHQDYDLODEOHFKDUDFWHUZLWQHVVHVFRQVWLWXWHG          &DPSEHOODUJXHVWKDWKLVFRQVWLWXWLRQDOULJKWVZHUHGHQLHG
WKHLQHIIHFWLYHDVVLVWDQFHRIFRXQVHO,G                            ZKHQWKHVWDWHWULDOFRXUWGHFOLQHGWRLQVWUXFWWKHMXU\RQWKH
                                                                        OHVVHULQFOXGHGRIIHQVHRIYROXQWDU\PDQVODXJKWHUWKHMXU\
  .XEDW LQ RXU RSLQLRQ GRHV QRW VXSSRUW &DPSEHOOjV             LQVWUXFWLRQVLPSHUPLVVLEO\UHGXFHGWKHmEH\RQGDUHDVRQDEOH
DUJXPHQW  &DPSEHOOjV DWWRUQH\V SXUVXHG VHYHUDO DYDLODEOH         GRXEWl EXUGHQ RI SURRI RQ WKH LVVXH RI &DPSEHOOjV LQWHQW
PLWLJDWLRQ ZLWQHVVHV SOHDGHG ZLWK &DPSEHOO WR DOORZ KLV         KHZDVGHQLHGWKHHIIHFWLYHDVVLVWDQFHRIFRXQVHOZKHQKLV
SDUHQWVWRWHVWLI\DQGKDGDFOLQLFDOSV\FKRORJLVWWHVWLI\DVWR       WULDODWWRUQH\IDLOHGWRREMHFWWRWKHMXU\LQVWUXFWLRQVDWLVVXH
WKHGHIHQGDQWjVPHQWDOFRQGLWLRQ:HGRQRWILQGWKDWWKH              LQWKHVHFRQGFODLPRIHUURUKHZDVGHQLHGWKHHIIHFWLYH
                                                                        DVVLVWDQFHRIFRXQVHOZKHQKLVWULDOFRXQVHOIDLOHGWRSUHVHQW
     &DPSEHOOY&R\OH                                1R        1R                             &DPSEHOOY&R\OH        

HYLGHQFHRI&DPSEHOOjVDOOHJHGSRVWWUDXPDWLFVWUHVVGLVRUGHU             LQDFRQFXUUHQFH8QLWHG6WDWHVY.R]PLQVNL)G
UHVXOWLQJIURPWKHILUHKHVXUYLYHGDVDFKLOGDWWKHJXLOWDQG         WK&LUHQEDQF.UXSDQVN\sFRQFXUULQJ
SHQDOW\ SKDVHV RI WULDO  WKH MXU\ LQVWUXFWLRQV GLUHFWHG D    DQG DQ 2KLR 6XSUHPH &RXUW FDVH LQ ZKLFK 376' ZDV
YHUGLFWRQWKHLVVXHRIZKHWKHU&DPSEHOOKDGFRPPLWWHGD                  DFNQRZOHGJHGDVDSRWHQWLDOPLWLJDWRU6WDWHY/DZUHQFH
mWKHIWRIIHQVHlDQHOHPHQWRIDJJUDYDWHGIHORQ\PXUGHUKH               1(G2KLRDVZHOODVDIHZFRQWHPSRUDU\
DOVRDOOHJHVWKHLQHIIHFWLYHDVVLVWDQFHRIFRXQVHOIRUIDLOXUHWR         ODZUHYLHZDUWLFOHVLQZKLFK376'ZDVGLVFXVVHGDWOHQJWKDV
REMHFWWRWKHVHLQVWUXFWLRQV2IILFHU&DPGHQjVWHVWLPRQ\             DQLQVDQLW\GHIHQVH6HHHJsDPHV&DUUROO3RVWWUDXPDWLF
ZDV XQFRQVWLWXWLRQDOO\ SUHMXGLFLDO KH DOVR DOOHJHV WKH             VWUHVVGLVRUGHUDVDQ,QVDQLW\GHIHQVHLQ9HUPRQW9W/
LQHIIHFWLYHDVVLVWDQFHRIFRXQVHOIRUIDLOXUHWRREMHFWWRWKLV           5HY&DPSEHOOWKXVFRQFOXGHVWKDWmDUHDVRQDEOH
WHVWLPRQ\  WKH WHVWLPRQ\ RI LQIRUPDQWV &ODUG\ DQG             DWWRUQH\LQZRXOGKDYHEHHQDOHUWWRWKHSUREDELOLW\RI
5RVHPDQ ZDV IDOVH DQG WKH VWDWH RI 2KLR ZLWKKHOG                 376'RQWKHIDFWVRIWKLVFDVHl
LPSHDFKLQJHYLGHQFHDERXWWKHVHWZRZLWQHVVHVDQGWKH
WHVWLPRQ\ RI WKH VHURORJLVW YLRODWHG KLV GXH SURFHVV ULJKWV         7KLV DUJXPHQW VWULNHV XV DV FRQWUDU\ WR WKH WHDFKLQJV RI
7KHVHFRQGILIWKDQGVL[WKFODLPVRIHUURULQYROYHLVVXHVWKDW          6WULFNODQG  (YHQ WKRXJK 'U &KLDSSRQH DV D WUDLQHG
WKH GHIHQVH QHLWKHU REMHFWHG WR DW WULDO QRU UDLVHG RQ GLUHFW   SV\FKRORJLVWIDLOHGWRGHWHFWDQ\HYLGHQFHRI376'&DPSEHOO
DSSHDO7KXVWKHGLVWULFWFRXUWKHOGWKDWWKHVHWKUHHFODLPV            DVNVXVWRGHFODUHWKDWKLVFRXQVHOjVLQGHSHQGHQWIDLOXUHWR
ZHUHSURFHGXUDOO\GHIDXOWHG                                              PDNH WKH VDPH GLDJQRVLV LV DQ REMHFWLYHO\ XQUHDVRQDEOH
                                                                          PLVWDNHGHSULYLQJKLPRIKLV6L[WK$PHQGPHQWULJKWWRWKH
   $WRUDODUJXPHQW&DPSEHOOjVFRXQVHOVWDWHGWKDWWKHILUVW             HIIHFWLYHDVVLVWDQFHRIFRXQVHO7KHUHLVQRHYLGHQFHWKDW'U
DQGIRXUWKFODLPVRIHUURUoFKDOOHQJLQJWKHRPLVVLRQRIWKH              &KLDSSRQHZDVLQFRPSHWHQWRUWKDW&DPSEHOOjVODZ\HUVKDG
OHVVHULQFOXGHGRIIHQVHLQVWUXFWLRQDQGWULDOFRXQVHOjVIDLOXUH           DQ\ UHDVRQ WR TXHVWLRQ &KLDSSRQHjV SURIHVVLRQDO
WRHOLFLWHYLGHQFHRI&DPSEHOOjVDOOHJHGSRVWWUDXPDWLFVWUHVV            TXDOLILFDWLRQV6HH6NDJJVY3DUNHU)G
GLVRUGHUoZHUHWKHVWURQJHVWFODLPV$IWHUDWKRURXJKUHYLHZ            WK&LUKROGLQJWKDWDQDWWRUQH\jVGHFLVLRQWRSXWD
RIWKHUHFRUGDQGWKHUHOHYDQWODZZHDJUHHWKDWWKHVHWZR               IUDXGXOHQWDQGLQHSWSV\FKRORJLVWRQWKHVWDQGDWWKHSHQDOW\
FODLPV SUHVHQW WKH FORVHVW PRVW VLJQLILFDQW LVVXHV LQ WKLV       SKDVHRIDWULDOGHVSLWHKLVQRWLFHRIWKHWKHUDSLVWjVLQHSWLWXGH
KDEHDVSHWLWLRQ$FFRUGLQJO\ZHIRFXVPRVWRIRXUDWWHQWLRQ             FRQVWLWXWHGWKHLQHIIHFWLYHDVVLVWDQFHRIFRXQVHO
RQWKHVHWZRFODLPV
                                                                             :HFRQFOXGHWKHUHIRUHWKDWLWZDVREMHFWLYHO\UHDVRQDEOH
                         ,,$1$/<6,6                                   IRU &DPSEHOOjV WULDO FRXQVHO WR UHO\ XSRQ 'U &KLDSSRQHjV
                                                                          GLDJQRVLVDQGIXUWKHUWULDOFRXQVHOjVIDLOXUHWRLQGHSHQGHQWO\
$ 6WDQGDUGRIUHYLHZ                                                     GLDJQRVH 376' ZDV QRW XQUHDVRQDEOH  6HH 3UXHWW Y
                                                                          7KRPSVRQ)GWK&LUm'HVSLWHDOO
   &DPSEHOOjVIHGHUDOKDEHDVFRUSXVSHWLWLRQZDVILOHGPRUH               RI6WDOOLQJVjVHIIRUWV3UXHWWZRXOGKDYHXVILQGWKDW6WDOOLQJV
WKDQ D \HDU DIWHU WKH GDWH WKH $QWLWHUURULVP DQG (IIHFWLYH       >3UXHWWjV DWWRUQH\@ VKRXOG KDYH NQRZQ WKDW 3UXHWW VXIIHUHG
'HDWK 3HQDOW\ $FW $('3$ EHFDPH HIIHFWLYH  7KH                   IURP PHQWDO LOOQHVV RUJDQLF EUDLQ GDPDJH GHYHORSPHQWDO
SURYLVLRQVRI$('3$DUHWKHUHIRUHDSSOLFDEOH6HH+DUULVY              SUREOHPVDQGSRVWWUDXPDWLFVWUHVVGLVRUGHUDQGWKDW7VDR
V
6WRYDOO)GWK&LU8QGHU$('3$                 HYDOXDWLRQ ZDV IODZHG :H FDQQRW UHDFK WKDW UHVXOW $Q
DIHGHUDOFRXUWLVDXWKRUL]HGWRJUDQWDZULWRIKDEHDVFRUSXV            DWWRUQH\LVQRWUHTXLUHGWREHVRH[SHUWLQSV\FKLDWU\l
WRDSHUVRQLQFXVWRG\SXUVXDQWWRDVWDWHFRXUWMXGJPHQWEXW
RQO\LI
    &DPSEHOOY&R\OH                             1R      1R                              &DPSEHOOY&R\OH          

  PLWLJDWLRQHYLGHQFHWKDWZDVQRWSUHVHQWHGDWWULDOEXW             WKHDGMXGLFDWLRQRIWKHFODLPUHVXOWHGLQDGHFLVLRQ
  WKDW PLJKW VXSSRUW DQ DOWHUQDWLYH WKHRU\ RI PLWLJDWLRQ       WKDW ZDV FRQWUDU\ WR RU LQYROYHG DQ XQUHDVRQDEOH
  FRQVWLWXWHVSURRIRIFRXQVHOjVLQHIIHFWLYHQHVVZKHQDV              DSSOLFDWLRQ RI FOHDUO\ HVWDEOLVKHG )HGHUDO ODZ DV
  KHUHWKHUHFRUGGHPRQVWUDWHVWKDWFRXQVHOSUHVHQWHGWKH             GHWHUPLQHGE\WKH6XSUHPH&RXUWRIWKH8QLWHG6WDWHVRU
  FDVH LQ PLWLJDWLRQ FRPSHWHQWO\ LQ YLHZ RI WKH IDFWV           UHVXOWHG LQ D GHFLVLRQ WKDW ZDV EDVHG RQ DQ
  DYDLODEOHWRWKHP                                                   XQUHDVRQDEOH GHWHUPLQDWLRQ RI WKH IDFWV LQ OLJKW RI WKH
                                                                       HYLGHQFHSUHVHQWHGLQWKH6WDWHFRXUWSURFHHGLQJ
6HH6WDWHY&DPSEHOO:/
$SSHDO1R&
2KLR&W$SSsDQ                                  86&  G  $('3$ DOVR LPSRVHV D GHIHUHQWLDO
                                                                     VWDQGDUGRIUHYLHZRQILQGLQJVRIIDFWPDGHE\DVWDWHFRXUW
  :HDOVRQRWHWKDWXQOLNHLQ6HLGHODQG*OHQQ&DPSEHOO            GXULQJDSHWLWLRQHUjVGLUHFWDSSHDODQGVWDWHFROODWHUDODWWDFN
KDVQRWSRLQWHGWRDQ\WKLQJLQKLVFKLOGKRRGPHGLFDOUHFRUGV         7KHDSSOLFDEOHSURYLVLRQVWDWHVWKDW
LQGLFDWLQJ WKDW KH KDV HLWKHU 376' RU VRPH IRUP RI EUDLQ
GDPDJH+HKDVQHYHUEHHQGLDJQRVHGRUWUHDWHGIRU376'              >L@QDSURFHHGLQJLQVWLWXWHGE\DQDSSOLFDWLRQIRUDZULWRI
ZKHUHDV WKH PHGLFDO UHFRUGV LQ 6HLGHO H[SOLFLWO\ QRWHG WKH     KDEHDV FRUSXV E\ D SHUVRQ LQ FXVWRG\ SXUVXDQW WR WKH
GHIHQGDQWjVPHQWDODIIOLFWLRQV6HH6HLGHO)GDW          MXGJPHQWRID6WDWHFRXUWDGHWHUPLQDWLRQRIDIDFWXDO
$WPRVW&DPSEHOOjVFKLOGKRRGPHGLFDOUHFRUGVZRXOG              LVVXH PDGH E\ D 6WDWH FRXUW VKDOO EH SUHVXPHG WR EH
KDYH SURYLGHG DQRWKHU OLVW RI SHRSOH WR LQWHUYLHZ  7KHVH     FRUUHFW7KHDSSOLFDQWVKDOOKDYHWKHEXUGHQRIUHEXWWLQJ
IRUPHUSK\VLFLDQVDQGKHDOWKFDUHZRUNHUV&DPSEHOODUJXHV             WKHSUHVXPSWLRQRIFRUUHFWQHVVE\FOHDUDQGFRQYLQFLQJ
ZRXOGKDYHEHHQDEOHWRH[SRVHKLVPHQWDOFRQGLWLRQ                 HYLGHQFH
   7KLVLVPXFKWRRWHQXRXVDFODLPWRVXSSRUWWKHFRQFOXVLRQ         86&  H  :H UHYLHZ WKH GLVWULFW FRXUWjV
WKDW&DPSEHOOZDVSUHMXGLFHGE\KLVDWWRUQH\VjIDLOXUHWRORRN       FRQFOXVLRQVRIODZLQWKHDSSOLFDWLRQRIWKHVHUXOHVGHQRYR
LQWR KLV FKLOGKRRG PHGLFDO UHFRUGV  ,QGHHG HYHQ WKH        DQGLWVIDFWXDOILQGLQJVDUHUHYHUVHGRQO\LIWKH\DUHFOHDUO\
SV\FKRORJLFDOH[SHUWVSURIIHUHGE\&DPSEHOOLQKLVVWDWHSRVW       HUURQHRXV6HH/XFDVY2j'HD)GWK&LU
FRQYLFWLRQSURFHHGLQJGLGQRWUHO\RQWKHVHPHGLFDOUHFRUGV          
WRVXSSRUWWKHLUFRQFOXVLRQWKDWKHPLJKWKDYH376'7RWKH
FRQWUDU\WKHLUFRQFOXVLRQVZHUHEDVHGSULPDULO\RQWKHVDPH          7KH6XSUHPH&RXUWUHFHQWO\HODERUDWHGRQWKHPHDQLQJRI
LQIRUPDWLRQ DYDLODEOH WR 'U &KLDSSRQH LH WKH ILUH       $('3$jVVWDWXWRU\ODQJXDJHSRLQWLQJRXWWKDWWKHUHYLVHG
&DPSEHOOjV JHQHUDO PHGLFDO KLVWRU\ DQG KLV UHVLVWDQFH WR     KDEHDV VWDWXWH mSODFHV D QHZ FRQVWUDLQW RQ WKH SRZHU RI D
KDYLQJKLVRZQSDUHQWVWHVWLI\RQKLVEHKDOI7KHUHLVWKXVQR      IHGHUDOKDEHDVFRXUWWRJUDQWDVWDWHSULVRQHUjVDSSOLFDWLRQIRU
UHDVRQWREHOLHYHWKDW'U&KLDSSRQHjVGLDJQRVLVZRXOGKDYH          DZULWRIKDEHDVFRUSXVZLWKUHVSHFWWRFODLPVDGMXGLFDWHGRQ
EHHQDQ\GLIIHUHQWHYHQLIKHKDGVHHQWKHFKLOGKRRGPHGLFDO         WKHPHULWVLQVWDWHFRXUWl:LOOLDPVY7D\ORU86
UHFRUGVLQTXHVWLRQ                                                   ,Q :LOOLDPV WKH &RXUW KHOG WKDW D VWDWHFRXUW
                                                                     GHFLVLRQLVmFRQWUDU\WRl6XSUHPH&RXUWSUHFHGHQWLIHLWKHU
  &DPSEHOOjV VHFRQG DVVHUWHG RPLVVLRQ LV WKDW m>F@RXQVHO       WKH mVWDWH FRXUW DUULYHV DW D FRQFOXVLRQ RSSRVLWH WR WKDW
ZHUHDOVRGHILFLHQWEHFDXVHWKH\ZHUHLJQRUDQWRI376'$           UHDFKHGE\>WKH6XSUHPH&RXUW@RQDTXHVWLRQRIODZlRUmWKH
UHDVRQDEOH DWWRUQH\ KDQGOLQJ D FDSLWDO FDVH LQ  ZRXOG    VWDWHFRXUWFRQIURQWVIDFWVWKDWDUHPDWHULDOO\LQGLVWLQJXLVKDEOH
KDYHVXVSHFWHGWKDWsHURPH&DPSEHOOVXIIHUHGIURP376'               IURPDUHOHYDQW6XSUHPH&RXUWSUHFHGHQWDQGDUULYHVDW>WKH
EDVHGRQWKHIDFWVDQGFLUFXPVWDQFHVRIKLVFDVHl+HFLWHV         RSSRVLWH@UHVXOWl,GDW
WZRFDVHVD6L[WK&LUFXLWFDVHLQZKLFK376'ZDVGLVFXVVHG
    &DPSEHOOY&R\OH                               1R       1R                             &DPSEHOOY&R\OH       

