Court Opinion

ID: 2969796
Source: CourtListenerOpinion
Date Created: 2015-09-22 15:57:24.280248+00
Date Added: 2024-06-11T11:40:52.667284
License: Public Domain

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
    8QLWHG6WDWHVY5RVV                         1R                      3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

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

                     BBBBBBBBBBBBBBBB                                                    )LOH 1DPH DS

                         ',66(17
                     BBBBBBBBBBBBBBBB                                81,7('67$7(6&28572)$33($/6
                                                                                        )257+(6,;7+&,5&8,7
   0(55,77 &LUFXLW sXGJH GLVVHQWLQJ  , DJUHH WKDW WKH                          BBBBBBBBBBBBBBBBB
GHIHQGDQWFDQHQWHULQWRDSOHDDJUHHPHQWWKDWZDLYHVIXUWKHU
VWDWXWRU\DQGFRQVWLWXWLRQDOSURFHGXUHV,DJUHHWKDWKHGLGVR
LQWKLVFDVH%XWWKHGLVWULFWMXGJHjVGHFLVLRQWRUHVHQWHQFH
WKH GHIHQGDQW IROORZLQJ KLV YLRODWLRQ RI WKH VHQWHQFLQJ        81,7(' 67$7(6 2) $0(5,&$        ;
DJUHHPHQWVKRXOGEHDIILUPHG                                                   3ODLQWLII$SSHOOHH     
                                                                                                        
   %\KROGLQJWKDWWKHGLVWULFWFRXUWGLGQRWKDYHMXULVGLFWLRQ                                           1R
WR UHVHQWHQFH 5RVV IROORZLQJ KLV EUHDFK RI WKH RULJLQDO                Y                      
VHQWHQFLQJ DJUHHPHQW WKH PDMRULW\ RSLQLRQ WHQGV WR GHWHU                                         !
                                                                                                        
SOD\HUVLQWKHFULPLQDOSURFHVVIURPHQWHULQJLQWRDVHQWHQFLQJ       '$1,(/ 3 5266                   
DJUHHPHQWEHFDXVHWKHGLVWULFWFRXUWQRZODFNVWKHWHHWKWR                   'HIHQGDQW$SSHOODQW 
HQIRUFHWKHRULJLQDOFRQWUDFW$VDUHVXOWRIWKLVUXOLQJLID                                       1
GHIHQGDQWZDLYHVKLVULJKWWRIXWXUHOLWLJDWLRQLQH[FKDQJHIRU
D OLJKWHU VHQWHQFH EXW WKHQ EULQJV D QHZ DFWLRQ DQ\ZD\           $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
WKHUHE\IRUFLQJWKHJRYHUQPHQWWRUHVSRQGDQGGHSULYLQJLW               IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG
RIWKHEHQHILWRILWVEDUJDLQWKHGLVWULFWFRXUWFDQQRWSHQDOL]H      1Rn'RQDOG&1XJHQW'LVWULFWsXGJH
WKHGHIHQGDQWE\UHVHQWHQFLQJKLPXVLQJWKHVHQWHQFHWKDW
ZRXOG KDYH DSSOLHG LQ WKH DEVHQFH RI DQ\ DJUHHPHQW                              $UJXHG2FWREHU
&RQVHTXHQWO\ SURVHFXWRUV ZLOO EH OHVV OLNHO\ WR DOORZ
GHIHQGDQWVWRHQWHULQWRWKHVHDJUHHPHQWVEHFDXVHWKH\NQRZ                        'HFLGHGDQG)LOHG0DUFK
WKHFRQWUDFWFDQQRWEHHQIRUFHGVKRXOGWKHGHIHQGDQWFKRRVH
WREUHDFKLW,QDGGLWLRQWKHGLVWULFWFRXUWZLOOEHXQDEOHWR     %HIRUH0(55,77DQG6,/(5&LUFXLWsXGJHV6$5*86
VLPSO\UHIXVHWRKHDUWKHGHIHQGDQWjVQHZFODLPEHFDXVHWKHUH                          'LVWULFWsXGJH
LVDOZD\VWKHSRVVLEOHWKDWWKHFODLPHG%UDG\YLRODWLRQRUQHZ
HYLGHQFHZLOOSURYHPHULWRULRXV                                                            BBBBBBBBBBBBBBBBB

  7KHVHDJUHHPHQWVJUHDWO\EHQHILWDOOWKUHHmSOD\HUVlLQWKH                                     &2816(/
FULPLQDOMXVWLFHV\VWHP'HIHQGDQWVUHFHLYHVKRUWHUVHQWHQFHV
SURVHFXWRUVUHGXFHWKHLUFDVHORDGDQGFRXUWVDUHIUHHGIURP        $5*8('  .HYLQ 5 &RQQHUV 925<6 6$7(5
VRPHRIWKHPDQ\IULYRORXVFULPLQDODSSHDOVZLWKZKLFKZH            6(<0285 	 3($6( &ROXPEXV 2KLR IRU $SSHOODQW
QRZGHDO2XUFRXUWjVRSLQLRQGHWHUVDOOWKUHHSDUWLFLSDQWV         'DQLHO6*RRGPDQ81,7('67$7(6'(3$570(172)
IURPXVLQJWKLVYDOXDEOHWRRO
  $FFRUGLQJO\,UHVSHFWIXOO\GLVVHQW                                   
                                                                          7KH +RQRUDEOH (GPXQG $ 6DUJXV sU 8QLWHG 6WDWHV 'LVWULFW sXGJH
                                                                     IRU WKH 6RXWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ

                                                                                                         
     8QLWHG6WDWHVY5RVV                          1R       1R                          8QLWHG6WDWHVY5RVV      

s867,&($33(//$7(6(&7,21&5,0,1$/',9,6,21                         WKDWLVDUHVHQWHQFLQJRIDGHIHQGDQWEH\RQGWKRVHH[FHSWLRQV
:DVKLQJWRQ '& IRU $SSHOOHH  21 %5,()  .HYLQ 5          H[SUHVVO\HQDFWHGE\&RQJUHVV
&RQQHUV7LPRWK\:+RRYHU925<66$7(56(<0285
	 3($6( &ROXPEXV 2KLR IRU $SSHOODQW  'DQLHO 6               %DVHG XSRQ WKH IRUHJRLQJ WKH &RXUW FRQFOXGHV WKDW WKH
*RRGPDQ81,7('67$7(6'(3$570(172)s867,&(                          GLVWULFW FRXUW ZDV ZLWKRXW MXULVGLFWLRQ WR UHRSHQ WKH
$33(//$7( 6(&7,21 &5,0,1$/ ',9,6,21                               VHQWHQFLQJDJUHHPHQWDQGWRLPSRVHDQHZVHQWHQFHXSRQWKH
:DVKLQJWRQ '& sDFN 6DPPRQ 81,7(' 67$7(6                      DSSHOODQW7KHGHFLVLRQRIWKHWULDOFRXUWWRUHVHQWHQFHWKH
$77251(<&OHYHODQG2KLRIRU$SSHOOHH                               GHIHQGDQWLVWKHUHIRUH5(9(56('
  6$5*86sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK               7KHUHPDLQLQJLVVXHVUDLVHGE\WKHDSSHOODQWDVWRZKHWKHU
6,/(5sMRLQHG0(55,77sSGHOLYHUHGDVHSDUDWH          WKHGLVWULFWMXGJHLPSRVHGDYLQGLFWLYHVHQWHQFHRUZKHWKHU
GLVVHQWLQJRSLQLRQ                                                    WKH GHIHQGDQW KDG OHJLWLPDWH H[SHFWDWLRQ RI ILQDOLW\ LQ KLV
                                                                       VHQWHQFHDUHUHQGHUHGPRRWE\WKLV&RXUWjVGHWHUPLQDWLRQWKDW
                     BBBBBBBBBBBBBBBBB                                 WKH GLVWULFW MXGJH ZDV ZLWKRXW MXULVGLFWLRQ WR UHVHQWHQFH
                                                                       DSSHOODQW
                         23,1,21
                     BBBBBBBBBBBBBBBBB                                                                9,
  6$5*86 'LVWULFW sXGJH  'DQLHO 3 5RVV 5RVV                %DVHGXSRQWKHIRUHJRLQJWKHGHFLVLRQRIWKHGLVWULFWMXGJH
DSSHOODQWKHUHLQZDVFRQYLFWHGE\DMXU\RIWKHIROORZLQJ           LV$)),50('LQSDUWDQG5(9(56('LQSDUW
PDNLQJ IDOVH VWDWHPHQWV WR D IHGHUDOO\ LQVXUHG EDQN LQ
YLRODWLRQRI86&PDNLQJIDOVHVWDWHPHQWVWRDQ
DJHQF\ LQVXUHG E\ WKH +RXVLQJ DQG 8UEDQ 'HYHORSPHQW
'HSDUWPHQW LQ YLRODWLRQ RI  86&  FRPPLWWLQJ
ZLUH IUDXG LQ YLRODWLRQ RI  86&  PDNLQJ IDOVH
GHFODUDWLRQV EHIRUH D JUDQG MXU\ LQ YLRODWLRQ RI  86&
 DQG REVWUXFWLQJ MXVWLFH LQ YLRODWLRQ RI  86&

