Court Opinion

ID: 2970764
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:21:24.403778+00
Date Added: 2024-06-11T15:01:17.160553
License: Public Domain

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
                3XUVXDQW WR 6L[WK &LUFXLW 5XOH                              8QLWHG6WDWHVY1LQHW\7KUHH                   1R
        (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
                                                                                )LUHDUPVHWDO
                    )LOH 1DPH DS

                                                                                                BBBBBBBBBBBBBBBBB
81,7('67$7(6&28572)$33($/6                                                                       &2816(/
                   )257+(6,;7+&,5&8,7                                  21 %5,()  0LFKDHO ) 3OHDVDQWV 3/($6$176 /$:
                     BBBBBBBBBBBBBBBBB                                    ),500HPSKLV7HQQHVVHHIRU$SSHOODQW&KULVWRSKHU(
                                                                          &RWWHQ $66,67$17 81,7(' 67$7(6 $77251(<
                                                                          0HPSKLV7HQQHVVHHIRU$SSHOOHH
 81,7(' 67$7(6 2) $0(5,&$        ;
           3ODLQWLII$SSHOOHH                                                                 BBBBBBBBBBBBBBBBB
                                   
                                     1R                                                   23,1,21
            Y                                                                                 BBBBBBBBBBBBBBBBB
                                    !
                                                                            .$5(11(/6210225(&LUFXLWsXGJH7KH8QLWHG
 1,1(7<7+5((                  
 ),5($506 $1' $66257('                                                   6WDWHV EURXJKW WKLV FLYLOLQ UHP IRUIHLWXUH DFWLRQ XQGHU 
                                                                         86&  G IRU WKH IRUIHLWXUH RI QLQHW\WKUHH ILUHDUPV
 ),5($50 3$576 $1'                                                       LQYROYHGLQDJYLRODWLRQQHDUO\ILYH\HDUVDIWHUWKH
 $0081,7,21                                                             SURSHUW\ RULJLQDOO\ ZDV VHL]HG  ,Q UHVSRQVH &ODLPDQW
                    'HIHQGDQW                                           $SSHOODQW/DUU\=DQH6KRUWm6KRUWlWKHRZQHURIWKHVHL]HG
                                                                         SURSHUW\PRYHGWRGLVPLVVWKHDFWLRQRQERWKVWDWXWRU\DQG
                                                                         FRQVWLWXWLRQDO JURXQGV  7KH GLVWULFW FRXUW GHQLHG 6KRUWjV
 /$55< = 6+257                                                         PRWLRQWRGLVPLVVDQGJUDQWHGWKHJRYHUQPHQWjVPRWLRQIRU