  ,Q FRQWUDVW D VWDWHFRXUW RSLQLRQ UXQV DIRXO RI WKH            7KLVFRXUWKDVDOVRJUDQWHGWKHZULWWRDKDEHDVSHWLWLRQHU
mXQUHDVRQDEOHDSSOLFDWLRQlFODXVHRI$('3$ZKHQmWKHVWDWH              ZKRVHDWWRUQH\ERWKIDLOHGWRORRNLQWRDQ\RIWKHGHIHQGDQWjV
FRXUWLGHQWLILHVWKHFRUUHFWJRYHUQLQJOHJDOSULQFLSOHIURP>WKH        PHGLFDOUHFRUGVRULQWHUYLHZDQ\RIWKHGHIHQGDQWjVIDPLO\
6XSUHPH@ &RXUWjV GHFLVLRQV EXW XQUHDVRQDEO\ DSSOLHV WKDW          PHPEHUVRURWKHUVZKRNQHZKLP6HH*OHQQY7DWH 
SULQFLSOHWRWKHIDFWVl,GDW$VWDWHFRXUWRSLQLRQFDQ        )GWK&LU7KHPRVWFULWLFDOPLVWDNH
DOVR HQJHQGHU WKH mXQUHDVRQDEOH DSSOLFDWLRQl RI 6XSUHPH           KRZHYHU RFFXUUHG ZKHQ *OHQQjV ODZ\HUV IDLOHG WR
&RXUW SUHFHGHQW LI LW mHLWKHU XQUHDVRQDEO\ H[WHQGV RU            FRPPXQLFDWH ZLWK WKH FRXUWDSSRLQWHG SV\FKRORJLVWV ZKR
XQUHDVRQDEO\ UHIXVHV WR H[WHQG D OHJDO SULQFLSOH IURP            ZHUHRIWKHRSLQLRQWKDWWKHUHZDVQRSV\FKRVLVUHWDUGDWLRQ
6XSUHPH &RXUW SUHFHGHQW WR D QHZ FRQWH[Wl  6H\PRXU Y         RUEUDLQGDPDJH6HHLG7KHGHIHQVHZDVWDNHQE\VXUSULVH
:DONHU)GWK&LU                            ZKHQWKH\VRWHVWLILHGDWWULDO2QKDEHDVUHYLHZKRZHYHU
                                                                        *OHQQ SURIIHUHG VHYHUDO PHQWDO KHDOWK SURIHVVLRQDOV ZKR
  7KH 6XSUHPH &RXUW KDV GHFODUHG WKDW mD IHGHUDO KDEHDV         H[SUHVVHGWKHFRQWUDU\FRQFOXVLRQWKDWKHVXIIHUHGIURPJOREDO
FRXUWPDNLQJWKHµXQUHDVRQDEOHDSSOLFDWLRQjLQTXLU\VKRXOG              EUDLQGDPDJH,GDW
DVNZKHWKHUWKHVWDWHFRXUWjVDSSOLFDWLRQRIFOHDUO\HVWDEOLVKHG
IHGHUDO ODZ ZDV REMHFWLYHO\ XQUHDVRQDEOHl  :LOOLDPV           $VLQ6HLGHOKDG*OHQQjVFRXQVHOFRQVXOWHGZLWKWKHFRXUW
86DW,QLWVHODERUDWLRQRQWKHPHDQLQJRIWKHWHUP             DSSRLQWHG H[SHUWV SULRU WR WULDO RU ORRNHG LQWR *OHQQjV
mREMHFWLYHO\XQUHDVRQDEOHlWKH&RXUWVWDWHGWKDWmDIHGHUDO            PHGLFDOKLVWRU\UHSOHWHZLWKHYLGHQFHRIPHQWDOGLVDELOLWLHV
KDEHDVFRXUWPD\QRWLVVXHWKHZULWVLPSO\EHFDXVHWKDWFRXUW           WKH\ ZRXOG KDYH EHHQ DOHUWHG WR WKHLU FOLHQWjV PHQWDO
FRQFOXGHVLQLWVLQGHSHQGHQWMXGJPHQWWKDWWKHUHOHYDQWVWDWH          GHILFLHQFLHVWKDWZRXOGKDYHEHHQKLJKO\LQIOXHQWLDODWERWK
FRXUW GHFLVLRQ DSSOLHG FOHDUO\ HVWDEOLVKHG IHGHUDO ODZ            WKHJXLOWDQGSHQDOW\SKDVHVRIWULDO&DPSEHOOjVDWWRUQH\VLQ
HUURQHRXVO\RULQFRUUHFWO\5DWKHUWKDWDSSOLFDWLRQPXVWDOVR          FRQWUDVWSXUVXHGYDULRXVDYHQXHVRILQYHVWLJDWLRQLQFOXGLQJ
EHXQUHDVRQDEOHl,GDW                                         SV\FKRORJLFDOHYDOXDWLRQDQGZLWQHVVLQWHUYLHZV
% 7KHVWDWHFRXUWjVGHWHUPLQDWLRQWKDW&DPSEHOOZDV                       ,PSOLFLW LQ &DPSEHOOjV DUJXPHQW DERXW KLV FKLOGKRRG
   QRW FRQVWLWXWLRQDOO\ HQWLWOHG WR D OHVVHULQFOXGHG              PHGLFDOUHFRUGVLVWKHVXJJHVWLRQWKDWKLVDWWRUQH\VLJQRUHG
   RIIHQVHLQVWUXFWLRQZDVQRWREMHFWLYHO\XQUHDVRQDEOH                 WKHIDFWWKDWKHZDVDYLFWLPRIDWHUULEOHILUHDVDFKLOGDQG
                                                                        WKDWWKLVWUDXPDDIIHFWHGKLPDVDQDGXOW7RWKHFRQWUDU\DV
  &DPSEHOOjVILUVWFKDOOHQJHWRKLVFRQYLFWLRQLVEDVHGRQWKH          LV DSSDUHQW LQ WKH DERYHTXRWHG SRUWLRQV RI KLV DWWRUQH\Vj
DVVHUWLRQWKDWKLV(LJKWKDQG)RXUWHHQWK$PHQGPHQWULJKWV               FORVLQJDUJXPHQW&DPSEHOOjVWULDOFRXQVHOVSHQWDVLJQLILFDQW
ZHUH YLRODWHG E\ WKH VWDWH WULDO FRXUW ZKHQ LW UHMHFWHG KLV   DPRXQW RI WLPH IRFXVLQJ RQ WKH OLNHO\ HIIHFWV RI WKLV
UHTXHVWWRLQVWUXFWWKHMXU\RQWKHOHVVHULQFOXGHGRIIHQVHRI          FKLOGKRRGWUDJHG\&DPSEHOOLVQRZVLPSO\VXJJHVWLQJWKDW
LQYROXQWDU\ PDQVODXJKWHU  6HH *XQQHOO Y /D]DURII           DQRWKHU VWUDWHJ\ WR KLJKOLJKW WKH WUDXPD ZRXOG KDYH EHHQ
1(G   2KLR  VWDWLQJ WKDW LQYROXQWDU\            PRUHIUXLWIXO(YHQLIZHZHUHWRDJUHHZLWKWKLVDVVHVVPHQW
PDQVODXJKWHU LV D OHVVHULQFOXGHG RIIHQVH RI DJJUDYDWHG           ZHFDQQRWFRQFOXGHWKDWKLVDWWRUQH\VjVWUDWHJLFFKRLFHZDV
PXUGHUXQGHU2KLRODZ7KLVFODLPRIHUURULVEDVHGRQWKH            REMHFWLYHO\XQUHDVRQDEOH6HH6WULFNODQG86
6XSUHPH &RXUW FDVH RI %HFN Y $ODEDPD  86             7KLVLVHVVHQWLDOO\WKHVDPHFRQFOXVLRQUHDFKHGE\
LQZKLFKWKH&RXUWKHOGWKDWLWLVXQFRQVWLWXWLRQDOWR          WKH2KLR&RXUWRI$SSHDOVZKHQLWVWDWHG
LPSRVHWKHGHDWKSHQDOW\ZKHQDmMXU\>LV@QRWSHUPLWWHGWR
FRQVLGHU D YHUGLFW RI JXLOW RI D OHVVHU LQFOXGHG QRQFDSLWDO     1HLWKHU SURRI WKDW GHIHQVH FRXQVHO GHYLDWHG IURP WKH
                                                                          mEHVW DYDLODEOH SUDFWLFHl QRU SURRI RI WKH H[LVWHQFH RI
    &DPSEHOOY&R\OH                             1R       1R                            &DPSEHOOY&R\OH        

   ,QWKHFDVHEHIRUHXVWULDOFRXQVHOHQJDJHGLQDQH[WHQVLYH       RIIHQVHDQGZKHQWKHHYLGHQFHZRXOGKDYHVXSSRUWHGVXFKD
LQYHVWLJDWLRQRI&DPSEHOOjVKLVWRU\DQGFXUUHQWPHQWDOVWDWH         YHUGLFWl,GDW
7KH\LQWHUYLHZHGIDPLO\PHPEHUVKDG&DPSEHOOHYDOXDWHG
E\DFOLQLFDOSV\FKRORJLVWDQGFRQVXOWHGZLWKWZRPLWLJDWLRQ           ,Q%HFNWKHGHIHQGDQWDQGKLVDFFRPSOLFHEURNHLQWRWKH
VSHFLDOLVWV7KHGHFLVLRQRI&DPSEHOOjVWULDOFRXQVHOWRIRUJR       KRXVHRIDQ\HDUROGPDQ'XULQJWKHHQVXLQJUREEHU\
DSDUWLFXODULQYHVWLJDWLRQLQWR&DPSEHOOjVFKLOGKRRGPHGLFDO         WKH\ WLHG XS WKH HOGHUO\ PDQ DQG DFFRUGLQJ WR %HFN WKH
UHFRUGVWKHUHIRUHPXVWEHHYDOXDWHGZLWKmDKHDY\PHDVXUH           DFFRPSOLFHVWUXFNWKHPDQDQGNLOOHGKLP%HFNFRQVLVWHQWO\
RIGHIHUHQFHWRFRXQVHOjVMXGJPHQWl:RUNPDQY%HOO            PDLQWDLQHGWKDWKHGLGQRWNLOOWKHYLFWLPQRUKDG KHHYHU
)GWK&LULQWHUQDOTXRWDWLRQPDUNVDQG           LQWHQGHGIRUWKHPXUGHUWRRFFXU7KHVWDWHFKDUJHGKLPZLWK
FLWDWLRQV RPLWWHG  :H FDQQRW VD\ WKDW WKLV GHFLVLRQ ZDV    mUREEHU\LQWHQWLRQDOPXUGHUlDFDSLWDOFULPH3XUVXDQWWRWKH
REMHFWLYHO\XQUHDVRQDEOH                                           DSSOLFDEOHVWDWHVWDWXWHWKHWULDOMXGJHZDVSURKLELWHGIURP
                                                                      LQVWUXFWLQJWKHMXU\RQWKHOHVVHULQFOXGHGRIIHQVHRImIHORQ\
   ,Q6HLGHOY0HUNOH)GWK&LUD          PXUGHUlDQRQFDSLWDOFULPH  7KHMXU\FRQYLFWHG%HFNRI
FDVH UHOLHG XSRQ E\ &DPSEHOO WKH 1LQWK &LUFXLW JUDQWHG D    LQWHQWLRQDOPXUGHUDQGKHZDVVHQWHQFHGWRGHDWK,GDW
KDEHDVSHWLWLRQWRDGHIHQGDQWEHFDXVHKLVDWWRUQH\KDGIDLOHG        
WR GLVFRYHU WKH GHIHQGDQWjV EUDLQ GDPDJH DQG 376'
1HYHUWKHOHVVXQOLNHWKHFDVHEHIRUHXVZKHUHWULDOFRXQVHO            ,QKROGLQJWKDWWKHGHQLDORIDQLQVWUXFWLRQRQWKHOHVVHU
GHFOLQHGWRSXUVXHRQHDYHQXHRILQYHVWLJDWLRQZKLOHIRFXVLQJ         LQFOXGHG RIIHQVH YLRODWHG %HFNjV FRQVWLWXWLRQDO ULJKWV WKH
RQRWKHUVWKHLQDGHTXDF\RIWKHDWWRUQH\jVLQYHVWLJDWLRQLQ          &RXUWIRFXVHGRQWKHDFFXUDF\RIWKHIDFWILQGLQJSURFHVV$
6HLGHOZDVPDQLIHVW6HLGHOjVWULDOFRXQVHOKDGERWKDFWXDO          FUXFLDOHOHPHQWRIWKHFULPHIRUZKLFK%HFNZDVFRQYLFWHG
QRWLFHRIKLVFOLHQWjVGLVRUGHUVDFRQFOXVLRQWKH1LQWK&LUFXLW      ZDVWKHHOHPHQWRILQWHQW1HYHUWKHOHVVWKHQDWXUHRI%HFNjV
PDGHZKHQLWSRLQWHGRXWWKDW6HLGHOjVFRXQVHOKDGZULWWHQLQ         LQWHQWZDVmYHU\PXFKLQGLVSXWHDWWULDOl,GDW7KH
KLVQRWHVWKDWKLVFOLHQWKDGVXIIHUHGIURPEODFNRXWVDQJHU         &RXUWIRXQGWKDWWKHDFFXUDF\RIWKHIDFWILQGLQJSURFHVVZDV
ILWVDQGZDVDERXWWREHSXWRQPHGLFDWLRQE\SULVRQPHQWDO          SODFHGLQGRXEWZKHQWKHMXU\ZDVGHSULYHGRIWKHRSSRUWXQLW\
KHDOWKRIILFLDOVDVZHOODVFRQVWUXFWLYHQRWLFHFRQVLVWLQJRI      WR FRQVLGHU WKH OHVVHULQFOXGHG RIIHQVH RI IHORQ\ PXUGHU
6HLGHOjVKDYLQJEHHQPHGLFDWHGE\DSULVRQSV\FKLDWULVWDQG           ZKLFKGLGQRWLQFOXGHWKHLQWHQWUHTXLUHPHQW6HHLGDW
KDYLQJEHHQDWYDULRXVPHQWDOKRVSLWDOV6HHLGDW            :KHQ WKLV VLWXDWLRQ RFFXUV WKH &RXUW UHDVRQHG MXURUV DUH
                                                                      PRUHOLNHO\WRFRQYLFWDGHIHQGDQWGHVSLWHWKHLUGRXEWDVWR
  'HVSLWHWKLVDZDUHQHVVWKDWVRPHWKLQJZDVVHULRXVO\ZURQJ           RQH HOHPHQW LQ WKH JUHDWHU RIIHQVH GXH WR WKHLU DELGLQJ
ZLWK KLV FOLHQWjV PHQWDO VWDWH 6HLGHOjV FRXQVHO IDLOHG WR    FRQYLFWLRQWKDWWKHGHIHQGDQWGLGVRPHWKLQJZURQJ6HHLGDW
UHYLHZDQ\RI6HLGHOjVPHGLFDOUHFRUGVGHFOLQHGWRLQWHUYLHZ           ,QGHHG mWKH ULVN RI DQ XQZDUUDQWHG FRQYLFWLRQl
DQ\ ZLWQHVVHV DERXW 6HLGHOjV PHGLFDO FRQGLWLRQ GLG QRW        LQFUHDVHG WKH &RXUW FRQFOXGHG mZKHQ WKH HYLGHQFH
UHTXHVW D SV\FKLDWULF HYDOXDWLRQ RI KLV FOLHQW DQG LJQRUHG   XQTXHVWLRQDEO\HVWDEOLVKHVWKDWWKHGHIHQGDQWLVJXLOW\RID
YDULRXVRWKHUDVSHFWVRIKLVFOLHQWjVPHGLFDOKLVWRU\6HHLG       VHULRXVYLROHQWRIIHQVHlDQGWKHmWKLUGRSWLRQlRIWKHOHVVHU
+DGKHGRQHDQ\RIWKRVHWKLQJV6HLGHOjVDWWRUQH\ZRXOGQRW          LQFOXGHG RIIHQVH LV QRW SUHVHQWHG WR WKH MXU\ GHVSLWH WKH
KDYH PLVVHG KLV FOLHQWjV PLWLJDWLQJ PHGLFDO FRQGLWLRQ  ,Q    H[LVWHQFH RI mVRPH GRXEW ZLWK UHVSHFW WR DQ HOHPHQW WKDW
FRQWUDVW&DPSEHOOjVDWWRUQH\VGLGLQWHUYLHZZLWQHVVHVDQG           ZRXOGMXVWLI\FRQYLFWLRQRIDFDSLWDORIIHQVHl,GDW7KH
LPSRUWDQWO\ KDG &DPSEHOO HYDOXDWHG E\ 'U &KLDSSRQH D        &RXUW WKHUHIRUH H[SDQGHG WKH IHGHUDO HQWLWOHPHQW WR mµDQ
PHQWDO KHDOWK SURIHVVLRQDO ZKR DOVR IDLOHG WR GLDJQRVH         LQVWUXFWLRQRQDOHVVHULQFOXGHGRIIHQVHLIWKHHYLGHQFHZRXOG
&DPSEHOOjVDOOHJHG376'                                              SHUPLWDMXU\UDWLRQDOO\WRILQGKLPJXLOW\RIWKHOHVVHURIIHQVH
    &DPSEHOOY&R\OH                               1R       1R                             &DPSEHOOY&R\OH        