  3ULRUWRVHQWHQFLQJ5RVVDQGWKH*RYHUQPHQWUHDFKHGD
VHQWHQFLQJDJUHHPHQWLQZKLFKLQWHUDOLD5RVVDJUHHGQRWWR
DSSHDO RU ILOH RWKHU SRVWFRQYLFWLRQ PRWLRQV  5RVV ZDV
WKHUHXSRQVHQWHQFHGWRDWHUPRIFRQILQHPHQWRIWHQPRQWKV
VSOLW EHWZHHQ LPSULVRQPHQW DQG KRPH FRQILQHPHQW ZLWK
HOHFWURQLFPRQLWRULQJ
   0RUHWKDQWZR\HDUVDIWHUVHQWHQFLQJDQGDIWHUFRPSOHWLRQ
RIWKHWHUPRILPSULVRQPHQW5RVVILOHGDPRWLRQIRUDQHZ
WULDORQ0DUFK7KHGLVWULFWFRXUWGHQLHGWKHPRWLRQ
RQWKHPHULWVZKLOHDOVRILQGLQJWKDWWKHILOLQJRIWKHPRWLRQ
YLRODWHGWKHSULRUVHQWHQFLQJDJUHHPHQW7KH&RXUWWKHUHXSRQ
    8QLWHG6WDWHVY5RVV                          1R       1R                        8QLWHG6WDWHVY5RVV     

  WKH FRXUW PD\ PRGLI\ DQ LPSRVHG VHQWHQFH RI                   UHVHQWHQFHG 5RVV WR D SHULRG RI WZHQW\RQH PRQWKV
  LPSULVRQPHQWWRWKHH[WHQWRWKHUZLVHH[SUHVVO\SHUPLWWHG             LPSULVRQPHQWWREHIROORZHGE\WKUHH\HDUVRIVXSHUYLVHG
  E\VWDWXWHRUE\5XOHRIWKH)HGHUDO5XOHVRI&ULPLQDO            UHOHDVHZLWKFUHGLWIRUWLPHVHUYHG5RVVDSSHDOVFODLPLQJ
  3URFHGXUH                                                     WKHGLVWULFWFRXUWHUUHGLQGHQ\LQJKLVPRWLRQIRUDQHZWULDO
                                                                       LQILQGLQJWKDWKHEUHDFKHGWKHVHQWHQFLQJDJUHHPHQWDQGLQ
   2QO\WZRRWKHUVWDWXWRU\H[FHSWLRQVPRGLI\WKHJHQHUDOUXOH         UHVHQWHQFLQJKLPWRDJUHDWHUSHULRGRILQFDUFHUDWLRQ
H[SUHVVHGLQ86&WKDWDGLVWULFWFRXUWPD\QRW
PRGLI\ D WHUP RI LPSULVRQPHQW RQFH WKH VDPH KDV EHHQ                                        ,
LPSRVHG8SRQWKHLVVXDQFHRIUHOLHIXQGHU86&
DUHVHQWHQFLQJPD\RFFXU6LPLODUO\XQGHU86&              $SSHOODQW5RVVZDVIRUPHUO\HPSOR\HGDVDSURIHVVLRQDO
XSRQUHPDQGIURPD&RXUWRI$SSHDOVRUWKH6XSUHPH&RXUW               DFFRXQWDQW DQG VHUYHG DV &RXQW\ $XGLWRU IRU $VKWDEXOD
WR WKH GLVWULFW FRXUW D UHVHQWHQFLQJ LV DXWKRUL]HG E\ ODZ   &RXQW\2KLRIURPWR$FWLQJRQEHKDOIRIRQH
1HLWKHURIWKRVHVWDWXWRU\SURYLVLRQVQRU)HG5&ULP3          6WHYH % +DUWPDQ DQG +DUWPDQ $FRXVWLFV ,QF 5RVV
LVDSSOLFDEOHWRWKLVFDVH 1RRWKHUDXWKRULW\LVJLYHQWRD         VXEPLWWHGORDQDSSOLFDWLRQGRFXPHQWVWR%DQN2QHVHHNLQJ
GLVWULFWFRXUWDXWKRUL]LQJLWWRPRGLI\DWHUPRILPSULVRQPHQW         D  ORDQ  ,QFOXGHG DPRQJ WKH VXEPLWWHG
RQFHVXFKVHQWHQFHKDVEHHQLPSRVHG                                 GRFXPHQWDWLRQZHUH+DUWPDQjVSXUSRUWHGWD[UHWXUQVIRUWKH
                                                                       \HDUVWRDVZHOODVSHUVRQDOILQDQFLDOVWDWHPHQWV
  ,Q 8QLWHG 6WDWHV Y %DUUDJDQ0HQGR]D  )G           5RVVWROGD%DQN2QHFRPPHUFLDOORDQRIILFHUWKDWWKHWD[
 WK &LU  WKH &RXUW UHMHFWHG D FODLP WKDW D   UHWXUQVKDGEHHQSUHSDUHGE\DQ,QGLDQDDFFRXQWDQWZKHQLQ
GLVWULFW FRXUW KDV LQKHUHQW SRZHU WR PRGLI\ D WHUP RI         IDFW5RVVKDGSUHSDUHGWKHWD[UHWXUQVKLPVHOI7KHUHWXUQV
LPSULVRQPHQWEH\RQGWKHDXWKRULW\JUDQWHGE\5XOHRU             ZHUHLQDFFXUDWHDQGPLVUHSUHVHQWHG+DUWPDQjVWUXHILQDQFLDO
86&RU7KH&RXUWKHOGWKDWLQWKHDEVHQFH            VWDWXV
RIDQH[SUHVVVWDWXWHRUUXOHWRWKHFRQWUDU\DGLVWULFWFRXUWLV
ZLWKRXWMXULVGLFWLRQWRUHFRQVLGHUDQGXOWLPDWHO\UHLPSRVHD             5RVVDOVRVXEPLWWHGORDQDSSOLFDWLRQGRFXPHQWVRQEHKDOI
PRGLILHG WHUP RI LPSULVRQPHQW  $FFRUG 8QLWHG 6WDWHV Y        RI +DUWPDQ $FRXVWLFV ,QF WR WKH $VKWDEXOD &RXQW\ 
=VRIND 1R   :/  VW &LU $XJ          &RUSRUDWLRQDQRQSURILWHQWLW\ZKLFKOHQGVSXEOLFPRQH\WR
XQSXEOLVKHG8QLWHG6WDWHVY%ODFNZHOO)G           EXVLQHVVHVLQDQHIIRUWWRVWLPXODWHHFRQRPLFGHYHORSPHQW
WK&LU8QLWHG6WDWHVY&URZGHU)6XSS           $JDLQWKHGRFXPHQWVVXEPLWWHGE\5RVVZHUHIUDXGXOHQWO\
('7HQQ                                                     GHVFULEHG DV KDYLQJ EHHQ SUHSDUHG E\ DQRWKHU DFFRXQWDQW
                                                                       ZKHQ LQ IDFW 5RVV SUHSDUHG WKH VDPH  )XUWKHU WKH
  7KHGLVVHQWDUJXHVWKDWDEVHQWWKHDXWKRULW\RIDGLVWULFW          LQIRUPDWLRQ VHW IRUWK LQ WKH ILQDQFLDO GRFXPHQWV ZDV
FRXUWWRUHVHQWHQFHDVHQWHQFLQJDJUHHPHQWLVZLWKRXWHIIHFW         LQDFFXUDWH DQG PLVUHSUHVHQWHG WKH FRPSDQ\jV ILQDQFLDO
7R WKH FRQWUDU\ DQ DJUHHPHQW ZKLFK EDUV DSSHDO SRVW         FRQGLWLRQE\LQIODWLQJWKHYDOXHRIWKHDVVHWV
VHQWHQFLQJ PRWLRQV RU SHWLWLRQV FDQ EH HQIRUFHG E\ WKH
RXWULJKWGHQLDORIWKHUHOLHIVRXJKWEDVHGXSRQWKHWHUPVRI            5RVV DOVR FDXVHG IUDXGXOHQW ORDQ DSSOLFDWLRQV WR EH
WKH DJUHHPHQW  &RQVHTXHQWO\ QHLWKHU SDUW\ LV GHQLHG LWV      VXEPLWWHGWRWKH6HFRQG1DWLRQDO%DQNRI:DUUHQ2KLRRQ
EDUJDLQ  0RUH IXQGDPHQWDOO\ DQ DJUHHPHQW E\ WKH               EHKDOIRIWKH/DNH$YHQXH'DLU\4XHHQ7KLVEXVLQHVVZDV
JRYHUQPHQW DQG WKH GHIHQGDQW VLPSO\ FDQQRW RSHUDWH WR           RZQHG E\ RQH :LOOLDP 2VERUQ ZKR DOVR VHUYHG DV &KLHI
SHUPLW ZKDW  86& F% H[SUHVVO\ SURKLELWV        'HSXW\$XGLWRUIRU$VKWDEXOD&RXQW\XQGHU5RVV6KRUWO\
                                                                       EHIRUHVXEPLWWLQJWKHORDQDSSOLFDWLRQ5RVVFDXVHGWKHVXP
                                                                       RIWREHGUDZQRQWKHDFFRXQWRI+DUWPDQ$FRXVWLFV
     8QLWHG6WDWHVY5RVV                         1R       1R                          8QLWHG6WDWHVY5RVV      

