Court Opinion

ID: 2970525
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:15:23.805611+00
Date Added: 2024-06-11T11:42:48.070678
License: Public Domain

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

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

                    BBBBBBBBBBBBBBBBBBBB                                                  )LOH 1DPH DS

                      &21&855(1&(
                    BBBBBBBBBBBBBBBBBBBB                                 81,7('67$7(6&28572)$33($/6
                                                                                        )257+(6,;7+&,5&8,7
   &/$<&LUFXLWsXGJHFRQFXUULQJ%HFDXVHP\YLHZRIWKH                               BBBBBBBBBBBBBBBBB
LVVXH WKDW , ZRXOG RWKHUZLVH ILQG PHULWRULRXVnWKH MXU\
LQVWUXFWLRQLVVXHKDVEHHQUHMHFWHGE\RXUFLUFXLW,FRQFXULQ
WKH PDMRULW\ RSLQLRQ LQ LWV HQWLUHW\  +RZHYHU , ZULWH
VHSDUDWHO\WRUHLWHUDWHP\EHOLHIWKDWDMXU\LQVWUXFWLRQZKLFK           s2+1 */(11 52(                   ;
OHDYHVWKHMXU\ZLWKWKHLPSUHVVLRQWKDWLWFRXOGQRWFRQVLGHU                   3HWLWLRQHU$SSHOODQW       
LPSRVLQJDOLIHVHQWHQFHZLWKRXWILUVWXQDQLPRXVO\UHMHFWLQJ                                                 
D GHDWK VHQWHQFH LV XQFRQVWLWXWLRQDO  6HH +HQGHUVRQ Y                                                1R
&ROOLQV)GWK&LU&OD\                         Y                      
sGLVVHQWLQJ$OWKRXJKP\YLHZRIWKLVLVVXHZDVUHMHFWHG                                                 !
                                                                                                             
E\WKHPDMRULW\LQ+HQGHUVRQDQGWKHUHIRUHFDQQRWVHUYHDV               '(11,6 %$.(5                      
D EDVLV XSRQ ZKLFK WR JUDQW 3HWLWLRQHU UHOLHI LQ WKH LQVWDQW             5HVSRQGHQW$SSHOOHH 
FDVH,FRQWLQXHWREHRIWKHPLQGWKDWVXFKMXU\LQVWUXFWLRQV                                              1
YLRODWHWKH&RQVWLWXWLRQIRUDOORIWKHUHDVRQVVHWIRUWKE\P\
GLVVHQWLQ+HQGHUVRQ6HHLG:LWKUHVSHFWWR3HWLWLRQHUjV                    $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
RWKHUDVVLJQPHQWVRIHUURU,DJUHHZLWKWKHPDMRULW\RSLQLRQ                  IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&ROXPEXV
WKDWWKRVHLVVXHVODFNPHULW                                              1Rn(GPXQG$6DUJXVsU'LVWULFWsXGJH
                                                                                         $UJXHGsDQXDU\
                                                                                    'HFLGHGDQG)LOHG2FWREHU
                                                                           %HIRUH68+5+(,15,&+6,/(5DQG&/$<&LUFXLW
                                                                                              sXGJHV
                                                                                            BBBBBBBBBBBBBBBBB
                                                                                                 &2816(/
                                                                         $5*8('  'DYLG / 'RXJKWHQ &OHYHODQG 2KLR IRU
                                                                         $SSHOODQW6WHSKHQ(0DKHU$77251(<*(1(5$/j6
                                                                         2)),&( 2) 2+,2 &$3,7$/ &5,0(6 6(&7,21
                                                                         &ROXPEXV 2KLR IRU $SSHOOHH  21 %5,()  'DYLG /
                                                                         'RXJKWHQ &OHYHODQG 2KLR IRU $SSHOODQW  6WHSKHQ (
                                                                         0DKHU $77251(< *(1(5$/j6 2)),&( 2) 2+,2

                                                                                                      
     5RHY%DNHU                                   1R       1R                                    5RHY%DNHU       

&$3,7$/ &5,0(6 6(&7,21 &ROXPEXV 2KLR IRU                       )GWK&LUZHKHOGWKDWUHOLHIPD\QRWEH
$SSHOOHH                                                              JUDQWHG WR D KDEHDV SHWLWLRQHU IRU DOOHJHG GHILFLHQFLHV LQ D
                                                                       VWDWHjVSRVWFRQYLFWLRQSURFHGXUHVEHFDXVHVXFKFODLPVUHODWH
  6,/(5 s GHOLYHUHG WKH RSLQLRQ RI WKH FRXUW LQ ZKLFK     WR D VWDWH FLYLO PDWWHU QRW WKH FXVWRG\ RI D GHIHQGDQW
68+5+(,15,&+sMRLQHG&/$<sSGHOLYHUHGD               7KHUHIRUH HYHQ LI 5RH FDQ GHPRQVWUDWH WKDW VRPH HUURU
VHSDUDWHFRQFXUULQJRSLQLRQ                                           RFFXUUHG GXULQJ WKH VWDWH SRVWFRQYLFWLRQ SURFHHGLQJV WKH
                                                                       FODLPLVQRWFRJQL]DEOHRQIHGHUDOKDEHDVUHYLHZ
                     BBBBBBBBBBBBBBBBB
                                                                                                       IV.
                         23,1,21
                     BBBBBBBBBBBBBBBBB                                   )RUWKHIRUHJRLQJUHDVRQVWKHGLVWULFWFRXUWGLGQRWHUULQ
                                                                       GLVPLVVLQJWKHKDEHDVSHWLWLRQSXUVXDQWWR
   6,/(5&LUFXLWsXGJH3HWLWLRQHUsRKQ*OHQQ5RHDSSHDOV
WKHGHQLDORIKLVSOHDIRUDZULWRIKDEHDVFRUSXVSXUVXDQWWR           $)),50('
86&7KHGLVWULFWFRXUWJUDQWHGDFHUWLILFDWHRI
DSSHDODELOLW\IRUWZHQW\WZRRIWKHWKLUW\IRXULVVXHVUDLVHG
EHORZ  5RH UDLVHV VHYHQ RI WKRVH FHUWLILHG LVVXHV LQ WKLV
DSSHDO DOOHJLQJ WKDW  WKH MXU\ LQVWUXFWLRQV DGGUHVVLQJ
XQDQLPLW\ LQ LWV VHQWHQFLQJ UHFRPPHQGDWLRQ YLRODWHG KLV
FRQVWLWXWLRQDOULJKWVUHPDUNVE\WKHSURVHFXWRUGXULQJWKH
VHQWHQFLQJSKDVHRIWKHWULDOUHQGHUHGKLVWULDOIXQGDPHQWDOO\
XQIDLUWKHDGPLVVLRQRIWHVWLPRQ\WKDWKHSRVVHVVHGDOLVW
RIDOOWKHSRWHQWLDOMXURUVQDPHVDQGDGGUHVVHVYLRODWHGKLV
FRQVWLWXWLRQDOULJKWWRDQLPSDUWLDOMXU\WKHWULDOFRXUWKDV
D FRQVWLWXWLRQDO REOLJDWLRQ WR VHQWHQFH D GHIHQGDQW RQ
XQGHUO\LQJ IHORQLHV SULRU WR FRPPHQFHPHQW RI WKH FDSLWDO
VHQWHQFLQJ SKDVH RI WKH WULDO  DQ LQGLFWPHQW UHFLWLQJ
DOWHUQDWLYH WKHRULHV RI NLGQDSSLQJ GRHV QRW PHHW
FRQVWLWXWLRQDO QRWLFH UHTXLUHPHQWV  WKH 2KLR FDSLWDO
VHQWHQFLQJVFKHPHGRHVQRWDGHTXDWHO\QDUURZWKHFODVVRI
RIIHQGHUV HOLJLEOH IRU WKH GHDWK SHQDOW\ DQG  RQ SRVW
FRQYLFWLRQUHYLHZWKHVWDWHDSSHOODWHFRXUWIDLOHGWRSURYLGH
DIXOODQGIDLUUHYLHZRIKLVFODLPVRILQHIIHFWLYHDVVLVWDQFH
GXULQJWKHVHQWHQFLQJSKDVHRIKLVWULDO:HDIILUP
                                 ,
 7KH6XSUHPH&RXUWRI2KLRVHWIRUWKWKHIDFWVXQGHUO\LQJ
5RHjV FULPLQDO FRQYLFWLRQV LQ LWV GHFLVLRQ DIILUPLQJ WKRVH
FRQYLFWLRQVDQGWKHVHQWHQFHRIGHDWKZKLFKWKHGLVWULFWFRXUW
UHOLHGXSRQDVIROORZV
       5RHY%DNHU                                       1R        1R                                   5RHY%DNHU          

