Court Opinion

ID: 2970202
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:07:13.461139+00
Date Added: 2024-06-11T11:43:28.925092
License: Public Domain

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

    (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
                )LOH 1DPH DS

81,7('67$7(6&28572)$33($/6
              )257+(6,;7+&,5&8,7
                BBBBBBBBBBBBBBBBB

521$/' , :(,66([HFXWRU         ;
DQG7UXVWHHIRU3ODLQWLII          
:DOWHU/$EW                     
                                     1RV
            3ODLQWLII$SSHOOHH 
              &URVV$SSHOODQW !
                                   
                                   
           Y                      
                                   
67 3$8/ ),5( $1' 0$5,1(           
,1685$1&( &203$1<                 
                                   
         'HIHQGDQW$SSHOODQW 
               &URVV$SSHOOHH 
                                  1
      $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
     IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG
  1Rn/HVOH\%URRNV:HOOV'LVWULFWsXGJH
               $UJXHG2FWREHU
          'HFLGHGDQG)LOHG0DUFK
%HIRUH.(,7+.(11('<DQG%$7&+(/'(5&LUFXLW
                     sXGJHV

                            
     :HLVVY6W3DXO)LUH                1RV        1RV                    :HLVVY6W3DXO)LUH      
      DQG0DULQH,QV&R                                                                                  DQG0DULQH,QV&R

                     BBBBBBBBBBBBBBBBB                               &6XPPDU\sXGJPHQWRQ'XW\WR,QGHPQLI\
                          &2816(/                                      %HFDXVH WKH 6W 3DXO SROLFLHV GR QRW DUJXDEO\ FRYHU WKH
                                                                     SDWHQW LQIULQJHPHQW FODLPV WKH\ FDQQRW EH KHOG WR UHTXLUH
$5*8('  )HOL[ s *RUD 5(1',*6 )5< .,(/< 	                LQGHPQLILFDWLRQ RQ WKRVH FODLPV  :H WKHUHIRUH DIILUP WKH
'(11,6 &LQFLQQDWL 2KLR IRU $SSHOODQW  5LFKDUG 6          GLVWULFW FRXUWjV GHWHUPLQDWLRQ WKDW 6W 3DXO KDG QR GXW\ WR
0LWFKHOO 52(7=(/ 	 $1'5(66 &OHYHODQG 2KLR IRU              LQGHPQLI\0RU)OR
$SSHOOHH  21 %5,()  )HOL[ s *RUD 5(1',*6 )5<
.,(/<	'(11,6&LQFLQQDWL2KLRIRU$SSHOODQW5LFKDUG                                    &21&/86,21
60LWFKHOO52(7=(/	$1'5(66&OHYHODQG2KLRIRU
$SSHOOHH                                                               )RUWKHIRUHJRLQJUHDVRQVZH$)),50WKHMXGJPHQWRI
                                                                     WKH GLVWULFW FRXUW YDFDWLQJ WKH GHIDXOW MXGJPHQW DJDLQVW 6W
                     BBBBBBBBBBBBBBBBB                               3DXOZH$)),50WKHSRUWLRQRIWKHMXGJPHQWKROGLQJWKDW
                                                                     WKH6W3DXOLQVXUDQFHSROLFLHVGLGQRWFRYHUFODLPVIRUSDWHQW
                         23,1,21                                     LQIULQJHPHQWDQGZH5(9(56(WKHSRUWLRQRIWKHMXGJPHQW
                     BBBBBBBBBBBBBBBBB                               KROGLQJ WKDW 6W 3DXO KDG D GXW\ WR GHIHQG 0RU)OR LQ WKH
                                                                     SDWHQW LQIULQJHPHQW OLWLJDWLRQ DQG DZDUGLQJ FRVWV DQG
   $/,&(0%$7&+(/'(5&LUFXLWsXGJH6W3DXO)LUH                DWWRUQH\jVIHHV
DQG 0DULQH ,QVXUDQFH &RPSDQ\ m6W 3DXOl DSSHDOV WKH
MXGJPHQWRIWKHGLVWULFWFRXUWKROGLQJWKDWLWRZHGLWVLQVXUHG
0RU)OR,QGXVWULHV,QFm0RU)ORlDGXW\WRGHIHQGLQD
SDWHQW LQIULQJHPHQW DFWLRQ DQG WKDW LW ZDV OLDEOH IRU WKH
DWWRUQH\jVIHHVDQGFRVWVLQFXUUHGE\0RU)ORLQGHIHQGLQJ
WKDWDFWLRQ5RQDOG:HLVVDSSHDOVWKHGLVWULFWFRXUWjVRUGHU
YDFDWLQJ:HLVVjVGHIDXOWMXGJPHQWDJDLQVW6W3DXODQGWKH
GLVWULFW FRXUWjV MXGJPHQW WKDW 6W 3DXO KDG QR GXW\ WR
LQGHPQLI\0RU)ORIRUWKHMXGJPHQWDJDLQVWLWLQWKHSDWHQW
LQIULQJHPHQWDFWLRQ:HZLOODIILUPWKHRUGHUYDFDWLQJWKH
GHIDXOWMXGJPHQWDQGWKHMXGJPHQWLQIDYRURI6W3DXORQWKH
LVVXHRILQGHPQLILFDWLRQ:HZLOOUHYHUVHWKHGLVWULFWFRXUWjV
MXGJPHQWLQIDYRURI0RU)ORRQWKHLVVXHRI6W3DXOjVGXW\
WRGHIHQGDQGWKHDZDUGRIIHHVDQGFRVWV
                 ,3URFHGXUDO%DFNJURXQG
  6W 3DXO SURYLGHG OLDELOLW\ FRYHUDJH IRU 0RU)OR D
PDQXIDFWXUHURIZDWHUKHDWHUV,Q0RU)ORZDVVXHGIRU
SDWHQW LQIULQJHPHQW DQG 6W 3DXO GHFOLQHG WR GHIHQG
FRQWHQGLQJWKDWLWKDGQRGXW\HLWKHUWRGHIHQGRULQGHPQLI\
0RU)ORORVWWKHSDWHQWLQIULQJHPHQWVXLWDQGSDLGWKHSDWHQW
    :HLVVY6W3DXO)LUH                  1RV        1RV                       :HLVVY6W3DXO)LUH           
      DQG0DULQH,QV&R                                                                                       DQG0DULQH,QV&R