DQGDFTXLWKLPRIWKHJUHDWHUjl,GDWTXRWLQJ.HHEOHY         FLUFXPVWDQFHV DSSO\LQJ D KHDY\ PHDVXUH RI GHIHUHQFH WR
8QLWHG6WDWHV86                             FRXQVHO
VMXGJPHQWlLQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQV
                                                                        RPLWWHG
   7ZR\HDUVODWHULQ+RSSHUY(YDQV86
WKH6XSUHPH&RXUWUHDIILUPHGWKHKROGLQJRI%HFNDVZHOODV               &DPSEHOO EHJLQV KLV DUJXPHQW E\ FODLPLQJ WKDW KLV WULDO
WKH OLPLWDWLRQV RI WKH QHZ UXOH WKDW ZHUH HYLGHQW EXW          FRXQVHOjV SHUIRUPDQFH ZDV VR SRRU DV WR IDOO mEHORZ DQ
XQH[SORUHG LQ WKH %HFN RSLQLRQ  7KH KDEHDV SHWLWLRQHU LQ      REMHFWLYHVWDQGDUGRIUHDVRQDEOHQHVVl6WULFNODQG86
+RSSHUKDGEHHQFRQYLFWHGRIUREEHU\LQWHQWLRQDOPXUGHULQ              DW+HEDVHVWKLVDOOHJHGSHUIRUPDQFHGHILFLHQF\RQWKUHH
$ODEDPDXQGHUWKHVDPHVWDWXWRU\VFKHPHSUHVHQWLQ%HFN               VHSDUDWHRPLVVLRQVE\KLVWULDOFRXQVHO7KHILUVWRPLVVLRQ
'XULQJKLVWHVWLPRQ\EHIRUHWKHJUDQGMXU\LQYHVWLJDWLQJWKH            FODLPHGE\&DPSEHOOLVKLVDWWRUQH\VjIDLOXUHWRLQYHVWLJDWH
PXUGHULQTXHVWLRQ(YDQVWHVWLILHGWKDWWKHYLFWLPmZDVQRW            KLVPHGLFDOUHFRUGVIURPZKHQKHZDVWUHDWHGIRUEXUQVDVD
WKHRQO\SHUVRQKHKDGHYHUNLOOHGWKDWKHIHOWQRUHPRUVH             FKLOG  $FFRUGLQJ WR WKH DIILGDYLW RI sDPHV &UDWHV WKH
EHFDXVHRIWKDWPXUGHUWKDWKHZRXOGNLOODJDLQLQVLPLODU             PLWLJDWLRQ VSHFLDOLVW WKRVH UHFRUGV ZRXOG KDYH LQGLFDWHG
FLUFXPVWDQFHVDQGWKDWKHLQWHQGHGWRUHWXUQWRDOLIHRIFULPH        PRUH QDPHV RI SHRSOH WR LQWHUYLHZ ZKLFK mZRXOG KDYH
LIKHZDVHYHUIUHHGl,GDW                                   SURYLGHG WKH GHIHQVH WHDP ZLWK LQVLJKW DV WR &DPSEHOOjV
                                                                        EHKDYLRU SURYLGHG 'U &KLDSSRQH ZLWK DGGLWLRQDO GDWD RI
  7KH 6XSUHPH &RXUW KHOG WKDW (YDQV ZDV QRW                      GLDJQRVWLFLPSRUWDQGSURYLGHGZLWQHVVHVZKRFRXOGKDYH
FRQVWLWXWLRQDOO\ HQWLWOHG WR D OHVVHULQFOXGHG LQVWUXFWLRQ         LPSDUWHGVLJQLILFDQWGDWDWRWKHWULHURIIDFWl&DPSEHOODUJXHV
EHFDXVHWKHHYLGHQFHGLGQRWVXSSRUWDYHUGLFWRQWKHOHVVHU            WKDW EXW IRU FRXQVHOjV GHFLVLRQ QRW WR LQYHVWLJDWH KLV
FKDUJHQRUZDVWKHUHVXIILFLHQWHYLGHQFHWRVXSSRUWDUDWLRQDO         FKLOGKRRG PHGLFDO UHFRUGV KLV DOOHJHG 376' ZRXOG KDYH
MXU\jVFRQFOXVLRQWKDWKHVKRXOGKDYHEHHQDFTXLWWHGRIWKH             EHHQGLVFRYHUHGDQGXWLOL]HGVXFFHVVIXOO\LQIURQWRIWKHMXU\
JUHDWHURIIHQVH,GDW%HFDXVHm>W@KHHYLGHQFHQRWRQO\         DWERWKSKDVHVRIWKHWULDO%DVHGRQWKHUHFRUGEHIRUHXVZH
VXSSRUWHG WKH FODLP WKDW UHVSRQGHQW LQWHQGHG WR NLOO WKH        FDQQRWDJUHH
YLFWLPEXWDIILUPDWLYHO\QHJDWHGDQ\FODLPWKDWKHGLGQRW
LQWHQGWRNLOOWKHYLFWLPlWKH&RXUWKHOGWKDWWKHDEVHQFHRI             :H DFNQRZOHGJH WKDW DQ DWWRUQH\jV LJQRUDQFH RI WKH
WKH OHVVHULQFOXGHG RIIHQVH GLG QRW FRPSURPLVH DFFXUDWH           PHGLFDOUHFRUGVRIKLVFOLHQWRURIDNH\ZLWQHVVKDVEHHQWKH
IDFWILQGLQJ LQ WKH VDPH ZD\ WKDW LW GLG LQ %HFN ZKHUH WKH   VRXUFHRIVXFFHVVIXOKDEHDVSHWLWLRQVLQWKHSDVW6HHHJ
HOHPHQW RI LQWHQW ZDV YLJRURXVO\ FRQWHVWHG  ,G DW        *OHQQY7DWH)GWK&LUKROGLQJ
$FFRUGLQJWR+RSSHUWKHQD%HFNLQVWUXFWLRQLVRQO\UHTXLUHG          WKDWDQDWWRUQH\ZDVXQFRQVWLWXWLRQDOO\LQHIIHFWLYHZKHQKH
ZKHQ mWKHUH ZDV HYLGHQFH ZKLFK LI EHOLHYHG FRXOG               IDLOHGWRGLVFRYHUPHGLFDOUHFRUGVRIWKHGHIHQGDQWDVDFKLOG
UHDVRQDEO\KDYHOHGWRDYHUGLFWRIJXLOWRIDOHVVHURIIHQVHl         LQZKLFKWKHGHIHQGDQWZDVGLDJQRVHGDVKDYLQJVRORZDQ,4
EXWQRWWKHJUHDWHU,GDW                                     DVWREHZLWKLQDm0HQWDOO\'HIHFWLYHUDQJHl2XULQTXLU\
                                                                        KRZHYHULVDIDFWLQWHQVLYHRQHWKDWUHTXLUHVWKHUHYLHZLQJ
  7KH %HFN KROGLQJ KDV EHHQ FRQVLVWHQWO\ IROORZHG E\ WKH        FRXUWWRORRNLQWRWKHDWWRUQH\jVLQYHVWLJDWLRQDVDZKROHLQ
FRXUWV EXW LW KDV DOZD\V EHHQ UHVWUDLQHG ZLWKLQ WKH OLPLWV    RUGHU WR GHWHUPLQH ZKHWKHU KLV RU KHU SHUIRUPDQFH ZDV
VXJJHVWHG E\ +RSSHU  %HFN KDV QHYHU VWRRG IRU WKH             GHILFLHQW 6HH 6WULFNODQG  86 DW  m7KXV D FRXUW
SURSRVLWLRQWKDWWKH&RQVWLWXWLRQPDQGDWHVDMXU\PHGLDWHG              GHFLGLQJ DQ DFWXDO LQHIIHFWLYHQHVV FODLP PXVW MXGJH WKH
SOHD EDUJDLQ RQ D OHVVHU FKDUJH GHVSLWH RYHUZKHOPLQJ            UHDVRQDEOHQHVVRIFRXQVHOjVFKDOOHQJHGFRQGXFWRQWKHIDFWV
HYLGHQFH LQ VXSSRUW RI WKH JUHDWHU RIIHQVH  5DWKHU WKH       RIWKHSDUWLFXODUFDVHl
SXUSRVHRIWKHUXOHLVWRIDFLOLWDWHDFFXUDWHIDFWILQGLQJE\WKH
    &DPSEHOOY&R\OH                              1R       1R                             &DPSEHOOY&R\OH        

SHUIRUP DQ\ LQYHVWLJDWLRQ LQWR D GHIHQGDQWjV FDVH IRU           MXU\$OHVVHULQFOXGHGRIIHQVHLQVWUXFWLRQLVWKHUHIRUHQRW
PLWLJDWLRQ KDV EHHQ KHOG E\ WKLV FRXUW WR FRQVWLWXWH WKH      UHTXLUHG ZKHQ WKH HYLGHQFH GRHV QRW VXSSRUW LW QRU LV WKH
LQHIIHFWLYHDVVLVWDQFHRIFRXQVHO6HH&DUWHUY%HOO)G       LQVWUXFWLRQPDQGDWHGZKHQLWLVSUHFOXGHGE\DSURFHGXUDOEDU
  WK &LU  ILQGLQJ LQHIIHFWLYH DVVLVWDQFH RI    VXFKDVDVWDWXWHRIOLPLWDWLRQV6HH6SD]LDQRY)ORULGD
FRXQVHOZKHUHWKHGHIHQGDQWjVDWWRUQH\VIDLOHGWRLQYHVWLJDWH          86KROGLQJWKDWDFRXUWGLGQRWYLRODWH
RU LQWURGXFH DQ\ HYLGHQFH RI PLWLJDWLRQ DW WKH VHQWHQFLQJ      WKH %HFN UXOH ZKHQ LW GHFOLQHG WR JLYH D OHVVHULQFOXGHG
SKDVHDQGUHOLHGVROHO\RQDWKHRU\RIUHVLGXDOGRXEW  ,Q         RIIHQVH LQVWUXFWLRQ EHFDXVH WKH VWDWXWH RI OLPLWDWLRQV KDG
KROGLQJWKDW&DUWHUjV6L[WK$PHQGPHQWULJKWVZHUHYLRODWHG            SDVVHGRQWKHOHVVHURIIHQVHVHHDOVR+RSNLQVY5HHYHV
WKLVFRXUWIDXOWHGWKHDWWRUQH\VIRUUHO\LQJVROHO\RQPLWLJDWLRQ      86KROGLQJWKDWD%HFNLQVWUXFWLRQLVQRW
LQIRUPDWLRQ YROXQWHHUHG E\ WKH GHIHQGDQW UDWKHU WKDQ            UHTXLUHGLIWKHUHTXHVWHGMXU\FKDUJHGRHVQRWVDWLVI\WKHOHJDO
SHUIRUPLQJWKHLURZQLQGHSHQGHQWLQYHVWLJDWLRQ:HVWDWHG             GHILQLWLRQRIDOHVVHULQFOXGHGRIIHQVH7KLVFRXUWKDVIXUWKHU
WKDW mFRXQVHO PXVW PDNH VRPH HIIRUW DW LQGHSHQGHQW              KHOGWKDWEHFDXVH%HFNZDVDFKDOOHQJHEDVHGRQWKH(LJKWK
LQYHVWLJDWLRQLQRUGHUWRPDNHDUHDVRQHGLQIRUPHGGHFLVLRQl         $PHQGPHQW WKH &RQVWLWXWLRQ GRHV QRW UHTXLUH D OHVVHU
,GDWVHHDOVR&RQHY%HOO)GWK           LQFOXGHGRIIHQVHLQVWUXFWLRQLQQRQFDSLWDOFDVHV6HH%DJE\
&LUJUDQWLQJKDEHDVFRUSXVXQGHU$('3$EDVHGRQ                Y6RZGHUV)GWK&LUHQEDQF
WKH IDLOXUH RI WKH GHIHQGDQWjV WULDO FRXQVHO WR SUHVHQW DQ\
PLWLJDWLRQHYLGHQFHRUDFORVLQJDUJXPHQWDWVHQWHQFLQJ               &DPSEHOO EDVHV KLV DVVHUWLRQ WKDW KH ZDV HQWLWOHG WR D
                                                                       OHVVHULQFOXGHGRIIHQVHLQVWUXFWLRQVROHO\RQKLVHYDOXDWLRQRI
   1HYHUWKHOHVVZHQRWHWKDWWKHFDVHVZKHUHWKLVFRXUWKDV           WKHHYLGHQFH$FFRUGLQJWR&DPSEHOOWKHLVVXHRIZKHWKHUKH
JUDQWHGWKHZULWIRUIDLOXUHRIFRXQVHOWRLQYHVWLJDWHSRWHQWLDO       LQWHQGHGWRNLOO7XUQHUZDVLQGLVSXWHDWWULDO+HPDLQWDLQV
PLWLJDWLQJHYLGHQFHKDYHEHHQOLPLWHGWRWKRVHVLWXDWLRQVLQ           WKHQWKDWWKHMXU\FRXOGKDYHSRVVHVVHGDUHDVRQDEOHGRXEWDV
ZKLFKGHIHQVHFRXQVHOKDYHWRWDOO\IDLOHGWRFRQGXFWVXFKDQ           WRKLVJXLOWRIDJJUDYDWHGPXUGHUEXWEHFDXVHWKH\ZHUHQRW
LQYHVWLJDWLRQ,QFRQWUDVWLIDKDEHDVFODLPmGRHVQRWLQYROYH       SUHVHQWHG ZLWK D mWKLUG RSWLRQl RI D OHVVHU RIIHQVH WKH\
DIDLOXUHWRLQYHVWLJDWHEXWUDWKHUSHWLWLRQHUjVGLVVDWLVIDFWLRQ     LJQRUHGWKHVHGRXEWVDQGFRQYLFWHGKLPRIWKHFDSLWDORIIHQVH
ZLWK WKH GHJUHH RI KLV DWWRUQH\jV LQYHVWLJDWLRQl WKH
SUHVXPSWLRQRIUHDVRQDEOHQHVVLPSRVHGE\6WULFNODQGZLOOEH              &DPSEHOOUHOLHVRQWZRHYLGHQWLDU\DUJXPHQWVWRVXSSRUW
KDUGWRRYHUFRPH/HZLVY$OH[DQGHU)G              KLVFODLP)LUVWKHDUJXHVWKDWWKHUHZDVVXIILFLHQWHYLGHQFH
WK &LU  KROGLQJ WKDW DQ DWWRUQH\jV UHOLDQFH RQ WKH   RIDVWUXJJOHEHWZHHQKLPVHOIDQG7XUQHUWRFDVWGRXEWRQKLV
HYDOXDWLRQ RI WKH GHIHQGDQWjV PHGLFDO UHFRUGV E\ D              LQWHQWWRNLOO7KLVDOOHJHGVWUXJJOHLVUHLQIRUFHGKHDUJXHV
SURIHVVLRQDOKHNQHZDQGWUXVWHGZDVQRWDYLRODWLRQRIWKH            SULPDULO\E\WKHIDFWWKDWWKHFRURQHUGHVFULEHGWKHZRXQGRQ
6L[WK$PHQGPHQW                                                    7XUQHUjV WKXPE DV D mGHIHQVLYH ZRXQGl  &DPSEHOO DOVR
                                                                       SRLQWV WR WKDW SRUWLRQ RI 5RVHPDQjV WHVWLPRQ\ ZKHUH WKH
   :KHUHDVLJQLILFDQWLQYHVWLJDWLRQKDVEHHQFRQGXFWHGDQG          ZLWQHVVWHVWLILHGWKDW
DKDEHDVSHWLWLRQHUFKDOOHQJHVWKHVWURQJSUHVXPSWLRQWKDWWKH
DWWRUQH\jVLQYHVWLJDWLRQZDVUHDVRQDEOHDFRXUWPXVWORRNWR            m>&DPSEHOO@GLGQjWVD\KHWULHGWRNLOOWKHJX\+HVDLGKH
WKHVSHFLILFIDFWVRIWKHFDVHDVZHOODVWKHGHFLVLRQVRIWKH          ZHQWRYHUWRUREWKHJX\$QGZKHQKHJHWRYHUWKHUH
GHIHQGDQWWKDWPD\KDYHKLQGHUHGWULDOFRXQVHOjVSUHSDUDWLRQ            GXGHZDVQjWJRLQJIRULWROGPDQZDVQjW JRLQJIRULW
6HH :RUNPDQ Y %HOO  )G   WK &LU          7KHVWUXJJOHFDPHKHKDGWRWDNHKLPRXW([DFWZRUGV
m+RZHYHUDSDUWLFXODUGHFLVLRQQRWWRLQYHVWLJDWHPXVWEH              KHKDGWRWDNHKLPRXWl
GLUHFWO\ DVVHVVHG IRU UHDVRQDEOHQHVV LQ DOO RI WKH
    &DPSEHOOY&R\OH                                1R       1R                              &DPSEHOOY&R\OH         