,QFDQGWREHGHSRVLWHGLQWKHDFFRXQWRIWKH/DNH$YHQXH            RIDQDFTXLWWDODVUHTXLUHGXQGHU)HG5&ULP36HH
'DLU\4XHHQ                                                          8QLWHG6WDWHVY2j'HOO)GWK&LU
   $IWHU5RVVEHFDPHDZDUHWKDWWKH)%,ZDVLQYHVWLJDWLQJKLV            5RVVDOVRFODLPVWKDWWZRQHZZLWQHVVHVZRXOGGHVWUR\WKH
DFWLYLWLHV KH LQGXFHG 2VERUQ KLV GHSXW\ WR VLJQ D IDOVH   FUHGLELOLW\ RI 2VERUQjV WULDO WHVWLPRQ\ WKDW KLV DIILGDYLW
DIILGDYLWZKLFK5RVVKDGSUHSDUHG,QDQHIIRUWWRMXVWLI\WKH       VXSSRUWLQJ5RVVjJUDQGMXU\WHVWLPRQ\ZDVIDOVH7KHGLVWULFW
ILQDQFLDOVWDWHPHQWVSUHYLRXVO\VXEPLWWHG5RVVSUHSDUHGDQ           FRXUWGHWHUPLQHGWKDW5RVVFRXOGKDYHSURGXFHGWKHDIILGDYLWV
DIILGDYLWIDOVHO\FODLPLQJWKDW2VERUQKDGDVVLVWHG5RVVDQG          RIWKHVHZLWQHVVHVEHIRUHWULDOKDGKHH[HUFLVHGGXHGLOLJHQFH
+DUWPDQ LQ SUHSDULQJ WKH WD[ DQG ILQDQFLDO GRFXPHQWV           ,QDGGLWLRQWKHMXU\KHDUG5RVVWHVWLI\WKDW2VERUQZDVRXW
VXEPLWWHG ZLWK WKH ORDQ DSSOLFDWLRQ PDGH RQ EHKDOI RI         WRJHWKLPDQGNQHZWKDW2VERUQZDVVXLQJ5RVVRYHUWKH
+DUWPDQ$FRXVWLFV,QF5RVVSUHVHQWHGWKHIDOVHDIILGDYLWWR        'DLU\4XHHQGHDO7KXVWKHGLVWULFWFRXUWGLGQRWDEXVHLWV
D IHGHUDO JUDQG MXU\ RQ 2FWREHU    5RVV IXUWKHU     GLVFUHWLRQLQILQGLQJWKDWWKLVLQIRUPDWLRQGLGQRWSURGXFHWKH
WHVWLILHGEHIRUHWKHJUDQGMXU\WKDWKHKDGVSHQWVHYHUDOGD\V        OLNHOLKRRGRIDQDFTXLWWDO
ZLWK+DUWPDQDQG2VERUQSXWWLQJWRJHWKHUWKHEXVLQHVVSODQ
IRU+DUWPDQ$FRXVWLFV,QF,QWKHJUDQGMXU\GHFOLQHG           %DVHG XSRQ WKH IRUHJRLQJ WKH &RXUW FRQFOXGHV WKDW WKH
WRLQGLFW5RVVDQGUHWXUQHGD1RW7UXH%LOO                          GLVWULFW FRXUW GLG QRW DEXVH LWV GLVFUHWLRQ LQ GHQ\LQJ WKH
                                                                      GHIHQGDQWjVPRWLRQIRUDQHZWULDO
   6XEVHTXHQWO\2VERUQFRQWDFWHGWKH)%,DQGVWDWHGWKDWWKH
DIILGDYLWZKLFKKHKDGVLJQHGZDVQRWWUXH+HDGPLWWHGWR                                           9
WKH)%,WKDWKHKDGQRWDVVLVWHG5RVVRU+DUWPDQLQSUHSDULQJ
WKH EXVLQHVV SODQ IRU +DUWPDQ $FRXVWLFV ,QF  +H IXUWKHU      5RVVQH[WFKDOOHQJHVWKHMXULVGLFWLRQRIWKHWULDOFRXUWWR
VWDWHGWKDWKHKDGDJUHHGWRVLJQWKHDIILGDYLWVLPSO\EHFDXVH        UHVHQWHQFHKLPRQ)HEUXDU\IROORZLQJWKHLQLWLDO
KHZRUNHGIRU5RVVDQGFRQVLGHUHGKLPWREHDIULHQG               VHQWHQFLQJZKLFKRFFXUUHGRQ0DUFK:KHWKHUWKH
                                                                      GLVWULFW FRXUW KDG WKH DXWKRULW\ WR UHVHQWHQFH 5RVV LV D
  7KHUHDIWHUQHZLQIRUPDWLRQZDVSUHVHQWHGWRDGLIIHUHQW            TXHVWLRQRIODZVXEMHFWWRDGHQRYRVWDQGDUGRIUHYLHZ6HH
JUDQGMXU\ZKLFKUHWXUQHGDQHLJKWFRXQWLQGLFWPHQWDJDLQVW           8QLWHG6WDWHVY6PLWK)GWK&LU
5RVV)ROORZLQJDVL[GD\MXU\WULDOLQ'HFHPEHU5RVV
ZDVFRQYLFWHGRQDOOHLJKWFRXQWV                                    7KHGLVWULFWFRXUWIRXQGWKDWLWKDGMXULVGLFWLRQWRUHRSHQWKH
                                                                      VHQWHQFLQJ LQ RUGHU WR HQIRUFH WKH VHQWHQFLQJ DJUHHPHQW
   7KH SUHVHQWHQFH LQYHVWLJDWLRQ UHSRUW UHFRPPHQGHG WKDW         HQWHUHG LQWR E\ WKH GHIHQGDQW DQG WKH JRYHUQPHQW  7KH
5RVVjFRQYLFWLRQIRUREVWUXFWLRQRIMXVWLFHQRWEHJURXSHGIRU        GLVWULFW FRXUW DQDORJL]HG WKH FLUFXPVWDQFHV WR D EUHDFK RI
VHQWHQFLQJ SXUSRVHV  7KLV FRQFOXVLRQ UHVXOWHG LQ WZR          FRQWUDFWRYHUZKLFKLWKDGDXWKRULW\WRUHPHG\WKHYLRODWLRQ
DGGLWLRQDORIIHQVHOHYHOVSXUVXDQWWR866*'7KH           RIWKHDJUHHPHQW
SUHVHQWHQFHUHSRUWDOVRUHFRPPHQGHGWKDW5RVVUHFHLYHDWZR
OHYHO HQKDQFHPHQW IRU XVH RI D VSHFLDO VNLOO SXUVXDQW WR      7KHDXWKRULW\RIDGLVWULFWFRXUWWRUHVHQWHQFHDGHIHQGDQWLV
866* %  5RVV ILOHG ZULWWHQ REMHFWLRQV WR WKH        OLPLWHGE\VWDWXWH86&F%VWDWHV
HQKDQFHPHQWIRUXVHRIDVSHFLDOVNLOODQGIRUWKHVHSDUDWH
WUHDWPHQWRIWKHREVWUXFWLRQRIMXVWLFHFRQYLFWLRQ                     7KHFRXUWPD\QRWPRGLI\DWHUPRILPSULVRQPHQWRQFH
                                                                        LWKDVEHHQLPSRVHGH[FHSWWKDW
  3ULRUWRVHQWHQFLQJ5RVVDQGWKH*RYHUQPHQWUHDFKHGD
VHQWHQFLQJDJUHHPHQW7KH*RYHUQPHQWDJUHHGWKDWLWZRXOG
    8QLWHG6WDWHVY5RVV                             1R       1R                         8QLWHG6WDWHVY5RVV       