  ,Q $GYDQFH :DWFK &R /WG  )G DW  D FDVH         KROGHULQGDPDJHVDQGLQIHHV
LQYROYLQJFODLPVRIWUDGHPDUNLQIULQJHPHQWUDWKHUWKDQSDWHQW          DQG FRVWV  ,Q  0RU)OR ZDV VROG DQG LWV IRUPHU
LQIULQJHPHQWZHIRXQGQHLWKHUFRYHUDJHQRUDGXW\WRGHIHQG          FKDLUPDQ:DOWHU/$EWSXUFKDVHGWKHULJKWVWR0RU)ORjV
:H KHOG WKDW WKH PHDQLQJ RI mDGYHUWLVLQJ LQMXU\l ZDV           GXW\WRGHIHQGFODLPDJDLQVW6W3DXOIRU
XQDPELJXRXVEHFDXVHWKHWHUPVLQ TXHVWLRQKDGmHLWKHUDQ
HVWDEOLVKHG GLFWLRQDU\ PHDQLQJ RU D PHDQLQJ GHULYHG IURP           $EWILOHGWKLVDFWLRQDJDLQVW6W3DXOVHHNLQJDGHFODUDWRU\
FDVHODZl,GDW:HGLVWLQJXLVKHGDQDGYHUWLVLQJLQMXU\        MXGJPHQWWKDW6W3DXOKDGDGXW\WRGHIHQG0RU)ORLQWKH
IURPWUDGHPDUNLQIULQJHPHQWLQQXPHURXVZD\V)LUVWZH               SDWHQWLQIULQJHPHQWDFWLRQDQGDGXW\WRLQGHPQLI\0RU)OR
QRWHG WKDW D WUDGHPDUN FODLP XQOLNH DQ DGYHUWLVLQJ LQMXU\    IRUWKHMXGJPHQWDJDLQVWLWLQWKDWDFWLRQ'XHWRWKHIDLOXUH
GRHVQRWGHSHQGRQKDUPIXOVSHHFKEXWLQVWHDGLVFRQFHUQHG            RI6W3DXODQGLWVRXWVLGHFRXQVHOWRILOHDQDQVZHUDGHIDXOW
VROHO\ZLWKWKHGHVLJQRUDSSHDUDQFHRIDSURGXFW,GDW        MXGJPHQW ZDV HQWHUHG DJDLQVW 6W 3DXO  7KH GLVWULFW FRXUW
6HFRQG ZH IRXQG WKDW EHFDXVH WUDGHPDUN LQIULQJHPHQW LV         JUDQWHG 6W 3DXOjV PRWLRQ WR YDFDWH WKH GHIDXOW MXGJPHQW
FRPPRQO\ XQGHUVWRRG WR EH D GLVWLQFW IRUP RI DFWLRQDEOH        SXUVXDQW WR 5XOH E DQG ERWK SDUWLHV WKHQ PRYHG IRU
FRQGXFW WKH DEVHQFH RI DQ H[SOLFLW UHIHUHQFH WR WUDGHPDUN     VXPPDU\MXGJPHQW7KHGLVWULFWFRXUWKHOGWKDW6W3DXOKDG
LQIULQJHPHQWLQDFRQWH[WLQZKLFKVXFKDUHIHUHQFHZRXOGEH           DGXW\WRGHIHQG0RU)ORLQWKHSDWHQWOLWLJDWLRQEXWGLGQRW
H[SHFWHGSRLQWHGWRZDUGVDQH[FOXVLRQRIWUDGHPDUNOLWLJDWLRQ          KDYHDGXW\WRLQGHPQLI\7KHGLVWULFWFRXUWIXUWKHUIRXQG
IURPFRYHUDJH,G)LQDOO\ZHIRXQGWKDWWKHFODLPDQWKDG           WKDWKDYLQJEUHDFKHGLWVGXW\WRGHIHQG0RU)ORLQWKHSDWHQW
IDLOHGWRDOOHJHDQH[XVEHWZHHQKLVWUDGHPDUNLQIULQJHPHQW            OLWLJDWLRQVXLW6W3DXOZDVOLDEOHIRUWKHUHDVRQDEOHDWWRUQH\jV
FODLPDQGDQ\DGYHUWLVLQJDFWLYLW\DWDOO,GDW                IHHVDQGFRVWVLQFXUUHGE\0RU)ORLQGHIHQGLQJWKDWDFWLRQ
                                                                       7KHFRXUWDZDUGHGSUHMXGJPHQWLQWHUHVWIURPWKHGDWHRIWKH
   :H KROG WKDW WKH GLVWULFW FRXUW HUUHG LQ FRQFOXGLQJ WKDW   FRQFOXVLRQ   RI WKH SDWHQW OLWLJDWLRQ 7KLV WLPHO\ DSSHDO
EHFDXVHRIWKHVSOLWLQOHJDODXWKRULW\LQLQMXULVGLFWLRQV       IROORZHG
RXWVLGH RI 2KLR WKHUH ZDV QR ZD\ WR GHWHUPLQH ZKDW
FRQVWUXFWLRQRIWKHWHUPVLQTXHVWLRQWKH2KLRFRXUWVZRXOG                                           ,,)DFWV
JLYH7KHSODLQPHDQLQJRIDQmDGYHUWLVLQJLQMXU\lGHILQHGLQ
WKH SROLF\ DV mSLUDF\l DQG mXQIDLU FRPSHWLWLRQl GRHV QRW         ,Q6WDWH,QGXVWULHVDPDQXIDFWXUHURIZDWHUKHDWHUV
DUJXDEO\ FRYHU WKH ORVVHV GXH WR SDWHQW OLWLJDWLRQ DQG        DSSOLHGIRUDSDWHQWWRFRYHULWVQHZSURFHVVIRUPDNLQJZDWHU
WKHUHIRUH6W3DXOKDGQRGXW\WRGHIHQG0RU)ORLQWKHSDWHQW         KHDWHUV WKDW XVHG IRDP LQVXODWLRQ DV RSSRVHG WR WKH SULRU
LQIULQJHPHQWOLWLJDWLRQ$QGEHFDXVHZHKDYHKHOGWKDW6W            LQGXVWU\VWDQGDUGRIILEHUJODVVLQVXODWLRQ6KRUWO\WKHUHDIWHU
3DXOKDGQRGXW\WRGHIHQGZHZLOOUHYHUVHWKHGLVWULFWFRXUWjV       0RU)OR GHYHORSHG LWV RZQ IRDPLQVXODWHG ZDWHU KHDWHU
MXGJPHQW DZDUGLQJ DWWRUQH\jV IHHV DQG FRVWV  7KH GLVWULFW     XVLQJDVOLJKWYDULDWLRQRI6WDWHjVGHVLJQDQGE\0RU
FRXUWVLWWLQJLQGLYHUVLW\ZDVERXQGWRDSSO\WKHVXEVWDQWLYH        )ORZDVSURGXFLQJIRDPLQVXODWHGKHDWHUV%\0RU)OR
ODZRI2KLR(ULH55&RY7RPSNLQV86           ZDV RQH RI WKH ODUJHVW ZDWHU KHDWHU PDQXIDFWXUHUV LQ WKH
+D\HVY(TXLWDEOH(QHUJ\5HV&R)GWK             QDWLRQ
&LU   2KLR ODZ GRHV QRW SHUPLW D FRXUW WR DZDUG
DWWRUQH\jVIHHVLQDGHFODUDWRU\MXGJPHQWDFWLRQH[FHSWZLWK
H[SOLFLW VWDWXWRU\ DXWKRUL]DWLRQ DQG WR WKH SUHYDLOLQJ SDUW\       
                                                                             $IWHU WKH QRWLFHV RI DSSHDO ZHUH ILOHG :DOWHU $EW GLHG DQG 5RQDOG
2KLR5HY&RGH$QQ6WXUWY*UDQJH0XW&DV               :HLVV $EWjV H[HFXWRU DQG WUXVWHH ZDV VXEVWLWXWHG DV WKH SODLQWLII
&R1(G2KLR&W$SS                       DSSHOOHH FURVVDSSHOODQW )RU HDVH RI UHIHUHQFH ZH ZLOO FRQWLQXH WR UHIHU
                                                                       WR WKH SODLQWLII DV $EW
     :HLVVY6W3DXO)LUH                  1RV        1RV                   :HLVVY6W3DXO)LUH      
      DQG0DULQH,QV&R                                                                                   DQG0DULQH,QV&R

