Court Opinion

ID: 2969722
Source: CourtListenerOpinion
Date Created: 2015-09-22 15:55:52.588346+00
Date Added: 2024-06-11T11:43:25.803618
License: Public Domain

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

           %$1.5837&<$33(//$7(3$1(/2)7+(6,;7+&,5&8,7

,QUH '28*/$6(%227+             
                                      
                  'HEWRU             
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 
                                      
'28*/$6(%227+                   
                                      
                  $SSHOODQW          
                                      
Y                                    1R
                                      
(/,=$%(7+$9$8*+$175867((       
                                      
                  $SSHOOHH           
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 

                    $SSHDOIURPWKH8QLWHG6WDWHV%DQNUXSWF\&RXUW
             IRUWKH1RUWKHUQ'LVWULFWRI2KLR:HVWHUQ'LYLVLRQDW7ROHGR
                                     1R

                              $UJXHGsDQXDU\

                         'HFLGHGDQG)LOHG0DUFK

     %HIRUH$8*%52:1DQG5+2'(6%DQNUXSWF\$SSHOODWH3DQHOsXGJHV

                               BBBBBBBBBBBBBBBBBBBB

                                      &2816(/

$5*8('  / 'RXJODVV 0F&UXU\ 8$: /(*$/ 6(59,&(6 3/$1 7ROHGR 2KLR IRU
$SSHOODQW(OL]DEHWK$9DXJKDQ7ROHGR2KLRIRU$SSHOOHH21%5,()/'RXJODVV
0F&UXU\ 8$: /(*$/ 6(59,&(6 3/$1 7ROHGR 2KLR IRU $SSHOODQW  (OL]DEHWK $
9DXJKDQ7ROHGR2KLRIRU$SSHOOHH
                                  BBBBBBBBBBBBBBBBBBBB

                                        23,1,21
                                  BBBBBBBBBBBBBBBBBBBB

       67(9(1:5+2'(6&KLHI%DQNUXSWF\$SSHOODWH3DQHOsXGJH7KHEDQNUXSWF\
FRXUWJUDQWHGWKH7UXVWHHjVPRWLRQIRUWXUQRYHURIDSURUDWDSRUWLRQRIDSRVWSHWLWLRQSURILW
VKDULQJ SD\PHQW WKDW WKH 'HEWRU UHFHLYHG IURP KLV HPSOR\HU  2Q DSSHDO WKH 'HEWRU
DUJXHVWKDWEHFDXVHKHILOHGKLVEDQNUXSWF\SHWLWLRQEHIRUHKLVHPSOR\HUFDOFXODWHGLWV
SURILWVDWWKHHQGRIWKH\HDUKHKDGQROHJDORUHTXLWDEOHLQWHUHVWLQWKHSURILWVKDULQJ
ZKHQKHILOHGDQGWKHUHIRUHQRSDUWRIWKHSD\PHQWLVSURSHUW\RIWKHHVWDWH
       7KH 3DQHO FRQFOXGHV WKDW ZKHQ WKH 'HEWRU ILOHG EDQNUXSWF\ KLV LQWHUHVW LQ KLV
HPSOR\HUjVSURILWVKDULQJSODQGLGFRPHZLWKLQWKHEURDGFRQFHSWRISURSHUW\RIWKHHVWDWH
IRXQGLQ86&D7KH3DQHOVRFRQFOXGHVEHFDXVHWKH'HEWRUjVLQWHUHVWLQ
WKH SURILW VKDULQJ SD\PHQW ZDV VXIILFLHQWO\ URRWHG LQ KLV SUHSHWLWLRQ HPSOR\PHQW HYHQ
WKRXJKWKDWLQWHUHVWZDVFRQWLQJHQWDQGWKHUHIRUHXQHQIRUFHDEOHZKHQKHILOHGEDQNUXSWF\
7KH 3DQHO DOVR UHMHFWV WKH 'HEWRUjV FRQWHQWLRQ WKDW ZKDWHYHU LQWHUHVW KH KDG LQ KLV
HPSOR\HUjVSURILWVKDULQJZDVKHOGLQDWUXVWDQGLVWKXVQRWSURSHUW\RIWKHHVWDWHXQGHU
86&F$FFRUGLQJO\WKHRUGHURIWKH%DQNUXSWF\&RXUWLV$)),50('

                                 ,,668(621$33($/
       7KHILUVWLVVXHRQDSSHDOLVZKHWKHUWKH'HEWRUKDGDQ\LQWHUHVWLQKLVHPSOR\HUjV
SURILWVKDULQJZKHQKHILOHGKLVEDQNUXSWF\SHWLWLRQ7KHVHFRQGLVVXHLVZKHWKHUWKDW
LQWHUHVWZDVKHOGLQDEHQHILFLDOWUXVW

                   ,,s85,6',&7,21$1'67$1'$5'2)5(9,(:
      7KH%DQNUXSWF\$SSHOODWH3DQHORIWKH6L[WK&LUFXLWKDVMXULVGLFWLRQWRGHFLGHWKLV
DSSHDO7KH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH1RUWKHUQ'LVWULFWRI2KLRKDVDXWKRUL]HG
DSSHDOVWRWKH%$3$ILQDORUGHURIDEDQNUXSWF\FRXUWPD\EHDSSHDOHGE\ULJKWXQGHU
86&D)RUSXUSRVHVRIDSSHDODQRUGHULVILQDOLILWmµHQGVWKHOLWLJDWLRQRQ
WKHPHULWVDQGOHDYHVQRWKLQJIRUWKHFRXUWWRGREXWH[HFXWHWKHMXGJPHQWjl0LGODQG
$VSKDOW&RUSY8QLWHG6WDWHV866&WFLWDWLRQV
RPLWWHG

                                               
       &RQFOXVLRQV RI ODZ DUH UHYLHZHG GH QRYR  6HH 1LFKROVRQ Y ,VDDFPDQ ,Q UH
,VDDFPDQ)GWK&LUm'HQRYRUHYLHZUHTXLUHVWKH3DQHOWRUHYLHZ
TXHVWLRQV RI ODZ LQGHSHQGHQW RI WKH EDQNUXSWF\ FRXUWjV GHWHUPLQDWLRQl  )LUVW 8QLRQ
0RUWJDJH&RUSY(XEDQNV,QUH(XEDQNV%5%$3WK&LU
FLWDWLRQRPLWWHG