           &ODLPDQW$SSHOODQW                                           VXPPDU\MXGJPHQW2QDSSHDO6KRUWDUJXHVWKDWWKHGLVWULFW
                                                                         FRXUWHUUHGLQILQGLQJWKDWWKHMXGLFLDOSURFHHGLQJZDVWLPHO\
                                  1                                       XQGHUGDQGLQDSSO\LQJWKHVWDWXWHRIOLPLWDWLRQVLQ
       $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW                        86&    6KRUW DOVR DUJXHV WKDW KLV GXH SURFHVV
    IRUWKH:HVWHUQ'LVWULFWRI7HQQHVVHHDW0HPSKLV                     ULJKWV ZHUH YLRODWHG E\ WKH ILYH\HDU GHOD\ LQ EULQJLQJ WKH
     1RnsXOLD6*LEERQV'LVWULFWsXGJH                       DFWLRQDQGWKHVL[PRQWKGHOD\LQVHUYLFHRISURFHVV)LQDOO\
                                                                          6KRUWLQVLVWVWKDWWKHGLVWULFWFRXUWHUUHGE\IDLOLQJWRLQIRUP
                 6XEPLWWHG'HFHPEHU                            KLPDSURVHOLWLJDQWRIWKHUHTXLUHPHQWVDQGFRQVHTXHQFHV
                                                                          RIDVXPPDU\MXGJPHQWPRWLRQ
               'HFLGHGDQG)LOHG0D\
                                                                             :HKROGWKDWHLWKHUDQDGPLQLVWUDWLYHRUDMXGLFLDOIRUIHLWXUH
  %HIRUH%$7&+(/'(5DQG0225(&LUFXLWsXGJHV                          DFWLRQ EURXJKW ZLWKLQ  GD\V RI WKH VHL]XUH ZLOO WROO WKH
            )25(67(5&KLHI'LVWULFWsXGJH
                              GGHDGOLQH,QDGGLWLRQWKHJRYHUQPHQWjVILYH\HDU
                                                                          GHOD\ LQ EULQJLQJ SURFHHGLQJV DQG LWV VL[PRQWK GHOD\ LQ
                                                                          VHUYLQJ6KRUWZLWKSURFHVVGLGQRWULVHWRWKHOHYHORIDGXH
    
     7KH +RQRUDEOH .DUO 6 )RUHVWHU &KLHI 8QLWHG 6WDWHV 'LVWULFW sXGJH
                                                                          SURFHVVYLRODWLRQ)LQDOO\LQWKLVFLUFXLWQRQSULVRQHUSURVH
IRU WKH (DVWHUQ 'LVWULFW RI .HQWXFN\ VLWWLQJ E\ GHVLJQDWLRQ             OLWLJDQWVDUHQRWHQWLWOHGWRQRWLFHRIWKHFRQVHTXHQFHVDQG

                                    
1R                 8QLWHG6WDWHVY1LQHW\7KUHH                  8QLWHG6WDWHVY1LQHW\7KUHH                   1R
                                           )LUHDUPVHWDO                   )LUHDUPVHWDO

UHTXLUHPHQWVRIDVXPPDU\MXGJPHQWPRWLRQ(YHQLI6KRUW              PRQWK VHQWHQFH DQG WKUHH \HDUV RI VXSHUYLVHG UHOHDVH  2Q
LV FRQVLGHUHG D SULVRQHU SUR VH OLWLJDQW DQG WKHUHIRUH LV   GLUHFWDSSHDOZHDIILUPHGKLVFRQYLFWLRQDQGVHQWHQFH
HQWLWOHG WR QRWLFH RI WKH UHTXLUHPHQWV LQ UHVSRQGLQJ WR D
VXPPDU\MXGJPHQWPRWLRQDQ\DOOHJHGHUURUZDVKDUPOHVV                 2Q$XJXVWDOPRVWILYH\HDUVDIWHUWKHRULJLQDO
$FFRUGLQJO\ZH$)),50WKHGLVWULFWFRXUWjVGHFLVLRQ                  VHL]XUHWKHJRYHUQPHQWLQVWLWXWHGDMXGLFLDOIRUIHLWXUHDFWLRQ