                                 ,9                                      QRWREMHFWWRWKHJUDQWLQJRI5RVVjREMHFWLRQVZLWKUHJDUGWR
                                                                          WKHJURXSLQJRIFRXQWVDQGWKHHQKDQFHPHQWIRUVSHFLDOVNLOOV
  5RVVQH[WFRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHGLQGHQ\LQJ             ,QH[FKDQJH5RVVDJUHHGWRZDLYHKLVULJKWWRDSSHDORUWR
KLVPRWLRQIRUDQHZWULDOSXUVXDQWWR)HG5&ULP3               ILOHIRURWKHUSRVWFRQYLFWLRQUHOLHI
7KHGHFLVLRQWRJUDQWRUGHQ\DPRWLRQIRUDQHZWULDOEDVHG
XSRQQHZO\GLVFRYHUHGHYLGHQFHLVUHYLHZHGE\WKLV&RXUWIRU                $W VHQWHQFLQJ WKH GLVWULFW FRXUW HQJDJHG LQ D OHQJWK\
DQDEXVHRIGLVFUHWLRQ6HH8QLWHG6WDWHVY*DLWDQ$FHYHGR             FROORTX\ ZLWK 5RVV H[SODLQLQJ WKH FRQVHTXHQFHV RI WKH
)GWK&LU                                        SURSRVHGVHQWHQFLQJDJUHHPHQW7KHUHDIWHUWKHGLVWULFWFRXUW
                                                                          JUDQWHG5RVVjREMHFWLRQRQWKHVHSDUDWHWUHDWPHQWRI&RXQW
  7KHVHQWHQFLQJDJUHHPHQWKRZHYHURSHUDWHVWREDUDSRVW               DQG WKH WZROHYHO HQKDQFHPHQW IRU XVH RI D VSHFLDO VNLOO
FRQYLFWLRQFODLPEDVHGRQQHZO\GLVFRYHUHGHYLGHQFH%\                  %HIRUHPDNLQJWKHILQGLQJWKHFRXUWLQVWUXFWHG5RVVDVWRWKH
HQWHULQJLQWRWKHDJUHHPHQWDSSHOODQWYROXQWDULO\UHOLQTXLVKHG           FRQVHTXHQFHVRIDZDLYHURIDSSHDO7KHFRXUWGHILQHGWKH
KLVULJKWWRVXEVHTXHQWO\PRYHIRUDQHZWULDORQWKLVEDVLV            ZDLYHUWRZKLFK5RVVDJUHHGLQWKHIROORZLQJPDQQHU
  0RUHRYHUWKHDSSHOODQWjVEDVLVIRUWKHPRWLRQLQFOXGHGWZR               1RZDZDLYHURIDQDSSHDOULJKWPHDQVDVIROORZVWKDW
FODLPVRIQHZO\GLVFRYHUHGLPSHDFKPHQWHYLGHQFHZKLFKLV                    \RXKHUHE\ZDLYHDQ\ULJKWWRUDLVHRUDSSHDORUILOHDQ\
LQVXIILFLHQW WR ZDUUDQW D QHZ WULDO  s$ 9RO ,       SRVWFRQYLFWLRQZULWVRIKDEHDVFRUSXVFRQFHUQLQJDQ\
5RVVFODLPHGWKDWKLVLQYHVWLJDWRUXQFRYHUHGQHZHYLGHQFH                   SDUWVSHUWDLQLQJWRWKHSURVHFXWLRQLQFOXGLQJDOOPRWLRQ
UHJDUGLQJ +DUWPDQjV SULRU EXVLQHVV GHDOLQJV ZKLFK EHDU                GHIHQVHVSUREDEOHFDXVHGHWHUPLQDWLRQVDQGREMHFWLRQV
VXEVWDQWLDOVLPLODULWLHVWRKLVEXVLQHVVFRQGXFWZLWK5RVVLQ               WRWKHFRXUWjVHQWU\RIMXGJPHQWDJDLQVW\RXLQFOXGLQJ
ZKLFK +DUWPDQ VROLFLWHG LQYHVWRUV LQ EXVLQHVV YHQWXUHV WR            DQ\HUURURUSRWHQWLDOHUURUWKDWPD\KDYHRFFXUUHGGXULQJ
SURGXFH VSHDNHUV HPEH]]OHG LQYHVWPHQW IXQGV IDLOHG WR               WKHFRXUVHRIWKHWULDO
SURGXFH DQ\ SURGXFW DQG UDQ RII ZLWK WKH PRQH\  5RVV
FODLPV WKLV LQIRUPDWLRQ ZRXOG KDYH GHVWUR\HG +DUWPDQjV              s$9RO,,
FUHGLELOLW\WKXVHOLPLQDWLQJWKHRQO\ZLWQHVVWKDWOLQNHG5RVV
WRWKHSXUSRVHIXOXVHRIIDOVHLQIRUPDWLRQRQ+DUWPDQjVWD[                 +DG WKH FRXUW DGRSWHG WKH SURSRVHG ILQGLQJV LQ WKH
UHWXUQVDQGORDQDSSOLFDWLRQV                                            SUHVHQWHQFH UHSRUW 5RVV ZRXOG KDYH IDFHG D WRWDO RIIHQVH
                                                                          OHYHORIDQGDFULPLQDO KLVWRU\FDWHJRU\RI,\LHOGLQJD
   7KHGLVWULFWFRXUWKHOGWKDW5RVVFRXOGKDYHGLVFRYHUHGWKLV           JXLGHOLQH VHQWHQFLQJ UDQJH RI  WR  PRQWKV RI
LQIRUPDWLRQEHIRUHWULDOKDGKHH[HUFLVHGGXHGLOLJHQFHDQG              LPSULVRQPHQW%\WUHDWLQJWKHREVWUXFWLRQRIMXVWLFHFRXQWDV
WKDW5RVVjXVHRIDSULYDWHLQYHVWLJDWRUIRUGLVFRYHU\VXSSRUWV           JURXSHG ZLWK WKH RWKHU FRXQWV RI FRQYLFWLRQ DQG E\ QRW
WKH GLVWULFW FRXUWjV KROGLQJ  ,Q DGGLWLRQ WKH GLVWULFW FRXUW   HQKDQFLQJ5RVVjVHQWHQFHIRUXVHRIDVSHFLDOVNLOOWKHGLVWULFW
UHOLHGRQGRFXPHQWDU\HYLGHQFHOLQNLQJ5RVVWRWKHDOOHJHG                FRXUW FDXVHG D IRXU SRLQW UHGXFWLRQ LQ WKH RIIHQVH OHYHO
IUDXGXOHQW DFWV DQG WKH WHVWLPRQ\ RI VHYHUDO ZLWQHVVHV            \LHOGLQJDJXLGHOLQHVHQWHQFLQJUDQJHRIWRPRQWKV
LQFOXGLQJUHSUHVHQWDWLYHVRIWKUHHILQDQFLDOLQVWLWXWLRQVZKHUH
5RVV ILOHG ORDQ DSSOLFDWLRQV  )XUWKHU +DUWPDQ ZDV                  $IWHU5RVVFRPSOHWHGWKHWHQPRQWKLQFDUFHUDWLRQLPSRVHG
YLJRURXVO\FURVVH[DPLQHGUHJDUGLQJSRVVLEOHIUDXGLQYROYLQJ              E\WKHGLVWULFWMXGJHKHILOHGDPRWLRQIRUDQHZWULDOSXUVXDQW
DORDQDSSOLFDWLRQLQ0LFKLJDQ(YHQLQWKHDEVHQFHRIWKH               WR)HG5&ULP3,QWKHPRWLRQ5RVVDUJXHGWKDWKH
VHQWHQFLQJ DJUHHPHQW WKH GLVWULFW FRXUW GLG QRW DEXVH LWV        KDG GLVFRYHUHG QHZ HYLGHQFH ZKLFK HVWDEOLVKHG WKDW WKH
GLVFUHWLRQ LQ ILQGLQJ WKDW 5RVVj FODLP RI QHZO\ GLVFRYHUHG        *RYHUQPHQWKDGIDLOHGWRSURGXFHH[FXOSDWRU\HYLGHQFHLQ
HYLGHQFHFRQFHUQLQJ+DUWPDQGLGQRWSURGXFHWKHOLNHOLKRRG                YLRODWLRQ RI %UDG\ Y 0DU\ODQG  86   
     8QLWHG6WDWHVY5RVV                         1R      1R                          8QLWHG6WDWHVY5RVV      