IHORQ\ PXUGHUV VXEMHFW WR WKH GHDWK SHQDOW\ E\ H[FOXGLQJ                  7KHDSSHOODQWsRKQ*5RHZDVFRQYLFWHGE\DMXU\RI
WKRVH ZKR FRPPLW >PXUGHU LQ WKH FRXUVH RI DQ@ DUVRQ                   WKH NLGQDSSLQJ DJJUDYDWHG UREEHU\ DQG DJJUDYDWHG
UREEHU\EXUJODU\RUHVFDSHXQOHVVWKH\DUHFKDUJHGZLWKD                     PXUGHURI'RQHWWH5&UDZIRUGDQGZDVVHQWHQFHGXSRQ
GLIIHUHQWDJJUDYDWLQJFLUFXPVWDQFHl6FRWW)GDW                  WKHUHFRPPHQGDWLRQRIWKHMXU\WRGHDWKIRUDJJUDYDWHG
FHUWGHQLHG86FLWDWLRQDQGTXRWDWLRQV                     PXUGHU  2Q WKH HYHQLQJ RI 2FWREHU   'RQHWWH
RPLWWHG                                                                       &UDZIRUGOHIWKHULQIDQWGDXJKWHUZLWKKHUSDUHQWVRQWKH
                                                                                ZHVW VLGH RI &ROXPEXV DQG ZHQW ZLWK D IULHQG 7RQL
 :KHWKHURQSRVWFRQYLFWLRQUHYLHZWKHVWDWHDSSHOODWH                       sHVWHU WR WKH $OURVD 9LOOD 7DYHUQ LQ WKH QRUWK HQG RI
    FRXUWSURYLGHGDIXOODQGIDLUUHYLHZRI5RHjVFODLPV                       &ROXPEXV&UDZIRUGKDGFDVKHGKHUSD\FKHFNWKDWGD\
    RILQHIIHFWLYHDVVLVWDQFHGXULQJWKHSHQDOW\SKDVHRI                       DQGORFNHGPRVWRIKHUPRQH\LQKHUFDUEHIRUHHQWHULQJ
    KLVWULDO"                                                               WKHWDYHUQ7KHSDLUOHIWWKHWDYHUQDURXQGDPRQ
                                                                                2FWREHU   sHVWHU GURYH WKH FDU WR KHU KRPH ZKLOH
  5RHDUJXHVWKDWLUUHJXODULWLHVLQWKHVWDWHDSSHOODWHFRXUWV                  &UDZIRUG VDW RQ WKH SDVVHQJHUjV VLGH ORRNLQJ IRU KHU
GHSULYHGKLPRIDIXOODQGIDLUKHDULQJLQWKHDSSHOODWHUHYLHZ                 FLJDUHWWHV8SRQOHDYLQJsHVWHUDWKHUKRPHRQWKHZHVW
RI KLV SRVWFRQYLFWLRQ FODLPV ILOHG SXUVXDQW WR 25&                   VLGHRI&ROXPEXV&UDZIRUGVWDWHGVKHZDVJRLQJWRSLFN
6SHFLILFDOO\WKHWULDOFRXUWGHQLHGKLVFODLPRI                   XSKHUGDXJKWHUDQGJRKRPHZKLFKZDVOHVVWKDQDPLOH
LQHIIHFWLYHDVVLVWDQFHRIFRXQVHOEDVHGXSRQFRXQVHOjVIDLOXUH                 DZD\  2Q KHU ZD\ DQG EHWZHHQ  DQG  DP
WRFDOODSV\FKRORJLVWWRWKHVWDQGGXULQJWKHSHQDOW\SKDVH                   &UDZIRUGVWRSSHGDWDQHDUE\(OHYHQFRQYHQLHQFHVWRUH
5RHDSSHDOHGWKHGHQLDOWRWKH2KLR&RXUWRI$SSHDOV7KH                      RQ:HVW0RXQG6WUHHWWREX\DSDFNRIFLJDUHWWHV$Q
FRXUWRIDSSHDOVKRZHYHUUHIXVHGWRFRQVLGHUWKHWUDQVFULSW                   DFTXDLQWDQFHRI&UDZIRUGODVWVDZKHUDV&UDZIRUGOHIW
RIWKHWHVWLPRQ\DWWKHSRVWFRQYLFWLRQKHDULQJRQWKLVLVVXH                   WKH(OHYHQDQGFRQWLQXHGZHVWRQ0RXQG6WUHHW
EHFDXVHo5RHFODLPVmGXHWRDFOHULFDOHUURUloWKDWWUDQVFULSW
ZDVQHYHUPDGHSDUWRIWKHUHFRUG7KHFRXUWRIDSSHDOVDOVR                     $WDSSUR[LPDWHO\DP&UDZIRUGjVPRWKHUZKR
GHQLHG5RHjVPRWLRQWRUHFRQVLGHULWVGHFLVLRQQRWWRUHYLHZ                    ZDVFRQFHUQHGWKDW'RQHWWHKDGQRWUHWXUQHGWRSLFNXS
WKHKHDULQJWUDQVFULSW5RHDOOHJHVWKDWWKLVIDLOXUHWRFRQVLGHU              KHU GDXJKWHU WHOHSKRQHG sHVWHU DQG 'RQHWWHjV
WKHWUDQVFULSWFRQVWLWXWHGDYLRODWLRQRIGXHSURFHVVDQGHTXDO                 FRPPRQODZKXVEDQG6WHYH6WHLQHUWRILQGRXWZKHUH
SURWHFWLRQ                                                                     'RQHWWHPLJKWEH:KHQVKHOHDUQHGWKDWQHLWKHUSDUW\
                                                                                KDGVHHQQRUKHDUGIURP&UDZIRUG&UDZIRUGjVPRWKHU
   7KHUHLVQRVXEVWDQWLYHPHULWWRWKLVFODLP7KHFRXUWRI                   EHJDQ ORRNLQJ IRU KHU  /DWHU WKDW 6DWXUGD\ PRUQLQJ
DSSHDOV GLG DGGUHVV WKH LVVXH 5RH UDLVHG RQ DSSHDO LW MXVW           ZKHQ &UDZIRUGjV IDWKHU ZHQW ORRNLQJ IRU 'RQHWWH KH
ZRXOGQRWUHYLHZWKHODWHILOHGWUDQVFULSWRIWKHKHDULQJEHORZ                 IRXQGKLVGDXJKWHUjVHPSW\FDUSDUNHGLQWKHSDUNLQJORW
LQLWVFRQVLGHUDWLRQRIWKHLVVXH1HYHUWKHOHVVWKLVFRXUWQHHG               RI6W$JQHV&KXUFKRQ:HVW0RXQG6WUHHW7KHFDUKDG
QRWUHDFKWKHPHULWVRIWKLVLVVXH,Q.LUE\Y'XWWRQ                    EHHQUDQVDFNHGDQGWKHNH\VZHUHODWHUIRXQGLQDIORZHU
                                                                                EHGDWWKHFKXUFK'RQHWWHjVZDOOHWSXUVHDQGPRQH\
                                                                                ZHUHQHYHUIRXQG
     
     :H QRWH WKDW 5RH FODLPV LQHIIHFWLYH DVVLVWDQFH EHFDXVH GHIHQVH
                                                                                  2QRUDERXW2FWREHUWKH+XQWLQJWRQ&ORWKLHUV
FRXQVHO VWUDWHJLFDOO\ HOHFWHG QRW WR RIIHU WKH WHVWLPRQ\ RI WKH GHIHQVH
SV\FKRORJLVW 'U $OEHUW 9LUJLO GXULQJ WKH FDSLWDO VHQWHQFLQJ SKDVH RI WKH
                                                                                VWRUH RQ $OXP &UHHN 'ULYH RQ WKH QHDU HDVW VLGH RI
WULDO QRW WKDW KH GLG QRW FRQVXOW ZLWK DQG SUHSDUH WKDW WHVWLPRQ\ )XUWKHU
                                                                                &ROXPEXVZDVEURNHQLQWRWKURXJKDKROHLQWKHZDOO
FRXQVHO GLG RIIHU WKH WHVWLPRQ\ RI WZHQW\RQH RWKHU ZLWQHVVHV LQ VXSSRUW        DQG D FRQVLGHUDEOH DPRXQW RI FORWKLQJ ZDV WDNHQ  $
RI PLWLJDWLRQ
      5RHY%DNHU                                     1R    1R                                       5RHY%DNHU       

    VHFXULW\JXDUGZDVKLUHGWRZDWFKWKHEXLOGLQJRQ6XQGD\           DJDLQVWKLPYLRODWLQJKLVGXHSURFHVVULJKWVDQGIXQGDPHQWDO
    QLJKW2FWREHU$WSPWKHJXDUGREVHUYHG          IDLUQHVV
    DFDUSXOOLQWRDORWQHDUWKHVWRUH7KHGULYHULQWKHFDU
    ZDLWHG DERXW ILYH PLQXWHV DQG WKHQ JRW RXW DQG                8QTXHVWLRQDEO\IURPWKHLQGLFWPHQW5RHKDGQRWLFHRIWKH
    SURFHHGHGWRZDONWRWKH+XQWLQJWRQ&ORWKLHUVVWRUH+H           NLGQDSLQJFKDUJHDJDLQVWKLPDQGERWKDOWHUQDWLYHWKHRULHVRI
    WKHQHQWHUHGWKHVWRUHWKURXJKWKHKROHLQWKHZDOO7KH          WKHNLGQDSLQJ7KLVFRXUWQHHGQRWJRIXUWKHU%H\RQGQRWLFH
    SROLFHZHUHFDOOHGDQGWKHJXDUGDWWHPSWHGWREORFNWKH            D FODLPHG GHILFLHQF\ LQ D VWDWH FULPLQDO LQGLFWPHQW LV QRW
    KROHZLWKKLVYHKLFOHEXWWKHVXEMHFWDVOLPZKLWHPDOH          FRJQL]DEOHRQIHGHUDOFROODWHUDOUHYLHZ0LUDY0DUVKDOO
    ZLWK ORQJ KDLU VOLSSHG RXW DQG UDQ  7KH JXDUG JDYH     )GWK&LUm7KHLQGLFWPHQWKHUHKDG
    FKDVH DQG ILUHG WKUHH VKRWV DW WKH VXEMHFW ZKR            VXIILFLHQW LQIRUPDWLRQ WR SURYLGH SHWLWLRQHU ZLWK DGHTXDWH
    QHYHUWKHOHVVHVFDSHG7KHVXEMHFWjVFDUZDVLPSRXQGHG             QRWLFH DQG WKH RSSRUWXQLW\ WR GHIHQG DQG SURWHFW KLPVHOI
    DQGODWHULGHQWLILHGDVEHLQJUHJLVWHUHGWRWKHDSSHOODQW         DJDLQVWIXWXUHSURVHFXWLRQIRUWKHVDPHRIIHQVH$Q\RWKHU
    $WDSSUR[LPDWHO\SPDSSHOODQWjVPRWKHUsR\FH             GHILFLHQFLHVLQWKHLQGLFWPHQWDOOHJHGE\SHWLWLRQHUDUHVROHO\
    /XFDV WRRN DSSHOODQW WR WKH KRPH RI 0LFKDHO DQG           PDWWHUVRIVWDWHODZDQGVRQRWFRJQL]DEOHLQDIHGHUDOKDEHDV
    3DWULFLD 'DQLHO DQG DVNHG LI KH FRXOG VWD\ ZLWK WKHP      SURFHHGLQJl
    RYHUQLJKW$SSHOODQWKDGEHHQVKRWLQWKHIRRWZKLFKKH
    H[SODLQHGRFFXUUHGZKLOHUXQQLQJIURPDVWRUHKHKDG               :KHWKHU WKH 2KLR FDSLWDO VHQWHQFLQJVFKHPH
    EURNHQLQWRWKDWQLJKW$SSHOODQWWKHQFKDUDFWHUL]HGWKH              DGHTXDWHO\QDUURZVWKHFODVVRIRIIHQGHUVHOLJLEOHIRU
    HYHQW DV PLQRU ZKHQ FRPSDUHG WR KLV VKRRWLQJ RI D             WKHGHDWKSHQDOW\"
    ZRPDQ LQ WKH KHDG WKH SUHYLRXV )ULGD\ QLJKW  7KH
    'DQLHOV WKDW QLJKW GLVPLVVHG KLV GHVFULSWLRQ RI WKH           5RH FKDOOHQJHV WKH FRQVWLWXWLRQDOLW\ RI WKH 2KLR FDSLWDO
    PXUGHUDVLQNHHSLQJZLWKKLVFKDUDFWHUDVDEUDJJDUW             VHQWHQFLQJVFKHPH+HFODLPVWKDWKLVGHDWKVHQWHQFHYLRODWHV
                                                                       KLVULJKWVXQGHUWKH(LJKWKDQG)RXUWHHQWK$PHQGPHQWVWRWKH
      $PRQWKODWHURQ1RYHPEHUDSSHOODQWZDV                8QLWHG6WDWHV&RQVWLWXWLRQEHFDXVHLWIDLOVWRSURSHUO\QDUURZ
    DUUHVWHGZLWK0RVHV06WHYHQVZKLOHEUHDNLQJLQWRD               WKH FODVV RI SHUVRQV HOLJLEOH WR UHFHLYH WKH GHDWK SHQDOW\
    5DGLR 6KDFN VWRUH LQ %HDYHUFUHHN 2KLR  2QFH LQ           6SHFLILFDOO\KHFRQWHQGVWKDWLQHIIHFWHYHU\SHUVRQZKRLV
    FXVWRG\DSSHOODQWZDVUHDGKLVULJKWVZKLFKKHZDLYHG           FRQYLFWHGRIIHORQ\PXUGHULVDXWRPDWLFDOO\HOLJLEOHWRUHFHLYH
    DJUHHLQJWRVSHDNZLWKWKHSROLFH$IWHUGLVFXVVLQJKLV           DGHDWKVHQWHQFHDQGWKHDJJUDYDWLQJFLUFXPVWDQFHPHUHO\
    EUHDNLQJDQGHQWHULQJFKDUJHVDSSHOODQWRIIHUHGWKDWKH           UHSHDWVZKDWWKHMXU\ZRXOGKDYHQHFHVVDULO\IRXQGLQRUGHU
    KDG LQIRUPDWLRQ UHJDUGLQJ D PLVVLQJ ZRPDQ LQ                 WRFRQYLFWKLPRIWKHXQGHUO\LQJIHORQ\
    &ROXPEXVoLQIRUPDWLRQWKDWVKHKDGEHHQNLOOHGDQGWKDW
    KHNQHZZKRZDVLQYROYHGDQGZKHUHWKHERG\FRXOGEH                 6FRWWDGGUHVVHG WKLVSUHFLVHFKDOOHQJHZKLFKLWUHMHFWHG
    IRXQG$SSHOODQWLQGLFDWHGKHZLVKHGWRH[FKDQJHWKLV             KROGLQJ WKDW mWKH 2KLR /HJLVODWXUH QDUURZ>HG@ WKH FODVV RI
    LQIRUPDWLRQ WR GHDO ZLWK KLV FXUUHQW FKDUJHV
    %HDYHUFUHHN 'HWHFWLYH +DUU\ : $QWKRQ\ WKHQ DVNHG
    DSSHOODQW LI KH ZRXOG OLNH WR WDON DERXW LW ODWHU DQG       
    DSSHOODQWDJUHHG7KHQH[WGD\DSSHOODQWFODLPHGWKDWD                 5RH DOVR FLWHV $SSUHQGL Y 1HZ sHUVH\  86   LQ
                                                                       VXSSRUW RI WKLV DUJXPHQW DQG DUJXHV WKDW VXEPLVVLRQ RI ERWK WKHRULHV WR
    SHUVRQQDPHGsHUU\3RZHOOKDGVKRWWKHZRPDQLQWKH                WKH MXU\ FRQVWLWXWHV DQ LPSURSHU DPHQGPHQW WR WKH LQGLFWPHQW E\ WKH WULDO
    IDFH DQG GXPSHG KHU ERG\ EHKLQG D FHPHQW SODQW RQ         MXGJH  $SSUHQGL     DGGUHVVHG VHQWHQFLQJ IDFWRUV WKDW PD\ LQFUHDVH D
    $OXP&UHHN'ULYHLQ&ROXPEXV$SSHOODQWGHVFULEHG                 VHQWHQFH LQ H[FHVV RI WKH VWDWXWRU\ PD[LPXP DQG LV QRW UHOHYDQW WR WKLV
                                                                       LVVXH
    5RHY%DNHU                                  1R       1R                                  5RHY%DNHU          