                                                                       XQGHUGVHHNLQJIRUIHLWXUHRIWKHILUHDUPVVHL]HGLQ
                      ,%$&.*5281'                                   WKHVHDUFK6KRUWILOHGDPRWLRQWRGLVPLVVRQWKHEDVLVWKDW
                                                                       WKHFRPSODLQWZDVXQWLPHO\SXUVXDQWWRGWKHILYH
  2Q $XJXVW   %XUHDX RI $OFRKRO 7REDFFR DQG          \HDUGHOD\YLRODWHGKLVGXHSURFHVVULJKWWRDSURPSWKHDULQJ
)LUHDUPVm%$7)lDQG'UXJ(QIRUFHPHQW$GPLQLVWUDWLRQ                  DQG WKH DFWLRQ YLRODWHG WKH ([FHVVLYH )LQHV &ODXVH  7KH
m'($lDJHQWVH[HFXWHGDVHDUFKZDUUDQWDW6KRUWjVKRPH               GLVWULFW FRXUW SDUWLDOO\ GHQLHG WKH PRWLRQ EXW RUGHUHG WKH
DQGVHL]HGQLQHW\WKUHHDVVRUWHGILUHDUPVDQGDPPXQLWLRQ$W          JRYHUQPHQW WR VKRZ FDXVH IRU WKH XQWLPHO\ FRPSODLQW  ,Q
WKHWLPHWKLVVHDUFKZDUUDQWLVVXHG6KRUWZDVSURKLELWHGIURP         UHVSRQVHWRWKHVKRZFDXVHRUGHUWKHJRYHUQPHQWDGPLWWHG
SRVVHVVLQJ ILUHDUPV RU DPPXQLWLRQ SXUVXDQW WR  86&         WKDW LW GLG QRW LVVXH VHUYLFH RI SURFHVV ZLWKLQ WKH WLPH
 J EHFDXVH KH ZDV SUHYLRXVO\ FRQYLFWHG IRU             GHPDQGHGXQGHUWKH)HGHUDO5XOHVRI&LYLO 3URFHGXUHEXW
YLRODWLRQVRIWKH*XQ&RQWURO$FW7KHILUHDUPVSRVVHVVHGLQ          LQGLFDWHGWKDWDIWHUWKHHQWU\RIWKHVKRZFDXVHRUGHUDFRS\
YLRODWLRQRIJWKHUHIRUHZHUHVXEMHFWWRVHL]XUHDQG            RI WKH FRPSODLQW ZDV VHUYHG XSRQ 6KRUWjV DWWRUQH\ /RJDQ
IRUIHLWXUHXQGHU86&G,QMXVWRYHUDPRQWKjV         6KDUSm6KDUSlZKRDJUHHGWRDFFHSWVHUYLFHRQEHKDOIRI
WLPH%$7)FRPPHQFHGDGPLQLVWUDWLYHIRUIHLWXUHSURFHHGLQJV             KLVFOLHQW$IHZGD\VODWHU6KDUSILOHGDQDIILGDYLWZLWKWKH
DJDLQVW WKHVH ILUHDUPV E\ SXEOLFDWLRQ LQ 86$ 7RGD\ RQ          FRXUW VZHDULQJ WKDW KH GLG QRW DJUHH WR DFFHSW VHUYLFH RQ
2FWREHUDQG2Q$XJXVWWKH%$7)             EHKDOIRI6KRUWWKDWKHGLGQRWDFFHSWVHUYLFHRQKLVEHKDOI
LQWHUSUHWHG D OHWWHU ILOHG E\ 6KRUW LQ 1RYHPEHU            DQGWKDWKHGLGQRWUHSUHVHQW6KRUWLQWKHIRUIHLWXUHDFWLRQ
UHTXHVWLQJ WKH UHWXUQ RI WKH SURSHUW\ DV D SHWLWLRQ IRU
UHPLVVLRQRUPLWLJDWLRQDQGGHQLHGWKLVUHTXHVW                          2Q sXQH   WKH JRYHUQPHQW VHQW UHTXHVWV IRU
                                                                       DGPLVVLRQ WR 6KRUW DW WKH SODFH RI KLV LQFDUFHUDWLRQ  7KH
   0HDQZKLOHRQ2FWREHU6KRUWZDVLQGLFWHGE\D             UHTXHVWVDVNHGKLPWRDGPLWWKDWKHZDVSUHYLRXVO\FRQYLFWHG
JUDQG MXU\ RQ IRXU FRXQWV RI SRVVHVVLQJ DQ XQUHJLVWHUHG        IRUYLRODWLRQVRIWKH*XQ&RQWURO$FWZKLFKDUHSXQLVKDEOHE\
ILUHDUP LQ YLRODWLRQ RI  86&  G RQH FRXQW RI    DSULVRQWHUPRIRYHURQH\HDUWKDWKHZDVDZDUHWKDWGXHWR
SRVVHVVLQJXQUHJLVWHUHGILUHDUPVLOHQFHUVLQYLRODWLRQRI           WKLV FRQYLFWLRQ KH FRXOG QRW SRVVHVV ILUHDUPV DQG WKDW WKH
86&GDQGRQHFRXQWRISRVVHVVLRQRIDILUHDUP             GHIHQGDQW ILUHDUPV ZHUH LQ KLV SRVVHVVLRQ RQ WKH GDWH RI
DIWHUFRQYLFWLRQRIDIHORQ\LQYLRODWLRQRI86&J       VHL]XUH6KRUWGLGQRWUHVSRQGWRWKHVHUHTXHVWVZLWKLQWKH