)XUWKHU5RVVDVVHUWHGWKDWQHZO\GLVFRYHUHGLPSHDFKPHQW             SUREDELOLW\jRIDGLIIHUHQWUHVXOWLVDFFRUGLQJO\VKRZQZKHQ
HYLGHQFHFRQFHUQLQJ+DUWPDQHQWLWOHGKLPWRDQHZWULDO           WKH JRYHUQPHQWjV HYLGHQWLDU\ VXSSUHVVLRQ µXQGHUPLQHV
                                                                     FRQILGHQFH LQ WKH RXWFRPH RI WKH WULDOj ,G DW 
   7KH PDWHULDO ZKLFK 5RVV SUHVHQWHG WR WKH GLVWULFW FRXUW   >6@KRZLQJWKDWWKHSURVHFXWLRQNQHZRIDQLWHPRIIDYRUDEOH
LQYROYHGWKHSD\PHQWRIE\WKH)%,IRUSUHSDUDWLRQ         HYLGHQFHXQNQRZQWRWKHGHIHQVHGRHVQRWDPRXQWWRD%UDG\
RI+DUWPDQjVWD[UHWXUQV7KHSD\PHQWZDVPDGHDIWHUWKH            YLRODWLRQZLWKRXWPRUH,GDW7KHSURVHFXWLRQKDVD
WULDO DQG ZDV XQNQRZQ WR *RYHUQPHQW SURVHFXWRUV XQWLO         GXW\WROHDUQRIDQ\IDYRUDEOHHYLGHQFHNQRZQWRWKHRWKHUV
FRQWDFWHG WZR \HDUV ODWHU E\ FRXQVHO IRU 5RVV  ,W LV      DFWLQJRQWKHJRYHUQPHQWjVEHKDOILQWKHFDVH,G7KH
XQGLVSXWHGWKDWWKH)%,PDGHWKHSD\PHQWWRDQDFFRXQWLQJ            SURVHFXWLRQ DOVR LV UHVSRQVLEOH IRU JDXJLQJ WKH OLNHO\ QHW
ILUPWKDWKDGSUHSDUHG+DUWPDQjVWD[UHWXUQV$Q)%,DJHQW          HIIHFWRIDOOVXFKHYLGHQFHDQGPDN>LQJ@GLVFORVXUHZKHQWKH
KDGSULRUWRWULDOXUJHG+DUWPDQWRFRPSOHWHDOOWD[UHWXUQV       SRLQWRIµUHDVRQDEOHSUREDELOLW\jLVUHDFKHG,G
ZKLFK KH ZDV UHTXLUHG WR ILOH  %HFDXVH +DUWPDQ XVHG DQ
DFFRXQWDQWWRFRPSO\ZLWKWKLVUHTXHVWRIWKH)%,WKHDJHQF\           ,Q WKLV FDVH 5RVV FODLPV WKDW WKH JRYHUQPHQW IDLOHG WR
VXEVHTXHQWO\UHLPEXUVHG+DUWPDQjVDFFRXQWDQW                       SURYLGHKLPLQIRUPDWLRQUHJDUGLQJLWVDVVLVWDQFHWR+DUWPDQ
                                                                     LQ WKH SUHSDUDWLRQ RI KLV WD[ UHWXUQV WRJHWKHU ZLWK WKH
  5RVV DOVR FODLPHG WKDW KH KDG GLVFRYHUHG WZR QHZ           JRYHUQPHQWjVSD\PHQWIRUWKLVHYLGHQFH,QDGGLWLRQ
ZLWQHVVHVZKRZRXOGDWWDFN2VERUQjVFUHGLELOLW\ZLWKUHVSHFW         5RVV DVVHUWV WKDW WKH JRYHUQPHQW YLRODWHG %UDG\ ZKHQ LW
WR WKH IDOVH DIILGDYLW VXEPLWWHG WR WKH JUDQG MXU\  7KH   IDLOHGWRGLVFORVHWKDWWKH)%,ZDVLQYHVWLJDWLQJ+DUWPDQIRU
ZLWQHVVHV LQFOXGHG sXG\ )UHQFK ZKR VLJQHG DQ DIILGDYLW       DQHPEH]]OHPHQWVFKHPHLQ,QGLDQDSROLV,QGLDQDEDVHGRQ
LQGLFDWLQJ WKDW 2VERUQ KDG DSSURDFKHG KHU WR LQYHVW LQ       DFKHFNFDVKHGE\+DUWPDQ$SSHOODQWDUJXHVWKDWWKLV
+DUWPDQ$FRXVWLFVDQGSUHVHQWHGKHUZLWKDEXVLQHVVSODQKH          LQIRUPDWLRQVDWLVILHVWKH%UDG\WHVWVLQFHLWZRXOGKDYHUDLVHG
KDGSUHSDUHG7KHVHFRQGZLWQHVV/HH&DUWHUDVVHUWHGWKDW         GRXEWVDERXWWKHJRYHUQPHQWjVFDVHSDUWLFXODUO\+DUWPDQjV
2VERUQZDVYHU\LQYROYHGLQ+DUWPDQ$FRXVWLFV                    FUHGLELOLW\ DV WKH RQO\ ZLWQHVV OLQNLQJ 5RVV WR WKH IDOVH
                                                                     LQIRUPDWLRQLQ+DUWPDQjVILQDQFLDODQGORDQGRFXPHQWV
   5RVV DOVR FODLPHG WR KDYH QHZ HYLGHQFH FRQFHUQLQJ
+DUWPDQ$FFRUGLQJWR5RVV+DUWPDQZDVLQYROYHGLQDQ                 7KHGLVWULFWFRXUWKHOGWKDWWKHJRYHUQPHQWjVIDLOXUHWROHDUQ
HPEH]]OHPHQWVFKHPHLQ,QGLDQDSROLVZKLFKZDVLQYHVWLJDWHG           RI WKH  WD[ SUHSDUDWLRQ SD\PHQW DQG WR GLVFORVH WKH
E\WKH)%,5RVVDVVHUWVWKDWWKLVHYLGHQFHVKRZLQJ+DUWPDQ        VDPHWR5RVVGLGQRWULVHWRDPDWHULDOOHYHOXQGHU%UDG\
LQDIUDXGXOHQWVFKHPHZRXOGKDYHGLVFUHGLWHGKLVWHVWLPRQ\        s$9RO,,QWKHGLVWULFWFRXUWjVYLHZWKHSD\PHQWZDV
5RVVFRQWHQGVWKDWWKHQHZO\GLVFRYHUHGHYLGHQFHUHQGHUHG            QRW DQ LQGXFHPHQW RU FRQVLGHUDWLRQ PDGH E\ WKH )%, WR
KLPOHVVFUHGLEOHDVDZLWQHVV                                    LQIOXHQFH +DUWPDQ  5DWKHU +DUWPDQjV SURFUDVWLQDWLRQ LQ
                                                                     SURGXFLQJWKHGRFXPHQWVUHVXOWHGLQDVXESRHQDWRSURGXFH
   7KHGLVWULFWFRXUWILUVWFRQFOXGHGWKDW5RVVKDGZDLYHGKLV       WKH UHWXUQV DQG WKH SD\PHQW ZDV PDGH VLPSO\ WR VHFXUH
ULJKWWRVHHNDQHZWULDO:KLOHWKHVHQWHQFLQJDJUHHPHQWGLG       GRFXPHQWDU\ HYLGHQFH  ,G DW   ,QGHHG +DUWPDQjV
QRWH[SUHVVO\ZDLYHWKHULJKWWRILOHDPRWLRQIRUDQHZWULDO      UHOXFWDQFH DSSHDUV ORJLFDO DV WKH FRUUHFWHG WD[ LQIRUPDWLRQ
WKH FRXUW FRQFOXGHG WKDW WKH VSHFLILF ODQJXDJH RI WKH        FRXOGKDYHSURYHQGDPDJLQJWRKLVRZQLQWHUHVWV7KLV&RXUW
DJUHHPHQWPDGHLQRSHQFRXUWE\WKHGHIHQGDQWHQFRPSDVVHG            DJUHHV  7DNHQ DV D ZKROH WKH GLVWULFW FRXUW FRUUHFWO\
DPRWLRQIRUDQHZWULDO7KHFRXUWDOVRDGGUHVVHGWKHPHULWV       GHWHUPLQHGWKDWQR%UDG\YLRODWLRQKDGRFFXUUHG
RIWKHLVVXHVUDLVHGLQ5RVVjPRWLRQ7KHFRXUWILUVWIRXQG
WKDW WKH SD\PHQW ZDV QRW DQ LQGXFHPHQW E\ WKH )%, WR
LQIOXHQFH +DUWPDQ UDWKHU WKH FRXUW IRXQG WKDW +DUWPDQjV
       8QLWHG6WDWHVY5RVV                              1R        1R                           8QLWHG6WDWHVY5RVV      