+HDOVRFRQWHQGVWKDWWKHSURVHFXWRUFRQFHGHGWKHH[LVWHQFH              6WULFNODQG86DW7DNLQJLQWRDFFRXQWWKHWRWDOLW\
RI D VWUXJJOH ZKHQ DUJXLQJ DJDLQVW &DPSEHOOjV PRWLRQ IRU         RIWKHFLUFXPVWDQFHVDVZHOODVWKHUHODWLYHVWUHQJWKRIWKH
DFTXLWWDO&DPSEHOOEDVHVWKLVFRQWHQWLRQRQWKHVWDWHPHQWLQ           FDVHSURIIHUHGE\WKHSURVHFXWLRQDFRXUWPXVWmTXHVWLRQ
WKHSURVHFXWRUjVDUJXPHQWZKHUHKHVDLGWKDWm>WKHHYLGHQFH@             ZKHWKHU WKHUH LV D UHDVRQDEOH SUREDELOLW\ WKDW DEVHQW WKH
VKRZV WKDW >7XUQHU@ PHW KLV GHDWK WKURXJK D VWDE ZRXQG         HUURUV WKH IDFWILQGHU ZRXOG KDYH KDG D UHDVRQDEOH GRXEW
PXOWLSOH VWDE ZRXQGV  $IWHU D FRPSOHWH VWUXJJOH DQG WKH        UHVSHFWLQJJXLOWl,GDW6LPLODUO\LIDFKDOOHQJHLVWRWKH
HYLGHQFHVKRZVDUDQVDFNLQJRIKLVDSDUWPHQWl&DPSEHOO                 SHQDOW\SKDVHmWKHTXHVWLRQLVZKHWKHUWKHUHLVDUHDVRQDEOH
WKXVFRQFOXGHVWKDWEHFDXVHWKHUHZDVDVWUXJJOHKLVLQWHQWWR         SUREDELOLW\WKDWDEVHQWWKHHUURUVWKHVHQWHQFHUZRXOG
NLOO 7XUQHU DV LQ %HFN ZDV VXIILFLHQWO\ LQ GLVSXWH DV WR     KDYHFRQFOXGHGWKDWWKHEDODQFHRIDJJUDYDWLQJDQGPLWLJDWLQJ
UHTXLUHDOHVVHULQFOXGHGRIIHQVHLQVWUXFWLRQ                           FLUFXPVWDQFHVGLGQRWZDUUDQWGHDWKl,GVHHDOVR*ORYHUY
                                                                         8QLWHG6WDWHV86FODULI\LQJWKH6WULFNODQG
  &DPSEHOOjVVHFRQGHYLGHQWLDU\DUJXPHQWRQZKLFKKHEDVHV               SUHMXGLFHVWDQGDUG
KLVFKDOOHQJHWRWKHGHQLDORID%HFNLQVWUXFWLRQLVWKHIDFWWKDW
KH ZDV XQDUPHG ZKHQ KH HQWHUHG 7XUQHUjV DSDUWPHQW                  %HFDXVH WKH 2KLR &RXUW RI $SSHDOV FRUUHFWO\ VWDWHG WKH
%HFDXVH 7XUQHU ZDV NLOOHG ZLWK KLV RZQ NQLIH &DPSEHOO           6WULFNODQGVWDQGDUGZHPXVWGHFLGHZKHWKHULWVDSSOLFDWLRQ
DUJXHV DQG EHFDXVH WKH HYLGHQFH VXJJHVWV WKDW &DPSEHOO           RI WKLV UXOH ZDV mREMHFWLYHO\ XQUHDVRQDEOHl  ,Q WKH VWDWH
HQWHUHGWKHDSDUWPHQWXQDUPHGDUHDVRQDEOHMXURUFRXOGKDYH             FRXUWjV DQDO\VLV LW IRFXVHG PRVW RI LWV DWWHQWLRQ RQ
FRQFOXGHGWKDW&DPSEHOOGLGQRWSRVVHVVWKHLQWHQWWRNLOOWKH           &DPSEHOOjVFKDOOHQJHWRWKHSHUIRUPDQFHRIFRXQVHODWWKH
YLFWLP                                                                 SHQDOW\SKDVHDQGIXUWKHUEDVHGLWVKROGLQJSULPDULO\RQWKH
                                                                         SHUIRUPDQFHSURQJRIWKH6WULFNODQGWHVW,QLWVFRQFOXVLRQ
   ,QVXP&DPSEHOODUJXHVWKDWEDVHGRQWKHHYLGHQFHRID              WKDW &DPSEHOOjV DWWRUQH\V SHUIRUPHG FRPSHWHQWO\ DW WKH
VWUXJJOH DQG RI DQ XQDUPHG HQWU\ D MXU\ FRXOG KDYH             PLWLJDWLRQSKDVHWKHFRXUWQRWHGWKDW&DPSEHOOSODFHGVHYHUDO
UHDVRQDEO\FRQFOXGHGWKDW&DPSEHOOODFNHGWKHUHTXLVLWH              UHVWULFWLRQV RQ KLV WULDO FRXQVHOjV DELOLW\ WR SXW WRJHWKHU D
LQWHQWWRVDWLVI\WKHDJJUDYDWHGPXUGHUFKDUJHDQGWKHUH             PLWLJDWLRQ VWUDWHJ\  )XUWKHUPRUH WKH FRXUW FKDUDFWHUL]HG
ZDVVXIILFLHQWHYLGHQFHWRFRQFOXGHWKDWKHZDVJXLOW\RIWKH            &DPSEHOOjVFODLPDVDFKDOOHQJHWRWKHIDFWWKDWKHGLGQRW
OHVVHUFKDUJHRILQYROXQWDU\PDQVODXJKWHU%HFDXVHKHZDV               UHFHLYH WKH EHVWDYDLODEOH UHSUHVHQWDWLRQ UDWKHU WKDQ
GHSULYHGRIWKLVmWKLUGRSWLRQlKHFODLPVWKDWWKHMXURUVZHUH          UHDVRQDEO\ FRPSHWHQW UHSUHVHQWDWLRQ  &DPSEHOO FRQWHVWV
IRUFHGWRFKRRVHEHWZHHQDFTXLWWDOGHVSLWHWKHLUEHOLHIWKDW            WKHVH FRQFOXVLRQV E\ VWDWLQJ WKDW mKLV FRXQVHO IDLOHG WR
&DPSEHOOGLGFRPPLWDFULPHDQGFRQYLFWLRQIRUDFDSLWDO                LQYHVWLJDWHGLVFRYHUDQGSUHVHQWDGGLWLRQDOIDFWVDWWULDODERXW
FULPH LQ ZKLFK WKHLU FRQILGHQFH LQ KLV JXLOW EH\RQG D           KLV3RVW7UDXPDWLF6WUHVV'LVRUGHU376'l
UHDVRQDEOHGRXEWZDVVXVSHFW
                                                                            7KLV FRXUW KDV KHOG mWKDW IDLOXUH WR LQYHVWLJDWH SRVVLEOH
   7KH2KLR6XSUHPH&RXUWZKHQSUHVHQWHGZLWKWKLVFODLP                PLWLJDWLQJIDFWRUVDQGIDLOXUHWRSUHVHQWPLWLJDWLQJHYLGHQFH
RQ GLUHFW DSSHDO GLVDJUHHG ZLWK &DPSEHOO  6HH 6WDWH Y        DWVHQWHQFLQJFDQFRQVWLWXWHLQHIIHFWLYHDVVLVWDQFHRIFRXQVHO
&DPSEHOO  1(G   2KLR   :LWK              XQGHUWKH6L[WK$PHQGPHQWl&ROHPDQY0LWFKHOO)G
UHVSHFWWRWKHDUJXPHQWUHJDUGLQJDVWUXJJOHWKHFRXUWQRWHG              WK &LU  HPSKDVLV LQ RULJLQDO VHH DOVR
WKDWWKHHYLGHQFHRIDVWUXJJOHmGRHVQRWH[SODLQ7XUQHUjVIRXU          6WULFNODQG Y :DVKLQJWRQ  86    
RWKHU ZRXQGVl  ,G DW   )XUWKHU WKH FRXUW VWDWHG WKDW   mFRXQVHOKDVDGXW\WRPDNHUHDVRQDEOHLQYHVWLJDWLRQVRUWR
DOWKRXJK&DPSEHOOPD\QRWKDYHLQWHQGHGWRNLOO7XUQHUZKHQ              PDNH D UHDVRQDEOH GHFLVLRQ WKDW PDNHV SDUWLFXODU
KH HQWHUHG WKH DSDUWPHQW mWKH LVVXH LV QRW ZKDW &DPSEHOO       LQYHVWLJDWLRQVXQQHFHVVDU\l,QGHHGDFRPSOHWHIDLOXUHWR
    &DPSEHOOY&R\OH                                 1R       1R                             &DPSEHOOY&R\OH       