2Q0DUFK6KRUWHQWHUHGDFRQGLWLRQDOJXLOW\SOHDWR           WKLUW\GD\ SHULRG QRU GLG WKH FRXUW RU SDUWLHV DJUHH WR DQ
WZRFRXQWVLQYROYLQJSRVVHVVLRQRIXQUHJLVWHUHGILUHDUPVDQG           H[WHQVLRQRIWLPHWKXV6KRUWjVIDLOXUHWRUHVSRQGVHUYHGDV
RQHFRXQWRISRVVHVVLQJXQUHJLVWHUHGILUHDUPVLOHQFHUV+LV           D FRQVWUXFWLYH DGPLVVLRQ  2Q sXO\   6KRUW ZDV
VHQWHQFLQJKHDULQJZDVKHOGLQDEH\DQFHZKLOHKHZDVWXUQHG            UHOHDVHGIURPSULVRQ$IHZPRQWKVODWHURQ2FWREHU
RYHU WR WKH %XUHDX RI 3ULVRQV m%23l IRU SV\FKRORJLFDO         6KRUW UHTXHVWHG WKDW WKH FRXUW DSSRLQW KLP FRXQVHO
HYDOXDWLRQV7KHVHQWHQFLQJKHDULQJZDVILQDOO\FRQGXFWHGRQ          1RWLQJ LWV EURDG GLVFUHWLRQ WR DSSRLQW FRXQVHO IRU LQGLJHQW
6HSWHPEHU   DQG 6KRUW UHFHLYHG D VHYHQW\HLJKW          FLYLO OLWLJDQWV WKH GLVWULFW FRXUW GHQLHG 6KRUWjV PRWLRQ IRU
                                                                       DSSRLQWPHQW RI FRXQVHO EHFDXVH KH KDG QRW VKRZQ
1R                8QLWHG6WDWHVY1LQHW\7KUHH                  8QLWHG6WDWHVY1LQHW\7KUHH                   1R
                                          )LUHDUPVHWDO                   )LUHDUPVHWDO

mH[FHSWLRQDOFLUFXPVWDQFHVl7KHJRYHUQPHQWVXFFHVVIXOO\             WLPHSHULRGVXIILFLHQWO\FRPSO\ZLWKWKHOHWWHURIWKHODZDV
PRYHG IRU VXPPDU\ MXGJPHQW DQG WKLV WLPHO\ DSSHDO             SURYLGHGLQGZKHQWKHMXGLFLDOSURFHHGLQJVDUHQRW
IROORZHG                                                             EURXJKW DOVR ZLWKLQ WKH SHUPLVVLEOH  GD\V  6HFWLRQ
                                                                      GSURYLGHVLQSDUWm$Q\DFWLRQRUSURFHHGLQJIRUWKH
                        ,,$1$/<6,6                                 IRUIHLWXUH RI ILUHDUPV RU DPPXQLWLRQ VKDOO EH FRPPHQFHG
                                                                      ZLWKLQ RQH KXQGUHG DQG WZHQW\ GD\V RI VXFK VHL]XUHl  
   :H UHYLHZ GH QRYR D GLVWULFW FRXUWjV RUGHU JUDQWLQJ        86&  G  $OWKRXJK WKLV LV D TXHVWLRQ RI ILUVW
VXPPDU\ MXGJPHQW  5DQQDOV Y 'LDPRQG sR &DVLQR           LPSUHVVLRQ LQ WKH FRXUWV RI DSSHDOV D QXPEHU RI GLVWULFW
)GWK&LUFHUWGHQLHG86            FRXUWVKDYHSXEOLVKHGRSLQLRQVDGGUHVVLQJWKLVYHU\TXHVWLRQ
,QDFFRUGDQFHZLWK)HGHUDO5XOHRI&LYLO3URFHGXUH           6HHHJ8QLWHG6WDWHVY$VVRUWHG)LUHDUPV)6XSSG
FWKLVFRXUWDIILUPVDJUDQWRIVXPPDU\MXGJPHQWmLIWKH           ' 0G  QRWLQJ WKDW mZKHUH   
SOHDGLQJV GHSRVLWLRQV DQVZHUV WR LQWHUURJDWRULHV DQG          DGPLQLVWUDWLYHSURFHHGLQJVDUHWLPHO\LQVWLWXWHGDVXEVHTXHQW
DGPLVVLRQVRQILOHWRJHWKHUZLWKWKHDIILGDYLWVLIDQ\VKRZ        MXGLFLDODFWLRQQHHGQRWEHLQVWLWXWHGZLWKLQGD\VRIWKH
WKDWWKHUHLVQRJHQXLQHLVVXHDVWRDQ\PDWHULDOIDFWDQGWKDW       VHL]XUHl8QLWHG6WDWHVY6L[W\)LUHDUPV)6XSSG
WKHPRYLQJSDUW\LVHQWLWOHGWRDMXGJPHQWDVDPDWWHURIODZl         0' 3D  VWDWLQJ WKDW DGPLQLVWUDWLYH
)HG5&LY3F7KHPRYLQJSDUW\KDVWKHEXUGHQRI            SURFHHGLQJV ZRXOG EH IRLOHG E\ D SURFHVV UHTXLULQJ WKH