VXEVHTXHQW%UDG\EDVHGFKDOOHQJHV,Q0DWKHZYsRKQVRQ                     SURFUDVWLQDWLRQ UHVXOWHG LQ D VXESRHQD WR SURGXFH WKH WD[
)GWK&LUWKH&RXUWUHYLHZHGWKH                   UHWXUQVDQGWKDWWKHSD\PHQWZDVPDGHWRVHFXUHGRFXPHQWDU\
FRQFOXVLRQV UHDFKHG E\ RXU VLVWHU &RXUWV RI $SSHDOV DQG                HYLGHQFH
FRQFOXGHGWKDWPRVWKDGIRXQGDQDUURZO\SUHVFULEHGULJKWWR
UDLVH%UDG\LVVXHVZKLOHDPLQRULW\KDGFRQFOXGHGWKDWDSOHD                   :LWKUHJDUGWR5RVVjFODLPRIQHZO\GLVFRYHUHGHYLGHQFH
RIJXLOW\EDUUHGUHYLHZRIVXFKFODLPV$OWKRXJKWKHGLVWULFW                 DV WR +DUWPDQ WKH GLVWULFW FRXUW IRXQG WKDW DOO RI WKH
FRXUWIRXQGWKDW5RVVj%UDG\FODLPVZHUHEDUUHGE\RSHUDWLRQ                   LQIRUPDWLRQFRXOGKDYHEHHQGLVFRYHUHGEHIRUHWULDOWKURXJK
RI WKH VHQWHQFLQJ DJUHHPHQW LW QRQHWKHOHVV FRQVLGHUHG WKH              WKH H[HUFLVH RI GXH GLOLJHQFH  7KH FRXUW DOVR QRWHG WKDW
DSSHOODQWjVFODLPDQGIRXQGWKDW5RVVZDVQRWHQWLWOHGWRD                    +DUWPDQZDVYLJRURXVO\FURVVH[DPLQHGUHJDUGLQJSRVVLEOH
QHZ WULDO  %HFDXVH WKH GLVWULFW FRXUW ZDV FRUUHFW LQ                 RWKHUIUDXGVZKLFKZDVWKHHVVHQFHRIWKHQHZO\GLVFRYHUHG
GHWHUPLQLQJWKDWQR%UDG\YLRODWLRQKDGRFFXUUHGWKLV&RXUW                   LQIRUPDWLRQVXEPLWWHGE\5RVV
QHHGQRWUHVROYHZKHWKHUWKHDSSHOODQWZDLYHGWKLVFODLPE\
WKHRSHUDWLRQRIWKHVHQWHQFLQJDJUHHPHQW                                       7KHGLVWULFWFRXUWDOVRREVHUYHGWKDWWKHMXU\KHDUG5RVV
                                                                               WHVWLI\WKDW2VERUQZDVRXWWRJHWKLP7KHMXU\DOVRNQHZ
  ,QWKHDEVHQFHRIDSOHDRUVHQWHQFLQJDJUHHPHQWWKLV&RXUW                 WKDW2VERUQKDGVXHG5RVVRYHUDEXVLQHVVGLVSXWHDQGWKDW
UHYLHZVWKHGHQLDORIDPRWLRQIRUDQHZWULDOEDVHGRQQHZO\                  WKHVXLWZDVWKHQSHQGLQJ7KHFRXUW DJDLQIRXQGWKDWWKH
GLVFRYHUHG%UDG\HYLGHQFHIRUDQDEXVHRIGLVFUHWLRQ8QLWHG                  ZLWQHVVHVSUHVHQWHGSRVWWULDOFRXOGKDYHEHHQGLVFRYHUHGE\
6WDWHV Y %UDJJV  )G   WK &LU   ,Q           5RVVSULRUWRWULDOWKURXJKWKHH[HUFLVHRIGXHGLOLJHQFH
%UDG\Y0DU\ODQG86WKH866XSUHPH
&RXUW KHOG WKDW WKH VXSSUHVVLRQ E\ WKH SURVHFXWLRQ RI                   ,QUHVSRQVHWKH*RYHUQPHQWILOHGDPRWLRQWRUHRSHQWKH
HYLGHQFHIDYRUDEOHWRDQDFFXVHGXSRQUHTXHVWYLRODWHVGXH                     VHQWHQFLQJDJUHHPHQWZKLFKWKHGLVWULFWFRXUWJUDQWHG2Q
SURFHVVZKHUHWKHHYLGHQFHLVPDWHULDOHLWKHUWRJXLOWRUWR                   )HEUXDU\WKHFRXUWUHVHQWHQFHG5RVVZLWKRXWWDNLQJ
SXQLVKPHQW LUUHVSHFWLYH RI JRRG IDLWK RU EDG IDLWK RI WKH            DQ\ DGGLWLRQDO HYLGHQFH ZLWK UHJDUG WR VHQWHQFLQJ LVVXHV
SURVHFXWLRQ  :KHWKHU WKH HYLGHQFH LV H[FXOSDWRU\ RU                   UHVROYHGE\WKHFRXUWSULRUWRWKHILUVWVHQWHQFLQJ7KHFRXUW
LPSHDFKLQJ IDYRUDEOH HYLGHQFH LV PDWHULDO DQG                          WKHUHXSRQ UHYHUWHG WR WKH RULJLQDO SUHVHQWHQFH UHSRUW DQG
FRQVWLWXWLRQDO HUURU UHVXOWV IURP LWV VXSSUHVVLRQ E\ WKH                IRXQGWKDW&RXQW(LJKWVKRXOGQRWEHJURXSHGZLWK&RXQWV
JRYHUQPHQWµLIWKHUHLVDUHDVRQDEOHSUREDELOLW\WKDWKDGWKH                2QHWKURXJK6HYHQDQGWKDW5RVVVKRXOGEHVXEMHFWWRDWZR
HYLGHQFH EHHQ GLVFORVHG WR WKH GHIHQVH WKH UHVXOW RI WKH             OHYHOHQKDQFHPHQWIRUWKHXVHRIDVSHFLDOVNLOOLQFRPPLWWLQJ
SURFHHGLQJZRXOGKDYHEHHQGLIIHUHQWj.\OHVY:KLWOH\                     WKHRIIHQVHV7KHGLVWULFWFRXUWWKHUHXSRQLPSRVHGDVHQWHQFH
 86    TXRWLQJ 8QLWHG 6WDWHV Y                  RIWZHQW\RQHPRQWKVZLWKFUHGLWJLYHQIRUWKHWHQPRQWKV
%DJOH\  86     $ µUHDVRQDEOH                     SUHYLRXVO\VHUYHG
                                                                                                               ,,
     