  2Q0D\WKH3DWHQW2IILFHJUDQWHG6WDWHDSDWHQWRQ          RPLWWHGm7KH6XSUHPH&RXUWRI2KLRKDVKHOGWKDWµ>Z@KHQ
6WDWHjV PHWKRG RI PDQXIDFWXULQJ IRDP LQVXODWHG KHDWHUV          WKHODQJXDJHRIDQLQVXUDQFHSROLF\KDVDSODLQDQGRUGLQDU\
6WDWH LPPHGLDWHO\ VXHG 0RU)OR IRU SDWHQW LQIULQJHPHQW          PHDQLQJLWLVXQQHFHVVDU\DQGLPSHUPLVVLEOHIRUWKLVFRXUWWR
5HO\LQJRQWKHDGYLFHRISDWHQWFRXQVHO0RU)ORFRQWHVWHG             UHVRUWWRFRQVWUXFWLRQRIWKDWODQJXDJHj,IZHZHUHWRDFFHSW
WKH VXLW DQG FRQWLQXHG WR SURGXFH IRDP LQVXODWHG ZDWHU         SODLQWLIIVjDUJXPHQWWKDWDFRQWUDFWSURYLVLRQLVDPELJXRXVDV
KHDWHUV7KHGLVWULFWFRXUWUXOHGWKDW0RU)ORKDGLQIULQJHG          DPDWWHURIODZEHFDXVHRWKHUMXULVGLFWLRQVKDYHFKRVHQWR
6WDWHjVSDWHQWDQGWKDWMXGJPHQWZDVDIILUPHG7KHGLVWULFW           DSSO\DSURYLVLRQGLIIHUHQWO\WKHQZHZRXOGEHUHMHFWLQJD
FRXUWDZDUGHG6WDWHDSSUR[LPDWHO\PLOOLRQLQGDPDJHV             ZHOOVHWWOHG 2KLR UXOH RI FRQVWUXFWLRQ WR DSSO\ WKH SODLQ
%\ sDQXDU\   0RU)OR KDG SDLG 6WDWH D WRWDO RI       ODQJXDJH RI WKH FRQWUDFW ZKHUH WKDW ODQJXDJH LV FOHDU DQG
LQGDPDJHVDQGKDGDOVRSDLGLQ            XQDPELJXRXVl
IHHVDQGFRVWV
                                                                          2XUYLHZWKDWWKHSODLQPHDQLQJRIWKHFRQWUDFWWHUPVDW
  :KHQ WKH SDWHQW OLWLJDWLRQ EHJDQ 0RU)OR KDG WKUHH           LVVXH KHUH SUHFOXGHV D ILQGLQJ WKDW FODLPV IRU SDWHQW
LQVXUDQFH SROLFLHV WKURXJK 6W 3DXO  7KH &RPSUHKHQVLYH         LQIULQJHPHQWDUHFRYHUHGDUJXDEO\RURWKHUZLVHE\WKH6W
*HQHUDO /LDELOLW\ SODQ SURYLGHG FRYHUDJH IRU mDGYHUWLVLQJ        3DXOSROLFLHVLVVXSSRUWHGKRZHYHUE\ERWK2KLRDQG6L[WK
LQMXU\ FODLPV UHVXOWLQJ IURP \RXU EXVLQHVV DFWLYLWLHVl          &LUFXLWFDVHODZ3ULRUWRRXUGHFLVLRQLQ+HUPDQ0LOOHUWKH
$GYHUWLVLQJ LQMXU\ ZDV GHILQHG DV m3LUDF\ 8QIDLU                1LQWK 'LVWULFW &RXUW RI $SSHDOV RI 2KLR JDYH D UHVWULFWLYH
FRPSHWLWLRQ,QIULQJHPHQWRIFRS\ULJKWWLWOHRUVORJDQlWKDW          LQWHUSUHWDWLRQWRWKHWHUPmDGYHUWLVLQJLQMXU\lLQWKHFDVHRI
UHVXOWHG LQ LQWHUIHUHQFH ZLWK DQRWKHUjV ULJKWV  $GYHUWLVLQJ    6\QHUJ\VWH[,QWjO,QFY0RWRULVWV0XW,QV1R0
FODLPV WKDW ZHUH WKH UHVXOW RI mLQIULQJHPHQW RI WUDGHPDUN      :/  2KLR &W $SS sXO\  
VHUYLFHPDUNRUWUDGHQDPHlZHUHH[FOXGHGIURPFRYHUDJH               XQSXEOLVKHG,Q6\QHUJ\VWH[WKHFRXUWIRXQGWKDWWKHWHUPV
$QRWKHUSROLF\WKH8PEUHOOD([FHVV/LDELOLW\SODQFRYHUHG            DWLVVXHnm,QIULQJHPHQWRIFRS\ULJKWWLWOHRUVORJDQlnZHUH
HVVHQWLDOO\ WKH VDPH DFWLYLWLHV LQ UHODWLRQ WR DGYHUWLVLQJ      QRWDPELJXRXVDQGZLWKRXWWKHSUHUHTXLVLWHSOHDGLQJRIDQ
LQMXULHV  7KH WKLUG SROLF\ ZDV D 'LUHFWRUjV DQG 2IILFHUjV    LQMXU\ FDXVHG E\ DGYHUWLVLQJ QR FRYHUDJH RI D SDWHQW
/LDELOLW\SODQ                                                        LQIULQJHPHQWFODLPZDVDUJXDEOH,GDW