SURYLQJWKDWQRJHQXLQHLVVXHDVWRDQ\PDWHULDOIDFWH[LVWV          MXGLFLDO DFWLRQ WR EH FRPPHQFHG ZLWKLQ WKH VDPH GD\
DQGWKDWLWLVHQWLWOHGWRDMXGJPHQWDVDPDWWHURIODZ6WUHHW     SHULRG8QLWHG6WDWHVY0LVFHOODQHRXV)LUHDUPV([SORVLYHV
Y s& %UDGIRUG 	 &R  )G   WK &LU    'HVWUXFWLYH'HYLFHV	$PPXQLWLRQ)6XSSG
$GLVSXWHRYHUDPDWHULDOIDFWFDQQRWEHmJHQXLQHl            &',OOKROGLQJWKDWDIRUIHLWXUHDFWLRQLVWLPHO\VR
XQOHVV D UHDVRQDEOH MXU\ FRXOG UHWXUQ D YHUGLFW IRU WKH      ORQJDVmDWOHDVWlDQDGPLQLVWUDWLYHDFWLRQLVILOHGZLWKLQWKH
QRQPRYLQJSDUW\$QGHUVRQY/LEHUW\/REE\,QF86           GD\VWDWXWRU\SHULRG8QLWHG6WDWHVY7ZHOYH)LUHDUPV
,QUHYLHZLQJWKHGLVWULFWFRXUWjVGHFLVLRQWR        ) 6XSS G   6' 7H[  DIIjG  )HG
JUDQWVXPPDU\MXGJPHQWZHYLHZDOOHYLGHQFHLQWKHOLJKW             $SS[:/DW
WK&LU2FW
PRVW IDYRUDEOH WR WKH QRQPRYLQJ SDUW\  0DWVXVKLWD (OHF      FRQFOXGLQJWKDWWKHVWDWXWHUHTXLUHGmHLWKHUDQDGPLQLVWUDWLYH
,QGXV&RY=HQLWK5DGLR&RUS86           IRUIHLWXUHSURFHHGLQJRUDMXGLFLDOIRUIHLWXUHDFWLRQZLWKLQ
7KHLVVXHVWKDWZHPXVWUHYLHZRQWKLVDSSHDODUHZKHWKHU             GD\V RI D VHL]XUHl 8QLWHG 6WDWHV Y )RXUWHHQ 9DULRXV
VXPPDU\ MXGJPHQW ZDV SURSHU EHFDXVH  D WKH MXGLFLDO        )LUHDUPV)6XSS('9DKROGLQJ
IRUIHLWXUHDFWLRQZDVWLPHO\XQGHUGE6KRUWjVGXH       WKDW WKH GLVWULFW FRXUW ODFNHG MXULVGLFWLRQ WR KHDU WKH FDVH
SURFHVV ULJKWV ZHUH QRW YLRODWHG E\ WKH ILYH\HDU GHOD\ LQ   EHFDXVH ERWK WKH DGPLQLVWUDWLYH DQG WKH MXGLFLDO IRUIHLWXUH
EULQJLQJWKHDFWLRQDQGE\WKHVL[PRQWKGHOD\LQVHUYLFHRI          DFWLRQVZHUHQRWFRPPHQFHGZLWKLQWKHGD\WLPHIUDPH
SURFHVV DQG F WKH FRXUWjV IDLOXUH WR LQIRUP 6KRUW D      8QLWHG 6WDWHV Y 7ZHOYH 0LVFHOODQHRXV )LUHDUPV  )
QRQSULVRQHU SUR VH OLWLJDQW RI WKH UHTXLUHPHQWV DQG           6XSS&',OOGHFLGLQJWKDWDOWKRXJKWKH
FRQVHTXHQFHVRIDVXPPDU\MXGJPHQWPRWLRQZDVQRWHUURU              SKUDVHmDQ\DFWLRQRUSURFHHGLQJlLQFOXGHVERWKMXGLFLDODQG
                                                                      DGPLQLVWUDWLYH DFWLRQV WKH VWDWXWH ZDV VDWLVILHG VR ORQJ DV
$7LPHOLQHVVRIWKH)RUIHLWXUH$FWLRQ                               HLWKHU DFWLRQ ZDV EURXJKW ZLWKLQ  GD\V  ,Q WKH LQVWDQW
                                                                      FDVHWKHGLVWULFWFRXUWDJUHHGZLWKWKHUDWLRQDOHIURP7ZHOYH
  7KH ILUVW TXHVWLRQ SUHVHQWHG RQ WKLV DSSHDO LV ZKHWKHU      )LUHDUPVWKDWWDNLQJDQDGPLQLVWUDWLYHIRUIHLWXUHDFWLRQDORQH
DGPLQLVWUDWLYHIRUIHLWXUHDFWLRQVEURXJKWZLWKLQWKHGD\          ZDVVXIILFLHQWFRPSOLDQFHZLWKWKHGD\UHTXLUHPHQWDQG
1R                 8QLWHG6WDWHVY1LQHW\7KUHH                  8QLWHG6WDWHVY1LQHW\7KUHH                 1R
                                           )LUHDUPVHWDO                   )LUHDUPVHWDO

JUDQWHGVXPPDU\MXGJPHQWIRUWKHJRYHUQPHQW2QDSSHDO                  7KHNH\WRWKLVFDVHWXUQVRQVWDWXWRU\LQWHUSUHWDWLRQ:H