      ,Q WKH FRQWH[W RI D KDEHDV FRUSXV SURFHHGLQJ WKLV &RXUW KDV                5RVVILUVWDVVHUWVWKDWWKHGLVWULFWFRXUWHUUHGLQILQGLQJWKDW
UHFRJQL]HG WKDW D VWDWH GHIHQGDQW PD\ UDLVH DIWHU D SOHD RI JXLOW\ D FODLP   WKHILOLQJRIDPRWLRQIRUDQHZWULDOYLRODWHGWKHVHQWHQFLQJ
WKDW SURVHFXWRUV ZLWKKROG H[FXOSDWRU\ HYLGHQFH LQ YLRODWLRQ RI %UDG\ 6HH      DJUHHPHQW  7KH SDUWLHV GLVSXWH ZKHWKHU WKH WHUPV RI WKH
&DPSEHOO Y 0DUVKDO  )G  WK &LU  VHH DOVR 0XUU Y            VHQWHQFLQJDJUHHPHQWSURKLELWWKHILOLQJRIDPRWLRQIRUDQHZ
7XUQHU 1R   :/  WK &LU 1RY  
                                                                               WULDO%HFDXVHWKHLVVXHUDLVHGWXUQVRQDQLQWHUSUHWDWLRQRI
XQSXEOLVKHG &DPSEHOO VHWV IRUWK D VWULQJHQW VWDQGDUG UHTXLULQJ WKH
GHIHQGDQW WR VKRZ WKDW WKH HYLGHQFH ZLWKKHOG ZRXOG KDYH EHHQ
                                                                               GLVSXWHGWHUPVRIDVHQWHQFLQJDJUHHPHQWWKLV&RXUWUHYLHZV
FRQWUROOLQJ LQ WKH GHFLVLRQ ZKHWKHU WR SOHDG &DPSEHOO  )G DW 
     8QLWHG6WDWHVY5RVV                             1R        1R                           8QLWHG6WDWHVY5RVV       