                                          ,,,)$&76
       2Q 6HSWHPEHU   'RXJODV %RRWK ILOHG D FKDSWHU  EDQNUXSWF\ SHWLWLRQ
:KHQ KH ILOHG KLV EDQNUXSWF\ SHWLWLRQ %RRWK ZDV HPSOR\HG E\ 'DLPOHU&KU\VOHU
&RUSRUDWLRQ ZKLFK KDV D SURILW VKDULQJ SURJUDP SXUVXDQW WR LWV FROOHFWLYH EDUJDLQLQJ
DJUHHPHQWZLWKWKH8QLWHG$XWR:RUNHUV8QLRQ7RUHFHLYHDSURILWVKDULQJSD\PHQWXQGHU
WKLVSURJUDP'DLPOHU&KU\VOHUPXVWKDYHSURILWVIRUDJLYHQ\HDUDQGDQHPSOR\HHPXVW
EHHPSOR\HGE\'DLPOHU&KU\VOHUDWWKHHQGRIWKH\HDU)XUWKHUWKHSURJUDPSURYLGHVWKDW
WKHIXQGVDUHQRQDVVLJQDEOHXQWLOWKH\DUHGLVWULEXWHG
       2Q'HFHPEHUWKH7UXVWHHILOHGDm0RWLRQIRU7XUQRYHUlRImDQ\%RQXVRU
3URILW6KDULQJFKHFNUHFHLYHGIURPWKH'HEWRUjV(PSOR\HUIRUXSRQUHFHLSWl%RRWK
REMHFWHG WR WKH 7UXVWHHjV PRWLRQ DUJXLQJ WKDW ZKHQ KLV SHWLWLRQ ZDV ILOHG KH KDG QR
LQWHUHVWLQDQ\SURILWVKDULQJDQGWKDWLIKHKDGDQ\LQWHUHVWLWZDVLQWKHIRUPRIDEHQHILFLDO
LQWHUHVWLQDWUXVW
       2Q0DUFK%RRWKUHFHLYHGDSURILWVKDULQJSD\PHQWIURP'DLPOHU&KU\VOHU
LQWKHDPRXQWRI
       2Q sXQH   WKH EDQNUXSWF\ FRXUW HQWHUHG LWV 0HPRUDQGXP 2SLQLRQ DQG
'HFLVLRQKROGLQJWKDWWKHSURUDWDSDUWRIWKH'HEWRUjVSURILWVKDULQJWKDWUHODWHGWRKLV
SUHSHWLWLRQHDUQLQJVZDVSURSHUW\RIWKHEDQNUXSWF\HVWDWH7KLVDSSHDOIROORZHG

                                      ,9',6&866,21
$7KH'HEWRUjVLQWHUHVWLQWKHSURILWVKDULQJSD\PHQWLVSURSHUW\RIWKHHVWDWHWRWKHH[WHQW
WKDWLWLVEDVHGXSRQSUHSHWLWLRQHPSOR\PHQW

       7KH'HEWRUILUVWDUJXHVWKDWEDVHGRQWZRIDFWRUVKHKDGQROHJDORUHTXLWDEOH
LQWHUHVWLQWKHSURILWVKDULQJZKHQKHILOHGKLVEDQNUXSWF\SHWLWLRQ)LUVWKLVHPSOR\HUKDG
QRW\HWGHFODUHGDSURILWIRUWKH\HDU6HFRQGKLVHPSOR\PHQWFRXOGKDYHEHHQWHUPLQDWHG
EHIRUHWKHHQGRIWKH\HDU7KHLVVXHWKHUHIRUHLVZKHWKHUWKHVHFRQWLQJHQFLHVFRPSHO

                                                
WKHFRQFOXVLRQWKDWXQGHUDWKHEDQNUXSWF\HVWDWHKDVQRLQWHUHVWLQWKHSURILW
VKDULQJ
       7KHDQDO\VLVEHJLQVZLWKWKHDSSOLFDEOHVWDWXWRU\SURYLVLRQ8QLWHG6WDWHVY5RQ
3DLU(QWHUV866&W/DQGUHWK7LPEHU&RY
/DQGUHWK866&W
       6HFWLRQRIWKH%DQNUXSWF\&RGHGHILQHVSURSHUW\RIWKHEDQNUXSWF\HVWDWHDV
IROORZV

              D7KHFRPPHQFHPHQWRIDFDVHXQGHUVHFWLRQRU
              RIWKLVWLWOHFUHDWHVDQHVWDWH6XFKHVWDWHLVFRPSULVHGRI
              DOOWKHIROORZLQJSURSHUW\ZKHUHYHUORFDWHGDQGE\ZKRPHYHU
              KHOG

                      ([FHSWDVSURYLGHGLQVXEVHFWLRQVEDQGFRI
              WKLV VHFWLRQ DOO OHJDO RU HTXLWDEOH LQWHUHVWV RI WKH GHEWRU LQ
              SURSHUW\DVRIWKHFRPPHQFHPHQWRIWKHFDVH

86&D
       $FFRUGLQJWRWKHOHJLVODWLYHKLVWRU\WKHSXUSRVHRIDLVWRmEULQJDQ\WKLQJRI
YDOXHWKDWWKHGHEWRUVKDYHLQWRWKHHVWDWHl+5 5! 1 DWUHSULQWHG
LQ86&&$1
       7KHGHWHUPLQDWLRQDVWRZKHWKHUDGHEWRUjVLQWHUHVWLQSURSHUW\LVSURSHUW\RIWKH
EDQNUXSWF\HVWDWHLVDTXHVWLRQRIIHGHUDOODZ+RZHYHUVWDWHODZJHQHUDOO\FRQWUROVWKH
TXHVWLRQRIZKHWKHUWKHGHEWRUKDVDQLQWHUHVWLQSURSHUW\6HH%XWQHUY8QLWHG6WDWHV
866&W
       8QGHU2KLRODZm>D@FRQWLQJHQWLQWHUHVWLVRQHLQZKLFKWKHUHLVQRSUHVHQWIL[HGULJKW
RIHLWKHUSUHVHQWRUIXWXUHHQMR\PHQWEXWLQZKLFKDIL[HGULJKWZLOODULVHLQWKHIXWXUHXQGHU
FHUWDLQVSHFLILHGFRQWLQJHQFLHVl&OHYHODQG7UXVW&RY0F4XDGH1(G
2KLR$SSFLWDWLRQRPLWWHG7KHUHIRUHLQWKLVFDVHWKH'HEWRUjVLQWHUHVWLQKLV
HPSOR\HUjVSURILWVKDULQJFRQVWLWXWHGDFRQWLQJHQWLQWHUHVWDWWKHWLPHRIWKHSHWLWLRQ
       6LJQLILFDQWO\XQGHU2KLRODZDFRQWLQJHQWLQWHUHVWLVIXOO\DOLHQDEOHDQGPD\EH
DWWDFKHGE\FUHGLWRUV0RRUHY)RUHVPDQ1(G2KLR,WIROORZV
WKDWDFRQWLQJHQWLQWHUHVWLVDQLQWHUHVWLQSURSHUW\WKDWEHFRPHVSURSHUW\RIWKHHVWDWH
XQGHUDZKHQDEDQNUXSWF\SHWLWLRQLVILOHG