WKHPD[LPXPDPRXQWWKHMXU\FRXOGUHFRPPHQG7KHUHIRUH               &UDZIRUGjVFDUVWDWHGVKHZDVSRVVLEO\VKRWZLWKD
WKH ZKROH DQDO\VLV RI WKH OLQH RI FDVHV FLWHG E\ 5RH         PDJQXPKDQGJXQDQGJDYHGHWDLOVLQFOXGLQJDPDSRI
XQGHUPLQHV 5RHjV DUJXPHQWV  ,Q WKRVH FDVHV D GHIHQGDQW       WKH ORFDWLRQ RI WKH ERG\  +H WKHQ LQGLFDWHG KLV
VRXJKWDQLQVWUXFWLRQWKDWKHZRXOGEHLQHOLJLEOHIRUSDUROHVR        ZLOOLQJQHVVWRWDONWR&ROXPEXVSROLFHDERXW&UDZIRUG
WKDWWKHMXU\ZRXOGNQRZWKDWKHZRXOGSRVHQRIXWXUHGDQJHU           'HWHFWLYH $QWKRQ\ YHULILHG WKH LQIRUPDWLRQ DERXW WKH
WRVRFLHW\DQGMXURUVWKXVPLJKWEHOHVVLQFOLQHGWRVHQWHQFH       PLVVLQJZRPDQZLWK&ROXPEXVSROLFHDQGWKHQDUUDQJHG
DGHIHQGDQWWRGHDWK+HUH5RHDUJXHVWKDWWKHMXU\PLJKW            IRUWKHPWRWDONZLWKDSSHOODQW
KDYHEHHQVZD\HGLIWKHFRXUWKDGVHQWHQFHGKLPSULRUWRWKH
FDSLWDOSKDVHEHFDXVHWKHMXU\ZRXOGNQRZWKDWKHZRXOGEH                2Q1RYHPEHU&ROXPEXV3ROLFH'HWHFWLYHV
HOLJLEOHIRUSDUROHMXVWWHQ\HDUVODWHUWKDQWKH\FRXOGKDYH         6WHSKHQsXG\DQG'DYLG9HUQHZHQWWRWKHFHPHQWSODQW
VHQWHQFHGKLP1RWRQO\LVWKLVVSHFXODWLRQEXWWKHORJLFRI         WRIDPLOLDUL]HWKHPVHOYHVZLWKWKHDUHDDQGWKHQGURYHWR
WKDW DVVHUWLRQ LV TXHVWLRQDEOH DQG FHUWDLQO\ QRW RI             WKH*UHHQH&RXQW\sDLOWRWDONZLWKDSSHOODQW$SSHOODQW
FRQVWLWXWLRQDOPDJQLWXGH                                           UHSHDWHG KLV HDUOLHU GHVFULSWLRQ RI WKH ERG\jV ORFDWLRQ
                                                                       DQG RI sHUU\ 3RZHOOjV LQYROYHPHQW DQG WHQWDWLYHO\
 :KHWKHU DQ LQGLFWPHQW ZKLFK UHFLWHVDOWHUQDWLYH                LGHQWLILHG SKRWRJUDSKV RI &UDZIRUG DQG KHU FDU  2Q
    WKHRULHV RI NLGQDSSLQJ PHHWV FRQVWLWXWLRQDO QRWLFH            1RYHPEHUWKHDUHDGHVFULEHGE\DSSHOODQWZDV
    UHTXLUHPHQWV"                                                      VHDUFKHGDQGWKHGHFRPSRVHGUHPDLQVRI&UDZIRUGZHUH
                                                                       GLVFRYHUHG7KHUHPDLQVZHUHLGHQWLILHGE\WKHFORWKLQJ
  7KH FDSLWDO VSHFLILFDWLRQ RI 5RH SXUVXDQW WR 25&          IRXQG ZLWK WKHP DQG E\ XVH RI &UDZIRUGjV GHQWDO
$FKDUJHGWKDWKHZDVWKHSULQFLSDORIIHQGHU            UHFRUGV$KROHFRQVLVWHQWZLWKDJXQVKRWZRXQGZDV
RUFRPPLWWHGWKHDJJUDYDWHGPXUGHUZLWKSULRUFDOFXODWLRQ              ORFDWHG LQ WKH ORZHU EDFN ULJKW SRUWLRQ RI WKH VNXOO
DQGGHVLJQGXULQJWKHFRPPLVVLRQRIDNLGQDSLQJ+RZHYHU             +RZHYHU VXEVHTXHQW LQYHVWLJDWLRQ RI sHUU\ 3RZHOO
25&GHILQHVNLGQDSSLQJLQDOWHUQDWLYHWKHRULHV           LQFOXGLQJDSRO\JUDSKH[DPLQDWLRQH[FOXGHGKLPDVD
5RH REMHFWV WR WKH JRYHUQPHQWjV IDLOXUH WR VSHFLI\ LQ LWV     VXVSHFW
LQGLFWPHQWZKLFKVSHFLILFWKHRU\RINLGQDSLQJLWLQWHQGHGWR
SURYH7KHDOWHUQDWLYHWKHRULHVFKDUJHGLQWKHLQGLFWPHQWERWK          2Q1RYHPEHU'HWHFWLYHsXG\PHWZLWKDQ
DVWRWKHNLGQDSLQJFKDUJHDQGFDSLWDOVSHFLILFDWLRQDOOHJHG           DQRQ\PRXVFDOOHUZKRZDVODWHULGHQWLILHGDV0LFKDHO
WKDW 5RH m GLG E\ IRUFH WKHIW RU GHFHSWLRQ UHPRYH WKH    'DQLHO ZKR FRQYH\HG KLV LQIRUPDWLRQ FRQFHUQLQJ
YLFWLPIURPWKHSODFHZKHUHVKHZDVIRXQGZLWKDSXUSRVHWR            DSSHOODQWjVVWDWHPHQWDERXWDPXUGHUKHKDGFRPPLWWHG
IDFLOLWDWHWKHFRPPLVVLRQRIDIHORQ\RUGLGE\IRUFHWKHIW      LQ2FWREHU)XUWKHULQYHVWLJDWLRQWXUQHGXSDSSHOODQWjV
RUGHFHSWLRQNQRZLQJO\RUXQGHUFLUFXPVWDQFHVZKLFKFUHDWHG            ZHDSRQ D 5XJHU 6HFXULW\ 6L[  PDJQXP UHYROYHU
VXEVWDQWLDOULVNRIVHULRXVSK\VLFDOKDUPWRYLFWLPUHPRYHWKH         7KLVZHDSRQZDVWUDFHGEDFNWRDEXUJODU\RI&DVWQHUjV
YLFWLPIURPWKHSODFHZKHUHVKHZDVIRXQGl7KHWULDOFRXUW           JXQVKRSLQ.LUNHUVYLOOH2KLRRQ6HSWHPEHU
VXEPLWWHG ERWK WKHRULHV WR WKH MXU\  5RH DUJXHV WKDW WKH    $SSHOODQWKDGFRPPLWWHGWZREUHDNLQVRI&DVWQHUjVLQ
IDLOXUHRIWKHWULDOFRXUWWRIRUFHWKHJRYHUQPHQWWR HOHFWD         0DUFK  KDG VHUYHG MDLO WLPH WKHUHRQ DQG ZDV
VSHFLILF WKHRU\ GHQLHG KLP SURSHU QRWLFH RI WKH FKDUJHV        VXVSHFWHGRIKDYLQJFRPPLWWHGWKH6HSWHPEHUEUHDNLQ
                                                                       DVZHOO2WKHUZHDSRQVVWROHQIURP&DVWQHUjVZHUHODWHU
                                                                       UHFRYHUHGIURPWKHDSSHOODQWjVSDUHQWVjKRPH%DOOLVWLFV
                                                                       HYLGHQFH LQGLFDWHG WKDW D  FDOLEHU EXOOHW IUDJPHQW
      5RHY%DNHU                                   1R       1R                                     5RHY%DNHU       