6KRUWXUJHVXVWRDFFHSWWKH UDWLRQDOHRI)RXUWHHQ9DULRXV            EHJLQRXUDQDO\VLVE\ORRNLQJDWmWKHODQJXDJHRIWKHVWDWXWH
)LUHDUPVDQGGLVPLVVWKLVFDVHIRUODFNRIMXULVGLFWLRQEDVHG          LWVHOIlWRGHWHUPLQHLILWVPHDQLQJLVSODLQ86'HSjWRIWKH
RQWKHJRYHUQPHQWjVIDLOXUHWRILOHDMXGLFLDODFWLRQZLWKLQWKH       7UHDVXU\Y)DEH868QLWHG6WDWHVY
GD\ UHTXLUHPHQW  6KRUW FRQWHQGV WKDW WKH VWDWXWHjV         &KRLFH)GWK&LUFHUWGHQLHG86
PHDQLQJLVSODLQDQGXQDPELJXRXVDQGWKDWmDQ\lPHDQVERWK             3ODLQPHDQLQJLVH[DPLQHGE\ORRNLQJDWmµWKH
DGPLQLVWUDWLYHDQGMXGLFLDOSURFHHGLQJVDQGWKXVLQRUGHUWR         ODQJXDJHDQGGHVLJQRIWKHVWDWXWHDVDZKROHjl&KRLFH
FRPSO\ZLWKGERWKDFWLRQVPXVWEHEURXJKWZLWKLQ           )GDWTXRWLQJ8QLWHG6WDWHVY0H\HUV)G
GD\VRIWKHVHL]XUH                                                WK &LU FHUW GHQLHG  86    :KHQ
                                                                       LQWHUSUHWLQJWKHSODLQODQJXDJHRIDVWDWXWHZHmPDN>H@HYHU\
   ,QLWVRSLQLRQWKHGLVWULFWFRXUWILUVWUHFRJQL]HGWKHJHQHUDO     HIIRUWQRWWRLQWHUSUHW D SURYLVLRQLQDPDQQHUWKDWUHQGHUV
UXOHWKDWVHL]HGSURSHUW\ RWKHUWKDQFRQWUDEDQGVKRXOGEH           RWKHUSURYLVLRQVRIWKHVDPHVWDWXWHLQFRQVLVWHQWPHDQLQJOHVV
UHWXUQHGWRLWVULJKWIXORZQHUDWWKHFRPSOHWLRQRIFULPLQDO           RUVXSHUIOXRXVl&DIDUHOOLY<DQF\)GWK
SURFHHGLQJV6HH8QLWHG6WDWHVY/D)DWFK)G            &LU  TXRWDWLRQ RPLWWHG  +RZHYHU LI WKH WH[WXDO
WK&LU:LWKUHVSHFWWRILUHDUPVDSRWHQWLDOFODLPDQW       DQDO\VLV LV XQFOHDU RU OHDGV WR DPELJXRXV RU XQUHDVRQDEOH
KDVQRULJKWWRFRQWHVWVHL]XUHRIZHDSRQVmLQWULQVLFDOO\LOOHJDO      UHVXOWV OHJLVODWLYH KLVWRU\ PD\ EH XVHG WR JXLGH RXU
LQFKDUDFWHUlEHFDXVHKHZRXOGKDYHQRSURSHUW\ULJKWLQVXFK          LQWHUSUHWDWLRQRIDVWDWXWH7KH/LPLWHG,QFY&RPPLVVLRQHU
DZHDSRQ&RRSHUY&LW\RI*UHHQZRRG)G               )G   WK &LU   0RUHRYHU m>M@XGLFLDO
WK&LU2QWKHRWKHUKDQGWKHGLVWULFWFRXUWQRWHGD       SHUFHSWLRQWKDWDSDUWLFXODUUHVXOWZRXOGEHXQUHDVRQDEOHPD\
FODLPDQWmPD\KDYHDQRZQHUVKLSLQWHUHVWlLQILUHDUPVQRW             HQWHU LQWR WKH FRQVWUXFWLRQ RI DPELJXRXV SURYLVLRQV EXW
LQWULQVLFDOO\LOOHJDOsRLQW$SSHQGL[ms$lDW'LVW&W       FDQQRW MXVWLI\ GLVUHJDUG RI ZKDW &RQJUHVV KDV SODLQO\ DQG
2S  $FFRUGLQJ WR WKH GLVWULFW FRXUW EHFDXVH  G   LQWHQWLRQDOO\SURYLGHGl&RPPLVVLRQHUY$VSKDOW3URGV&R
H[SOLFLWO\SURYLGHVWKDWILUHDUPVDQGDPPXQLWLRQLQYROYHGLQ           86:HUHYLHZGHQRYRTXHVWLRQVRI
DNQRZLQJYLRODWLRQRIJDUHVXEMHFWQRWRQO\WRVHL]XUH        VWDWXWRU\LQWHUSUHWDWLRQ&KRLFH)GDW
DQGIRUIHLWXUHEXWDOVRWRUHOHYDQWSURYLVLRQVRIWKH,QWHUQDO
5HYHQXH &RGH ZKLFK FRQWDLQ D ILYH\HDU VWDWXWH RI                  7KHILUVWFRXUWWRDGGUHVVWKHTXHVWLRQRIZKHWKHUWLPHO\
OLPLWDWLRQVWKHMXGLFLDODFWLRQZDVWLPHO\EURXJKWDVORQJDV         DGPLQLVWUDWLYHIRUIHLWXUHDFWLRQVZLWKRXWFRQFXUUHQWMXGLFLDO
WKH DGPLQLVWUDWLYH DFWLRQ WROOHG WKH GD\ GHDGOLQH           SURFHHGLQJV FRPSO\ ZLWK  G GHWHUPLQHG WKDW WKH
3HUVXDGHGE\WKHUDWLRQDOHRI7ZHOYH)LUHDUPVWKHGLVWULFW            ILOLQJ RI DQ DGPLQLVWUDWLYH IRUIHLWXUH ZLWKLQ WKH GD\