UHTXLUHVDFRXUWWRWDNHLQWRDFFRXQWWKHVNLOOVDODZ\HUVKRXOG          LQWHQGHGZKHQKHEURNHLQEXWZKDWKHLQWHQGHGZKHQKH
SRVVHVVWKHJXLGHOLQHVRISURIHVVLRQDORUJDQL]DWLRQVVXFKDV             VWDEEHG 7XUQHUl  ,G DW  7KH FRXUW IRXQG WKDW D
WKH$%$DQGWKHVSHFLILFFLUFXPVWDQFHVRIHDFKFDVH6HHLG            UHDVRQDEOHMXURUZRXOGKDYHEHHQmFRPSHOOHGlWRILQGWKDW
                                                                          &DPSEHOOKDGSRVVHVVHGWKHLQWHQWWRNLOOGXHWRWKHmQXPEHU
   6WULFNODQGFDXWLRQVKRZHYHUWKDWDQ\FRXUWDSSO\LQJWKLV             DQGORFDWLRQlRIWKHZRXQGV
DQDO\VLV PXVW GR VR ZLWK WUHPHQGRXV GHIHUHQFH WR WULDO
FRXQVHOjVGHFLVLRQV6HHLGDWm,WLVDOOWRRWHPSWLQJIRU            7KXVDVLQ+RSSHUZKHUHWKH6XSUHPH&RXUWKHOGWKDWWKH
D GHIHQGDQW WR VHFRQGJXHVV FRXQVHOjV DVVLVWDQFH DIWHU              WHVWLPRQ\ RI WKH GHIHQGDQW VLPXOWDQHRXVO\ VXSSRUWHG D
FRQYLFWLRQ RU DGYHUVH VHQWHQFH DQG LW LV DOO WRR HDV\ IRU D   ILQGLQJRILQWHQWDQGQHJDWHGDILQGLQJRIQRLQWHQWWKH2KLR
FRXUW H[DPLQLQJ FRXQVHOjV GHIHQVH DIWHU LW KDV SURYHG             FRXUWGHWHUPLQHGWKDWWKHQXPEHUDQGORFDWLRQRIWKHZRXQGV
XQVXFFHVVIXOWRFRQFOXGHWKDWDSDUWLFXODUDFWRURPLVVLRQRI            ZRXOGKDYHFRPSHOOHGDUHDVRQDEOHMXURUWRUHDFKDYHUGLFWRI
FRXQVHOZDVXQUHDVRQDEOHl7KXVmDFRXUWPXVWLQGXOJHD               DJJUDYDWHGPXUGHU7KHVHDUHWKHFRQFOXVLRQVWKDW&DPSEHOO
VWURQJ SUHVXPSWLRQ WKDW FRXQVHO
V FRQGXFW IDOOV ZLWKLQ WKH         QRZDVNVXVWRUHYLHZWKURXJKWKHQDUURZOHQVSURYLGHGE\
ZLGHUDQJHRIUHDVRQDEOHSURIHVVLRQDODVVLVWDQFHWKDWLVWKH            $('3$
GHIHQGDQW PXVW RYHUFRPH WKH SUHVXPSWLRQ WKDW XQGHU WKH
FLUFXPVWDQFHV WKH FKDOOHQJHG DFWLRQ PLJKW EH FRQVLGHUHG               $WWKHRXWVHWRIRXUDQDO\VLVZHPXVWDGGUHVVWKHWKUHVKROG
VRXQG WULDO VWUDWHJ\l  ,G LQWHUQDO TXRWDWLRQ PDUNV DQG         TXHVWLRQRImZKHWKHU>WKHKDEHDVSHWLWLRQHU@VHHNVWRDSSO\D
FLWDWLRQRPLWWHG                                                        UXOHRIODZWKDWZDVFOHDUO\HVWDEOLVKHGDWWKHWLPHKLVVWDWH
                                                                          FRXUWFRQYLFWLRQEHFDPHILQDOl:LOOLDPVY7D\ORU86
  ,QVWHDG RI UHTXLULQJ SHUIHFW SHUIRUPDQFH WKHQ ZH PXVW              %HFDXVH %HFN GDWHV EDFN PRUH WKDQ WHQ
SHUPLWDmZLGHUDQJHRISURIHVVLRQDOO\FRPSHWHQWDVVLVWDQFHl             \HDUV EHIRUH WKH 2KLR 6XSUHPH &RXUW UXOHG RQ WKH OHVVHU
HVSHFLDOO\ UHJDUGLQJ WKRVH VWUDWHJLF FKRLFHV LQIRUPHG E\            LQFOXGHGRIIHQVHFODLPWKLVTXHVWLRQLVHDVLO\DQVZHUHGLQWKH
mUHDVRQDEOHLQYHVWLJDWLRQVl6HHLGDW$VLQWKHFLYLO         DIILUPDWLYH)XUWKHUPRUHZHDOVRILQGWKDWWKH2KLR6XSUHPH
FRQWH[WZKHUHZHUHIXVHWRUHYHUVHWKHGHFLVLRQVRIDMXU\VR            &RXUWDSSOLHGWKHFRUUHFWUXOHZKHQDQDO\]LQJWKLVFODLP,W
ORQJ DV WKH\ ZHUH UHDVRQDEO\ EDVHG RQ WKH HYLGHQFH  DQ         VWDWHG WKDW mDQ LQYROXQWDU\ PDQVODXJKWHU LQVWUXFWLRQ LV
LQHIIHFWLYHDVVLVWDQFHRIFRXQVHOFODLPFDQQRWVXUYLYHVRORQJ            MXVWLILHGRQO\ZKHQRQWKHHYLGHQFHSUHVHQWHGWKHMXU\FRXOG
DV WKH GHFLVLRQV RI D GHIHQGDQWjV WULDO FRXQVHO ZHUH              UHDVRQDEO\ ILQG DJDLQVW WKH VWDWH RQ WKH HOHPHQW RI
UHDVRQDEOHHYHQLIPLVWDNHQ6HH:KLWHY0F$QLQFK                 SXUSRVHIXOQHVVDQGVWLOOILQGIRUWKHVWDWHRQWKHGHIHQGDQW
V
)G   WK &LU  m7KH 6WULFNODQG &RXUW              DFW RI NLOOLQJ DQRWKHUl  6HH &DPSEHOO  1(G DW 
FDXWLRQHG WKDW FRXUWV PXVW WDNH FDUH WR DYRLG µVHFRQG            LQWHUQDOTXRWDWLRQPDUNVRPLWWHG
JXHVV>LQJ@jVWUDWHJLFGHFLVLRQVWKDWGLGQRWSURYHVXFFHVVIXOl
DOWHUDWLRQLQRULJLQDOTXRWLQJ6WULFNODQG86DW             7KLV VWDWHPHQW RI WKH UXOH UHJDUGLQJ D OHVVHULQFOXGHG
                                                                          RIIHQVH LQVWUXFWLRQ XQGHU WKH (LJKWK $PHQGPHQW LV
   7KHVHFRQGIDFWRULQWKLVDQDO\VLVLVZKHWKHUWKHGHIHQGDQW            LQGLVWLQJXLVKDEOHIURPWKHKROGLQJRI%HFNDQGLWVSURJHQ\
ZDVPDWHULDOO\SUHMXGLFHGE\WKHDOOHJHGHUURUVRIKLVRUKHU             :H PXVW WKHUHIRUH GHWHUPLQH ZKHWKHU WKH VWDWH FRXUWjV
WULDOFRXQVHO8QGHUWKLVSURQJm>W@KHGHIHQGDQWPXVWVKRZ              DSSOLFDWLRQ RI WKLV UXOH WR WKHVH IDFWV ZDV REMHFWLYHO\
WKDWWKHUHLVDUHDVRQDEOHSUREDELOLW\WKDWEXWIRUFRXQVHO
V            XQUHDVRQDEOH6HH:LOOLDPV86DW(YHQLIZH
XQSURIHVVLRQDOHUURUVWKHUHVXOWRIWKHSURFHHGLQJZRXOGKDYH            ZHUHWRGLVDJUHHZLWKWKH2KLR6XSUHPH&RXUWjVFRQFOXVLRQ
EHHQ GLIIHUHQW $ UHDVRQDEOH SUREDELOLW\ LV D SUREDELOLW\          WKDWDMXU\FRXOGQRWKDYHUHDVRQDEO\IRXQGDJDLQVWWKHVWDWH
VXIILFLHQW WR XQGHUPLQH FRQILGHQFH LQ WKH RXWFRPHl                 RQWKHLQWHQWHOHPHQWRIDJJUDYDWHGPXUGHUZHDUHQRWIUHHWR
    &DPSEHOOY&R\OH                               1R       1R                              &DPSEHOOY&R\OH        

JUDQW&DPSEHOOjVSHWLWLRQXQOHVVWKDWKROGLQJZDVREMHFWLYHO\             )XUWKHUWKH2KLR&RXUWRI$SSHDOVQRWHGWKDWWKHUHZDVQR
XQUHDVRQDEOH  %DVHG RQ WKH HYLGHQFH LQ WKH UHFRUG ZH         mUHDVRQDEOHSUREDELOLW\WKDWEXWIRUWKHDOOHJHGRPLVVLRQVRI
FRQFOXGHWKDW&DPSEHOOKDVQRWVDWLVILHGWKLVVWULFWVWDQGDUG           FRXQVHOWKHUHVXOWRIWKHSHQDOW\SKDVHRI&DPSEHOOjVWULDO
RIUHYLHZ                                                              ZRXOGKDYHEHHQGLIIHUHQWl,GDW
7KHFRXUWLQDQRWKHU
                                                                        SDUW RI LWV RSLQLRQ DJDLQ VWDWHG WKDW WKH HYLGHQFH GLG QRW
   .H\WRWKH2KLRFRXUWjVFRQFOXVLRQWKDWQROHVVHULQFOXGHG           VXIILFLHQWO\FKDOOHQJHWKHSHUIRUPDQFHRI&DPSEHOOjVFRXQVHO
RIIHQVHLQVWUXFWLRQZDVFRQVWLWXWLRQDOO\UHTXLUHGZDVWKHODFN          QRUZDVWKHUHDQ\SURRIWKDWmWKHUHVXOWVRIWKHJXLOWSKDVHRI
RIHYLGHQFHWRH[SODLQDZD\DOOILYHZRXQGVWR7XUQHUjVERG\           &DPSEHOOjV WULDO ZRXOG KDYH EHHQ GLIIHUHQWl  ,G DW 

7KH FRXUW QHYHU GLVSXWHG WKH HYLGHQFH RI RQH mGHIHQVLYH         &DPSEHOODSSHDOHGWKLVGHFLVLRQWRWKH2KLR6XSUHPH&RXUW
ZRXQGlWKDWDVWUXJJOHHQVXHGRUWKDW7XUQHUWULHGWRZDUG            ZKLFK GHQLHG OHDYH WR UHYLHZ WKLV KROGLQJ  6HH 6WDWH Y
RII&DPSEHOO5DWKHUWKHIDFWWKDWWKHUHZHUHIRXUGHDGO\             &DPSEHOO1(G2KLR7KHGLVWULFWFRXUW
ZRXQGVWKHFRXUWUHDVRQHGSUHFOXGHGDUDWLRQDOMXURUIURP             EHORZDOVRGLVPLVVHGWKLVFODLPDVPHULWOHVV
ILQGLQJWKHODFNRIDSXUSRVHIXONLOOLQJ6HH&DPSEHOO
1(G DW  mWKH QXPEHU DQG ORFDWLRQ RI KLV YLFWLPjV          %HIRUH ZH DGGUHVV WKH PHULWV RI &DPSEHOOjV LQHIIHFWLYH
ZRXQGV ZRXOG FRPSHO DQ\ UHDVRQDEOH WULHU RI IDFW WR ILQG       DVVLVWDQFHRIFRXQVHOFODLPZHQHHGWRFODULI\ZKDWWKLVLVVXH
LQWHQW WR NLOOl  7KLV mFRPSHOOHGl FRQFOXVLRQ ZDV QRW          GRHVQRWHQWDLO&DPSEHOOGRHVQRWFKDOOHQJHWKHVWDWHFRXUWjV
VXIILFLHQWO\QHJDWHGE\WKHHYLGHQFHRIDVWUXJJOH7KH2KLR           SURYLVLRQRIWKHDVVLVWDQFHRIDQH[SHUWQRUGRHVKHFKDOOHQJH
6XSUHPH&RXUWjVKROGLQJZDVWKXVQRWDQXQUHDVRQDEOHRQH               WKHHIIHFWLYHQHVVRI'U&KLDSSRQH6HH6NDJJVY3DUNHU
&DPSEHOO KDV \HW WR H[SODLQ KRZ WKH IRXU GHDGO\ ZRXQGV         )GWK&LUQRWLQJWKDWDFODLPmWKDW
FRXOG KDYH EHHQ LQIOLFWHG FRQVLVWHQW ZLWK KLV WKHRU\ WKDW       WKHSHWLWLRQHULVHQWLWOHGWRDFRPSHWHQWH[SHUWLQKLVGHIHQVHl
7XUQHUjV GHDWK ZDV QRW LQWHQWLRQDO EXW UDWKHU VROHO\ WKH      KDVQHYHUEHHQmH[SOLFLWO\DGRSWHGE\WKLV&RXUWl5DWKHU
UHVXOWRIDVWUXJJOH                                                   &DPSEHOODUJXHVWKDWKLVDWWRUQH\VVKRXOGKDYHNQRZQWKDW
                                                                        KLV EHKDYLRU ZDV V\PSWRPDWLF RI 376' RU VKRXOG KDYH
   ,QVXSSRUWRIKLVDUJXPHQWWKDWWKHHYLGHQFHRIDVWUXJJOH           GLVFRYHUHGWKLVGLVRUGHUE\UHYLHZLQJKLVFKLOGKRRGPHGLFDO
FUHDWHGDGLVSXWHGLVVXHRIIDFWZLWKUHVSHFWWRKLVLQWHQWWKH        UHFRUGV+DGWKLVGLVFRYHU\EHHQPDGH&DPSEHOODUJXHVWKDW
RQO\ FDVH IURP WKLV FRXUW WKDW &DPSEHOO LV DEOH WR FLWH LV   WKH\FRXOGKDYHSUHVHQWHGWKLV376'HYLGHQFHWRWKHMXU\DW
'UDNHY6XSHULQWHQGHQW1R:/WK                ERWK WKH JXLOW DQG SHQDOW\ SKDVHV WKHUHE\ LPSURYLQJ KLV
&LUsDQXQSXEOLVKHGWDEOHGHFLVLRQ7KHPXUGHU            FKDQFHVRIDFTXLWWDORURIDSHQDOW\OHVVWKDQGHDWK
YLFWLP LQ 'UDNH GLHG IURP D JXQVKRW ZRXQG ILUHG IURP D
ZHDSRQRQO\WKUHHIHHWDZD\7KLVFRXUWKHOGWKDWWKHUHZDV               ,Q 6WULFNODQG Y :DVKLQJWRQ  86   WKH
QR HYLGHQFH WR QHJDWH LQWHQW DQG WKDW WKH HYLGHQFH RI WKH    6XSUHPH &RXUW GHWDLOHG WKH QRZ IDPLOLDU WZRSURQJHG
ZRXQGVVKRZHGDmSXUSRVHIXONLOOLQJlXQGHU2KLRODZ,GDW            DQDO\VLV WKDW D FRXUW DSSOLHV ZKHQ SUHVHQWHG ZLWK D 6L[WK

  7KH FRXUW LQ 'UDNH KRZHYHU QRWHG WKH DEVHQFH RI D     $PHQGPHQWFKDOOHQJHWRWKHHIIHFWLYHQHVVRIFRXQVHO7KH
VWUXJJOHLQDVKRUWOLVWRIH[DPSOHVRIQRQH[LVWHQWHYLGHQFH            ILUVWIDFWRUWKDWDGHIHQGDQWPDNLQJDFODLPRILQHIIHFWLYHQHVV
WKDWPLJKWKDYHQHJDWHGWKHGHIHQGDQWjVLQWHQW,Gm8QGHU           PXVWVKRZLVWKDWWKHSHUIRUPDQFHRIKLVRUKHUFRXQVHOZDV
WKHFLUFXPVWDQFHVWKHUH ZDVQRHYLGHQFHSXWIRUWKWKDWWKH             mEHORZDQREMHFWLYHVWDQGDUGRIUHDVRQDEOHQHVVl,GDW
VKRRWLQJLWVHOIZDVXQLQWHQWLRQDODFFLGHQWDORUWKHUHVXOWRI         $OWKRXJKWKLVDQDO\VLVZDVQRWGHILQHGLQGHWDLOE\WKH&RXUW
D VWUXJJOH ZLWK +XGVRQ WKH HYLGHQFH VKRZV D SXUSRVHIXO         LWGHFODUHGWKDWm>W@KHSURSHUPHDVXUHRIDWWRUQH\SHUIRUPDQFH
NLOOLQJl HPSKDVLV DGGHG  &DPSEHOO ODWFKHV RQ WR WKLV       UHPDLQVVLPSO\UHDVRQDEOHQHVVXQGHUSUHYDLOLQJSURIHVVLRQDO
                                                                        QRUPVl,G$FFRUGLQJWR6WULFNODQGWKHQVXFKDQDQDO\VLV
    &DPSEHOOY&R\OH                               1R       1R                             &DPSEHOOY&R\OH        