    UHFRYHUHG IURP &UDZIRUGjV VNXOO KDG EHHQ ILUHG IURP            KDYH EHHQ WROG RI WKH GHIHQGDQWjV SDUROH LQHOLJLELOLW\
    DSSHOODQWjVUHYROYHU                                                 7KHUHDUHWKUHHLPSRUWDQWGLIIHUHQFHVEHWZHHQWKDWFDVH
                                                                          DQG WKLV RQH KRZHYHU  )LUVW RI DOO WKH GHIHQGDQW LQ
       $SSHOODQWZDVLQGLFWHGRQ'HFHPEHUIRUWZR               6LPPRQV LI FRQYLFWHG ZDV GHILQLWHO\ JRLQJ WR EH
    FRXQWVRIDJJUDYDWHGPXUGHUZLWKWZRVSHFLILFDWLRQVIRU               LQHOLJLEOH IRU SDUROH  6LPPRQV  86 DW  
    IHORQ\PXUGHUNLGQDSSLQJDQGDJJUDYDWHGUREEHU\5&               6&W6HFRQGWKHSURVHFXWLRQjVDSSHDOWRWKHMXU\
    % $ RQH FRXQW RI DJJUDYDWHG               IRU D GHDWK VHQWHQFH ZDV H[SOLFLWO\ EDVHG RQ WKH
    UREEHU\ ZLWK D ILUHDUP VSHFLILFDWLRQ 5&              GHIHQGDQWjVIXWXUHGDQJHURXVQHVVZLWKWKHLPSOLFDWLRQ
     DQG WZR FRXQWV RI NLGQDSSLQJ ZLWK ILUHDUP            EHLQJWKDWRQO\GHDWKZRXOGSURWHFWWKHSXEOLFIRUVXUH
    VSHFLILFDWLRQV5&7ULDOEHJDQRQ               ,GDW6&W)LQDOO\WKHGHIHQGDQWLQWKDW
    1RYHPEHUDQGRQ'HFHPEHUWKHMXU\                   FDVHVSHFLILFDOO\UHTXHVWHGWKHLQVWUXFWLRQDWWULDO,ELG
    IRXQGDSSHOODQWJXLOW\RQDOOFRXQWVDQGVSHFLILFDWLRQV              6LPPRQVWKHUHIRUHGRHVQRWDSSO\WRWKLVFDVH
    $VHQWHQFLQJKHDULQJZDVKHOGSXUVXDQWWR5&
    DQG DIWHU WKUHH DQG RQHKDOI GD\V RI WHVWLPRQ\ DQG          ,GDW5RHjVDUJXPHQWLVPHUHO\DYDULDWLRQRIWKH
    GHOLEHUDWLRQVWKHMXU\UHFRPPHQGHGWKHLPSRVLWLRQRI               DUJXPHQWLQ&RH7KXVXQGHU7HDJXHWKLVQHZUXOHZRXOG
    WKHGHDWKSHQDOW\)ROORZLQJLWVLQGHSHQGHQWUHYLHZWKH           QRWEHDYDLODEOHWR5RH
    WULDO FRXUW DFFHSWHG WKH MXU\jV UHFRPPHQGDWLRQ DQG
    PHUJLQJ FRXQWV RQH DQG WZR VHQWHQFHG DSSHOODQW WR              5RHVHHNVWRDYRLGWKHDSSOLFDWLRQRI7HDJXHE\DUJXLQJ
    GHDWKIRUDJJUDYDWHGPXUGHU,QDGGLWLRQPHUJLQJWKH              WKDWKHUHOLHVRQ+LWFKFRFNY'XJJHU86
    WZR NLGQDSSLQJ FRXQWV WKH WULDO FRXUW VHQWHQFHG              UDWKHUWKDQ6LPPRQVDQGLWVSURJHQ\oGHVSLWHWKHIDFWWKDWKH
    DSSHOODQWIRUWKHNLGQDSSLQJDQGDJJUDYDWHGUREEHU\DQG            EDVHV PRVW RI KLV DUJXPHQW RQ WKHVH KROGLQJV DQG EDUHO\
    WZRILUHDUPVSHFLILFDWLRQV7KHFRXUWRIDSSHDOVDIILUPHG          PHQWLRQV+LWFKFRFN+LWFKFRFNKRZHYHULVLQDSSOLFDEOHLW
    WKHMXGJPHQWRIFRQYLFWLRQDQGGHDWKVHQWHQFH                      KHOG WKDW D MXU\ PXVW EH SHUPLWWHG WR FRQVLGHU DOO UHOHYDQW
                                                                        PLWLJDWLQJHYLGHQFH,GDW,QWKLVFDVHKRZHYHU
6WDWHY5RH1(G2KLR                     5RHZRXOGKDYHWKLVFRXUWILQGWKDWWKH&RQVWLWXWLRQPDQGDWHV
                                                                        WKDW D WULDO FRXUW VHQWHQFH D GHIHQGDQW RQ DOO RWKHU FKDUJHV
   )ROORZLQJ WKH 2KLR 6XSUHPH &RXUWjV GHFLVLRQ DQG WKH          SULRUWRWKHFDSLWDOSKDVHVRWKDWWKHMXU\FRXOGNQRZWKHH[DFW
8QLWHG6WDWHV6XSUHPH&RXUWjVGHQLDORIFHUWLRUDUL5RHILOHG           DPRXQW RI \HDUV EHIRUH D GHIHQGDQW ZRXOG EH HOLJLEOH IRU
DPRWLRQIRUSRVWFRQYLFWLRQUHOLHILQWKHWULDOFRXUWSXUVXDQW        SDUROH7KHUHLVQRVXSSRUWIRUWKLVDUJXPHQWLQ+LWFKFRFN
WR25&RQ2FWREHU7KHWULDOFRXUWKHOG          0RUHRYHUWKHMXU\NQHZWKDW5RHZRXOGQRWEHHOLJLEOHIRU
DKHDULQJDQGVXEVHTXHQWO\GHQLHG5RHjVSHWLWLRQIRUSRVW             SDUROHIRUDWOHDVWWKHDPRXQWRIWLPHZKLFKWKH\VSHFLILHG
FRQYLFWLRQUHOLHI 5RHDSSHDOHGEXWLQWKH)UDQNOLQ            HLWKHUWZHQW\RUWKLUW\\HDUV:KHWKHUWKHDFWXDOWLPHXQWLO
&RXQW\&RXUWRI$SSHDOVDIILUPHGWKHWULDOFRXUWjVMXGJPHQW             SDUROHHOLJLELOLW\LVWKLUW\WZRRUIRUW\WZR\HDUVFDQQRWEH
GLVPLVVLQJ KLV SRVWFRQYLFWLRQ FODLP  7KH 2KLR 6XSUHPH          VDLGWREHFRQVWLWXWLRQDOO\VLJQLILFDQWWRDMXU\jVGHWHUPLQDWLRQ
&RXUWGHQLHG5RHjVUHTXHVWIRUDGLVFUHWLRQDU\DSSHDOLQ          DVQRSRVVLELOLW\RISDUROHPLJKWVXFKDVLQ6LPPRQV
  5RHILOHGKLVKDEHDVFRUSXVDFWLRQLQUDLVLQJWKLUW\             (YHQLIQRWEDUUHGWKLVDUJXPHQWVODFNVDQ\PHULWEHFDXVH
IRXUFODLPVIRUUHOLHI,QWKHFDVHZDVWUDQVIHUUHGWRWKH       VLJQLILFDQWO\XQOLNH6LPPRQVDQGLWVSURJHQ\5RHFRQFHGHV
6RXWKHUQ 'LVWULFW RI 2KLR WKH GLVWULFW RI KLV FRQYLFWLRQ      WKDWKHZRXOGKDYHEHHQHOLJLEOHIRUSDUROHWKRXJKSHUKDSVLQ
7KHQLQH[SOLFDEO\WKHFDVHODQJXLVKHGDQGZDVUHDVVLJQHGWR           DZRUVWFDVHVFHQDULRDIWHUIRUW\\HDUVUDWKHUWKDQWKLUW\\HDUV
VHYHUDO GLIIHUHQW MXGJHV  )LQDOO\ WKH FDVH ZDV DVVLJQHG WR
   5RHY%DNHU                                  1R    1R                                      5RHY%DNHU        