  ,Q0D\RI0RU)ORUHTXHVWHGWKDW6W3DXOGHIHQGWKH             7KLV FLUFXLW DGGUHVVHG WKH TXHVWLRQ RI ZKHWKHU SDWHQW
SDWHQWDFWLRQDQGLQGHPQLI\DQ\ORVVHV7KH6W3DXODGMXVWHU         LQIULQJHPHQW LV FRYHUHG DV DQ DGYHUWLVLQJ LQMXU\ LQ 8QLWHG
DVVLJQHG WR GHWHUPLQH ZKHWKHU WKHUH ZDV FRYHUDJH                 1DWjO ,QV &R  )G DW   )ROORZLQJ WKH OHDG RI
LQH[SOLFDEO\ HYHQ DFFRUGLQJ WR 6W 3DXO LWVHOI OLPLWHG KLV   6\QHUJ\VWH[ZHKHOGWKDWDQDGYHUWLVLQJLQMXU\GRHVQRWRFFXU
UHYLHZWR0RU)ORjV'LUHFWRUjVDQG2IILFHUjV/LDELOLW\SODQ           GXULQJ WKH FRXUVH RI SDWHQW LQIULQJHPHQW XQOHVV WKH LQMXU\
%DVHG RQ LWV UHYLHZ RI RQO\ WKH 'LUHFWRUjV DQG 2IILFHUjV      UHVXOWVGLUHFWO\IURPDGYHUWLVLQJ,GDW6LQFH667
/LDELOLW\SODQ6W3DXOGHQLHGFRYHUDJH                              RQO\DOOHJHGDQDGYHUWLVLQJLQMXU\WKDWZDVLQUHDOLW\DSDWHQW
                                                                       LQIULQJHPHQWFODLPWKHFRXUWIRXQGWKDWWKHUHZDVQRGXW\WR
  :DOWHU$EWZDVWKHFKDLUPDQRIWKHERDUGFKLHIH[HFXWLYH            GHIHQG,GDW6LPLODUO\WKHFRPSODLQWILOHGE\6WDWH
RIILFHU DQG PDMRULW\ VKDUHKROGHU RI 0RU)OR  ,Q )HEUXDU\     ,QGXVWULHVDJDLQVW0RU)ORnWKHFRPSODLQWDVWRZKLFK$EW
 $EW UHDG DQ DUWLFOH LQ WKH :DOO 6WUHHW sRXUQDO WKDW    QRZ FODLPV 6W 3DXO ZDV REOLJDWHG WR SURYLGH 0RU)OR D
VXJJHVWHGWKDWDGYHUWLVLQJLQMXU\SURYLVLRQVLQFRPSUHKHQVLYH          GHIHQVHnGRHVQRWDOOHJHDQ\LQMXU\GLUHFWO\UHVXOWLQJIURP
LQVXUDQFH SODQV VXFK DV 0RU)ORjV FRYHUHG SDWHQW                 DGYHUWLVLQJUDWKHUWKDWFRPSODLQWDOOHJHVSDWHQWLQIULQJHPHQW
    :HLVVY6W3DXO)LUH                    1RV          1RV                   :HLVVY6W3DXO)LUH      
      DQG0DULQH,QV&R                                                                                       DQG0DULQH,QV&R

ZDVUHTXLUHGWRGHIHQGLWLQDSDWHQWLQIULQJHPHQWDFWLRQ,G            LQIULQJHPHQW OLWLJDWLRQ  $UPHG ZLWK WKLV LQIRUPDWLRQ $EW
:HKHOGWKDWSDWHQWLQIULQJHPHQWZDVQRWDUJXDEO\FRYHUHG                  VXEPLWWHGDFODLPWR6W3DXO2Q$SULO6W3DXO
DV DQ mDGYHUWLVLQJ LQMXU\l XQGHU HLWKHU mSLUDF\l RU mXQIDLU        EHJDQLWVLQYHVWLJDWLRQLQWRSRVVLEOHFRYHUDJHIRUOHJDOIHHV
FRPSHWLWLRQl,GDW:HFRQFHGHGWKDWSLUDF\DQGXQIDLU             H[SHQGHG E\ 0RU)OR LQ WKH SDWHQW OLWLJDWLRQ  ,Q sXO\
FRPSHWLWLRQLQWKHDEVWUDFWPLJKWEHFRQVWUXHGEURDGO\DV                sDFTXHOLQH0F&URVNH\WKH6W3DXOFODLPUHSUHVHQWDWLYHDW
HQFRPSDVVLQJ SDWHQW LQIULQJHPHQW EXW ZH FRQFOXGHG WKDW              WKH&OHYHODQGRIILFHDVVLJQHGWR0RU)ORjVFODLPHVWDEOLVKHG
VLQFHWKHSROLF\VSHFLILFDOO\FRYHUHGFRS\ULJKWLQIULQJHPHQW               DQH[SHQVHUHVHUYHRIPLOOLRQEDVHGRQKHUEHOLHIWKDWWKHUH
DV DQ DGYHUWLVLQJ LQMXU\ WKH RPLVVLRQ RI DQ\ UHIHUHQFH WR        ZDVDILIW\SHUFHQWOLNHOLKRRGWKDW6W3DXOFRXOGEH IRXQG
SDWHQWLQIULQJHPHQWDVDQDGYHUWLVLQJLQMXU\ZDVDQLQGLFDWLRQ             OLDEOHIRUWKHDSSUR[LPDWHO\PLOOLRQLQOHJDOIHHVDFFUXHG
RI WKH SDUWLHVj LQWHQW  ,G  7KH QDWXUDO XVDJH RI WKH WHUPV   E\0RU)ORLQGHIHQGLQJWKHSDWHQWOLWLJDWLRQ2Q6HSWHPEHU