   )LQDOO\&DPSEHOOSURGXFHGWKHDIILGDYLWRIsDPHV&UDWHV            GLVFXVVLRQLQ'UDNHWRDUJXHWKDWDQ\HYLGHQFHRIDVWUXJJOH
D PLWLJDWLRQ VSHFLDOLVW ZKR GLVFXVVHG WKH IXQFWLRQV DQG         PDQGDWHVDOHVVHULQFOXGHGRIIHQVHLQVWUXFWLRQ
W\SLFDO GXWLHV RI VRPHRQH OLNH KLPVHOI  &UDWHV FRQFOXGHG
EDVHG RQ KLV UHYLHZ RI WKH WUDQVFULSW DQG RWKHU UHFRUGV          'UDNHGRHVQRWVRKROG$OWKRXJKZHPD\LQIHUIURPWKH
UHJDUGLQJ &DPSEHOOjV PHGLFDO KLVWRU\ WKDW WKH SUHSDUDWLRQ        DQDO\VLVLQ'UDNHWKDWDVWUXJJOHPLJKWKDYHFDVWGRXEWRQWKH
DQGSUHVHQWDWLRQRIPLWLJDWLRQHYLGHQFHLQWKLVFDVHKDGEHHQ           GHIHQGDQWjVLQWHQWWRNLOOWKDWLVQRWWRVD\WKDWDQ\HYLGHQFH
LQDGHTXDWH,QSDUWLFXODU&UDWHVFULWLFL]HGWKHLQIUHTXHQF\RI        RIDVWUXJJOHPDQGDWHVD%HFNLQVWUXFWLRQ,QGHHGLIWKHUHKDG
PHHWLQJV EHWZHHQ &DPSEHOO DQG WKH PLWLJDWLRQ VSHFLDOLVW           EHHQDVWUXJJOHLQ'UDNHDQGLIWKHGHIHQGDQWKDGVKRWWKH
KLUHG E\ KLV DWWRUQH\V DV ZHOO DV WKH mFXUVRU\ DWWHPSWV DW   YLFWLP IRXU PRUH WLPHV UDWKHU WKDQ MXVW RQFH LW ZRXOG QRW
UHWULHYLQJ GRFXPHQWDWLRQ DV WR VLJQLILFDQW HSLVRGLF OLIH          KDYHEHHQREMHFWLYHO\XQUHDVRQDEOHWRFRQFOXGHWKDWIURPWKH
HYHQWVlWKDWZRXOGKDYHKHOSHGKLVFDVHDWWKHSHQDOW\SKDVH           QDWXUH RI WKRVH ZRXQGV WKH GHIHQGDQW KDG SRVVHVVHG WKH
%HFDXVH &DPSEHOOjV FKLOGKRRG PHGLFDO UHFRUGV ZHUH QRW             LQWHQW WR NLOO  7KH GLVFXVVLRQ LQ 'UDNH ZRXOG DSSO\ PRUH
UHWULHYHG &UDWHV SRLQWHG RXW WKDW KLV DWWRUQH\V ZHUH QRW       GLUHFWO\WR&DPSEHOOjVFDVHLIDOORI7XUQHUjVZRXQGVKDGLQ
H[SRVHGWRWKHQDPHVRIYDULRXVSK\VLFLDQVDQGQXUVHVWKDW              IDFWEHHQmGHIHQVLYHZRXQGVl
WUHDWHGKLPDVDFKLOG)XUWKHUPRUHEHFDXVHWKHUHZDVRQO\
RQHPHHWLQJEHWZHHQ'U&KLDSSRQHDQG&DPSEHOO&UDWHV                    'HVSLWHWKHDEVHQFHRIDQ\FRQWUROOLQJFDVHODZVXSSRUWLQJ
PDLQWDLQHG WKDW WKHUH ZDV QR FRKHVLYH RU FRQYLQFLQJ              KLVFODLPUHJDUGLQJWKHVWUXJJOH&DPSEHOOUHDVRQVWKDWEDVHG
PLWLJDWLRQ VWUDWHJ\  7KLV DFFRUGLQJ WR &UDWHV SODFHG          RQ WKH QDWXUH RI 7XUQHUjV WKXPE ZRXQG 5RVHPDQjV
&DPSEHOODWDGLVDGYDQWDJH                                           WHVWLPRQ\DQGWKHSURVHFXWRUjVVWDWHPHQWVDMXU\FRXOGKDYH
                                                                        UHDVRQDEO\ FRQFOXGHG WKDW KH VWDEEHG 7XUQHU mUHIOH[LYHO\
   :HQRWHWKDWGHVSLWHDOORIWKLVHYLGHQFHQRWRQHPHGLFDO          ZLWKDSXUSRVHRQO\WRHVFDSHRUFDXVHDQRQIDWDOLQMXU\l
KHDOWK SURIHVVLRQDO KDV DFWXDOO\ GLDJQRVHG &DPSEHOO ZLWK          7KLV KRZHYHU ZRXOG UHTXLUH XV WR KROG WKDW WKH 2KLR
376'$WEHVWWKH\FRQFOXGHGWKDWKHKDVVRPHV\PSWRPV                6XSUHPH&RXUWjVFRQFOXVLRQoWKDWWKHQDWXUHDQGQXPEHURI
RIWKHGLVRUGHU:KHQSUHVHQWHGZLWKWKHVHVDPHDUJXPHQWV              WKHZRXQGVFRPSHOOHGDUHDVRQDEOHMXU\WRILQGWKDW&DPSEHOO
DQGDIILGDYLWVWKH2KLR&RXUWRI$SSHDOVUHMHFWHGWKLVFODLP           SRVVHVVHGWKHLQWHQWWRNLOOoZDVREMHFWLYHO\XQUHDVRQDEOH
LQ &DPSEHOOjV VWDWH SRVWFRQYLFWLRQ PRWLRQ  6HH 6WDWH Y
&DPSEHOO1R&:/
2KLR&W$SS                   &DPSEHOOWDNHVWKLVDUJXPHQWRQHVWHSIXUWKHUDQGDUJXHV
sDQ$VWRWKHSHQDOW\SKDVHDUJXPHQWWKHFRXUW             WKDWVHYHUDO6XSUHPH&RXUWFDVHVVXSSRUWKLVSURSRVLWLRQWKDW
VWDWHG                                                                m>W@KH&RQVWLWXWLRQSURKLELWVFRQFOXVLYHLQIHUHQFHVRIWKH
                                                                        PHQVUHDHOHPHQWIURPWKHPHUHXVHRIDGHDGO\ZHDSRQl
  1HLWKHU SURRI WKDW GHIHQVH FRXQVHO GHYLDWHG IURP WKH           7KHVHFDVHVKRZHYHUDUHLQDSSRVLWHEHFDXVHWKH\DGGUHVVWKH
  mEHVW DYDLODEOH SUDFWLFHl QRU SURRI RI WKH H[LVWHQFH RI       FRQVWLWXWLRQDOSURKLELWLRQRQSODFLQJFRQFOXVLYHSUHVXPSWLRQV
  PLWLJDWLRQHYLGHQFHWKDWZDVQRWSUHVHQWHGDWWULDOEXW              RQWKHHOHPHQWVRIDFULPHLQWKHMXU\LQVWUXFWLRQV6HHHJ
  WKDW PLJKW VXSSRUW DQ DOWHUQDWLYH WKHRU\ RI PLWLJDWLRQ        )UDQFLV Y )UDQNOLQ  86    WKH
  FRQVWLWXWHVSURRIRIFRXQVHOjVLQHIIHFWLYHQHVVZKHQDV               &RQVWLWXWLRQ mSURKLELWV WKH 6WDWH IURP XVLQJ HYLGHQWLDU\
  KHUHWKHUHFRUGGHPRQVWUDWHVWKDWFRXQVHOSUHVHQWHGWKH              SUHVXPSWLRQVLQDMXU\FKDUJHWKDWKDYHWKHHIIHFWRIUHOLHYLQJ
  FDVH LQ PLWLJDWLRQ FRPSHWHQWO\ LQ YLHZ RI WKH IDFWV           WKH 6WDWH RI LWV EXUGHQ RI SHUVXDVLRQ EH\RQG D UHDVRQDEOH
  DYDLODEOHWRWKHP                                                    GRXEWRIHYHU\HVVHQWLDOHOHPHQWRIDFULPHl6DQGVWURPY
                                                                        0RQWDQD  86    m%HFDXVH 'DYLG
6HHLG                                                               6DQGVWURPjVMXU\PD\KDYHLQWHUSUHWHGWKHMXGJHjVLQVWUXFWLRQ
    &DPSEHOOY&R\OH                                  1R        1R                             &DPSEHOOY&R\OH       

DV    D FRQFOXVLYH SUHVXPSWLRQ     DQG EHFDXVH HLWKHU     FDVHRIWKHSHWLWLRQHUWKDWKLVSRWHQWLDOIRUIHDUZRXOG
LQWHUSUHWDWLRQZRXOGKDYHGHSULYHGGHIHQGDQWRIKLVULJKWWR                  OLNHO\EHPRUHH[DJJHUDWHGEDVHGRQKLVORZDYHUDJH,4
WKHGXHSURFHVVRIODZZHKROGWKHLQVWUXFWLRQJLYHQLQWKLV                 ODFNRISDUHQWDOVXSSRUWDQGHYHQWXDOO\WKHWUDXPDZKLFK
FDVH XQFRQVWLWXWLRQDOl  ,Q WKH SUHVHQW FDVH WKH 2KLR              KHH[SHULHQFHG7KXVRQHZRXOGH[SHFWKLVWHQGHQF\IRU
6XSUHPH &RXUW KHOG WKDW WKH HYLGHQFH RI 7XUQHUjV ZRXQGV               K\SHUYLJLODQFHQRUPDOO\DVVRFLDWHGZLWKSHGLDWULFEXUQ
ZRXOG KDYH FRPSHOOHG D UHDVRQDEOH MXU\ WR FRQFOXGH WKDW               YLFWLPVWREHPRUHSURQRXQFHGDQGOHVVUHPLWWLQJ
WKHUHZDVVXIILFLHQWHYLGHQFHRILQWHQWWRFRQYLFW&DPSEHOORI
WKHJUHDWHURIIHQVH7KLVLVHQWLUHO\GLIIHUHQWIURPDMXGJH               $OWKRXJK QRWLQJ WKDW SHGLDWULF EXUQ YLFWLPV GR QRW DOZD\V
LQVWUXFWLQJWKHMXU\WKDWLWPXVWUHDFKDSDUWLFXODUFRQFOXVLRQ             VXIIHUIURPK\SHUYLJLODQFH'U%UDPVFRQFOXGHGWKDWEDVHG
EDVHGRQDSUHVXPSWLRQZKHQWKHHYLGHQFHLVUHDVRQDEO\LQ                   RQ &DPSEHOOjV  IDPLO\ KLVWRU\ KH SRVVHVVHG PDQ\ RI WKH
GLVSXWH                                                                    V\PSWRPV RI 376'  )XUWKHU 'U %UDPV FULWLFL]HG
                                                                            &DPSEHOOjV WULDO FRXQVHO IRU QRW mEHLQJ PRUH DZDUH RI KLV
   ,QGHHG HYHQ DIWHU WDNLQJ LQWR DFFRXQW 7XUQHUjV WKXPE             VSHFLILF SV\FKRORJLFDO GLIILFXOWLHV DQG IRU QRW UHFRJQL]LQJ
ZRXQG5RVHPDQjVWHVWLPRQ\DQGWKHSURVHFXWRUjVVWDWHPHQW                 WKDW KLV UHVLVWDQFH WR YDULRXV IRUPV RI KHOS VXFK DV WKH
WKH2KLR6XSUHPH&RXUWjVFRQFOXVLRQEDVHGRQWKHQDWXUHRI                  WHVWLPRQ\RIKLVSDUHQWVZDVDVLJQRI376'UDWKHUWKDQMXVW
WKHZRXQGVZDVQRWREMHFWLYHO\XQUHDVRQDEOHXQGHU$('3$jV                   WDNLQJKLVGHVLUHVDWIDFHYDOXHl
VWDQGDUGV  &DPSEHOO KDV QRW VKRZQ WKDW WKH FRXUW ZDV
XQUHDVRQDEOHKHVLPSO\XUJHVDGLIIHUHQWLQWHUSUHWDWLRQRIWKH               'U 1HZWRQ sDFNVRQ sU D OLFHQVHG SV\FKRORJLVW DOVR
HYLGHQFH)HGHUDOODZSURKLELWVXVIURPJUDQWLQJDKDEHDV                  VXEPLWWHG DQ DIILGDYLW LQ VXSSRUW RI &DPSEHOOjV KDEHDV
SHWLWLRQEDVHGRQVXFKDQDUJXPHQW6HH:LOOLDPVY7D\ORU                SHWLWLRQ+HRIIHUHGDVWDWHPHQWWKDWHVVHQWLDOO\UHLWHUDWHG'U
86                                                   %UDPVjV EHOLHI WKDW DV D FRQVHTXHQFH RI &DPSEHOOjV
                                                                            FDWDVWURSKLFEXUQLQJLWLVOLNHO\WKDWKHGHYHORSHGV\PSWRPV
   7KH 2KLR 6XSUHPH &RXUW DOVR DGGUHVVHG &DPSEHOOjV                   RI376'/LNH'U%UDPV'U sDFNVRQFULWLFL]HGZKDWKH
DVVHUWLRQWKDWWKHHYLGHQFHLQGLFDWLQJWKDW7XUQHUZDVNLOOHG               FKDUDFWHUL]HG DV WKH ODFN RI D WKRURXJK GHYHORSPHQW DW
ZLWK KLV RZQ NQLIH SODFHG &DPSEHOOjV LQWHQW LQ GLVSXWH             PLWLJDWLRQRIWKHLPSDFWWKHVHLQMXULHVKDGXSRQ&DPSEHOO
UHTXLULQJDOHVVHULQFOXGHGRIIHQVHLQVWUXFWLRQ7KLVDUJXPHQW             +HDOVRFULWLFL]HG&DPSEHOOjVWULDOFRXQVHODQG'U&KLDSSRQH
ZDVUHMHFWHGE\WKHVWDWHFRXUWZKHQLWGHWHUPLQHGWKDWmWKH                IRU IDLOLQJ WR FRPSUHKHQG WKDW &DPSEHOOjV DGKHUHQFH WR
LVVXHLVQRWZKDW&DPSEHOOLQWHQGHGZKHQKHEURNHLQEXW                   SRVLWLRQV FRQWUDU\ WR KLV RZQ EHVW LQWHUHVWV VXFK DV WKH
ZKDW KH LQWHQGHG ZKHQ KH VWDEEHG 7XUQHUl  6WDWH Y                SURKLELWLRQRIKLVSDUHQWVjWHVWLPRQ\ZDVDSURGXFWRIWKLV
&DPSEHOO1(G2KLR)XUWKHUWKH                 mWKUHDWVHQVLWLYLW\lDQGWKDWWKHDWWRUQH\VZRXOGKDYHEHHQ
FRXUWQRWHGWKDWm>W@KHVWDWHGLGQRWDOOHJHDQGGLGQRWKDYHWR           DEOH WR RYHUFRPH &DPSEHOOjV REMHFWLRQV KDG WKH\ PDGH
SURYHSULRUFDOFXODWLRQDQGGHVLJQl,GDW7KH2KLR                WKHPVHOYHVDZDUHRIKLV376'V\PSWRPVDQGGHYHORSHGD
6XSUHPH &RXUW WKXV FRQFOXGHG WKDW GXH WR WKH QDWXUH DQG           EHWWHUZRUNLQJUHODWLRQVKLS
ORFDWLRQ RI WKH ZRXQGV WKH HYLGHQFH VWLOO FRPSHOOHG D
UHDVRQDEOH MXURU WR FRQFOXGH WKDW &DPSEHOO GHYHORSHG WKH               $IRXUWKDIILGDYLWZDVVXEPLWWHGE\DSHGLDWULFVXUJHRQ'U
LQWHQWWRNLOO7XUQHUDWVRPHSRLQWEHWZHHQKLVHQWU\LQWRWKH              'HQQLV .LQJ  +H GHVFULEHG WKH OLNHO\ PHGLFDO SURFHGXUHV
DSDUWPHQWDQGWKHVWDEELQJ                                                 QHHGHG WR WUHDW &DPSEHOOjV EXUQV DV ZHOO DV WKH SDLQ DQG
                                                                            GLVFRPIRUWWKDW&DPSEHOOIDFHGDWWKHWLPHRIKLVLQMXULHVDQG
  &DPSEHOODWWHPSWVWRFKDOOHQJHWKHUHDVRQDEOHQHVVRIWKLV                 VXEVHTXHQWWUHDWPHQW
FRQFOXVLRQE\FLWLQJ$OOHQY0RUULV)GWK&LU
    &DPSEHOOY&R\OH                              1R       1R                              &DPSEHOOY&R\OH        