 :HDGGUHVVHGWKLVLVVXHLQ&RH)GDVIROORZV        sXGJH6DUJXVZKRGLVPLVVHGWKHSHWLWLRQLQEXWFHUWLILHG
                                                                  WZHQW\WZRLVVXHIRUDSSHDOWRWKLVFRXUW5RHUDLVHVVHYHQRI
    $V IRU SDUROH HOLJLELOLW\ &RH DUJXHV WKDW WKH MXU\   WKRVHFHUWLILHGLVVXHVLQWKLVDSSHDO7KHJRYHUQPHQWPDNHV
 VKRXOGKDYHEHHQLQIRUPHGWKDWLIKHZDVJLYHQDOLIH           QR FODLPV RI SURFHGXUDO GHIDXOW DV WR DQ\ RI WKHVH VHYHQ
 VHQWHQFH IRU WKH PXUGHU KH ZRXOG QRW EH HOLJLEOH IRU   LVVXHV
 SDUROHXQWLOKHZDV\HDUVROG7KDWLVVLQFHKLVOLIH
 VHQWHQFHV IRU UDSH DQG NLGQDSSLQJ PHDQW WKDW XQGHU                                        ,,
 7HQQHVVHHODZKHZRXOGKDYHVHUYHG\HDUVRQHDFK
 VHQWHQFHEHIRUHKHFRXOGEHSDUROHGDOLIHVHQWHQFHIRU          $OWKRXJKZHUHYLHZGHQRYRWKHGLVWULFWFRXUWjVGLVSRVLWLRQ
 WKHPXUGHUZRXOGKDYHEHHQHIIHFWLYHO\DVHQWHQFHRI           RIDSHWLWLRQIRUZULWRIKDEHDVFRUSXVZHUHYLHZWKHGLVWULFW
 OLIHZLWKRXWSDUROH.QRZLQJWKLV&RHDUJXHVWKHMXU\         FRXUWjV IDFWXDO ILQGLQJV RQO\ IRU FOHDU HUURU  0F4XHHQ Y
 PLJKW KDYH VHHQ D OLIH VHQWHQFH DV D PRUH VHULRXV       6FURJJ\)GWK&LU)XUWKHUIHGHUDO
 SXQLVKPHQWDQGWKHUHIRUHVXIILFLHQWLQOLHX RIDGHDWK         FRXUWVPXVWGHIHUWRVWDWHFRXUWIDFWXDOILQGLQJVDFFRUGLQJWR
 VHQWHQFH                                                        WKHP D SUHVXPSWLRQ RI FRUUHFWQHVV WKDW WKH SHWLWLRQHU PD\
                                                                  UHEXWRQO\ZLWKFOHDUDQGFRQYLQFLQJHYLGHQFH,G+RZHYHU
   7KHVROHJURXQGLQJRIWKHGLVWULFWFRXUWjVUHMHFWLRQRI        m>W@KHSUHVXPSWLRQRQO\DSSOLHVWREDVLFSULPDU\IDFWVDQG
 WKLVFODLPZDVWKDWWKHFODLPZDVEDVHGRQDmQHZUXOHl          QRW WR PL[HG TXHVWLRQV RI ODZ DQG IDFWl ZKLFK UHFHLYHGH
 XQGHU7HDJXHY/DQH866&W          QRYRUHYLHZ,G
 / (GG    :H DJUHH WKDW 7HDJXH ZRXOG
 IRUHFORVHWKLVFODLPLIWKHSURFHGXUDOEDUGLGQRWVLQFH          ,Q VHWWLQJ IRUWK WKLV VWDQGDUG RI UHYLHZ WKH HIIHFW RI WKH
 &RHUHOLHVRQDFDVH6LPPRQVY6RXWK&DUROLQD             DPHQGPHQWV WR  86&   FRQWDLQHG LQ WKH
 866&W/(GGWKDW          $QWLWHUURULVP DQG (IIHFWLYH 'HDWK 3HQDOW\ $FW RI 
 ZDVGHFLGHGZHOODIWHU&RHjVFRQYLFWLRQEHFDPHILQDOLQ          $('3$3XE/6WDWKDVEHHQ
  DQG ZDV QRW VXIILFLHQWO\ GLFWDWHG E\ SULRU          LJQRUHG$OWKRXJK$('3$EHFDPHHIIHFWLYHRQ$SULO
 SUHFHGHQW6HH2
'HOOY1HWKHUODQG86           DQG LW PDQGDWHV VLJQLILFDQW FKDQJHV WR WKH IHGHUDO
 6&W/(GGKROGLQJ            FRXUWVjWUHDWPHQWRIERWKIDFWXDODQGOHJDOLVVXHVLQWKHKDEHDV
 WKDW6LPPRQVDQQRXQFHGDQHZUXOHDQGUHWURVSHFWLYH              VHWWLQJ WKH6XSUHPH&RXUWjVGHFLVLRQLQ/LQGKY0XUSK\
 DSSOLFDWLRQRIWKHUXOHZDVEDUUHGE\7HDJXH                   86LQVWUXFWVWKDWWKRVHFKDQJHVGRQRWDSSO\
                                                                  WR WKLV FDVH RU WR DQ\ FDVH SHQGLQJ DW WKH WLPH RI WKH
    &RHjV FODLP IDLOV DQ\ZD\  7KHUH LV QR UHDVRQ WR     $('3$jVHQDFWPHQWLQVWHDGWKRVHFKDQJHVmJHQHUDOO\DSSO\
 DVVXPHRUFRQFOXGHWKDWWKHVHQWHQFLQJMXGJHLQ&RHjV            RQO\WRFDVHVILOHGDIWHUWKH$FWEHFDPHHIIHFWLYHl,GDW
 DOWHUQDWLYHVFHQDULRZRXOGKDYHRUGHUHG&RHWRVHUYHKLV         %HFDXVH5RHILOHGKLVKDEHDVSHWLWLRQLQZHPXVWDSSO\
 WKUHHOLIHVHQWHQFHVFRQVHFXWLYHO\LQVWHDGRIFRQFXUUHQWO\      GDVLWH[LVWHGSULRUWRHQDFWPHQWRI$('3$,G
 6HH7HQQ5&ULP3FDFFRUGLQJVXFKGLVFUHWLRQ
 WRWKHWULDOFRXUW3XWDQRWKHUZD\DMXURUZRXOGQRW                                          III.
 QHFHVVDULO\ KDYH EHHQ ZURQJ WR EHOLHYH WKDW D GHDWK
 VHQWHQFHZDVWKHRQO\ZD\WRPDNHVXUHWKDW&RHQHYHU              5RHGRHVQRWFRQWHVWRQDSSHDODQ\RIWKHIDFWVXQGHUO\LQJ
 OHIWSULVRQDOLYH                                               KLVFRQYLFWLRQV$OOVHYHQRIKLVDVVLJQPHQWVRIHUURUDOOHJH
                                                                  YDULRXVSURFHGXUDOHUURUVE\WKHVWDWHFRXUWV:HDGGUHVVHDFK
  &RHFLWHV6LPPRQVLQZKLFKWKUHHMXVWLFHVDQGWKUHH           DVVLJQPHQWLQWXUQ
 PRUHFRQFXUULQJLQWKHUHVXOWKHOGWKDWDMXU\ VKRXOG
      5RHY%DNHU                                    1R     1R                                    5RHY%DNHU      

 :KHWKHUWKHMXU\LQVWUXFWLRQVDGGUHVVLQJXQDQLPLW\                 GHQ\WKHGHIHQGDQWWKHIXQGDPHQWDOULJKWWRDIDLUWULDO.HOO\
    LQ LWV VHQWHQFLQJ UHFRPPHQGDWLRQ YLRODWHG 5RHjV               Y:LWKURZ)GWK&LUFLWLQJ/RJDQY
    FRQVWLWXWLRQDOULJKWV"                                             0DUVKDOO)GWK&LU5RHKDVQRW
                                                                       PHWWKLVEXUGHQE\GHPRQVWUDWLQJWKDWWKHDGPLVVLRQRIWKLV
  5RH REMHFWV WR WKH WULDO FRXUWjV LQVWUXFWLRQV WR WKH MXU\   HYLGHQFHUHQGHUHGKLVWULDOIXQGDPHQWDOO\XQIDLU,IWKHFRXUW
UHODWHG WR LWV VHQWHQFLQJ UHFRPPHQGDWLRQ  7KH ILUVW            DGRSWHG KLV UHDVRQLQJ D MXURU PDGH DZDUH RI WKH VWDWXWH
LQVWUXFWLRQDWLVVXHZDVJLYHQDVIROORZV                            UHJDUGLQJ WKLV PDWWHU GXULQJ WULDO ZRXOG FUHDWH SUHMXGLFH
                                                                       UHQGHULQJDWULDOIXQGDPHQWDOO\XQIDLU5DWKHUWKDQLQVWUXFW
    $V LQ WKH ILUVW FDVH DQG WKLV LV QRW LQ WKH ZULWWHQ    WKHMXURUVDVWRWKHODZWKHFRXUWZRXOGKDYHWRFRQFHDOWKLV
    LQVWUXFWLRQVDVLQWKHILUVWFDVH\RXUYHUGLFWPXVWEHD          VWDWXWHDQGWKHSXEOLFUHFRUGVODZIURPWKHMXURUV/LNHZLVH
    XQDQLPRXV YHUGLFW  $OO  RI WKH MXURUV PXVW DJUHH       GXULQJ VHOHFWLRQ DZDUHQHVV RI HLWKHU RI WKHVH ODZV PLJKW
    XQDQLPRXVO\RQWKHDSSURSULDWHYHUGLFW2QFH\RXKDYH             FRQVWLWXWHJURXQGVIRUVWULNLQJDMXURU
    PDGHVXFKDILQGLQJDJDLQ\RXZRXOGQRWLI\P\EDLOLII
    ZLWKUHVSHFWWRWKDW$OOMXURUVKDYHWRVLJQWKHYHUGLFW       :KHWKHUWKHWULDOFRXUWKDVDFRQVWLWXWLRQDOREOLJDWLRQ
    IRUP 7KH IRUHSHUVRQ ZLOO VLJQ RQ WKH OLQH GHVLJQDWHG          WR VHQWHQFH 5RH RQ XQGHUO\LQJ IHORQLHV SULRU WR
    IRUHSHUVRQ                                                            FRPPHQFHPHQWRIWKHFDSLWDOVHQWHQFLQJSKDVHRIKLV
                                                                           WULDO"
7KHVHFRQGLQVWUXFWLRQDWLVVXHZDVJLYHQHDUOLHUDVIROORZV
                                                                          7KH WULDO FRXUW GHQLHG 5RHjV VHYHUDO UHTXHVWV WKDW KH EH
    1RZHDFKRI\RXPXVWGHFLGHWKHFDVHIRU\RXUVHOIEXW             VHQWHQFHGRQWKHQRQFDSLWDOIHORQLHVSULRUWRWKHVHQWHQFLQJ
    \RX VKRXOG GR VR RQO\ DIWHU D GLVFXVVLRQ DQG               SKDVHRQWKHDJJUDYDWHGPXUGHUFRQYLFWLRQVZKLFKIRUPVWKH
    FRQVLGHUDWLRQRIWKLVFDVHZLWK\RXUIHOORZMXURUV1RZ           EDVLVIRUWKLVDVVLJQPHQWRIHUURU7KHRSWLRQVEHIRUHWKHMXU\
    GRQRWKHVLWDWHWRFKDQJHDQRSLQLRQLI\RXODWHUILQGWKDW        GXULQJ WKH FDSLWDO VHQWHQFLQJ SKDVH ZHUH GHDWK OLIH ZLWK
    WKDW RSLQLRQ RU WKDW SRVLWLRQ LV ZURQJ  +RZHYHU \RX     SDUROHHOLJLELOLW\DIWHU\HDUVRUOLIHZLWKSDUROHHOLJLELOLW\
    VKRXOGQRWVXUUHQGHUKRQHVWFRQYLFWLRQVLQRUGHUWREH             DIWHU  \HDUV  5RH DUJXHV WKDW KDG WKH MXU\ NQRZQ WKH
    FRQJHQLDORULQRUGHUWRUHDFKDYHUGLFWVROHO\EDVHGXSRQ         VHQWHQFHVDVWRWKHVHRWKHUFKDUJHVWKDWLWZRXOGKDYHEHHQ
    WKHRSLQLRQRIWKHRWKHUMXURUV                                   PRUHOLNHO\WRVHOHFWSDUROHDQGLWLVHUURUWRSUHFOXGHWKHMXU\
                                                                       IURP WKH FRQVLGHUDWLRQ RI HYLGHQFH ZKLFK PD\ PLWLJDWH D
7KHUHOHYDQW2KLRVWDWXWHSURYLGHV                                    VHQWHQFHXQGHU6NLSSHUY6RXWK&DUROLQD86
                                                                       $V VXSSRUW IRU WKLV FRQWHQWLRQ KH VWUHVVHV WKDW GXULQJ WKH
    ,I WKH WULDO MXU\ XQDQLPRXVO\ ILQGV E\ SURRI EH\RQG D    GHOLEHUDWLRQV IROORZLQJ WKH SHQDOW\ SKDVH KHDULQJ WKH MXU\
    UHDVRQDEOHGRXEWWKDWWKHDJJUDYDWLQJFLUFXPVWDQFHVWKH           VXEPLWWHG D TXHVWLRQ DVNLQJ m>Z@LOO WKH VHQWHQFHV UXQ
    RIIHQGHUZDVIRXQGJXLOW\RIFRPPLWWLQJRXWZHLJKWKH               FRQVHFXWLYHO\ RU FRQFXUUHQWO\"l  :LWK DJUHHPHQW RI ERWK
    PLWLJDWLQJIDFWRUVWKHWULDOMXU\VKDOOUHFRPPHQGWRWKH          SDUWLHVWKHWULDOFRXUWUHVSRQGHGWKDWm>W@KHVHQWHQFHVRQWKH
    FRXUW WKDW WKH VHQWHQFH RI GHDWK EH LPSRVHG RQ WKH        PXUGHU FKDUJHV ZLOO PHUJH DQG WKHUH ZLOO EH RQO\ RQH
    RIIHQGHU  $EVHQW VXFK D ILQGLQJ WKH MXU\ VKDOO           VHQWHQFH RQ WKRVH FKDUJHV  7KH VHQWHQFH RQ WKH ILUHDUPV
    UHFRPPHQG WKDW WKH RIIHQGHU EH VHQWHQFHG WR OLIH            VSHFLILFDWLRQE\ODZPXVWEHUXQFRQVHFXWLYHWRWKHRWKHU
    LPSULVRQPHQWZLWKSDUROHHOLJLELOLW\DIWHUVHUYLQJWZHQW\          VHQWHQFHV7KHVHQWHQFHVRQWKHDJJUDYDWHGUREEHU\DQGWKH
    IXOO\HDUVRILPSULVRQPHQWRUWROLIHLPSULVRQPHQWZLWK            NLGQDSSLQJZLOOEHGHWHUPLQHGE\WKH&RXUWDIWHU\RXUYHUGLFW
    SDUROH HOLJLELOLW\ DIWHU VHUYLQJ WKLUW\ IXOO \HDUV RI       LVUHQGHUHGl
    LPSULVRQPHQW
    5RHY%DNHU                                    1R     1R                                     5RHY%DNHU           