mSLUDF\l DQG mSDWHQW LQIULQJHPHQWl DOVR FRXQVHOHG XV WR             6W3DXOUHFHLYHGDQRSLQLRQIURPRXWVLGHFRXQVHO
DVVXPHWKDWLIWKHSDUWLHVKDGGHVLUHGWRLQFOXGHFRYHUDJHIRU             WKDW6W3DXOKDGQRGXW\WRGHIHQGDQGRQ2FWREHU
SDWHQWLQIULQJHPHQWWKH\ZRXOGKDYHLQFOXGHGLWVSHFLILFDOO\              0F&URVNH\UHFRPPHQGHGWKDW6W3DXOLVVXHDOHWWHUWR0RU
,G  7KH FRXUW IRXQG WKDW WKH WHUPV RI WKH SROLF\ GLG QRW      )OR GHQ\LQJ DQ\ GXW\ WR GHIHQG  2Q 1RYHPEHU  
HQFRPSDVVSDWHQWLQIULQJHPHQWDQG7UDYHOHUVGLGQRWKDYHDQ                0F&URVNH\VHQWDGHQLDOOHWWHUWR0RU)OR7KURXJKRXWWKLV
mDUJXDEOHlGXW\WRGHIHQG                                                 SHULRG 6W 3DXOjV FRXQVHO DQG FRXQVHO IRU 0RU)OR
                                                                           FRUUHVSRQGHGE\OHWWHUDQGWHOHSKRQHZLWKUHJDUGWRZKHWKHU
   ,WLVWUXHWKDWWKH+HUPDQ0LOOHUFDVHZDVGHFLGHG\HDUV                WKH 6W 3DXO SROLFLHV SURYLGHG FRYHUDJH IRU WKH SDWHQW
DIWHUWKHFRQFOXVLRQRIWKHXQGHUO\LQJSDWHQWOLWLJDWLRQDWLVVXH          LQIULQJHPHQWFODLPRUUHTXLUHG6W3DXOWRGHIHQGWKHSDWHQW
KHUH%XWLQWKDWFDVHZHGLGQRWORRNWRRWKHUMXULVGLFWLRQVWR          OLWLJDWLRQ
GHWHUPLQH ZKHWKHU VLPLODU WHUPV LQ LQVXUDQFH SROLFLHV KDG
EHHQLQWHUSUHWHGGLIIHUHQWO\WKHUH2XUXVHLQ+HUPDQ0LOOHU                 0RU)ORZDVVROGWR6$%+86,QFGXULQJWKHVSULQJRI
RIWUDGLWLRQDOPHWKRGVRIFRQWUDFWLQWHUSUHWDWLRQWRGHWHUPLQH              DQG $EW SXUFKDVHG WKH ULJKWV WR 0RU)ORjV GXW\WR
WKH SODLQ PHDQLQJ RI WKH SROLF\jV WHUPV EROVWHUV 6W 3DXOjV       GHIHQG FODLP DJDLQVW 6W 3DXO IRU   $EW ILOHG WKLV
SRVLWLRQKHUH:HWKLQNWKH+HUPDQ0LOOHUDSSURDFKLVWKH                 GHFODUDWRU\ MXGJPHQW DFWLRQ RQ $XJXVW    %\
FRUUHFWRQHDQGZHFRQFOXGHWKDWWKHWHUPVRIWKHLQVXUDQFH               $XJXVW6W3DXOKDGUHFHLYHGWKHFRPSODLQWWKURXJK
FRQWUDFWDWLVVXHKHUHZHUHQRWPDGHDPELJXRXVE\WKHODFNRI              FHUWLILHG PDLO  2Q 6HSWHPEHU   6W 3DXO VHQW WKH
DQ DXWKRULWDWLYH RU FRQWUROOLQJ OHJDO LQWHUSUHWDWLRQ RI WKRVH       FRPSODLQWWR:HVWRQ6W3DXOjVFRXQVHOZKLFKUHFHLYHGWKH
WHUPV  )XUWKHUPRUH ZH KDYH KHOG WKDW WKH DSSURDFK                FRPSODLQWLQLWVGRFNHWGHSDUWPHQWWKHIROORZLQJGD\'HQQLV
DGYRFDWHGE\$EWnWKDWDFRQWUDFWSURYLVLRQLVDPELJXRXVDV                 .ROLEDEDGRFNHWFOHUNWHVWLILHGWKDWSXUVXDQWWR:HVWRQjV
D PDWWHU RI ODZ LI RWKHU MXULVGLFWLRQV KDYH FRQIOLFWLQJ            SROLF\KHFDOOHGWKHGLVWULFWFRXUWFOHUN DVNLQJZKHWKHUWKH
LQWHUSUHWDWLRQVRIVLPLODUSURYLVLRQVnLVQRWWKHODZLQ2KLR              UHWXUQRIVHUYLFHKDGEHHQILOHG$IWHUILQGLQJWKDWWKHUHWXUQ
3DUN2KLR,QGXV,QFY+RPH,QGHP&R)G                  KDG QRW \HW EHHQ ILOHG KH GRFNHWHG DQ DQVZHU GDWH IRU
 WK &LU  LWDOLFV LQ RULJLQDO LQWHUQDO FLWDWLRQV     6HSWHPEHUWZHQW\GD\VIURPWKHGDWHWKHFRPSODLQWZDV
                                                                           ILOHG7KHUHWXUQRIVHUYLFHZDVILOHGRQ6HSWHPEHU