                                                 
       7KH8QLWHG6WDWHV6XSUHPH&RXUWFDPHWRWKHVDPHFRQFOXVLRQLQDFDVHGHFLGHG
XQGHUWKH%DQNUXSWF\$FW7KH6XSUHPH&RXUWVWDWHGm>7@KHWHUPµSURSHUW\jKDVEHHQ
FRQVWUXHGPRVWJHQHURXVO\DQGDQLQWHUHVWLVQRWRXWVLGHLWVUHDFKEHFDXVHLWLVQRYHORU
FRQWLQJHQWRUEHFDXVHHQMR\PHQWPXVWEHSRVWSRQHGl6HJDOY5RFKHOOH86
6&W,QWKDWFDVHWKH6XSUHPH&RXUWKHOGWKDWWKHGHEWRUVj
FODLPIRUDORVVFDUU\EDFNWD[UHIXQGLVSURSHUW\RIWKHHVWDWHHYHQWKRXJKLWLVFRQWLQJHQW
ZKHQWKHSHWLWLRQLVILOHG7KHUHDVKHUHWKHGHEWRUVDVVHUWHGWKDWEHFDXVHWKHUHIXQG
FRXOGQRWEHFODLPHGXQWLOWKHHQGRIWKH\HDULWZDVQRWSURSHUW\RIWKHHVWDWHEXWWKH
6XSUHPH&RXUWFRQFOXGHGWKDWWKLVFLUFXPVWDQFHZDVQRWVXIILFLHQWWRWDNHWKHLQWHUHVWRXW
RI WKH HVWDWH  ,Q DGGLWLRQ WKHUH DV KHUH WKH GHEWRUV DUJXHG WKDW FHUWDLQ SRVWSHWLWLRQ
HYHQWVPLJKWHOLPLQDWHWKHFODLPDOWRJHWKHUEXWDJDLQWKH6XSUHPH&RXUWUHMHFWHGWKLV
DUJXPHQW
       6LPLODUO\LQDSSO\LQJWKH%DQNUXSWF\&RGHRIWKHFRXUWVKDYHDFURVVDZLGH
YDULHW\RIFLUFXPVWDQFHVDOPRVWXQLIRUPO\DGKHUHGWRWKHYLHZWKDWFRQWLQJHQWLQWHUHVWVDUH
SURSHUW\ RI WKH HVWDWH XQGHU  D  ,Q HDFK RI WKH IROORZLQJ FLUFXPVWDQFHV WKH
GHEWRUjVFRQWLQJHQWLQWHUHVWZDVKHOGWREHSURSHUW\RIWKHHVWDWH
       $GHEWRUjVFRQWLQJHQWULJKWWRDSRVWSHWLWLRQHPSOR\PHQWWHUPLQDWLRQSD\PHQWXQGHU
DSUHSHWLWLRQHPSOR\PHQWDJUHHPHQW5DXY5\HUVRQ,QUH5\HUVRQ)GWK
&LU
       $GHEWRUjVFRQWLQJHQWLQWHUHVWLQDQHDUQHGLQFRPHWD[FUHGLWHYHQZKHQWKHSHWLWLRQ
LVILOHGEHIRUHWKHHQGRIWKHWD[\HDU%DHUYsRQHV,QUH0RQWJRPHU\)G
WK&LUsRKQVWRQY+D]OHWW,QUHsRKQVWRQ)GWK&LU
7KHFRXUWVSHFLILFDOO\UHMHFWHGWKHGHEWRUjVDUJXPHQWWKDWmEHFDXVHVKHZDVQRWHQWLWOHG
WRWKH(,&XQWLOWKHHQGRIWKHWD[\HDUVKHKDGQHLWKHUDOHJDOQRUDQHTXLWDEOHLQWHUHVWLQ
WKH(,&DWWKHWLPHVKHILOHGKHUSHWLWLRQDQGWKHUHIRUHLWZDVQRWSDUWRIWKHEDQNUXSWF\
HVWDWHlVHHDOVRFDVHVFROOHFWHGLQ,QUHsRKQVWRQ)GDWQ
       $GHEWRUjVLQWHUHVWLQKHUKXVEDQGjVVHSDUDWHO\WLWOHGSURSHUW\WKDWZDVFRQWLQJHQW
RQWKHRXWFRPHRIWKHLUSHQGLQJGLYRUFHFDVH,QUH*UHHU%5%DQNU1'
2KLR
       $GHEWRUjVFRQWLQJHQWFODLPDJDLQVWDWKLUGSDUW\%RURFNY0DWKLV,QUH&OLSSHU,QWjO
&RUS)GWK&LUm7KXVµ>P@RQH\ZKRVHRULJLQLVSDUWRIWKHSUH
SHWLWLRQSHULRGEHORQJVWRWKHHVWDWHSXUVXDQWWRjlTXRWLQJ+DUWOH\Y'HUU\EHUU\,Q

                                                  
UH+DUWOH\%5%DQNU1'2KLRDOWHUDWLRQLQRULJLQDO%DXHUY
&RPPHUFH8QLRQ%DQN&ODUNVYLOOH7HQQHVVHH)GWK&LU,Q
UH<RQLNXV)GWK&LUm$GHEWRU
VFRQWLQJHQWLQWHUHVWLQIXWXUH
LQFRPHKDVFRQVLVWHQWO\EHHQIRXQGWREHSURSHUW\RIWKHEDQNUXSWF\HVWDWH,QIDFW
HYHU\FRQFHLYDEOHLQWHUHVWRIWKHGHEWRUIXWXUHQRQSRVVHVVRU\FRQWLQJHQWVSHFXODWLYH
DQGGHULYDWLYHLVZLWKLQWKHUHDFKRIlsRKQVRQ%ODNHO\3RSH%RNRU5XSSHO	
%XUQV3$Y$OYDUH],QUH$OYDUH])GWK&LUFHUWGHQLHGBB86
BB6&W3ROLVY*HWDZD\V,QF,QUH3ROLV)GWK&LU
.ROODUY0LOOHU)GG&LU:ROIHY*LOPRXU0IJ&R)G
WK&LU6WDWH)DUP/LIH,QV&RY6ZLIW,QUH6ZLIW)GWK&LU
6SDUWDQ7XEH	6WHHO,QFY+LPPHOVSDFK,QUH5&6(QJLQHHUHG3URGV&R
,QF)GWK&LU,Q%XFNH\H8QLRQ,QV&RY)RXU6WDU&RQVWU&R,Q
UH)RXU6WDU&RQVWU&R%5%DQNU1'2KLRWKHFRXUWVWDWHG