  YHUGLFWPD\EHPD\EHSXEOLF6R,WKLQNLWjVVRPHWKLQJ           25&'5RHjVDUJXPHQWWKHQLVWKDW
  \RX DUH DOO DZDUH GLUHFWO\ \RX DUH KHUH LQ SXEOLF         WKRXJK WKH FRXUW FRUUHFWO\ LQVWUXFWHG WKH MXURUV WKDW WKHLU
  SURFHHGLQJV DQG DOO WULDOV ZLOO EH D PDWWHU RI SXEOLF      VHQWHQFLQJUHFRPPHQGDWLRQRIGHDWKKDGWREHXQDQLPRXVLW
  UHFRUG                                                             HUURQHRXVO\IDLOHGWRLQVWUXFWWKHMXURUVWKDWXQDQLPLW\ZDVQRW
                                                                      UHTXLUHG WR VHQWHQFH 5RH WR HLWKHU OLIH LPSULVRQPHQW ZLWK
7KLVLVVXHQHYHUDURVHDJDLQWKURXJKRXWWKHUHPDLQGHURIWKH          SDUROH HOLJLELOLW\ DIWHU VHUYLQJ WZHQW\ \HDUV RU OLIH
WULDO5RHKRZHYHUFRQWHQGVWKDWWKHDGPLVVLRQRIWKHMXURU        LPSULVRQPHQWZLWKSDUROHHOLJLELOLW\DIWHUVHUYLQJWKLUW\\HDUV
OLVW LQIRUPDWLRQ VHYHUHO\ SUHMXGLFHG DQG WDLQWHG WKH WULDO     7KHGLVWULFWFRXUWGHVFULEHGWKHLVVXHLQWKLVPDQQHU
SURFHHGLQJVWRWKHH[WHQWWKDWKHZDVGHQLHGDIXQGDPHQWDOO\
IDLUWULDO+HDUJXHVWKDWWKHMXURUVjWDNLQJWKHH[WUDRUGLQDU\        ,W LV FOHDU IURP WKLV VWDWXWRU\ SURYLVLRQ WKDW D MXU\jV
VWHSRIDGYLVLQJWKHEDLOLIIRIWKHLUIHDUDQGFRQFHUQRYHUWKH         UHFRPPHQGDWLRQRIGHDWKPXVWEHXQDQLPRXV(TXDOO\
LVVXHHYLQFHVSUHMXGLFH)XUWKHUDGYLVLQJWKHMXU\WKDWWKHOLVW      FOHDU LV WKH IDFW WKDW WKLV SURYLVLRQ GRHV QRW UHTXLUH D
ZDVUHTXLUHGWREHSURYLGHGWR5RHDQGLVDQDYDLODEOHSXEOLF           FDSLWDO MXU\ WR XQDQLPRXVO\ UHMHFW D GHDWK VHQWHQFH LQ
UHFRUGGLGOLWWOHWRUHPRYHWKHSUHMXGLFLDOHIIHFW7KXVKH           RUGHUWRLPSRVHRQHRIWKHOLIHVHQWHQFHRSWLRQV:KDW
DYHUVKLV6L[WK$PHQGPHQW5LJKWWRDIDLUDQGLPSDUWLDOMXU\            VHHPV DPELJXRXV LV ZKHWKHU RQH RI WKH OLIH VHQWHQFH
ZDVYLRODWHG                                                        UHFRPPHQGDWLRQV FRXOG UHVXOW o QRW MXVW IURP D
                                                                        XQDQLPRXV GHWHUPLQDWLRQ E\ WKH MXURUV WKDW LW ZDV WKH
  2QWKLVLVVXHWKH6XSUHPH&RXUWRI2KLRKHOG                        DSSURSULDWHVHQWHQFHoEXWIURPDQLQDELOLW\RIWKHSDUWRI
                                                                        WKH MXURUV WR DFKLHYH XQDQLPLW\ RQ ZKHWKHU WR
  7KLVDUJXPHQWLVZLWKRXWPHULW7KHWULDOFRXUWH[SODLQHG            UHFRPPHQGDGHDWKVHQWHQFH
  WRWKHMXURUVWKDWWKHDSSHOODQWZDVHQWLWOHGWRVXFKOLVWE\
  VWDWXWHDQGWKDWLWZDVLQDQ\HYHQWSXEOLFLQIRUPDWLRQ          ,Q HVVHQFH 5RH FRQWHQGV WKDW WKH IDLOXUH RI WKH FRXUW WR
  7KH WHVWLPRQ\ ZDV UHOHYDQW WR GHPRQVWUDWH WKDW WKH           LQVWUXFWWKHMXU\UHJDUGLQJWKHUHVXOWRIDQ\GHDGORFNDVWRWKH
  FHOOPDWH GLG QRW IDEULFDWH KLV WHVWLPRQ\ IURP UHDGLQJ        LPSRVLWLRQ RI D GHDWK VHQWHQFH PD\ KDYH UHVXOWHG LQ WKH
  DSSHOODQWjVmOHJDOSDSHUVlDVWKHRQO\VXFKSDSHUVKHVDZ           LPSUHVVLRQRQWKHMXU\WKDWLWPXVWXQDQLPRXVO\UHMHFWGHDWK
  ZHUH WKH MXU\ OLVWV  (YLG 5   $SSHOODQW KDV QRW   UDWKHU WKDQ D VLQJOH MXURUjV EHLQJ FDSDEOH RI SUHYHQWLQJ D
  GHPRQVWUDWHGWKDWWKHSUREDWLYHYDOXHRIVXFKHYLGHQFH              GHDWKVHQWHQFHE\FUHDWLQJDGHDGORFN
  ZDV VXEVWDQWLDOO\ RXWZHLJKHG E\ WKH GDQJHU RI XQIDLU
  SUHMXGLFH(YLG5$                                           7KH2KLR6XSUHPH&RXUWKDVLVVXHGVHYHUDOGHFLVLRQVRQ
                                                                      WKLVSRLQW,Q6WDWHYsHQNLQV1(G2KLR
5RH1(GDW$VWKH2KLR6XSUHPH&RXUWKHOG              LW KHOG WKDW D MXU\jV UHFRPPHQGDWLRQ RI OLIH
LQOLJKWRI5RHjVVWUDWHJ\RIXQGHUPLQLQJ%R\GjVFUHGLELOLW\          LPSULVRQPHQWXQGHUWKDWVHFWLRQPXVWEHXQDQLPRXV,Q6WDWH
E\LQVLQXDWLQJWKDWKHJDLQHGKLVLQIRUPDWLRQIURPUHDGLQJ            Y6SULQJHU1(G2KLRWKHFRXUWKHOG
5RHjVSDSHUVLWZDVFULWLFDOO\UHOHYDQWZKDWLQIRUPDWLRQWKRVH       WKDW ZKHQ D MXU\ EHFRPHV KRSHOHVVO\ GHDGORFNHG DV WR
SDSHUVFRQWDLQHGsXURUOLVWVDUHSURYLGHGWR5RHDVDPDWWHU        VHQWHQFHWKHWULDOFRXUWLVUHTXLUHGWRLPSRVHDOLIHVHQWHQFH
RIVWDWHODZ7KHFRXUWDGGUHVVHGWKHFRQFHUQH[SUHVVHGE\           ,Q6WDWHY%URRNV1(G2KLR
VRPHMXURUVZLWKDWKRURXJKFXUDWLYHLQVWUXFWLRQ7KHUHFRUG         WKHFRXUWUHYLHZHGDVHQWHQFLQJLQVWUXFWLRQWKDWWKHMXU\PXVW
UHIOHFWVQRIXUWKHUPDQLIHVWDWLRQRIFRQFHUQE\WKHMXURUVDIWHU      XQDQLPRXVO\ DJUHH WKDW WKH GHDWK SHQDOW\ LV LQDSSURSULDWH
WKHLQVWUXFWLRQ(UURUVE\DVWDWHFRXUWLQWKHDGPLVVLRQRI         EHIRUHUHFRPPHQGLQJDOLIHVHQWHQFH7KHFRXUWIRXQGWKLV
HYLGHQFHDUHQRWFRJQL]DEOHLQKDEHDVSURFHHGLQJVXQOHVVWKH\         LQVWUXFWLRQFRQWUDU\WR'%URRNVSXUSRUWHGWR
VRSHUQLFLRXVO\DIIHFWWKHSURVHFXWLRQRIDFULPLQDOFDVHDVWR
    5RHY%DNHU                                     1R       1R                                   5RHY%DNHU      