 UHMHFWLQJ DQ DWWHPSW E\ D SDUW\ WR GLVWLQJXLVK 2KLR DQG 0LFKLJDQ
ODZ ILQGLQJ WKDW mHDFK VWDWHjV UXOHV RI FRQWUDFW LQWHUSUHWDWLRQ DUH WKH
VDPHl
       :HLVVY6W3DXO)LUH                  1RV         1RV                      :HLVVY6W3DXO)LUH        
        DQG0DULQH,QV&R                                                                                       DQG0DULQH,QV&R

  sDPHV%DURQHDQRWKHUGRFNHWFOHUNDW:HVWRQVWDWHGLQKLV             2KLROHJDORSLQLRQZDVGLYLGHGLQRYHUZKHWKHUDSDWHQW
DIILGDYLW WKDW RQ 6HSWHPEHU  RU   KH FDOOHG WKH      LQIULQJHPHQWFODLPZDVFRYHUHGDVDQmDGYHUWLVLQJLQMXU\lLQ
GLVWULFWFRXUWFOHUNWRDVFHUWDLQZKHWKHUWKHUHWXUQZDVILOHG           HVVHQFH$EWDJXHVWKDWWKLVGLYLVLRQRIRSLQLRQPDNHVWKH
DQGDJDLQZDVLQIRUPHGWKDWWKHUHWXUQKDGQRW\HWEHHQILOHG            FRYHUDJHmDUJXDEOHlXQGHU:LOORXJKE\+LOOV
)ROORZLQJ :HVWRQ SROLF\ %DURQH PRYHG WKH DQVZHU GDWH
IRUZDUGWR6HSWHPEHU7KLVGDWHZDVWKLUW\GD\V                    ,Q:LOORXJKE\+LOOVWKH6XSUHPH&RXUWRI2KLRDGGUHVVHG
DIWHUWKHFRPSODLQWZDVILOHG                                            WKHFKDQJHVZURXJKWE\2KLRjVXVHRIQRWLFHSOHDGLQJDQG
                                                                          H[SDQGHGXSRQWKHHDUOLHUUXOHWKDWDGXW\WRGHIHQGPD\DULVH
   1RDQVZHUWRWKHFRPSODLQWZDVILOHGE\WKHDQVZHUGDWHRI             VROHO\IURPWKHSOHDGLQJV6LQFHXQGHUQRWLFHSOHDGLQJWKH
6HSWHPEHU7ZRGD\VODWHUDGHIDXOWZDVHQWHUHGRQWKH                GXW\WRGHIHQGFRXOGDULVHDWVRPHSRLQWVXEVHTXHQWWRWKH
FRXUWjVGRFNHW2Q6HSWHPEHU$EWILOHGDQDIILGDYLW            ILOLQJRIWKHFRPSODLQWWKHFRXUWDGRSWHGWKHUXOHWKDWZKHQ
LQVXSSRUWRIDGHIDXOWMXGJPHQWLQZKLFKKHDOOHJHGGDPDJHV              WKHSOHDGLQJVmVWDWHDFODLPZKLFKLVSRWHQWLDOO\RUDUJXDEO\
GXHWRKLPRIDSSUR[LPDWHO\ILIWHHQPLOOLRQGROODUV$URXQG              ZLWKLQWKHSROLF\FRYHUDJHWKHLQVXUHUPXVWDFFHSWWKH
WKDWGDWH%DURQHDJDLQWHOHSKRQHGWKHGLVWULFWFRXUWFOHUNDQG           GHIHQVHRIWKHFODLPl,GDWHPSKDVLVDGGHG:HDJUHH
LQTXLUHG DERXW WKH VWDWXV RI WKH UHWXUQ RI VHUYLFH DQG ZDV      WKDW:LOORXJKE\+LOOVFRQWUROVKHUHDQGZHWKLQNWKDWFDVH
DJDLQWROGWKDWQRUHWXUQKDG\HWEHHQILOHG$SSDUHQWO\WKH            UHTXLUHV WKDW ZH GHWHUPLQH IURP WKH SODLQ PHDQLQJ RI WKH
FRXUWFOHUNGLGQRWPHQWLRQWKDWDGHIDXOWKDGEHHQHQWHUHGLQ            FRQWUDFWWHUPVZKHWKHUWKHRFFXUUHQFHLVDUJXDEO\FRYHUHGE\
WKH FDVH  %DURQH WKHQ QRWHG D QHZ ODWHU DQVZHU GDWH RI     WKHLQVXUDQFHFRQWUDFW
2FWREHU7KLVGDWHZDVIRUW\GD\VDIWHUWKHILOLQJRI
WKHFRPSODLQW                                                              ,Q2KLRQRUPDOFRQWUDFWUXOHVDSSO\WRWKHLQWHUSUHWDWLRQRI
                                                                          LQVXUDQFHFRQWUDFWV.LQJY1DWLRQZLGH,QV&R1(G
  7KH FRXUW HQWHUHG D GHIDXOW MXGJPHQW RQ 6HSWHPEHU              2KLR   7KH FRXUW GHWHUPLQHV ZKHWKHU
  :HVWRQjV LQWHUQDO GRFNHW VKHHW LQGLFDWHG WKDW RQ           FRQWUDFWWHUPVDUHDPELJXRXV8QLWHG1DWjO,QV&RY667
2FWREHUVRPHRQHn:HVWRQKDVQRWEHHQDEOHWRGHWHUPLQH                  )LWQHVV&RUS)GWK&LU$WHUPLV
ZKRnSRVWSRQHG WKH DQVZHU GDWH WR 2FWREHU                   DPELJXRXVLILWLVUHDVRQDEO\VXVFHSWLEOHRIPRUHWKDQRQH
)LQDOO\RQ2FWREHU:HVWRQOHDUQHGRIWKHGHIDXOW               PHDQLQJ  .LQJ  1(G DW   ,I WKH WHUPV RI WKH
7KHIROORZLQJGD\6W3DXOILOHGDPRWLRQWRYDFDWHWKHGHIDXOW           FRQWUDFWDUHXQDPELJXRXVWKHFRXUWGHWHUPLQHVWKHPHDQLQJ
MXGJPHQW SXUVXDQW WR )HGHUDO 5XOH RI &LYLO 3URFHGXUH               RI WKH FRQWUDFW  1DWLRQZLGH 0XW )LUH ,QV &R Y *XPDQ
EDQG                                                         %URV)DUP1(G2KLR7KHFRXUWLV
                                                                          WR JLYH WKH WHUPV RI WKH FRQWUDFW WKHLU SODLQ DQG QDWXUDO
  7KHGLVWULFWFRXUWJUDQWHGWKHPRWLRQILQGLQJWKDW$EWZDV              PHDQLQJ.LQJ1(GDW
QRWSUHMXGLFHGE\WKHYDFDWLQJRIWKHMXGJPHQW6W3DXOKDG
DPHULWRULRXVGHIHQVHWKHUHZDVQRFXOSDEOHFRQGXFWRQ6W                7KLVFRXUWIDFHGDVLWXDWLRQVLPLODUWRWKHRQHDWKDQGLQ
3DXOjVEHKDOIDQG$EWjVFRXQVHONQHZRIEXWGLGQRWQRWLI\             +HUPDQ 0LOOHU  )G DW  D FDVH DULVLQJ XQGHU
6W3DXOjVFRXQVHOEHIRUHREWDLQLQJWKHMXGJPHQW(DFKSDUW\            0LFKLJDQODZ7KHUH+HUPDQ0LOOHUFODLPHGWKDW7UDYHOHUV

                                                                              
                                                                               %HFDXVH 2KLR DQG 0LFKLJDQ IROORZ WKH VDPH UXOHV RI FRQWUDFW
    
      %DURQHjV UHFROOHFWLRQ LV IODZHG EHFDXVH 6HSWHPEHU  ZDV 6DWXUGD\   FRQVWUXFWLRQ WKH+HUPDQ   0LOOHU DQDO\VLV LV DSSOLFDEOH LQ WKLV FDVH 6HH
DQG WKH WK ZDV 6XQGD\ DQG RQ QHLWKHU GD\ ZDV WKH FOHUNjV RIILFH RSHQ   8QLWHG 1DWjO ,QV &R Y 667 )LWQHVV &RUS  )G   WK &LU
    :HLVVY6W3DXO)LUH                  1RV         1RV                    :HLVVY6W3DXO)LUH        
      DQG0DULQH,QV&R                                                                                     DQG0DULQH,QV&R