EHIRUH LW DW WKH SHQDOW\ SKDVH WKHQ LW ZRXOG KDYH       LQ ZKLFK DFFRUGLQJ WR &DPSEHOO D OHVVHULQFOXGHG
KXPDQL]HGsHURPH&DPSEHOOIRUWKHMXU\DQGLWZRXOGKDYH              RIIHQVHLQVWUXFWLRQZDVUHMHFWHGEHFDXVHWKHGHIHQGDQWZDV
SURYLGHG D FDXVDO QH[XV EHWZHHQ KLV PLWLJDWLRQ DQG WKLV        DUPHGZKHQDUULYLQJDWWKHFULPHVFHQH+HLVFRUUHFWLQVRIDU
RIIHQVHl,QVXSSRUWRIWKHVHDUJXPHQWV&DPSEHOODVVHPEOHG           DVWKHGHIHQGDQWLQ$OOHQHQWHUHGWKHFULPHVFHQHDUPHGDQG
DIILGDYLWVIURPYDULRXVH[SHUWV                                       YHUEDOO\H[SUHVVHGKLVLQWHQWWRNLOOWKHYLFWLP1HYHUWKHOHVV
                                                                       LWLVQRWFOHDUIURPWKHVXPPDU\GLVSRVLWLRQRIWKH%HFNLVVXH
   )LUVW KH SUHVHQWHG DQ DIILGDYLW RI 'HQQLV 'D\ /DJHU DQ   LQ$OOHQZKDWHYLGHQFHWKLVFRXUWUHOLHGXSRQZKHQLWKHOGWKDW
DWWRUQH\ ZLWK VLJQLILFDQW H[SHULHQFH LQ UHSUHVHQWLQJ WKRVH       m>E@HFDXVHWKHHYLGHQFHSUHVHQWHGDW$OOHQjVVWDWHFRXUWWULDO
DFFXVHGRIFDSLWDOFULPHVZKRGHVFULEHGWKHJRDOVDQGWDFWLFV         ZDV LQVXIILFLHQW WR VXSSRUW WKH UHTXHVWHG OHVVHU LQFOXGHG
RIDW\SLFDOGHIHQVHODZ\HULQVXFKFDVHV1RWKLQJLQ/DJHUjV         RIIHQVHLQVWUXFWLRQVWKHGLVWULFWFRXUWFRUUHFWO\FRQFOXGHGWKDW
VWDWHPHQWH[SOLFLWO\FULWLTXHGWKHSHUIRUPDQFHRI&DPSEHOOjV           WKLVDOOHJHGFRQVWLWXWLRQDOHUURUZDVDOVRZLWKRXWPHULWl,G
DWWRUQH\VQRUZDVWKHUHDQ\PHQWLRQRIZKHWKHUDUHDVRQDEOH           DW   :H GHFOLQH WR UHDG $OOHQ DV KDYLQJ FUHDWHG D
DWWRUQH\ ZRXOG KDYH DQWLFLSDWHG EDVHG RQ &DPSEHOOjV OLIH       IRUPDOLVWLFUXOHLQZKLFKZHZLOOUHTXLUHD%HFNLQVWUXFWLRQ
KLVWRU\DQGEHKDYLRUWKDWKHPLJKWKDYH376'                         ZKHQHYHUDGHIHQGDQWHQWHUVDFULPHVFHQHXQDUPHG6XFKD
                                                                       UXOHZRXOGXQGHUPLQH2KLRjVODZWKDWWKHLQWHQWWRNLOOLVQRW
  6HFRQG &DPSEHOO SURGXFHG WKH DIILGDYLW RI 'U sROLH 6      OLQNHGWRWKHWLPHLQWHUYDOEHWZHHQWKHIRUPDWLRQRIWKHLQWHQW
%UDPVDOLFHQVHGSV\FKRORJLVWZLWKH[SHULHQFHLQSHGLDWULF           DQGWKHDFWRINLOOLQJ6HH6WDWHY6WHZDUW1(G
EXUQWUDXPD'U%UDPVDIWHUUHYLHZLQJ&DPSEHOOjVPHGLFDO            2KLR&W$SSKROGLQJWKDWDFRXUWPD\mGUDZ
UHFRUGVWKHWULDOWUDQVFULSWWKH'HSDUWPHQWRI&RUUHFWLRQVjV         IURPWKHHYLGHQFHWKHLQIHUHQFHRIWKHIDFWWKDWWKHDFFXVHG
UHFRUGV UHODWHG WR &DPSEHOOjV LQFDUFHUDWLRQ DQG RWKHU           LQWHQGHGWRNLOOlDQGWKDWVXFKDILQGLQJRIGHOLEHUDWLRQLVQRW
GRFXPHQWV FRQFOXGHG WKDW &DPSEHOOjV EHKDYLRU VXJJHVWHG           XQGHUPLQHGE\WKHVKRUWDPRXQWRIWLPHLQZKLFKVXFKDQ
376'  6KH GHVFULEHG RQH RI WKH PRUH SURPLQHQW                 LQWHQWWRNLOOZDVIRUPHG
FKDUDFWHULVWLFVRID376'VXIIHUHUK\SHUYLJLODQFHDVIROORZV
                                                                          $GHFLVLRQDVWRZKHWKHUD%HFNLQVWUXFWLRQLVUHTXLUHGLVD
     &KLOGUHQ LQ WKHVH PHGLFDO VHWWLQJV DUH RIWHQ WLPHV         IDFWVSHFLILFLQTXLU\LQZKLFKDFRXUWPXVWGHWHUPLQHZKHWKHU
  K\SHUYLJLODQW RI WKHLU VXUURXQGLQJV EHFDXVH WKHUH DUH          WKHUHZHUHVXIILFLHQWIDFWVIRUDUHDVRQDEOHMXU\WRFRQFOXGH
  RIWHQIHZFXHVSURYLGHGWKHPWKDWVLJQDOWKHDEVHQFHRI              WKDW VXFK DQ LQWHQW GLG QRW H[LVW  7KDW ZDV SUHFLVHO\ WKH
  LPSHQGLQJ DGYHUVLYH SURFHGXUHV  6LPSO\ VWDWHG WKH\           LQTXLU\PDGHE\WKH2KLRFRXUW,QGHHGWKHFRUHFRQFOXVLRQ
  PXVW FRQVWDQWO\ EH mRQ JXDUGl IRU WKH QH[W SDLQIXO           UHDFKHGE\WKH2KLR6XSUHPH&RXUWZDVWKDWmWKHQXPEHUDQG
  SURFHGXUHWKDWZLOORFFXU7KLVK\SHUYLJLODQFHLQWHUIHUHV           ORFDWLRQRIKLVYLFWLPjVZRXQGVZRXOGFRPSHODQ\UHDVRQDEOH
  ZLWKRWKHUQHFHVVDU\FRPSRQHQWVRIKHDOLQJVSHFLILFDOO\             WULHURIIDFWWRILQGLQWHQWWRNLOOl&DPSEHOO1(GDW
  HDWLQJ DQG VOHHSLQJ 7KLV K\SHUYLJLODQW VWDQFH FDQ             &DPSEHOOKDVSURGXFHGQRWKLQJIURPWKHFDVHODZRUWKH
  EHFRPHLQJUDLQHGHVSHFLDOO\LQ\RXQJFKLOGUHQZKRDUH               UHFRUGWKDWLQGLFDWHVVXFKDFRQFOXVLRQZDVXQUHDVRQDEOH
  XQDEOHWRGLIIHUHQWLDWHWKHUROHRIFDUHJLYHUVYHUVXVWKH
  SDLQ WKH\ UHFHLYH    sHURPH &DPSEHOO ZDV LQMXUHG          :H KDYH IRXQG RQO\ RQH SRVW$('3$ FDVH LQ ZKLFK D
  ZKHQKHZDVIRXU\HDUVROG$WWKDWVWDJHRIFRJQLWLYH               KDEHDV SHWLWLRQZDVJUDQWHGEDVHGRQ%HFN6HH+RJDQY
  GHYHORSPHQWPRVWFKLOGUHQDUHVWLOOGHDOLQJZLWKORRNLQJ            *LEVRQ  )G  WK &LU    ,Q +RJDQ WKH
  DW QHZ H[SHULHQFHV DV SRWHQWLDO WKUHDWV  7KH SHULRG         GHIHQGDQWZDVYLVLWLQJWKHYLFWLPjVKRPHZKHQDQDOWHUFDWLRQ
  EHWZHHQWKUHHDQGILYHLVRQHLQZKLFKIHDUVXVXDOO\DUH             HUXSWHG7KHYLFWLPDWWDFNHGWKHGHIHQGDQWZLWKDNQLIHWKDW
  SURQRXQFHG,WZRXOGEHUHDVRQDEOHWRDVVXPHWKDWLQWKH            KHPDQDJHGWRZUHVWDZD\IURPKHU$VDUHVXOWRIWKLVDWWDFN
    &DPSEHOOY&R\OH                              1R       1R                             &DPSEHOOY&R\OH       

WKHGHIHQGDQWSURFHHGHGWRVWDEWKHYLFWLPWZHQW\WLPHVLQWKH           VWDWHPHQW WKDW KH KDG UHIXVHG DQ\ PRUH VXUJHU\ DIWHU
WKURDWKHDGQHFNFKHVWDQGEDFN7KHWULDOFRXUWUHIXVHGWR         PDQ\RSHUDWLRQVHYHQLIKHIHOWWKDWZD\,WKLQNWKHUHjV
LQVWUXFWWKHMXU\RQKHDWRISDVVLRQPDQVODXJKWHU,QUXOLQJ            D ORW RI LQGLFDWLRQV WKDW KLV SUREOHP KDG QRW EHHQ
RQ+RJDQjVKDEHDVSHWLWLRQWKH7HQWK&LUFXLWJUDQWHGWKHZULW           UHVROYHG7KHUHZDVVWLOODORWRIDQJHUDQGEDGIHHOLQJV
EHFDXVHWKHGHIHQGDQWKDGVWDWHGWKDWDIWHUKHKDGWDNHQWKH             LQKLP
NQLIHIURPWKHGHIHQGDQWKHZDVDIUDLGVKHZDVJRLQJWRWKH
NLWFKHQ WR ILQG DQRWKHU NQLIH  7KLV SOXV WKH GHIHQGDQWjV       2QWKLVVDPHSRLQWDGGUHVVLQJWKHZD\LQZKLFKWKHMXU\
FRQIHVVLRQDQGWKHLUORQJVWDQGLQJUHODWLRQVKLSOHGWKH7HQWK          VKRXOGYLHZ&DPSEHOOjVFKLOGKRRGWUDXPDKLVRWKHUDWWRUQH\
&LUFXLWWRILQGWKDWVXIILFLHQWHYLGHQFHH[LVWHGIRUWKHMXU\WR       VWDWHG
KDYHDFTXLWWHGWKHGHIHQGDQWRILQWHQWLRQDONLOOLQJEXWIRXQG
KLP JXLOW\ RI PDQVODXJKWHU  7KH FRXUW FDPH WR WKLV               ,jPQRWVXJJHVWLQJWR\RXIRURQHPLQXWHWKDWVRPHRQH
FRQFOXVLRQGHVSLWHWKHmTXDQWLW\DQGTXDOLW\RIWKHZRXQGVl             ZKHUHYHU VKRXOG HYHU EH H[FXVHG IRU RQHjV DFWLRQV
,GDW                                                             3HRSOHDORWVPDUWHUWKDQPHSV\FKRORJLVWVSV\FKLDWULVW
                                                                         KDYH PDGH FHUWDLQ GHWHUPLQDWLRQV 1RW >VLF@ , GRQjW
   :KHWKHU RU QRW +RJDQ ZDV FRUUHFWO\ GHFLGHG LV DQ              EHOLHYHE\ZD\RIH[FXVHEXWE\ZD\RIH[SODQDWLRQ
LQWHUHVWLQJTXHVWLRQ%XWWKHNH\GLVWLQFWLRQIURPWKHFDVH               ,WKLQNLWjVLPSRUWDQWWRXQGHUVWDQGKRZZHJHWIURP
EHIRUHXVLVWKDWWKH7HQWK&LUFXLWFRQFOXGHGWKDWWKHILQGLQJV          RQH SRLQW WR DQRWKHU $QG , WKLQN LWjV PRUH WKDQ DQ
RIWKHVWDWHFRXUWZHUHLQDGHTXDWHZLWKUHVSHFWWRWKH%HFN              HGXFDWLRQDO H[SHULHQFH ,WjV PRUH WKDQ D OHDUQLQJ
FODLP7KLVPHDQWWKDWWKHKDEHDVFRXUWZDVQRWERXQGE\WKH            H[SHULHQFH,WKLQNLWKHOSVHDFKDQGHYHU\RQHRIXVJDLQ
VWULFWVWDQGDUGRIUHYLHZLPSRVHGE\$('3$6HH+RJDQ                  VRPH LQVLJKW LQWR QRW RQO\ RXU RZQ SUREOHPV EXW WKH
)GDW,QGHHGUDWKHUWKDQGHFLGLQJZKHWKHUWKHUH            SUREOHPVRIRWKHUV$QG,WKLQNWKDWjVZKDWZHjUHWDONLQJ
ZDVDUHDVRQDEOHGLVSXWHDVWRWKHHOHPHQWRIDQLQWHQWWRNLOO         DERXW*HWWLQJVRPHLQVLJKW([SODLQLQJZLWKRXWWU\LQJWR
WKH 2NODKRPD VWDWH FRXUW LQ +RJDQ VLPSO\ VWDWHG WKDW WKH        H[FXVH
HYLGHQFHVXSSRUWLQJWKHFRQYLFWLRQZDVVXIILFLHQW6HHLG                , GRQjW WKLQN LW ZRXOG EH LQDSSURSULDWH DQG DJDLQ
                                                                         LQVXOWLQJWRFRPHLQKHUHDQGWU\WRH[FXVHDQ\W\SHRI
  7KLVFULWLFDOPLVDSSOLFDWLRQRI6XSUHPH&RXUWSUHFHGHQWOHG            EHKDYLRU DQG DVN\RXWRGLVPLVVWKDWDQGWRPRYHRQ
WKH7HQWK&LUFXLWWRFRQFOXGHWKDWmWKHUHDUHQRILQGLQJVWR            %XW WKDWjV QRW ZKDW WKH VXJJHVWLRQ LV KHUH 7KDWjV QRW
ZKLFK ZH FDQ JLYH GHIHUHQFHl  ,G  ,Q FRQWUDVW WKH 2KLR     ZKDWWKHSXUSRVHRI'U&KLDSSRQHZDV,WZDVWRJLYH
6XSUHPH&RXUWFRQFOXGHGWKDWWKHQDWXUHRI7XUQHUjVZRXQGV               \RXVRPHH[SODQDWLRQWRHQOLJKWHQ\RXLI\RXZLOOWKDW
ZRXOGKDYHFRPSHOOHGDUHDVRQDEOHMXU\WRILQGWKDW&DPSEHOO             WKHUHDUHRWKHUIDFWRUVWKDWKHGHVFULEHG
LQWHQGHGWRNLOO7XUQHU%HFDXVHWKLVFRQFOXVLRQILWVZLWKLQ
WKH SDUDPHWHUV RI WKH %HFN UXOH DQG LV QRW DQ REMHFWLYHO\      $FFRUGLQJ WR &DPSEHOO KLV WULDO DWWRUQH\Vj SHUIRUPDQFH
XQUHDVRQDEOH DSSOLFDWLRQ RI %HFN ZH DIILUP WKH GLVWULFW        ZDVFRQVWLWXWLRQDOO\LQDGHTXDWH6SHFLILFDOO\KHFODLPVWKDW
FRXUWjVGHQLDORIKDEHDVFRUSXVEDVHGRQWKLVFODLP                   WKHLUIDLOXUHWRGLVFRYHUKLVDOOHJHG376'FRPSURPLVHGKLV
                                                                       6L[WK $PHQGPHQW ULJKWV DW ERWK SKDVHV RI WKH WULDO
                                                                       &DPSEHOOjVSUHVHQWDWWRUQH\VPDLQWDLQWKDWDWWKHJXLOWSKDVH
                                                                       m&DPSEHOOjV 376' ZRXOG KDYH VXSSRUWHG WULDO FRXQVHOjV
                                                                       VWUDWHJ\RIFRQWHVWLQJ&DPSEHOOjVSXUSRVHWRNLOOKDGFRXQVHO
                                                                       PDGH UHDVRQDEOH HIIRUWV WR GLVFRYHU WKHLU FOLHQWjV 376'l
                                                                       7KH\DOVRDUJXHWKDWmLIWKHMXU\KDGWKLVHYLGHQFHRI376'
   &DPSEHOOY&R\OH                              1R     1R                             &DPSEHOOY&R\OH        