mKDUPRQL]HlWKHsHQNLQVDQG6SULQJHUKROGLQJVE\UHTXLULQJ               8QLWHG 6WDWHV Y %HVV  )G   WK &LU 
DQ LQVWUXFWLRQ WR EH JLYHQ WKHQFHIRUWK WKDW D VROLWDU\ MXURU    FLWDWLRQVRPLWWHG7KLVFDVHHDVLO\IDOOVLQWRWKDWFDWHJRU\
FRXOGSUHYHQWWKHLPSRVLWLRQRIWKHGHDWKSHQDOW\
                                                                          :KHWKHU 5RHjV FRQVWLWXWLRQDO ULJKW WR DQLPSDUWLDO
  1HYHUWKHOHVVmWKHIDFWWKDW>DQ@LQVWUXFWLRQZDVDOOHJHGO\                MXU\ZDVYLRODWHGE\WKHDGPLVVLRQRIWHVWLPRQ\WKDW
LQFRUUHFW XQGHU VWDWH ODZ LV QRW D EDVLV IRU KDEHDV UHOLHIl       KHSRVVHVVHGDOLVWRIDOOWKHSRWHQWLDOMXURUVjQDPHV
(VWHOOHY0F*XLUH867KHLVVXHRQ                 DQGDGGUHVVHV"
FROODWHUDOUHYLHZLQWKHIHGHUDOFRXUWVLVZKHWKHUDGHIHQGDQWjV
IHGHUDOFRQVWLWXWLRQDOULJKWVZHUHYLRODWHGE\WKHLQVWUXFWLRQ             9LQFHQW%R\G5RHjVFHOOPDWHWHVWLILHGDJDLQVWKLPDWWULDO
:HDGGUHVVHGWKLVVDPHLVVXHLQ&RHY%HOO)G               UHJDUGLQJFHUWDLQLQFULPLQDWLQJDGPLVVLRQVPDGHE\5RHWR
 WK &LU  DQG KHOG WKDW VXFK D XQDQLPLW\          KLP  $GPLWWHGO\ WKH GHIHQVH DWWHPSWHG WR GLVFUHGLW KLV
LQVWUXFWLRQDVWRDVHQWHQFLQJUHFRPPHQGDWLRQRIGHDWKGLG               WHVWLPRQ\RQFURVVH[DPLQDWLRQZLWKTXHVWLRQVGHVLJQHGWR
QRWYLRODWHWKH&RQVWLWXWLRQ$JDLQLQ6FRWWY0LWFKHOO          VKRZWKDWKHNQHZGHWDLOVRIWKHFDVHE\UHDGLQJ5RHjVOHJDO
)GWK&LUZHREVHUYHGWKHVDPHsXVWDV            SDSHUVLQWKHFHOO2QUHGLUHFWWKHSURVHFXWLRQDVNHG%R\G
LQ &RH DQG 6FRWW WKH LQVWUXFWLRQV DW LVVXH GR QRW UHTXLUH     ZKDWKHUHPHPEHUHGDERXWWKHSDSHUV%R\GGHQLHGVHHLQJ
XQDQLPLW\ DV WR D VSHFLILF PLWLJDWLQJ IDFWRU ZKLFK ZRXOG        WKHP H[FHSW FXUVRULO\ DQG VDLG WKDW WKH RQO\ WKLQJ KH
YLRODWH0LOOVY0DU\ODQG86EXWRQO\            UHPHPEHUHGZDVDOLVWRIDOOWKHMXURUVjQDPHVDQGDGGUHVVHV
DV WR WKH RYHUDOO ZHLJKLQJ SURFHVV ZKLFK LV SHUPLVVLEOH        5RH REMHFWHG DQG WKH WULDO FRXUW RYHUUXOHG WKDW REMHFWLRQ
)XUWKHU DV ZH REVHUYHG LQ6FRWW ERWK WKLV &LUFXLW DQG WKH     KDYLQJDOUHDG\FRQGXFWHGDVLGHEDUDVWRWKLVJHQHUDOLVVXH
6XSUHPH &RXUW m>KDYH@ FKDVWLVHG VXFK LQVWUXFWLRQV DV               /DWHUFRXQVHOPRYHGIRUDPLVWULDORQWKDWEDVLVZKLFKWKH
HQFRXUDJLQJ GHDGORFN DQG XQGHUPLQLQJ WKH VWURQJ                     WULDOFRXUWGHQLHG$IWHUWKHOXQFKUHFHVVWKHMXURUVH[SUHVVHG
JRYHUQPHQWDO LQWHUHVW LQ XQDQLPRXV YHUGLFWVl  6FRWW          WKHLUFRQFHUQWRWKHEDLOLIIDERXW5RHjVSRVVHVVLQJDOLVWRI
)GDWFLWLQJsRQHVY8QLWHG6WDWHV86           WKHLUQDPHVDQGDGGUHVVHV7KHEDLOLIIDGYLVHGWKHFRXUW7KH
DQG&RH)GDW$FFRUGLQJO\WKLV               FRXUWWKHQJDYHWKHIROORZLQJFXUDWLYHLQVWUXFWLRQWRWKHMXU\
DVVLJQPHQWLVZLWKRXWPHULW
                                                                              7KHUHKDVEHHQEURXJKWWRP\DWWHQWLRQVRPHFRQFHUQ
  5RHUHOLHVRQ0DSHVY&R\OH)GWK&LU              DERXWWHVWLPRQ\FRQFHUQLQJWKHMXU\OLVW$V\RXPD\RU
WRVXSSRUWKLVDUJXPHQW+HFRQWHQGVWKDW0DSHVKHOGVXFK                 PD\QRWEHDZDUHZHKDYHLQGLYLGXDOVVXESRHQDHG
DXQDQLPLW\LQVWUXFWLRQYLRODWHV2KLRODZ                                 IRU WKLV SDUWLFXODU MXU\  :H KDYH JRW  IRU 0RQGD\
                                                                           7XHVGD\:HGQHVGD\DQG7KXUVGD\2XUOHJLVODWXUHLQ
  7KH2KLRGHDWKVHQWHQFHVWDWXWHFRQWDLQVQRUHTXLUHPHQW                  WKHLULQILQLWHZLVGRPGHFLGHGLQDOOFDSLWDOFDVHVZKLFK
  WKDW D FDSLWDO MXU\ PXVW XQDQLPRXVO\ UHMHFW D GHDWK              LVWKHRQO\WLPHZKHQLWjVSURYLGHGLQWKHVWDWHVWDWXWH
  VHQWHQFH EHIRUH FRQVLGHULQJ OLIH LPSULVRQPHQW                 WKDWWKHHQWLUHFRPSXWHUSULQWRXWZLWKDOOQDPHVLVWR
  0RUHRYHU WKH 2KLR 6XSUHPH &RXUW KDV UXOHG WKDW DQ               EHJLYHQWRDOOSDUWLHVWKHSURVHFXWLRQDQGDQ\GHIHQVH
  DFTXLWWDOILUVWLQVWUXFWLRQVXFKDVWKHRQHJLYHQE\WKH                DQGWKHGHIHQGDQWWKUHHGD\VEHIRUHWULDO6RWKDWOLVWE\
  WULDO FRXUW KHUH YLRODWHV WKH (LJKWK DQG )RXUWHHQWK              VWDWXWHDOOSDUWLHVKDYHDULJKWWRDFRS\RIWKDWOLVW
  $PHQGPHQWV E\ FUHDWLQJ D ULVN RI DQ HUURQHRXV
  LPSRVLWLRQRIWKHGHDWKSHQDOW\6HH6WDWHY%URRNV                  $OVR \RX VKRXOG EH DZDUH WKDW DOO WULDOV DUH SXEOLF
  2KLR 6WG   1(G     7KH              SURFHHGLQJVDQGREYLRXVO\WKHSXEOLFLVLQYLWHGGRZQ
  UHFRUGUHIOHFWVWKDWWKHMXU\LQWKLVFDVHZDVLQVWUXFWHGLQ             DQGHYHU\WKLQJWKDWKDSSHQVLQWKHWULDOLQFOXGLQJ\RX
                                                                           NQRZZKRWKHMXURUVDUH>@DUHSXEOLFDVZKDWHYHUWKH
    5RHY%DNHU                                    1R     1R                                      5RHY%DNHU       

FULPHZDVXQGHUGXUHVVFRHUFLRQSURYRFDWLRQ,UHPLQG\RX            DPDQQHUFRPSOHWHO\FRQWUDU\WRODZ7KLVHUURU
RIZKDW0U5RHVDLGLQKLVXQVZRUQVWDWHPHQW,FRXOGKDYH            UHTXLUHGYDFDWLQJWKHGHDWKVHQWHQFHDQGUHPDQGLQJIRU
VWD\HG KRPH QR RQH IRUFHG PH , ZDQWHG WKH PRQH\  +H       UHVHQWHQFLQJ$OWKRXJKWKHWULDOFRXUWLQWKLVFDVH
ZDQWHGWRGRLW+HGLGLWl,QFRQVLGHULQJWKLVDVVLJQPHQWRI        GLG QRW KDYH WKH EHQHILW RI %URRNV WKDW FDVH FOHDUO\
HUURUWKH6XSUHPH&RXUWRI2KLRKHOG                                  HVWDEOLVKHVWKDWWKHWULDOFRXUWPLVDSSOLHG2KLR5HYLVHG
                                                                        &RGH  ' E\ UHTXLULQJ WKH MXU\ WR
  7KH SURVHFXWRU FRPPHQWHG RQ VWDWXWRU\ PLWLJDWLQJ                 XQDQLPRXVO\UHMHFWWKHGHDWKSHQDOW\EHIRUHFRQVLGHULQJ
  IDFWRUVRQZKLFKDSSHOODQWKDGQRWSUHVHQWHGHYLGHQFHDW              DOLIHVHQWHQFH
  WKHKHDULQJ,Q6WDWHY'H3HZ2KLR6WG
     1(G   ZH VWDWHG WKDW mVXFK        ,GDW1HYHUWKHOHVV0DSHVXOWLPDWHO\KHOGm>E@XWDOO
  FRPPHQWLVDSSURSULDWHRQO\ZLWKUHJDUGWRWKRVHIDFWRUV            WKDW EHLQJ VR WKH WULDO FRXUWjV LQVWUXFWLRQDO HUURUV GR QRW
  DFWXDOO\RIIHUHGLQPLWLJDWLRQE\WKHGHIHQGDQWl+HUH            UHTXLUHJUDQWLQJ0DSHVjVKDEHDVSHWLWLRQEHFDXVHQHLWKHURI
  KRZHYHUDVLQ:LOOLDPVVXSUD2KLR6WGDW             WKHVHODVWWZRLQVWUXFWLRQDOLVVXHVZDVUDLVHGRQDSSHDO7KXV
  2%5DW1(GDWDSSHOODQWIDLOHGWRWLPHO\            0DSHVjVSURFHGXUDOGHIDXOWLVDQDGHTXDWHDQGLQGHSHQGHQW
  REMHFWWRVXFKFRPPHQWEHORZDQGLQDQ\HYHQWWKHWULDO           JURXQGIRUDIILUPLQJKLVVHQWHQFHl,GDW$FFRUGLQJO\
  FRXUWjV LQVWUXFWLRQV WR WKH MXU\ UHJDUGLQJ ERWK               WKH6FRWWFRXUWLQDGGUHVVLQJWKHVDPHLVVXHIRXQGWKH0DSHV
  QRQVWDWXWRU\ DQG VWDWXWRU\ PLWLJDWLQJ IDFWV ZHUH              ODQJXDJH WR EH GLFWD  ,URQLFDOO\ WKH 6FRWW FRXUW OLNHZLVH
  VXIILFLHQW WR FRUUHFW DQ\ HUURU RQ WKH SDUW RI WKH         IRXQG WKH LVVXH SURFHGXUDOO\ GHIDXOWHG DQG DGGUHVVHG WKH
  SURVHFXWLRQ$OWKRXJKWKHSURVHFXWLRQjVDUJXPHQWZDV                PHULWVLQWKHDOWHUQDWLYHRQO\mRXWRIDQDEXQGDQFHRIFDXWLRQ
  LPSURSHULWGLGQRWDPRXQWWRDFRQYHUVLRQRIPLWLJDWLQJ           DQGLQRUGHUWRFODULI\RXUSUHFHGHQWVJRYHUQLQJVHQWHQFLQJ
  IDFWRUVLQWRSURKLELWHGQRQVWDWXWRU\DJJUDYDWLQJIDFWRUV          SKDVHLQVWUXFWLRQVRQMXU\XQDQLPLW\l6FRWW)GDW
                                                                      <HWDVWKH6FRWWFRXUWHPSKDVL]HGLQoD\HDUSULRUWR
$VEHORZWKHJRYHUQPHQWGRHVQRWDUJXHWKDWVXFKFRPPHQWV            0DSHVoWKLVFRXUWKDGGLUHFWO\DQGFRQFOXVLYHO\DGGUHVVHG
ZHUH DSSURSULDWH EXW WKH\ ZHUH OLPLWHG LVRODWHG DQG          WKH VDPH LVVXH LQ &RH  6HH LG DW   7KHUHIRUH HYHQ LI
PLWLJDWHG ZKHQ WKH FRXUW JDYH WKH MXU\ DSSURSULDWH             0DSHVjGLVFXVVLRQZDVQRWGLFWD&RHZRXOGFRQWURO
LQVWUXFWLRQVZKLFKZRXOGKDYHFXUHGDQ\PLVSHUFHSWLRQWKDW
WKHMXU\PLJKWKDYHUHFHLYHGIURPWKHSURVHFXWRUjVDUJXPHQWV          :KHWKHU UHPDUNV E\ WKH SURVHFXWRU GXULQJWKH
:HDJUHH0RUHRYHUVXFKSDVVLQJFRPPHQWVGLGQRWUHQGHU                 VHQWHQFLQJ SKDVH RI WKH WULDO UHQGHUHG 5RHjV WULDO
WKHVHQWHQFLQJSKDVHIXQGDPHQWDOO\XQIDLU:KHQUHYLHZLQJ                IXQGDPHQWDOO\XQIDLU"
SURVHFXWRULDO PLVFRQGXFW RQ GLUHFW DSSHDO WKLV FRXUW KDV
UHPDUNHG                                                              5RH PDLQWDLQV WKDW WKH SURVHFXWRUjV DUJXPHQWV DW WKH
                                                                      PLWLJDWLRQKHDULQJGHSULYHGKLPRIDIDLUVHQWHQFLQJKHDULQJ
  0RUHFRPPRQO\KRZHYHUWKHFRPSODLQHGRIFRQGXFW                   EHFDXVH WKRVH FRPPHQWV LPSURSHUO\ GHQLJUDWHG WKH HQWLUH
  ZLOO QRW ULVH WR UHYHUVLEOH HUURU QRWDEO\ LI LW LV QRW   QRWLRQ RI D PLWLJDWLRQ KHDULQJ DQG ZHUH DUJXPHQWV DV WR
  IODJUDQW ZKHUH SURRI RI JXLOW LV RYHUZKHOPLQJ ZKHUH        HYLGHQFHRIPLWLJDWLQJIDFWRUVQRWSUHVHQWHGE\5RH
  FRXQVHOGRHVQRWREMHFWDQGRUZKHUHWKHWULDOMXGJHVWHSV
  LQDQGDGPRQLVKHVWKHMXU\,QGHHGLWLVQRWDEOHKRZ                 7KRXJKQRWSURFHGXUDOO\GHIDXOWHGDV5RHUDLVHGWKLVLVVXH
  RIWHQFRXUWVFLWHLPSURSHUDUJXPHQWE\DSURVHFXWRUDQG             LQKLVVWDWHDSSHDOKLVFRXQVHOGLGQRWREMHFWWRDQ\FRPPHQWV
  KRZVHOGRPWKH\UHYHUVHFRQYLFWLRQVEHFDXVHRILW                 RIWKHSURVHFXWRUDWWULDO7KXVDVERWKWKH6XSUHPH&RXUWRI
                                                                      2KLRDQGWKHGLVWULFWFRXUWKHOGWKLVLVVXHZDVQRWSUHVHUYHG
                                                                      $FFRUGLQJO\ ZH UHYLHZ IRU SODLQ HUURU  8QLWHG 6WDWHV Y
    5RHY%DNHU                                  1R       1R                                    5RHY%DNHU      