WKHGLVWULFWFRXUWjVGHFLVLRQIRUFOHDUHUURU6HH8QLWHG6WDWHV          VWDWHGDIILUPDWLYHO\WKDWKHXQGHUVWRRGWKDWKHZDVZDLYLQJ
Y:HOOV)GWK&LU                               DQ\ULJKWWRDSSHDODQ\DVSHFWRIWKHFDVHZKDWVRHYHUs$
                                                                           9RO,,
   %RWKSDUWLHVWRWKLVDSSHDOKDYHUHOLHGRQDQDORJLHVWRSOHD
DJUHHPHQWV3OHDDJUHHPHQWVVKDUHVRPHEXWE\QRPHDQV                      ,Q8QLWHG6WDWHVY7XWW1R:/DW
DOORIWKHFKDUDFWHULVWLFVRIWKHW\SHRIVHQWHQFLQJDJUHHPHQW            
 WK &LU 6HSW   XQSXEOLVKHG WKH GHIHQGDQW
DW LVVXH LQ WKLV FDVH  7KHUH LV OLWWOH GHYHORSHG FDVHODZ       HQWHUHGLQWRDSOHDDJUHHPHQWSURYLGLQJIRUDZDLYHURIWKH
VSHFLILFDOO\ UHODWLQJ WR VHQWHQFLQJ DJUHHPHQWV DQG WKHLU            ULJKW WR DSSHDO WKH VHQWHQFH LQ WKLV PDWWHU RQ DQ\ JURXQG
HQIRUFHPHQW VR FRXUWV WXUQ WR FDVHODZ UHJDUGLQJ SOHD               XQOHVV WKH VHQWHQFH H[FHHGHG WKH VWDWXWRU\ PD[LPXP RU
DJUHHPHQWVIRUJXLGDQFH8QLWHG6WDWHVY%UDGVWUHHW                 FRQVWLWXWHG DQ XSZDUG GHSDUWXUH IURP WKH VHQWHQFLQJ
)G   Q VW &LU  VHH DOVR 8QLWHG 6WDWHV Y      JXLGHOLQHV7KLV&RXUWKHOGWKDWLQVRIDUDVWKHGHIHQGDQWKDG
5RELVRQ)GWK&LUKROGLQJWKDW                NQRZLQJO\DQGYROXQWDULO\HQWHUHGLQWRWKHZDLYHUDJUHHPHQW
SOHD DJUHHPHQWV DUH LQWHUSUHWHG DQG HQIRUFHG SXUVXDQW WR            DQGUHFHLYHGKLVEHQHILWKHFRXOGQRWSXUVXHDQDSSHDODVWKH
FRQWUDFWSULQFLSOHV,QWKLVFDVHWKHVHQWHQFLQJDJUHHPHQW              EURDGDQGJHQHUDOZDLYHUOHDYHVQRURRPIRUDQ\GHSDUWXUHV
FRQWDLQVDEURDGO\GUDZQZDLYHURIDQ\ULJKWWRUDLVHDQGRU              H[FHSWIRUWKRVHQRWHG,GDW

DSSHDORUILOHDQ\SRVWFRQYLFWLRQZULWVDGGUHVVLQJPRWLRQ
GHIHQVHVREMHFWLRQVWRWKH&RXUWjVHQWU\RIMXGJPHQWRU                  6LPLODUO\WKLV&RXUWFRQFOXGHVWKDWWKHGLVWULFWFRXUWZDV
DQ\ HUURU RU DQ\ SRWHQWLDO HUURU WKDW PD\ KDYH RFFXUUHG          QRWFOHDUO\HUURQHRXVLQLWVLQWHUSUHWDWLRQWKDW5RVVjZDLYHURI
GXULQJWKHFRXUVHRIWKHWULDOs$9RO,,$VVWDWHG          DSSHDO LQFOXGHG D PRWLRQ IRU D QHZ WULDO  $V WKH UHFRUG
LQWKHUHFRUGE\WKHORZHUFRXUWWKLVZDVLQWHQGHGWRVHUYHDV            LQGLFDWHV 5RVV NQRZLQJO\ DQG YROXQWDULO\ HQWHUHG LQWR WKH
D ZDLYHU RI DQ\ ULJKW WR DSSHDO DQ\ DVSHFW RI WKH FDVH         VHQWHQFLQJ DJUHHPHQW DQG UHFHLYHG KLV EHQHILW  7KXV
ZKDWVRHYHU,G                                                        'HIHQGDQW5RVVjDSSHDORIWKHGLVWULFWFRXUWjVGHQLDORIKLV
                                                                           PRWLRQIRUDQHZWULDOLVQRWZHOOWDNHQ
   5RVVDVVHUWVWKDWWKHWHUPVRIWKHDJUHHPHQWSURKLELWWKH
ILOLQJRIFKDOOHQJHVWRHUURUVLQWKHFDVHWKURXJKGLUHFWDSSHDO                                          ,,,
RU WKURXJK SHWLWLRQ IRU ZULW RI KDEHDV FRUSXV  86&
$SSHOODQWjV5HSO\%ULHIDW7KXVDFFRUGLQJWR               7KHDSSHOODQWQH[WDVVHUWVWKDWWKHGLVWULFW FRXUWHUUHGLQ
5RVV KH UHWDLQHG WKH ULJKW WR ILOH D PRWLRQ IRU D QHZ WULDO   FRQFOXGLQJWKDWWKHDSSHOODQWZDLYHGWKHULJKWWRDVVHUWFODLPV
EHFDXVHWKHDJUHHPHQWGRHVQRWH[SOLFLWO\UHIHUHQFHVXFKD                 DULVLQJXQGHU%UDG\Y0DU\ODQG867KLV
ILOLQJ,GDW                                                      &RXUW UHYLHZV GH QRYR WKH TXHVWLRQ RI ZKHWKHU D
                                                                           FRQVWLWXWLRQDO ULJKW ZDV ZDLYHG E\ WKH DSSHOODQW  6HH
   7KHJRYHUQPHQWFRXQWHUVWKDWXQGHUWKHSODLQODQJXDJHRI                %URRNKDUWYsDQLV86
WKHDJUHHPHQW5RVVNQRZLQJO\DQGYROXQWDULO\ZDLYHGKLV
ULJKWWRREMHFWWRWKHFRXUWjVHQWU\RIMXGJPHQWDJDLQVWKLP                7KLV&RXUWKDVQRWGLUHFWO\DGGUHVVHGZKHWKHUDVHQWHQFLQJ
$SSHOOHHjV)LQDO%ULHIDW7KHWHUPVRIWKHDJUHHPHQW                DJUHHPHQWRUHYHQDSOHDDJUHHPHQWZKLFKLQFOXGHVDZDLYHU
ZHUH GUDZQ EURDGO\ WR HQFRPSDVV DOO PRWLRQV LQFOXGLQJ              RI DSSHDO RU SRVW FRQYLFWLRQ FKDOOHQJHV RSHUDWHV WR EDU
WKRVHUHTXHVWLQJDQHZWULDO,G,QWKHJRYHUQPHQWjVYLHZ
E\ILOLQJWKHPRWLRQ5RVVEUHDFKHGKLVDJUHHPHQWZLWKWKH
JRYHUQPHQWGHQ\LQJLWWKHEHQHILWRILWVEDUJDLQ,GDW
%DVHGRQWKHVHQWHQFLQJKHDULQJUHFRUGWKHGHIHQGDQW