              8QGHU WKH IRUPHU %DQNUXSWF\ $FW D FRQWLQJHQW LQWHUHVW LQ
              SHUVRQDO SURSHUW\ SDVVHG WR WKH FDVH WUXVWHH RQO\ LI LW ZDV
              FDSDEOH RI EHLQJ DVVLJQHG RU ZDV VXEMHFW WR H[HFXWLRQ
              VHL]XUHRUVHTXHVWUDWLRQ$&ROOLHURQ%DQNUXSWF\DW
              WKHG7KDWUHTXLUHPHQWQRORQJHUH[LVWVXQGHU
              WKH%DQNUXSWF\&RGH,G>@WKHG%\
              LQFOXGLQJ DOO OHJDO LQWHUHVWV ZLWKRXW H[FHSWLRQ &RQJUHVV
              LQGLFDWHG LWV LQWHQWLRQ WR LQFOXGH DOO OHJDOO\ UHFRJQL]DEOH
              LQWHUHVWVDOWKRXJKWKH\PD\EHFRQWLQJHQWDQGQRWVXEMHFWWR
              SRVVHVVLRQXQWLOVRPHIXWXUHWLPH

       $ GHEWRU
V ULJKW WR UHFHLYH SURSHUW\ FRQWLQJHQW RQ VXUYLYLQJ RWKHUV  1HXWRQ Y
'DQQLQJ,QUH1HXWRQ)GWK&LU6WRNHVY7UXVW&RRI*D,QUH
0F/RXJKOLQ)GWK&LU3RWWHUY'UHZHV,QUH3RWWHU%5
 %$3 WK &LU  $QGHUVRQ Y 0F*RZDQ ,Q UH $QGHUVRQ  %5 
'5,5RVHY&DUOVRQ,QUH5RVH%5:'0R,QUH:LQVWHG
0HPjO+RVS%5%DQNU'&RQQ,QUH.QLJKW%5%DQNU6'
)OD)HGHUPDQY*DUWHQ,QUH*DUWHQ%5%DQNU:'0R
       $GHEWRUjVFRQWLQJHQWLQWHUHVWLQDQHDUQHVWPRQH\GHSRVLWLQDQHVFURZDFFRXQW
7XUQHUY%XUWRQ,QUH7XUQHU%5%DQNU'0H
       $QDWWRUQH\GHEWRUjVULJKWWROHJDOIHHVXQGHUDFRQWLQJHQWIHHDJUHHPHQWZLWKD
FOLHQW7XUQHUY$YHU\)GWK&LUsHVVY&DUH\,QUHsHVV

                                               
)GWK&LU&DQDWHOODY7RZHUV,QUH$OFDOD)GWK&LU
&DUOVRQY%UDQGW%51',OO:DWWVY:LOOLDPV%56'7H[
,QUH3DXO$1HOVRQ3$%5%DQNU0')OD%DQQHUY%DJHQ
,QUH%DJHQ%5%DQNU6'1< DII
G %5
6'1<
       $ GHEWRUjV FRQWUDFW ULJKW WR FRPPLVVLRQV DWWULEXWDEOH WR LQVXUDQFH SROLFLHV VROG
SUHSHWLWLRQEXWSDLGSRVWSHWLWLRQZKHWKHURUQRWYHVWHGRUFRQWLQJHQWXSRQIXWXUHVHUYLFHV
:LOOLDPVY7RPHU,QUH7RPHU%56',OO0F&UDFNHQY6HOQHU,QUH
6HOQHU%5%DQNU6')OD
       7KHGHEWRUjVULJKWWRDUHIXQGRIDGHSRVLWPDGHSXUVXDQWWRDUHVLGHQWLDOOLIHXVHIHH
DJUHHPHQWFRQWLQJHQWRQWKHGHEWRUPRYLQJRXWRIWKHUHVLGHQFHEHIRUHDVWDWHGWLPH,Q
UH7KRPSVRQ%5%DQNU1'2KLR
       $GHEWRUjVLQWHUHVWLQDVWRFNRSWLRQWKDWLVFRQWLQJHQWRQSRVWSHWLWLRQHPSOR\PHQW
6WRHEQHU Y :LFN ,Q UH :LFN  %5  %DQNU ' 0LQQ  UHYjG RQ RWKHU
JURXQGV%5'0LQQ$OOHQY/HYH\,QUH$OOHQ%5%DQNU
1',OO
       $GHEWRUjVIXWXUHLQWHUHVWLQORWWHU\ZLQQLQJV,QUH.HLP%5%DQNU'
0G,QUH3L]]L%5%DQNU6')OD6LUHNY'DOWRQ,QUH'DOWRQ
%5%DQNU'$UL]:DOOLFNY5KRGH,VODQG6WDWH/RWWHU\&RPP
Q,QUH
6NRJ%5%DQNU'5,,QUH0H\HUV%5%DQNU1'2KLR
%R\QY%URZQ,QUH%URZQ%5%DQNU1',QGDII
G%5
1',QG,QUH0LOOHU%5%DQNU'0G
       7KLVUHYLHZRIWKHFDVHVGHPRQVWUDWHVWZRVLJQLILFDQWSRLQWV)LUVWWKHDUUD\RI
FLUFXPVWDQFHVLQZKLFKWKHFDVHVKDYHKHOGWKDWDFRQWLQJHQWLQWHUHVWLVSURSHUW\RIWKH
HVWDWHLVH[WHQVLYH6HFRQGWKHXQLIRUPLW\RIWKHUHVXOWVLQWKHVHFDVHVLVFRPSHOOLQJ$V
DUHVXOWWKH3DQHOPXVWFRQFOXGHWKDWWKHFRQWLQJHQFLHVXSRQZKLFKWKH'HEWRUUHOLHVLQ
DUJXLQJWKDWKLVSURILWVKDULQJLVQRWSURSHUW\RIWKHHVWDWHDUHLQGLVWLQJXLVKDEOHIURPWKH
FRQWLQJHQFLHVLQWKHPDQ\FDVHVLQZKLFKWKHSURSHUW\LQWHUHVWZDVKHOGWREHSURSHUW\RI
WKHHVWDWH
       7KH'HEWRUUHOLHVRQ'H0DUFRY2KLR'HFRUDWLYH3URGV,QF)GWK
&LUXQSXEOLVKHGWDEOHGHFLVLRQ+RZHYHUDVDQXQSXEOLVKHGGHFLVLRQ'H0DUFR
KDVOLPLWHGSUHFHGHQWLDOYDOXH6DODPDOHNLVY&RPP
URI6RF6HF)G