FRXUW IRXQG WKDW WKH JRYHUQPHQW PHW  GjV               SHULRG ZDV DGHTXDWH WR FRQIHU MXULVGLFWLRQ  6HH 7ZHOYH
UHTXLUHPHQWV EHFDXVH FRPPHQFLQJ DQ DGPLQLVWUDWLYH                  0LVFHOODQHRXV)LUHDUPV)6XSSDW,Q7ZHOYH
IRUIHLWXUH SURFHHGLQJ LV VXIILFLHQW IRU FRPSOLDQFH ZLWK WKH     0LVFHOODQHRXV )LUHDUPV WKH FRXUW GHWHUPLQHG WKDW WKH
GD\UHTXLUHPHQW6HHJHQHUDOO\7ZHOYH)LUHDUPV)             VWDWXWRU\ SKUDVH mDQ\ DFWLRQ RU SURFHHGLQJl LQFOXGHG ERWK
6XSSGDWFRPPHQWLQJWKDWDQ\UHTXLUHPHQWWKDWERWK             MXGLFLDO DQG DGPLQLVWUDWLYH DFWLRQV DQG WKHUHIRUH EULQJLQJ
SURFHHGLQJV EH LQLWLDWHG ZLWKLQ WKLV EULHI GD\ SHULRG       HLWKHU ZLWKLQ WKH WLPHIUDPH ZDV VXIILFLHQW IRU FRPSOLDQFH
mGHIHDW>V@ WKH SXUSRVH RI VLPSOLILHG DGPLQLVWUDWLYH               ZLWK WKH VWDWXWH  ,G  )ROORZLQJ WKH ORJLF RI 7ZHOYH
SURFHHGLQJVl                                                         0LVFHOODQHRXV)LUHDUPVWKHGLVWULFWFRXUWLQ7ZHOYH)LUHDUPV
                                                                       FRQFOXGHG WKDW WKH JRYHUQPHQW VDWLVILHG WKH GD\ WLPH
                                                                       OLPLW RI  G E\ WLPHO\ EULQJLQJ DQ DGPLQLVWUDWLYH
1R                     8QLWHG6WDWHVY1LQHW\7KUHH                        8QLWHG6WDWHVY1LQHW\7KUHH                       1R
                                               )LUHDUPVHWDO                          )LUHDUPVHWDO

IRUIHLWXUH DFWLRQ 6HH 7ZHOYH )LUHDUPV  ) 6XSS G DW               LVSODLQ6HH7KH/LPLWHG,QF)GDW:HDJUHH
  7ZHOYH )LUHDUPV LQWHUSUHWHG WKH DEVHQFH RI PRUH                     WKDW WKH mPHDQLQJ RI WKH ZRUG µDQ\j LQ  G LV
VSHFLILFODQJXDJHLQGDVLQWHQWLRQDO                                  DPELJXRXVl7ZHOYH)LUHDUPV)6XSSGDW$VWKH
                                                                                  JRYHUQPHQW SRLQWV RXW WKH SURRI RI WKH DPELJXLW\ LV
  )LUVWLI&RQJUHVVKDGLQWHQGHGWKDWWKHWLPH OLPLW                      HYLGHQFHGE\WKHGLVDJUHHPHQWRYHULWVPHDQLQJVRPHGLVWULFW
  SURYLGHGLQGVKRXOGDOZD\VDSSO\WRWKHILOLQJ                        FRXUWVKDYHUHDGmDQ\lWRPHDQmHLWKHURUlZKHUHDVDWOHDVW
  RIDMXGLFLDOFRPSODLQWIRU IRUIHLWXUHRIILUHDUPVHYHQ                       RQH GLVWULFW FRXUW KDV LQWHUSUHWHG mDQ\l WR PHDQ mDOOl RU
  ZKHQ DQ DGPLQLVWUDWLYH SURFHHGLQJ KDV DOVR EHHQ                           mHYHU\l  &RPSDUH LG mWKH WLPH OLPLWDWLRQ LQ  G
  LQLWLDWHGLWFRXOGKDYHHDVLO\VSHFLILHGVRLQWKHVWDWXWH                    PHUHO\ UHTXLUHV WKH 8QLWHG 6WDWHV WR LQLWLDWH HLWKHU DQ
  DV LW GLG LQ  86&  F ZLWK UHVSHFW WR GUXJ                DGPLQLVWUDWLYHIRUIHLWXUHSURFHHGLQJRUDMXGLFLDOIRUIHLWXUH
  UHODWHGIRUIHLWXUHV                                                            DFWLRQZLWKLQGD\VRIDVHL]XUHlZLWK)RXUWHHQ9DULRXV
                                                                                  )LUHDUPV)6XSSDWGHFLGLQJWKDWWKHZRUGmDQ\l