    7KLVLVQjWDQ\NLQGRIPXPERMXPERZKHUHZHEULQJ               & 7KH VWDWH FRXUWjV GHWHUPLQDWLRQ WKDW &DPSEHOOjV
 LQ D SV\FKLDWULVW WR VD\ ZKDW ZH ZDQW <RX FDQ VHH          DWWRUQH\V GLG QRW SURYLGH LQHIIHFWLYH DVVLVWDQFH RI
 H[DFWO\ZKDWZHjUHWDONLQJDERXW,WjVULJKWWKHUHEHIRUH             FRXQVHO ZKHQ WKH\ IDLOHG WR GLVFRYHU &DPSEHOOjV
 \RX1RRQHjVPDNLQJXSDQ\WKLQJ7KHPDQLVKRUULEO\                 DOOHJHG SRVWWUDXPDWLF VWUHVV GLVRUGHU ZDV QRW
 GLVILJXUHGDWDQHDUO\DJH7KHPDQKDVVWDUWHGRIIOLIH              REMHFWLYHO\XQUHDVRQDEOH
 JRLQJ LQWR D QRUPDO OLIH DQG WKHQ WKDW ZDV FXW GRZQ
 EHFDXVHRIDQDFFLGHQWEHFDXVHRIDILUH$QGZHjUHQRW             7KH RWKHU PDMRU LVVXH LQ WKLV DSSHDO LV FRQWDLQHG LQ
 oWKDWjVQRWDoDQ\WKLQJWKDWZHjUHPDNLQJXS<RXFDQ            &DPSEHOOjVIRXUWKFODLP RIHUURU,QWKLVFODLP&DPSEHOO
 VHHLWULJKWEHIRUH\RXUH\HV,WjVULJKWKHUH                    DUJXHV WKDW KH ZDV GHSULYHG RI WKH HIIHFWLYH DVVLVWDQFH RI
    $QGDV,VDLGWKLVFDVHLVXQLTXH(YHU\FDVHLVXQLTXH       FRXQVHODULJKWJXDUDQWHHGWRDOOFULPLQDOGHIHQGDQWV6HH
 %XWWKLVFDVHLVHVSHFLDOO\GLIIHUHQWEHFDXVHKHUH\RXFDQ         6WULFNODQGY:DVKLQJWRQ86$FFRUGLQJWR
 VHHH[DFWO\DORWRIWKHo\RXFDQVHHZKDWFDXVHGDORWRI        &DPSEHOO KLV WULDO FRXQVHO YLRODWHG &DPSEHOOjV 6L[WK
 WKLVPDQjVSUREOHPV$QGWKHWKLQJWKDWQRQHRIXVKDYH           $PHQGPHQWULJKWVE\IDLOLQJWRGLVFRYHUDQGSUHVHQWHYLGHQFH
 KDG WR JR WKURXJK (DFK RI XV DV ZH VWDQG KHUH DUH      RIKLVSRVVLEOHSRVWWUDXPDWLFVWUHVVGLVRUGHU376'DWERWK
 QRUPDO ZHjUH ERUQ WKDW ZD\ DQG ZH QHYHU KDG VRPH        WKHJXLOWDQGSHQDOW\SKDVHVRIWULDO
 LQWHUYHQWLRQVRPHWKLQJFRPHLQDQGDIIHFWXVOLNHWKDW
    $QG ,jP QRW VD\LQJ o ,jP VXUH DV ZH DOO VWDQG KHUH     %DVHGRQWKHHYLGHQFHSUHVHQWHGLQKLVVWDWHSRVWFRQYLFWLRQ
 HYHU\RQHKDVSUREOHPVDQG,jPQRWEHOLWWOLQJWKRVHEXW            SURFHHGLQJV WKHUH LV WKH SRVVLELOLW\ WKDW &DPSEHOO VXIIHUV
 ZHFDQVHHWKDWWKLVPDQKDVKDGDPDMRUSUREOHP$QG              IURP 376' D PHGLFDO FRQGLWLRQ VWHPPLQJ IURP EHLQJ
 DOVR,jGOLNHWRHPSKDVL]HWKDWDOWKRXJKDVWKHSURVHFXWRU         VHYHUHO\EXUQHGLQDILUHLQZKHQKHZDVRQO\ILYH\HDUV
 DOOXGHG WR 3DP DOVR ZDV EXUQHG %XW , WKLQN \RX FDQ     ROG$VDUHVXOWRIWKLVILUH&DPSEHOOVXIIHUHGWKLUGGHJUHH
 FOHDUO\VHH3DPKLVVLVWHU3DP&DPSEHOOVKHZDVQRW             EXUQVFRYHULQJWZHQW\SHUFHQWRIKLVERG\7KHVHEXUQVZHUH
 LQMXUHGDVEDGO\DQGKDVDORWOHVVoKDGDORWOHVVWUDXPD        FRQFHQWUDWHGLQDUHDVWKDWDUHYLVLEOHWRRWKHUVVXFKDVKLV
 WRKHUERG\WKDQKHUEURWKHUGLG                                  IDFHKDQGVDQGIRUHDUPV'HVSLWHWHQ\HDUVRIVXUJHU\DQG
    $V\RXFDQVHH0U&DPSEHOOjVEXUQVJRULJKWXSWR             YDULRXV UHFRQVWUXFWLYH SURFHGXUHV KH ZDV VWLOO OHIW ZLWK
 WKHWRSRIKLVKHDG+HFDQjWoGRHVQjWKDYHDQ\KDLURQ           VLJQLILFDQWGHIRUPLWLHVDQGVFDUULQJLQWKHVHDUHDVRIKLVERG\
 WKDWSDUWRIKLVKHDG$QGKHLVPXFKZRUVHGLVILJXUHG
    $QGDV,jYHDOVRPHQWLRQHGHYHU\SHUVRQLVGLIIHUHQW            1RHYLGHQFHRI376'ZDVSUHVHQWHGWRWKHMXU\,QGHHGLW
 3HUKDSV\RXDQG,LQWKDWVLWXDWLRQZRXOGQjWKDYHUHDFWHG          DSSHDUVWKDW&DPSEHOOjVWULDOFRXQVHOZHUHQRWHYHQDZDUH
 WKDW ZD\ %XW WKHUH DUH SHRSOH WKDW KDYH QRW KDG WKH     WKDW&DPSEHOOPD\VXIIHUIURPWKLVFRQGLWLRQ$WWKHSHQDOW\
 VWURQJIDPLO\VLWXDWLRQVWKDWSHUKDSVZHDOOFDPHIURP             SKDVHSULRUWRWKHSUHVHQWDWLRQRIDQ\PLWLJDWLQJZLWQHVVHV
 DQGJUHZXSGLIIHUHQWO\7KDWWKH\ZHUHQjWLQDSDUWRIWKH        &DPSEHOOjVFRXQVHOEURXJKWWRWKHFRXUWjVDWWHQWLRQWKHIDFW
 FLW\ZKHUHDORWRISHRSOHZHUHSRRUDQGXQHGXFDWHGDQG            WKDW &DPSEHOO GHVSLWH WKHLU XUJLQJ UHIXVHG WR SHUPLW KLV
 WKHLU SDUHQWV SHUKDSV ZHUH QRW WHOOLQJ WKHP KRZ WR EH     SDUHQWV WR WHVWLI\ DV ZLWQHVVHV RQ KLV EHKDOI  7KH MXGJH
 SROLWHWRRWKHUFKLOGUHQWKDW KDGSUREOHPV$QGQRWWR            TXHVWLRQHG&DPSEHOOFRQILUPLQJWKDWKHLQGHHGZDQWHGWR
 WHDVHWKHPDQGWKLQJVRIWKDWQDWXUH                              LPSRVHWKLVUHVWULFWLRQRQWKHSUHVHQWDWLRQRIKLVPLWLJDWLRQ
    $QG>,@DOVRZRXOGOLNHWRPHQWLRQWKDW0U&DPSEHOO           SURRI
 DOWKRXJKWKHSV\FKLDWULVWRUSV\FKRORJLVWGLGWHVWLI\WKDW
 DSSDUHQWO\KHKDGDFFHSWHGKLVVLWXDWLRQZKHQKHZDV              7R DLG LQ WKHLU SUHVHQWDWLRQ DW WKLV VWDJH RI WKH WULDO
 RU  RU GLGQjW DFWXDOO\ VD\ WKDW EXW KHjV PDGH WKH     &DPSEHOOjVODZ\HUVKLUHGDPLWLJDWLRQVSHFLDOLVW7KH\DOVR
                                                                    UHFHLYHGDVVLVWDQFHIURPDPLWLJDWLRQH[SHUWZLWKWKH2KLR
    &DPSEHOOY&R\OH                                1R     1R                             &DPSEHOOY&R\OH        

3XEOLF'HIHQGHUjV2IILFH'XHWRWKHOLPLWDWLRQVLPSRVHGE\             8QIRUWXQDWHO\KHZDVUHPRYHGIURPWKHKRPHDQGSODFHG
&DPSEHOO KRZHYHU KLV FRXQVHO SUHVHQWHG RQO\ WZR                  LQ WKH KRVSLWDO $QG VR KH GLGQjW KDYH WKDW QRUPDO
PLWLJDWLRQ ZLWQHVVHV o KLV VLVWHU 3DPHOD &DPSEHOO DQG D        GHYHORSPHQWDOSDWKDWOHDVWDWWKDWWLPH
FOLQLFDO SV\FKRORJLVW 'U 'DYLG &KLDSSRQH  3DPHOD                   :KDWKHKDGZDVXQIRUWXQDWHO\LQMXU\>VLF@ZKHUHKH
&DPSEHOOWHVWLILHGDERXWWKHILUHIURPSHUVRQDONQRZOHGJH               ZDVVFDUUHGDQG,EHOLHYHKHVWDUWHGWRGHYHORSDVHQVHRI
KDYLQJKHUVHOIEHHQDYLFWLP$VWRWKHHIIHFWVRIWKHILUHVKH        KLPVHOIRIEHLQJVHHQE\RWKHUVIRUKLVVFDUVQRWKLPVHOI
VWDWHG                                                                 1RWDVKLVRZQSHUVRQ$QGSHRSOHUHDFWHGWRKLPPRUH
                                                                         IRUWKDW$QGQRWDVDUHDOSHUVRQ$QGWKLVZDVHYLGHQW
  :H >VLF@ ILUVW JRW RXW RI WKH KRVSLWDO ZH KDG D ORW RI     ODWHURQLQOLIHZKHQKHZHQWWRVFKRROHVSHFLDOO\
  SHRSOHSRNLQJIXQDWXVEHFDXVHZHZDVLQDKRXVHILUH
  DQGHYHU\WKLQJ$QG\RXNQRZZHWULHGWRGHDOZLWKLW              'U &KLDSSRQH ZDV DOVR RI WKH RSLQLRQ WKDW &DPSEHOO
  \RXNQRZDQGHYHU\WKLQJ$QGVWLOOo                               EHFDPHDOLHQDWHGDIHHOLQJWKDWZDVH[DFHUEDWHGE\WKHIDFW
                                                                WKDW&DPSEHOOJRWEHKLQGRQH\HDULQVFKRROEHFDXVHRIKLV
                                                                       KRVSLWDOL]DWLRQDQGEHFDXVHRIWKHWDXQWLQJKHZDVVXEMHFWHG
  6WLOOULJKWQRZWRGD\SHRSOHDUHVWLOOSRNLQJIXQMXVWOLNH          WRE\UHDVRQRIKLVVFDUV:KHQDVNHGDERXWKLVGLDJQRVLV
  WKH SURVHFXWRU PDGH D VWDWHPHQW LWjV %XUQW )DFH \RX         'U&KLDSSRQHFRQFOXGHG
  NQRZ,PHDQHYHU\ERG\NQRZZHjUHEXUQWHYHU\ERG\
  FDQVHHWKDWEXWSHRSOHMXVWGRQjWUHDOL]HWKH\jUHVWDULQJ            ,W VHHPV 0U &DPSEHOO IURP D GLDJQRVWLF SHUVSHFWLYH
  DOOWKHWLPHDQGHYHU\WKLQJ\RXNQRZ,UHDOo,jGUDWKHU             KDYLQJ ZKDW ZH FDOO SRO\VXEVWDQFH DEXVH GLVRUGHU
  IRUWKHPWRDVNTXHVWLRQVLQVWHDG                                     PHDQLQJKHjVXVHGQXPHURXVVXEVWDQFHVLQWKHSDVW%XW
                                                                         DOVRDFKDUDFWHUGLVRUGHUZHFDOOSHUVRQDOLW\GLVRUGHUFDOO
   'U &KLDSSRQHjV WHVWLPRQ\ ZKLFK IROORZHG 3DPHOD                 LWDPL[HGW\SHKDYLQJWZRPDLQIHDWXUHV7KHDQWLVRFLDO
&DPSEHOOjV IRFXVHG RQ KLV H[DPLQDWLRQ DQG DQDO\VLV RI            DFWLQJ RXW VW\OH RI EHKDYLQJ DQG DOVR ZKDW ZH FDOO
sHURPH&DPSEHOO7KHSV\FKRORJLVWPHWZLWK&DPSEHOORQO\                QDUFLVVLVWLF PHDQLQJ DQG >VLF@ RYHUHQGRUVHG VHQVH RI
RQFH GXULQJ ZKLFK WLPH KH SHUIRUPHG YDULRXV WHVWV DQG           LPSRUWDQFHDQGQRWZLOOLQJWRVHHKLVRZQOLPLWV
FRQGXFWHG D FOLQLFDO LQWHUYLHZ FRQFHUQLQJ &DPSEHOOjV
SHUVRQDOKLVWRU\$FFRUGLQJWR'U&KLDSSRQHjVWHVWLPRQ\KH          +HGLGQRWKRZHYHUILQGWKDW&DPSEHOOVXIIHUVIURP376'
ZDVDEOHWRH[SORUH&DPSEHOOjVmIDPLO\UHODWLRQVKLSVVFKRRO           2Q FURVVH[DPLQDWLRQ LQ IDFW 'U &KLDSSRQH VDLG WKDW
VLWXDWLRQVXVHRIVXEVWDQFHVOHJDOKLVWRU\YRFDWLRQDOKLVWRU\      DFFRUGLQJ WR &DPSEHOO mKLV GLVILJXUHPHQW ZDV QRW RI D
>DQG@ UHODWLRQVKLSVl  $V SRLQWHG RXW E\ &DPSEHOO LQ KLV      FRQFHUQWRKLPl
KDEHDVSHWLWLRQKRZHYHUWKLVKLVWRU\GLGQRWLQFOXGHDUHYLHZ
RI&DPSEHOOjVFKLOGKRRGPHGLFDOUHFRUGV:KHQDVNHGDERXW                ,Q FORVLQJ DUJXPHQW DW WKH SHQDOW\ SKDVH &DPSEHOOjV
WKH HIIHFW RI WKH ILUH DQG VXEVHTXHQW KRVSLWDOL]DWLRQ XSRQ     DWWRUQH\VFRQWHQGHGWKDWWKHIDFWVRIWKLVFDVHDVSUHVHQWHGDW
&DPSEHOOjVGHYHORSPHQW'U&KLDSSRQHVDLG                           WKH JXLOW SKDVH ZHUH QRW VR VHYHUH DV WR ZDUUDQW GHDWK
                                                                       )XUWKHU ZLWK UHVSHFW WR WKH HIIHFW WKDW &DPSEHOOjV LQMXULHV
     ,WKLQNLI\RXORRNDW>WKHILUHDQGKRVSLWDOL]DWLRQ@IURP        VKRXOG KDYH LQ WKH MXU\jV FRQVLGHUDWLRQ RI WKH PLWLJDWLQJ
  DSV\FKRORJLFDOGHYHORSPHQWDOVWDQGSRLQWLWjVLPSRUWDQW             FLUFXPVWDQFHVRQHRIKLVDWWRUQH\VDUJXHGDVIROORZV
  +H ZDV DSSUR[LPDWHO\ DJH IRXU RU ILYH ZKHQ WKLV
  RFFXUUHG$WWKDWSRLQWLQ\RXUOLIH\RXjUHWU\LQJWRJHW               7KLVLVDQXQXVXDOFLUFXPVWDQFHZKHQDOO\RXKDYHWR
  IURP\RXUSDUHQWVDVHQVHRIIDLWKLQWKHRXWVLGHZRUOG               GRLVORRNULJKWRYHUWKHUHDWWKHWDEOH\RXFDQVHHDORWRI
                                                                         ZKDWWKLVPDQjVJRLQJWKURXJK