                                               
WK&LU$QXQSXEOLVKHGRSLQLRQmLVQRWELQGLQJSUHFHGHQWl+RQLJPDQY&RPHULFD
%DQN,QUH9DQ'UHVVHU&RUS)GWK&LU0F0HDQVY%ULJDQR
 )G   WK &LU  8QSXEOLVKHG GHFLVLRQV KDYH mOLPLWHG SUHFHGHQWLDO
IRUFHl8QLWHG6WDWHVY$EOHV)GWK&LUFHUWGHQLHG86
m>$@QXQSXEOLVKHGRSLQLRQKDVQRSUHFHGHQWLDOIRUFH>@l*LEVRQY*LEVRQ,QUH
*LEVRQ%5Q%$3WK&LUm$OWKRXJKQRWELQGLQJXQSXEOLVKHG
GHFLVLRQVRIWKH6L[WK&LUFXLWPD\EHFLWHGLISHUVXDVLYHDQGQRSXEOLVKHGGHFLVLRQVZLOO
VHUYHDVZHOOl%HOIDQFHY%ODFN5LYHU3HWUROHXP,QF,QUH+HVV%5Q
%$3WK&LU6HHDOVR,QUH%UDGG\%5%DQNU('0LFK
FROOHFWLQJFDVHVm>$@OWKRXJKWKH&RXUWRI$SSHDOVGRHVUHFRJQL]HWKDWLWVXQSXEOLVKHG
GHFLVLRQVDUHQRWELQGLQJSUHFHGHQWLQWKHVDPHVHQVHDVSXEOLVKHGGHFLVLRQVWKHFRXUW
GRHVFLWHDQXQSXEOLVKHGGHFLVLRQZKHQWKHUHLVQRSXEOLVKHGGHFLVLRQRQSRLQWDQGWKH
UHDVRQLQJRIWKHXQSXEOLVKHGGHFLVLRQLVIRXQGSHUVXDVLYHl
       +RZHYHU GHWHUPLQLQJ ZKHWKHU 'H0DUFR LV SHUVXDVLYH LV QRW D VWUDLJKWIRUZDUG
HQGHDYRU$VGHPRQVWUDWHGEHORZWKHRSLQLRQLVVXEMHFWWRLQWHUSUHWDWLRQ7KH3DQHO
FRQFOXGHV WKDW WKH SURSHU LQWHUSUHWDWLRQ RI 'H0DUFR LV FRQVLVWHQW ZLWK WKH QHDUO\
XQDQLPRXVOLQHRIFDVHVKROGLQJWKDWDFRQWLQJHQWSURSHUW\LQWHUHVWLVSURSHUW\RIWKHHVWDWH
DQG WKHUHIRUH WKLV LQWHUSUHWDWLRQ LV SHUVXDVLYH  2Q WKH RWKHU KDQG WKH DOWHUQDWLYH
LQWHUSUHWDWLRQ SURSRVHG E\ WKH 'HEWRU LV LQFRQVLVWHQW ZLWK WKH FDVH ODZ DQG PXVW EH
UHMHFWHGDVXQSHUVXDVLYH
       ,Q 'H0DUFR IRXU \HDUV DIWHU ILOLQJ D &KDSWHU  EDQNUXSWF\ WKH SODLQWLII ZDV
WHUPLQDWHGIURPKLVSRVLWLRQDVDVDOHVUHSUHVHQWDWLYH/DWHUKHILOHGDFLYLOVXLWDJDLQVWKLV
HPSOR\HUIRUSRVWWHUPLQDWLRQVDOHVFRPPLVVLRQVEDVHGRQDQDOOHJHGDJUHHPHQWZLWKKLV
HPSOR\HUFDOOLQJIRUWKHSD\PHQWRImOLIHRIWKHSDUWlVDOHVFRPPLVVLRQV7KHHPSOR\HU
UHVSRQGHGWKDWWKHSODLQWLIIODFNHGVWDQGLQJEHFDXVHDQ\VXFKFRPPLVVLRQVZHUHSURSHUW\
RIWKHSODLQWLIIjVEDQNUXSWF\HVWDWHDQGRQO\WKHEDQNUXSWF\WUXVWHHKDGVWDQGLQJWRVXH
       ,QLWLDOO\WKHFRXUWRIDSSHDOVREVHUYHGm8QGHUWKHH[SDQVLYHFRQVWUXFWLRQFRXUWV
KDYH JLYHQ WKH WHUP WKHUH FDQ EH OLWWOH GRXEW WKDW ULJKWV WR SRVWWHUPLQDWLRQ IXQGV QR
PDWWHUZKDWWKHLUGHVLJQDWLRQHJFRQWUDFWYDOXHFRPPLVVLRQVTXDOLI\DVµSURSHUW\jIRU
SXUSRVHVRIWKHEDQNUXSWF\FRGHl'H0DUFR:/DW
7KLVREVHUYDWLRQLV
HQWLUHO\FRQVLVWHQWZLWKWKHUHDVRQLQJDQGUHVXOWVRIWKHFDVHVUHYLHZHGDERYH+RZHYHU
WKH FRXUW RI DSSHDOV WKHQ KHOG WKDW LQ WKH FLUFXPVWDQFHV RI WKDW FDVH WKH VDOHV

                                                 
FRPPLVVLRQVDOOHJHGO\RZLQJWRWKHSODLQWLIIRQVDOHVDIWHUKLVWHUPLQDWLRQZHUHQRWSURSHUW\
RIWKHEDQNUXSWF\HVWDWH
       ,QWKLVFDVHWKH'HEWRUUHOLHVRQWKHIROORZLQJVWDWHPHQWLQ'H0DUFRLQVXSSRUWRI
KLVSRVLWLRQ

                7KHFUXFLDOLQTXLU\LQVWHDGLVZKHQWKRVHSURSHUW\LQWHUHVWV
                FDPHLQWRH[LVWHQFH>$@IXWXUHLQWHUHVWZLOOQRWEHFRPHD
                SURSHUW\ULJKWXQWLOLWKDVLQHIIHFWYHVWHGRUSXWDQRWKHU
                ZD\ XQWLO WKH FRQGLWLRQV WKDW JR WR WKH FUHDWLRQ RI WKH ULJKW
                KDYHEHHQVDWLVILHG
                
                >7@KHGHEWRU
VSURSHUW\ULJKWKHUHGLGQRWDFFUXHXQWLODIWHUD
                EDQNUXSWF\SHWLWLRQKDGEHHQILOHG2QO\DIWHUEHLQJWHUPLQDWHG
                ZRXOG 'H0DUFR WKHQ EHFRPH HQWLWOHG WR SRVWWHUPLQDWLRQ
                FRPPLVVLRQV DQG HYHQ WKHQ ZKHWKHU VXFK IXQGV ZRXOG
                DFWXDOO\EHIRUWKFRPLQJZDVIDUIURPDFHUWDLQW\