ODZVXLWWKHHQWU\RIGHIDXOWRUWKHGHIDXOWMXGJPHQW7KLVLV         WKHQPRYHGIRUVXPPDU\MXGJPHQW7KHGLVWULFWFRXUWKHOG
FOHDUO\ QRW RQH RI WKRVH mPRVW H[WUHPH FDVHVl ZKHUH WKH        WKDW DW WKH WLPH WKH SDWHQW VXLW ZDV ILOHG LQ  LW ZDV
GHIDXOWMXGJPHQWLVWKHUHVXOWRIGHOLEHUDWHZLOOIXOFRQGXFW         DUJXDEOHZKHWKHU0RU)ORjVSROLFLHVFRYHUHGLWVFODLPDQG
8QLWHG&RLQ0HWHU&R,QF)GDW,QVWHDGWKLV            WKHUHIRUHXQGHU:LOORXJKE\+LOOVY&LQFLQQDWL,QV&R
FDVHSUHVHQWVDQDSSURSULDWHLQVWDQFHIRUWKHGLVWULFWFRXUWWR         1(G2KLR6W3DXOKDGDGXW\WRGHIHQG
H[HUFLVHLWVGLVFUHWLRQWRmDFKLHYHVXEVWDQWLDOMXVWLFHlWKURXJK
WKHOLEHUDODSSOLFDWLRQRI5XOHE%ORLVY )ULGD\              1H[WUHO\LQJRQ+HUPDQ0LOOHU,QFY7UDYHOHUV,QGHP
)GWK&LU:HKROGWKDWWKHGLVWULFWFRXUW         &R)GWK&LUWKHFRXUWUXOHGWKDW6W3DXO
GLGQRWDEXVHLWVGLVFUHWLRQLQYDFDWLQJWKHGHIDXOWMXGJPHQW          GLGQRWKDYHDGXW\WRLQGHPQLI\0RU)OREHFDXVHWKHSODLQ
                                                                        PHDQLQJRImSLUDF\lDQGmXQIDLUFRPSHWLWLRQlGLGQRWLQFOXGH
%6XPPDU\sXGJPHQWRQWKH'XW\WR'HIHQG                              DFODLPRISDWHQWLQIULQJHPHQW2QWKHLVVXHRIGDPDJHVWKH
                                                                        GLVWULFWFRXUWIRXQGWKDWEDVHGRQLWVEUHDFKRIWKHGXW\WR
   :HUHYLHZDGLVWULFWFRXUWjVJUDQWRIVXPPDU\MXGJPHQWGH            GHIHQG 6W 3DXO ZDV OLDEOH WR 0RU)OR IRU UHDVRQDEOH
QRYR$GYDQFH:DWFK&R/WGY.HPSHU1DWjO,QV&R             DWWRUQH\jV IHHV DQG FRVWV LQFXUUHG LQ WKH XQGHUO\LQJ SDWHQW
)G   WK &LU   6XPPDU\ MXGJPHQW LV            LQIULQJHPHQWDFWLRQDQGLQWKLVGHFODUDWRU\MXGJPHQWDFWLRQ
DSSURSULDWHLIWKHHYLGHQFHWDNHQLQWKHOLJKWPRVWIDYRUDEOH          DQGIRUSUHMXGJPHQWLQWHUHVWDW2KLRjVVWDWXWRU\UDWHIURP
WRWKHQRQPRYLQJSDUW\HVWDEOLVKHVWKDWWKHUHLVQRJHQXLQH           1RYHPEHU   WKH GDWH WKH SDUWLHV VWLSXODWHG DV WKH
LVVXHRIPDWHULDOIDFWDQGWKDWWKHPRYLQJSDUW\LVHQWLWOHGWR         FRQFOXVLRQRIWKHXQGHUO\LQJSDWHQWOLWLJDWLRQ
MXGJPHQWDVDPDWWHURIODZ)HG5&LY3URF+HUH
WKHIDFWVUHJDUGLQJWKHLVVXHRID GXW\WRGHIHQGDUHQRWLQ                                     ,,,$QDO\VLV
GLVSXWH
                                                                        $7KH'HIDXOWsXGJPHQW
   6W3DXODQG$EWDJUHHWKDW:LOORXJKE\+LOOV1(GDW
FRQWUROVWKLVFDVH6W3DXOFODLPVWKDW:LOORXJKE\+LOOV            :H UHYLHZ IRU DEXVH RI GLVFUHWLRQ WKH GLVWULFW FRXUWjV
UHTXLUHVDIDFWXDODQDO\VLVRIWKHSOHDGLQJVDWWKHWLPHWKHFDVH       JUDQWLQJ RI D PRWLRQ WR YDFDWH D GHIDXOW MXGJPHQW
ZDVLQLWLDWHGWRGHWHUPLQHZKHWKHUWKHIDFWVDOOHJHGVWDWHGD           0DQXIDFWXUHUVj,QGXV5HODWLRQV$VVjQY(DVW$NURQ&DVWLQJ
FODLPWKDWZDVmDUJXDEO\lFRYHUHGE\WKHLQVXUDQFHSROLF\              &R)GWK&LU:HUHYLHZDPRWLRQ
6W 3DXO IXUWKHU DUJXHV WKDW 2KLR FRXUWV KDYH IRXQG VLQFH     WRYDFDWHDGHIDXOWMXGJPHQWXQGHUWKHVWULFWHUVWDQGDUGVRI
ZKHQWKHXQGHUO\LQJSDWHQWVXLWZDVILOHGWKDWDSDWHQW           5XOHEUDWKHUWKDQXQGHUWKHPRUHOD[VWDQGDUGVJRYHUQLQJ
LQIULQJHPHQWFODLPLVQRWDQmDGYHUWLVLQJLQMXU\lZLWKLQWKH            D PRWLRQ WR YDFDWH WKH HQWU\ RI GHIDXOW XQGHU 5XOH F
PHDQLQJRIWKHSROLF\LQTXHVWLRQDQGWKLVIDFWPDQGDWHVWKH           :DLIHUVRQJ/WG,QFY&ODVVLF0XVLF9HQGLQJ)G
ILQGLQJ WKDW D SDWHQW VXLW LV QRW mDUJXDEO\l DQ mDGYHUWLVLQJ    WK &LU  m%XW RQFH WKH FRXUW KDV GHWHUPLQHG
LQMXU\l                                                                GDPDJHVDQGDMXGJPHQWKDVEHHQHQWHUHGWKHGLVWULFWFRXUWjV
                                                                        GLVFUHWLRQWRYDFDWHWKHMXGJPHQWLVFLUFXPVFULEHGE\SXEOLF
  $EWRQWKHRWKHUKDQGFRQWHQGVWKDWWKLVFRXUWPXVWORRN            SROLF\ IDYRULQJ ILQDOLW\ RI MXGJPHQWV DQG WHUPLQDWLRQ RI
WRWKHOHJDOODQGVFDSHZKHQWKHSDWHQWVXLWZDVLQLWLDWHGWR            OLWLJDWLRQ5XOHEUHIOHFWVWKLVSXEOLFSROLF\E\UHTXLULQJ
GHWHUPLQHZKHWKHUDUJXDEO\WKHUHZDVFRYHUDJHDQGWKDW6W             JUHDWHUVSHFLILFLW\IURPDPRYLQJSDUW\EHIRUHDFRXUWZLOOVHW
3DXOjV UHOLDQFH RQ FDVHV GHFLGHG DIWHU WKH SDWHQW OLWLJDWLRQ    DVLGHDGHIDXOWMXGJPHQWl
EHJDQLVPLVSODFHG$EWDUJXHVWKDWLQMXULVGLFWLRQVRWKHUWKDQ
     :HLVVY6W3DXO)LUH                  1RV         1RV                      :HLVVY6W3DXO)LUH         
      DQG0DULQH,QV&R                                                                                       DQG0DULQH,QV&R