&UR]LHU)GWK&LU7RHVWDEOLVK               ,Q 3D\QH Y 7HQQHVVHH  86    WKH
SODLQHUURUDGHIHQGDQWPXVWVKRZWKDWDQHUURURFFXUUHG        6XSUHPH &RXUW KHOG WKDW WKH (LJKWK $PHQGPHQW GRHV QRW
LQWKHGLVWULFWFRXUWWKHHUURUZDVSODLQLHREYLRXVRU      SURKLELW HYLGHQFH DQG DUJXPHQW UHODWLQJ WR WKH YLFWLPjV
FOHDUWKHHUURUDIIHFWHGGHIHQGDQWjVVXEVWDQWLDOULJKWVDQG     SHUVRQDOFKDUDFWHULVWLFVDQGWKHLPSDFWRIWKHYLFWLPjVGHDWK
 WKLV DGYHUVH LPSDFW VHULRXVO\ DIIHFWHG WKH IDLUQHVV       RQWKHYLFWLPjVIDPLO\8QGHU3D\QHVXFKDUJXPHQWZRXOG
LQWHJULW\RUSXEOLFUHSXWDWLRQRIWKHMXGLFLDOSURFHHGLQJV,G     EHSURSHU7KH&RXUWKRZHYHUOHIWRSHQWKHTXHVWLRQDVWR
5RH GRHV QRW VKRZ HLWKHU WKDW WKH UHPDUNV DIIHFWHG KLV       ZKHWKHUXQGHUWKH)RXUWHHQWK$PHQGPHQWVXFKDUJXPHQWV
VXEVWDQWLDO ULJKWV RU VXFK UHPDUNV VHULRXVO\ DIIHFWHG WKH      ZKHQ XQIDLUO\ SUHMXGLFLDO PLJKW RIIHQG GXH SURFHVV  7KH
IDLUQHVV LQWHJULW\ RU SXEOLF UHSXWDWLRQ RI WKH MXGLFLDO      VWDQGDUG IRU VXFK GXH SURFHVV FKDOOHQJHV LV ZKHWKHU WKH
SURFHHGLQJVDVKHPXVW,G                                         HYLGHQFHRUDUJXPHQWmVRLQIHFWHGWKHWULDOZLWKXQIDLUQHVVDV
                                                                      WR PDNH WKH UHVXOWLQJ FRQYLFWLRQ D GHQLDO RI GXH SURFHVVl
  )LUVWZLWKUHJDUGWRGHQLJUDWLRQRIWKHPLWLJDWLRQSURFHVV        'DUGHQY:DLQZULJKW86FRQFHUQLQJ
WKH SURVHFXWRU PHUHO\ DUJXHG WKDW WKH YLFWLPjV SHUVSHFWLYH     DGPLVVLRQRIHYLGHQFHVHHDOVR'RQQHOO\Y'H&KULVWRIRUR
ZDVLJQRUHGLQDPLWLJDWLRQKHDULQJ                                  86    FRQFHUQLQJ SURVHFXWRULDO
                                                                      PLVFRQGXFW  $ FRXUW PXVW ORRN WR WKH WRWDOLW\ RI WKH
  >'HIHQGDQW@ XVXUSV WKH FRPSDVVLRQ WKDW LV MXVWO\ KLV         FLUFXPVWDQFHVWRGHWHUPLQHZKHWKHUWKHPLVFRQGXFWGHQLHG
  YLFWLPjV GXH  +H ZLOO VWHDO KLV YLFWLPjV PRUDO             5RHDIDLUWULDO6XPPLWY%RUGHQNLUFKHU)G
  FRQVWLWXHQF\ DORQJ ZLWK KHU OLIH     $QG QRZ          WK &LU   :H KDYH LGHQWLILHG WKH IDFWRUV WR EH
  >'HIHQGDQW@DVNV\RXODGLHVDQGJHQWOHPHQZLWKRXWD               FRQVLGHUHGLQZHLJKLQJWKHH[WHQWRISURVHFXWRULDOPLVFRQGXFW
  ZRUGRIUHPRUVHZLWKRQO\WHDUVIRUKLPVHOIZLWKRXWD             LQ KDEHDV FDVHV  :H FRQVLGHU  WKH GHJUHH WR ZKLFK WKH
  WHDUIRUKLVYLFWLP1RWDZRUGo,jPVRUU\+HZDQWV             UHPDUNVFRPSODLQHGRIKDYHDWHQGHQF\WRPLVOHDGWKHMXU\
  \RX WR JLYH KLP ZKDW KH ZRXOG KDYH JRWWHQ LI >WKH         DQGWRSUHMXGLFHWKHDFFXVHGZKHWKHUWKH\DUHLVRODWHGRU
  YLFWLP@KDGEHHQDOORZHGWROLYHoMDLO                           H[WHQVLYHZKHWKHUWKH\ZHUHGHOLEHUDWHO\RUDFFLGHQWDOO\
                                                                      SODFHGEHIRUHWKHMXU\DQGWKHVWUHQJWKRIWKHFRPSHWHQW
5RH DVVHUWV WKDW WKLV DUJXPHQW IURP WKH SURVHFXWRU             SURRIWRHVWDEOLVKWKHJXLOWRIWKHDFFXVHG$QJHOY2YHUEXUJ
mHVVHQWLDOO\DVNHGWKHMXU\WRDJUHHWKDWWKHHQWLUHFRQFHSWRI        )G   WK &LU  FLWLQJ 8QLWHG 6WDWHV Y
DPLWLJDWLRQKHDULQJZDVUHSXJQDQWDQGFRQVWLWXWHGDQDWWHPSW         /HRQ  )G   WK &LU   (YHQ LI WKH
WRVWHDORUXVXUSWKHYLFWLPjVµPRUDOFRQVWLWXHQF\DORQJZLWK         SURVHFXWRUjV FRPPHQWV FRQYH\HG WKH PHDQLQJ WKDW 5RH
KHUOLIHj7KLVIRUPRIDUJXPHQWXQGHUPLQHGWKHLQWHJULW\RI         DOOHJHV WKH\ FRQYH\HG LW LV FOHDU WKDW VXFK LVRODWHG DQG
WKHHQWLUHSURFHVVDQG>RIIHQGHG@WKHFRQVWLWXWLRQDOFRQFHSW         LQGLUHFWFRPPHQWVGLGQRWUHQGHU5RHjVWULDOIXQGDPHQWDOO\
RI D µIDLU WULDOjl  ,W LV QRW FOHDU WKDW WKHVH FRPPHQWV   XQIDLU
GHQLJUDWHGWKHPLWLJDWLRQSURFHVVEXWUDWKHUDVWKHGLVWULFW
FRXUW KHOG m>W@KH SURVHFXWRU DUJXHG LQ HVVHQFH WKDW WKH       6HFRQGZLWKUHJDUGWRWKHSURVHFXWRUjVFRPPHQWVDVWRWKH
YLFWLPjVOLIHKDGHQGHGDQGWKDWRQO\>5RH@jVSOLJKWFRXOGEH         DEVHQFH RI HYLGHQFH DV WR FHUWDLQ PLWLJDWLRQ IDFWRUV 5RH
SUHVHQWHG LQ SHUVRQ WR WKH MXU\  7R WKLV H[WHQW WKH     SRLQWV WR WKH IROORZLQJ VWDWHPHQW m>L@Q VRPH FULPHV WKH
SURVHFXWRUjVFRPPHQWVFRQFHUQLQJWKHYLFWLPXQGHUVWDQGDEO\           YLFWLPKDVVRPHWKLQJWRGRZLWKZKDWKDSSHQHGWKHYLFWLPLV
GUDPDWLF DQG HPRWLRQDO LQ WKH FDVH RI D FULPH LQYROYLQJ D   VRPHKRZ SDUWLDOO\ WR EODPH  :KDW PDNHV WKLV FULPH VR
YLROHQWNLOOLQJZHUHZHOOZLWKLQWKHFRQVWLWXWLRQDOSDUDPHWHUV       UHSXOVLYHZKDWDEVROXWHO\WHVWV\RXUIDLWKLQWKHPHUF\RI*RG
RIDIDLUWULDOl                                                     LV >WKH@ DZHVRPH UDQGRPQHVV RI WKH FULPHl DV ZHOO DV
                                                                      m>V@RPH FULPHV \RX ILQG WKDW WKH SHUVRQ ZKR FRPPLWV WKH