'H0DUFR:/DW

       7KH 'HEWRU DUJXHV WKDW WKLV ODQJXDJH PHDQV WKDW RQO\ YHVWHG ULJKWV EHFRPH
SURSHUW\RIWKHHVWDWH7KXVWKH'HEWRUFRQWHQGVWKDWEHFDXVHKLVULJKWWRDSURILWVKDULQJ
SD\PHQWKDGQRWYHVWHGZKHQKHILOHGEDQNUXSWF\LWGLGQRWEHFRPHSURSHUW\RIWKHHVWDWH
7KHGLIILFXOW\ZLWKWKLVLQWHUSUHWDWLRQRI'H0DUFRLVWKDWLWFDQQRWEHUHFRQFLOHGZLWKWKH
6XSUHPH &RXUWjV GHFLVLRQ LQ 6HJDO Y 5RFKHOOH DQG WKH H[WHQVLYH ERG\ RI FDVH ODZ
UHYLHZHG DERYH WKDW KROGV RWKHUZLVH  0RUHRYHU WKH 'HEWRUjV LQWHUSUHWDWLRQ LV DOVR
LQFRQVLVWHQWZLWKWKHWZRVSHFLILFFDVHVRQZKLFK'H0DUFRUHOLHG5DXY5\HUVRQ,QUH
5\HUVRQ)GWK&LU+RIIPDQY%UXQHDX,QUH%UXQHDX%5
%DQNU'&RQQ,QGHHG5\HUVRQDQG%UXQHDXFRPSHOWKHUHDGLQJRI'H0DUFR
WKDWLVFRQVLVWHQWZLWK6HJDODQGWKHFDVHODZRQSRLQW
       ,Q5\HUVRQEHIRUHILOLQJIRUEDQNUXSWF\WKHGHEWRUDQGKLVHPSOR\HUHQWHUHGLQWR
DQ DJUHHPHQW WKDW XSRQ WHUPLQDWLRQ WKH HPSOR\HU FRXOG DW LWV RSWLRQ SD\ WKH GHEWRU
mFRQWUDFWYDOXHlEDVHGRQVDOHVFRPPLVVLRQVLIFHUWDLQFRQGLWLRQVZHUHPHW)RXU\HDUV
ODWHUWKHGHEWRUILOHGEDQNUXSWF\1LQHPRQWKVDIWHUWKDWKLVHPSOR\PHQWZDVWHUPLQDWHG
7KHFRXUWGHWHUPLQHGWKDWWKHGHEWRUjVULJKWWRSD\PHQWRIWKHFRQWUDFWYDOXHZDVSURSHUW\
RIWKHEDQNUXSWF\HVWDWHDWOHDVWWRWKHH[WHQWWKDWWKHFRQWUDFWYDOXHUHODWHGWRSUHSHWLWLRQ
VHUYLFHV7KHEDVLVRIWKLVUHVXOWZDVWKHDFFHSWHGSUHPLVHm%\LQFOXGLQJDOOOHJDOLQWHUHVWV
ZLWKRXW H[FHSWLRQ &RQJUHVV LQGLFDWHG LWV LQWHQWLRQ WR LQFOXGH DOO OHJDOO\ UHFRJQL]DEOH

                                                   
LQWHUHVWVDOWKRXJKWKH\PD\EHFRQWLQJHQWDQGQRWVXEMHFWWRSRVVHVVLRQXQWLOVRPHIXWXUH
WLPHl)GDWFLWLQJ+5 5! 1 DWUHSULQWHGLQ
86&&$1
       2QWKHRWKHUKDQGLQ%UXQHDXWKHFRXUWGHWHUPLQHGWKDWVHYHUDQFHSD\PHQWVWR
DGHEWRUEDVHGRQKHUSRVWSHWLWLRQHOHFWLRQWRSDUWLFLSDWHLQDQHPSOR\HUjVmHQKDQFHGH[LWl
SURJUDPZHUHQRWSURSHUW\RIWKHEDQNUXSWF\HVWDWHEHFDXVHXQGHUWKH6HJDOWHVWWKH
SD\PHQWVZHUHQRWVXIILFLHQWO\URRWHGLQWKHGHEWRUjVSUHSHWLWLRQSDVW%HIRUHWKHGHEWRU
ILOHGKHUEDQNUXSWF\SHWLWLRQKHUHPSOR\HURIIHUHGKHUDRQHWLPHRSWLRQWRWHUPLQDWHKHU
HPSOR\PHQWRQDVSHFLILFGDWHDQGUHFHLYHDVHYHUDQFHSDFNDJH7KHGHEWRUH[HUFLVHG
WKHRSWLRQRQHZHHNDIWHUILOLQJIRUEDQNUXSWF\7KHFRXUWGHWHUPLQHGWKDWWKHSXUSRVHRI
WKHVHYHUDQFHSD\PHQWVWRWKHGHEWRUZDVWRVXEVWLWXWHIRUIXWXUHLQFRPH

                        7KH 3URJUDP SD\PHQWV DUH FOHDUO\ LQWHQGHG DV
               HQKDQFHG VHYHUDQFH EHQHILWV RIIHUHG JHQHUDOO\ WR VXVWDLQ
               HPSOR\HHVZKLOHWKH\VHHNRWKHUMREV7KHGHEWRUZDVIDFHG
               ZLWKWKHFKRLFHVRIUHPDLQLQJHPSOR\HGDWWKH+DUWIRUGDQG
               WUXVW WKDW WKH +DUWIRUG ZRXOG QRW WHUPLQDWH KHU DFFHSW WKH
               3URJUDP
VHQKDQFHGEHQHILWVWRVXVWDLQKHUZKLOHVKHVRXJKW
               HPSOR\PHQWRUFKDQFHEHLQJGLVFKDUJHGZLWKLQDVKRUWSHULRG
               ZLWKVXEVWDQWLDOO\IHZHUEHQHILWVFRPSDUHGWRWKRVHXQGHUWKH
               3URJUDP