   7KH)HGHUDO5XOHVRI&LYLO3URFHGXUHUHTXLUHDGHIHQGDQW                :HUHFRJQL]HWKDWWKHGLVWULFWFRXUWGLGQRWFRQVLGHUWKH
WRVHUYHDQDQVZHUZLWKLQWZHQW\GD\VRIEHLQJVHUYHGZLWKD            8QLWHG &RLQ 0HWHU IDFWRUV LQ WKH RUGHU WKDW :DLIHUVRQJ
VXPPRQVDQGFRPSODLQW)HG5&LY3D$5XOH              UHTXLUHV1RQHWKHOHVVDOWKRXJKWKHFRXUWGLGQRWFRQVLGHU
SHUPLWVWKHFOHUNWRHQWHUDGHIDXOWZKHQDSDUW\IDLOVWR           ILUVWZKHWKHU6W3DXOKDGGHPRQVWUDWHGWKDWWKHGHIDXOWZDV
GHIHQG DQ DFWLRQ DV UHTXLUHG  7KH FRXUW PD\ WKHQ HQWHU D    QRWGXHWRLWVFXOSDEOHFRQGXFWWKHFRXUWjVILQGLQJRQWKDW
GHIDXOWMXGJPHQW)HG5&LY3E$SDUW\DJDLQVW           LVVXHLVFOHDUO\VXIILFLHQWWRVXSSRUWLWVFRQVLGHULQJWKHRWKHU
ZKRPDGHIDXOWMXGJPHQWKDVEHHQHQWHUHGPD\SHWLWLRQWKH               WZRIDFWRUV)LUVW6W3DXOGHPRQVWUDWHGWKDWLWVGHIDXOWZDV
FRXUWWRVHWDVLGHWKHGHIDXOWMXGJPHQWXQGHU5XOHVFDQG           QRWWKHUHVXOWRIFXOSDEOHFRQGXFWEXWRIPLVWDNHRUDWZRUVW
EIRUJRRGFDXVHDQGXSRQDVKRZLQJRIPLVWDNHRUDQ\             H[FXVDEOHQHJOHFW6W3DXOjVFRXQVHOGLGQRWVLPSO\LJQRUH
RWKHUMXVWUHDVRQ                                                      WKHSOHDGLQJGHDGOLQHVEXWUHSHDWHGO\FKHFNHGZLWKWKHRIILFH
                                                                        RIWKHGLVWULFWFRXUWFOHUNWRGHWHUPLQHZKHWKHUVHUYLFHKDG
   7KHVHPLQDOFDVHLQWKLVFLUFXLWRQ5XOHEPRWLRQVWR            EHHQHIIHFWHGXSRQ6W3DXODQGPLVWDNHQO\UHOLHGXSRQWKH
YDFDWHGHIDXOWMXGJPHQWVLV8QLWHG&RLQ0HWHU&R,QFY              LQIRUPDWLRQREWDLQHGIURPWKHFOHUN1HLWKHU6W3DXOQRULWV
6HDERDUG&RDVWOLQH55)GWK&LU,Q              FRXQVHO ZDV ZLOOIXO LQ IDLOLQJ WR UHVSRQG WLPHO\ DQG WKH
8QLWHG&RLQ0HWHUZHQRWHGWKDW5XOHELVWREHDSSOLHG             IDLOXUH WR ILOH DQ DQVZHU WLPHO\ UHVXOWHG IURP DQ KRQHVW
mHTXLWDEO\ DQG OLEHUDOO\l LQ FRQVLGHULQJ PRWLRQV WR YDFDWH       PLVWDNH6HH8QLWHG&RLQ0HWHU&R,QF)GDW
GHIDXOWVDQGGHIDXOWMXGJPHQWVLGDWDQGWKDWWKHVDPH          LQWHUQDOTXRWDWLRQVRPLWWHGm:KHUHGHIDXOWUHVXOWVIURPDQ
IDFWRUV WKDW FRQWURO D PRWLRQ WR YDFDWH DQ HQWU\ RI GHIDXOW   KRQHVWPLVWDNHUDWKHUWKDQZLOOIXOPLVFRQGXFWFDUHOHVVQHVVRU
XQGHU5XOHFDUHDOVRDSSOLFDEOHLQGHWHUPLQLQJZKHWKHU             QHJOLJHQFH WKHUH LV HVSHFLDO QHHG WR DSSO\ 5XOH E
WRYDFDWHDGHIDXOWMXGJPHQWZKHWKHUWKHRSSRVLQJSDUW\           OLEHUDOO\l6HFRQGDVZHVKDOOGHYHORSPRUHIXOO\EHORZ
ZRXOG EH SUHMXGLFHG  ZKHWKHU WKH SURSRQHQW KDG D            6W3DXOKDGDPHULWRULRXVGHIHQVH$QGWKLUG$EWZDVQRW
PHULWRULRXVFODLPRUGHIHQVHDQGZKHWKHUWKHSURSRQHQWjV           SUHMXGLFHGE\WKHYDFDWLRQRIWKHGHIDXOWMXGJPHQW6W3DXO
FXOSDEOHFRQGXFWOHGWRWKHGHIDXOW,G                               PRYHGWRYDFDWHWKLVMXGJPHQWLPPHGLDWHO\XSRQGLVFRYHULQJ
                                                                        WKHGHIDXOWDQGWKDWPRWLRQZDVILOHGOHVVWKDQGD\VDIWHU
   ,Q :DLIHUVRQJ ZH PDGH LW FOHDU WKDW D SDUW\ VHHNLQJ WR    WKHGDWHWKHDQVZHUWRWKHFRPSODLQWZDVGXH:HKDYHRIWHQ
YDFDWH D GHIDXOW MXGJPHQW XQGHU 5XOH E PXVW               UHLWHUDWHGWKHSULQFLSOHWKDWmWULDOVRQWKHPHULWVDUHIDYRUHGLQ
GHPRQVWUDWHILUVWDQGIRUHPRVWWKDWWKHGHIDXOWGLGQRWUHVXOW          IHGHUDO FRXUWVl LG DW  DQG WKDW mDQ\ GRXEW VKRXOG EH
IURPKLVFXOSDEOHFRQGXFW7KDWEXUGHQPD\EHFDUULHGZH              UHVROYHGLQIDYRURIWKHSHWLWLRQWRVHWDVLGHWKHMXGJPHQWVR
VDLGRQO\E\PHHWLQJWKHUHTXLUHPHQWVRI5XOHEWKDW           WKDW FDVHV PD\ EH GHFLGHG RQ WKHLU PHULWVl  ,G LQWHUQDO
LV E\ mGHPRQVWUDW>LQJ@ WKDW KLV GHIDXOW ZDV WKH SURGXFW RI    TXRWDWLRQVDQGFLWDWLRQVRPLWWHGTXRWLQJ5RRNVY$P%UDVV
PLVWDNH LQDGYHUWHQFH VXUSULVH RU H[FXVDEOH QHJOHFWl            &R)GWK&LU:HKDYHWKHUHIRUH
:DLIHUVRQJ)GDW2QO\LIWKHPRYLQJSDUW\PDNHV            KHOG WKDW mPHUH GHOD\ LQ VDWLVI\LQJ D SODLQWLIIjV FODLP LI LW
WKLVVKRZLQJPD\WKHGLVWULFWFRXUWSURFHHGWRFRQVLGHUWKH             VKRXOGVXFFHHGDWWULDOLVQRWVXIILFLHQWSUHMXGLFHWRUHTXLUH
RWKHU 8QLWHG &RLQ 0HWHU IDFWRUV  ,G  2WKHU FDVHV KDYH       GHQLDORIDPRWLRQWRVHWDVLGHDGHIDXOWMXGJPHQWl,G
DIILUPHGWKHPRUHVWULQJHQWLQTXLU\FRXUWVPXVWSXUVXHZKHQ
YDFDWLQJDGHIDXOWMXGJPHQWDVRSSRVHGWRDQHQWU\RIGHIDXOW             ,QIDFW$EWjVDUJXPHQWVDUHVRPHZKDWGLVLQJHQXRXV$V
6HHHJ0DQXIDFWXUHUVj,QGXV5HODWLRQV$VVjQ)GDW            WKH GLVWULFW FRXUW SRLQWHG RXW $EWjV DWWRUQH\V KDG EHHQ LQ
                                                                    IUHTXHQWWRXFKZLWK6W3DXOjVDWWRUQH\VSULRUWRWKHLQLWLDWLRQ
                                                                        RIWKLVVXLWEXWHOHFWHGQRWWRQRWLI\WKHPRIWKHILOLQJRIWKH