%UXQHDX%5DW%DVHGRQWKLVSXUSRVHWKHFRXUWFRQFOXGHGWKDWWKHGHEWRUjV
VHYHUDQFHEHQHILWVZHUHQRWVXIILFLHQWO\URRWHGLQKHUSUHSHWLWLRQSDVWDQGWKHUHIRUHZHUH
QRWSURSHUW\RIWKHHVWDWH,QFRQWUDVWWR%UXQHDXWKHSD\PHQWLQ5\HUVRQZDVJURXQGHG
LQDSUHSHWLWLRQFRQWUDFWDQGZDVEDVHGRQWKHGHEWRUjVSUHSHWLWLRQVHUYLFHV
       7KXVWKHWZRFDVHVRQZKLFK'H0DUFRUHOLHG5\HUVRQDQG%UXQHDXDJUHHRQWKH
WHVWIRUSURSHUW\RIWKHHVWDWHZKHQWKHSURSHUW\LVDFRQWLQJHQWULJKW%RWKDGRSWDQGDSSO\
WKHUXOHWKDWZKHQWKHFRQWLQJHQWULJKWLVEDVHGRQWKHGHEWRUjVSUHSHWLWLRQDFWLYLWLHVLWLV
SURSHUW\RIWKHHVWDWH7KHNH\GLVWLQFWLRQRQZKLFK5\HUVRQDQG%UXQHDXWXUQHGZDV
ZKHWKHU WKH FRQWLQJHQW ULJKW ZDV EDVHG RQ SUHSHWLWLRQ FLUFXPVWDQFHV  ,I WKH FRXUW LQ
5\HUVRQUHTXLUHGYHVWLQJIRUWKHLQWHUHVWWREHSURSHUW\RIWKHHVWDWHDVWKH'HEWRUKHUH
DUJXHVWKHFRXUWZRXOGKDYHIRXQGWKDWWKHSD\PHQWVZHUHQRWSURSHUW\RIWKHHVWDWH
EHFDXVHWKHGHEWRUjVHPSOR\PHQWKDGQRW\HWEHHQWHUPLQDWHGZKHQWKHEDQNUXSWF\ZDV
ILOHGDQGWKHFRQWUDFWULJKWZDVQRWYHVWHG6LPLODUO\LIWKH%UXQHDXFRXUWUHTXLUHGYHVWLQJ
QRQHRILWVH[WHQGHGGLVFXVVLRQUHJDUGLQJWKHSXUSRVHRIWKHVHYHUDQFHSD\PHQWVZRXOG

                                               
KDYH EHHQ QHFHVVDU\ EHFDXVH WKHUH WRR WKH FRQWUDFW ULJKW KDG QRW YHVWHG XSRQ
EDQNUXSWF\
        1RWKLQJLQ'H0DUFRH[SOLFLWO\RULPSOLFLWO\UHMHFWVWKHWHVWDGRSWHGDQGDSSOLHGLQ
5\HUVRQDQG%UXQHDX,QGHHGDVQRWHGDERYHWKHFRXUWRIDSSHDOVTXRWHGZLWKDSSURYDO
WKH VWDWHPHQW LQ 5\HUVRQ WKDW D FRQWLQJHQW LQWHUHVW FDQ EH SURSHUW\ RI WKH HVWDWH
'H0DUFR:/DW
TXRWLQJ)GDW7KXVWKHEHWWHULQWHUSUHWDWLRQ
RI'H0DUFRLVWKDWLWDGRSWVWKHQHDUO\XQDQLPRXVYLHZRIWKHRWKHUFRXUWVWKDWDFRQWLQJHQW
LQWHUHVW LV SURSHUW\ RI WKH HVWDWH LI VXIILFLHQWO\ URRWHG LQ WKH GHEWRUjV SUHSHWLWLRQ SDVW
$FFRUGLQJO\WKH3DQHOUHMHFWVWKH'HEWRUjVLQWHUSUHWDWLRQRI'H0DUFRWKDWRQO\YHVWHGULJKWV
DUHSURSHUW\RIWKHHVWDWH
        )LQDOO\WKH'HEWRUDOVRUHOLHVRQ6KDUSY'HU\%5('0LFK
+RZHYHUEHFDXVHWKHXQLTXHDSSURDFKLQ6KDUSGRHVQRWIROORZDSSOLFDEOHSUHFHGHQWRQ
WKLVLVVXHLWLVXQSHUVXDVLYH,Q6KDUSWKHGHEWRUILOHGKLVFKDSWHUEDQNUXSWF\SHWLWLRQ
RQ'HFHPEHU2Q)HEUXDU\WKHGHEWRUUHFHLYHGDERQXVRI
EDVHGXSRQKLVHPSOR\PHQWGXULQJ7RTXDOLI\IRUDERQXVWKHHPSOR\HUjVSODQ
UHTXLUHG WKH HPSOR\HH WR EH LQ JRRG VWDQGLQJ ZKHQ WKH FRPSDQ\ PDGH WKH ERQXV
SD\PHQW)XUWKHUWKHWLPLQJRIWKHERQXVSD\PHQWZDVVROHO\DWWKHHPSOR\HUjVGLVFUHWLRQ
7KHGLVWULFWFRXUWKHOGWKDWQRSDUWRIWKHERQXVSD\PHQWZDVSURSHUW\RIWKHEDQNUXSWF\
HVWDWHHYHQWKRXJKWKHERQXVZDVEDVHGDOPRVWHQWLUHO\XSRQWKHGHEWRUjVSUHSHWLWLRQ
HPSOR\PHQW7KHGLVWULFWFRXUWVWDWHGm7KHGHWHUPLQDWLYHLVVXHLQWKLVFDVHWKHUHIRUHLV
ZKHWKHU'HEWRUKDGDQHQIRUFHDEOHULJKWWRUHFHLYHWKHERQXVFKHFNZKHQKHILOHGKLV
SHWLWLRQl6KDUS%5DW
        7KHUHLVDIXQGDPHQWDOSUREOHPZLWK6KDUS)RFXVLQJRQZKHWKHUWKHGHEWRUKDG
DQmHQIRUFHDEOHlFRQWUDFWULJKWZKHQWKHSHWLWLRQZDVILOHGZRXOGH[FOXGHDOOFRQWLQJHQW
LQWHUHVWVIURPWKHEDQNUXSWF\HVWDWHEHFDXVHE\GHILQLWLRQDFRQWLQJHQWLQWHUHVWLVQRW
mHQIRUFHDEOHlXQWLOWKHFRQWLQJHQF\LVPHW7KHDSSURDFKLQ6KDUSLVWKXVLQFRQVLVWHQWZLWK
WKHEURDGFRQFHSWRISURSHUW\RIWKHHVWDWHLQDDQGZLWKWKHH[WHQVLYHFDVHODZ
UHYLHZHGDERYHKROGLQJWKDWDFRQWLQJHQWLQWHUHVWFDQEHSURSHUW\RIWKHHVWDWH6HFWLRQ
QHLWKHUVWDWHVQRULPSOLHVDQ\UHTXLUHPHQWWKDWWKHGHEWRUPXVWKDYHDQHQIRUFHDEOH
LQWHUHVW LQ SURSHUW\ IRU WKDW LQWHUHVW WR EHFRPH SURSHUW\ RI WKH EDQNUXSWF\ HVWDWH
$FFRUGLQJO\WKH3DQHOUHMHFWVWKHUHDVRQLQJDQGUHVXOWRI6KDUS

                                                  
         7KH3DQHODJUHHVZLWKWKHEDQNUXSWF\FRXUWWKDWLQWKHSUHVHQWFDVHWKH'HEWRUjV
SURILW VKDULQJ SD\PHQW ZDV VXIILFLHQWO\ URRWHG LQ KLV SUHSHWLWLRQ SDVW WR EH LQFOXGHG LQ
SURSHUW\RIKLVEDQNUXSWF\HVWDWHXQGHUD
         7KHEDQNUXSWF\FRXUWSURUDWHGWKHSURILWVKDULQJVRWKDWRQO\WKDWSRUWLRQRIWKHSURILW
VKDULQJWKDWUHODWHGWRWKH'HEWRUjVSUHSHWLWLRQHPSOR\PHQWEHFDPHSURSHUW\RIWKHHVWDWH
7KLV LV HQWLUHO\ DSSURSULDWH ZKHQ RQO\ SDUW RI WKH SD\PHQW LV EDVHG XSRQ SUHSHWLWLRQ
FRQGXFW6HHsHVVY&DUH\,QUHsHVV%5%$3WK&LUDIIjG
)GWK&LU7RZHUVY:X,QUH:X%5%$3WK&LU


%7KH'HEWRUjVLQWHUHVWLQWKHSURILWVKDULQJSD\PHQWZDVQRWKHOGLQDEHQHILFLDOWUXVW
FRQWDLQLQJDUHVWULFWLRQRQWUDQVIHUHQIRUFHDEOHXQGHUQRQEDQNUXSWF\ODZ

         7KH'HEWRUjVDOWHUQDWLYHDUJXPHQWLVWKDWKLVLQWHUHVWLQWKHSURILWVKDULQJSURJUDP
LVH[FOXGHGIURPSURSHUW\RIWKHHVWDWHSXUVXDQWWRF7KDWVHFWLRQSURYLGHVm$
UHVWULFWLRQRQWKHWUDQVIHURIDEHQHILFLDOLQWHUHVWRIWKHGHEWRULQDWUXVWWKDWLVHQIRUFHDEOH
XQGHUDSSOLFDEOHQRQEDQNUXSWF\ODZLVHQIRUFHDEOHLQDFDVHXQGHUWKLVWLWOHl86&
 F  7KH 'HEWRU DUJXHV WKDW WKH FROOHFWLYH EDUJDLQLQJ DJUHHPHQW UHVWULFWV WKH
WUDQVIHURISURILWVKDULQJSD\PHQWVXQWLODIWHUWKH\DUHGLVWULEXWHGE\WKHHPSOR\HUDQGWKDW
LIWKHHPSOR\HUZDVKROGLQJPRQH\RQKLVEHKDOIDFRQVWUXFWLYHWUXVWZDVFUHDWHG
         7KH6L[WK&LUFXLWUHFHQWO\KHOGm$QLQTXLU\XQGHUFQRUPDOO\KDVWKUHH
SDUWV )LUVW GRHV WKH GHEWRU KDYH D EHQHILFLDO LQWHUHVW LQ D WUXVW"  6HFRQG LV WKHUH D
UHVWULFWLRQ RQ WKH WUDQVIHU RI WKDW LQWHUHVW"  7KLUG LV WKH UHVWULFWLRQ HQIRUFHDEOH XQGHU
QRQEDQNUXSWF\ODZ"l7DXQWY*HQHUDO5HW6\VRIWKH&LW\RI'HWURLW,QUH:LOFR[
)GWK&LU$OWKRXJKWKHFROOHFWLYHEDUJDLQLQJDJUHHPHQWLQWKLVFDVH
GRHVFRQWDLQDUHVWULFWLRQDJDLQVWWUDQVIHUWKH'HEWRUKDVQRWVKRZQWKHH[LVWHQFHRIHLWKHU
DQH[SUHVVWUXVWRUDFRQVWUXFWLYHWUXVW
         8QGHU2KLRODZDQH[SUHVVWUXVWUHTXLUHVmDQH[SOLFLWGHFODUDWLRQRIWUXVWRU
FLUFXPVWDQFHVZKLFKVKRZEH\RQGDUHDVRQDEOHGRXEWWKDWDWUXVWZDVLQWHQGHGWREH
FUHDWHGlmDQLQWHQWLRQWRFUHDWHDWUXVWlDQGmDQDFWXDOFRQYH\DQFHRISURSHUW\
WR>D@WUXVWHH>@l8OPHUY)XOWRQ1(2KLR,QWKHSUHVHQWFDVH
WKH FROOHFWLYH EDUJDLQLQJ DJUHHPHQW GRHV QRW H[SOLFLWO\ GHFODUH D WUXVW QRU GR WKH
FLUFXPVWDQFHVVKRZEH\RQGDUHDVRQDEOHGRXEWDQLQWHQWWRFUHDWHDWUXVW$GGLWLRQDOO\

                                                  
WKHUHZDVQRFRQYH\DQFHRIWKHSURSHUW\WRDWUXVWHH7KHUHIRUHWKH'HEWRUjVFODLPRIDQ
H[SUHVVWUXVWPXVWEHUHMHFWHG
       )XUWKHUXQGHU2KLRODZDFRQVWUXFWLYHWUXVWLVGHILQHGDVIROORZV

                       $FRQVWUXFWLYHWUXVWLVDWUXVWFUHDWHGE\RSHUDWLRQRIODZ
               DJDLQVWWKHKROGHURIDOHJDOULJKWWRSURSHUW\ZKLFKWKDWSHUVRQ
               VKRXOGQRWLQHTXLW\DQGJRRGFRQVFLHQFHKROGRUHQMR\LWLV
               D UHODWLRQVKLS DVVRFLDWHG ZLWK SURSHUW\ VXEMHFWLQJ WKH WLWOH
               KROGHUWRDQHTXLWDEOHGXW\WRFRQYH\ LW WRDQRWKHUEHFDXVH
               RWKHUZLVHWKHWLWOHKROGHUZRXOGEHXQMXVWO\HQULFKHG

%HOIDQFHY%XVKH\,QUH%XVKH\%5%$3WK&LUTXRWLQJ8QLRQ
6DY	/RDQ$VVjQY0F'RQRXJK1(G2KLR&W$SS+HUHWKH
'HEWRUPDNHVQRDVVHUWLRQRIDQXQMXVWHQULFKPHQWZKLOHKLVHPSOR\HUKROGVWKHSURILW
VKDULQJ SULRU WR LWV GLVWULEXWLRQ  ,Q DQ\ HYHQW WKH HPSOR\HU KDV VLQFH PDGH WKH SURILW
VKDULQJSD\PHQWWRWKH'HEWRU7KHFLUFXPVWDQFHVRIWKHSUHVHQWFDVHGRQRWZDUUDQWWKH
LPSRVLWLRQRIDFRQVWUXFWLYHWUXVW

                                       9&21&/86,21
       7KHEDQNUXSWF\FRXUWjVGHFLVLRQILQGLQJWKDWDSURUDWHGVKDUHRIWKHSURILWVKDULQJ
LVSURSHUW\RIWKHEDQNUXSWF\HVWDWHLV$)),50('

                                                 