,G  $V D VHFRQGDU\ UDWLRQDOH WKH 7ZHOYH )LUHDUPV FRXUW                 PDGH LW LPSHUDWLYH WKDW LUUHVSHFWLYH RI ZKLFK W\SH RI
FRPPHQWHGWKDWGXDOSURFHHGLQJVZRXOGmGHIHDWWKHSXUSRVH                         SURFHHGLQJZDVDWLVVXHmDQ\DGPLQLVWUDWLYHSURFHHGLQJRU
RIVLPSOLILHGDGPLQLVWUDWLYHSURFHHGLQJVl,G                                   MXGLFLDODFWLRQIRUWKHIRUIHLWXUHRIWKHILUHDUPVKDGWR
                                                                                  EHJLQZLWKLQGD\VlDQGWKDWDMXGLFLDODFWLRQEURXJKWDIWHU
   :H DUH FRQYLQFHG WKDW WKH DSSURDFK WDNHQ E\ 7ZHOYH                      GD\V ZDV WRR ODWH  %HFDXVH WKH VWDWXWRU\ ODQJXDJH LV
0LVFHOODQHRXV)LUHDUPV7ZHOYH)LUHDUPVDQGRWKHUGLVWULFW                       DPELJXRXV ZH HQJDJH WKH HQWLUH WH[W DQG VWUXFWXUH RI WKH
FRXUWVWKDWIROORZHGWKHLUOHDGLVFRUUHFW%HJLQQLQJZLWKWKH                  VWDWXWHEHLQJFDUHIXOQRWWRLQWHUSUHWLWLQDZD\WKDWmUHQGHUV
VWDWXWHjVODQJXDJHLWVHOIZHILUVWDVVHVVZKHWKHULWVPHDQLQJ                   RWKHUSURYLVLRQVRIWKHVDPHVWDWXWHLQFRQVLVWHQWPHDQLQJOHVV
                                                                                  RU VXSHUIOXRXVl  &DIDUHOOL  )G DW  TXRWDWLRQ
                                                                                  RPLWWHG
    
     7KH VWDWXWH SURYLGHV LQ IXOO
                                                                                     ,QWHUSUHWLQJWKHVWDWXWHLQLWVHQWLUHW\ZHFDQQRWLJQRUHWKDW
    $Q\ ILUHDUP RU DPPXQLWLRQ LQYROYHG LQ RU XVHG LQ DQ\ NQRZLQJ
    YLRODWLRQ RI VXEVHFWLRQ D D I J K L M RU N
                                                                                  GH[SUHVVO\LQFRUSRUDWHVSURYLVLRQVRIWKH,QWHUQDO
    RI VHFWLRQ  RU NQRZLQJ LPSRUWDWLRQ RU EULQJLQJ LQWR WKH                   5HYHQXH &RGH UHODWLQJ WR IRUIHLWXUH  6HH  86&
    8QLWHG 6WDWHV RU DQ\ SRVVHVVLRQ WKHUHRI DQ\ ILUHDUP RU                        GmDOOSURYLVLRQVRIWKH,QWHUQDO5HYHQXH&RGH
                                                O
    DPPXQLWLRQ LQ YLRODWLRQ RI VHFWLRQ   RU NQRZLQJ YLRODWLRQ               UHODWLQJWRWKHVHL]XUHIRUIHLWXUHDQGGLVSRVLWLRQRIILUHDUPV
    RI VHFWLRQ  RU ZLOOIXO YLRODWLRQ RI DQ\ RWKHU SURYLVLRQ RI WKLV              VKDOO VR IDU DV DSSOLFDEOH H[WHQG WR VHL]XUHV DQG
    FKDSWHU RU DQ\ UXOH RU UHJXODWLRQ SURPXOJDWHG WKHUHXQGHU RU DQ\
    YLRODWLRQ RI DQ\ RWKHU FULPLQDO ODZ RI WKH 8QLWHG 6WDWHV RU DQ\
    ILUHDUP RU DPPXQLWLRQ LQWHQGHG WR EH XVHG LQ DQ\ RIIHQVH
    UHIHUUHG WR LQ SDUDJUDSK  RI WKLV VXEVHFWLRQ ZKHUH VXFK LQWHQW
    LV GHPRQVWUDWHG E\ FOHDU DQG FRQYLQFLQJ HYLGHQFH VKDOO EH                        RUGHU WR ZKLFK KH LV VXEMHFW WKH VHL]HG RU UHOLQTXLVKHG ILUHDUPV
    VXEMHFW WR VHL]XUH DQG IRUIHLWXUH DQG DOO SURYLVLRQV RI WKH                      RU DPPXQLWLRQ VKDOO EH UHWXUQHG IRUWKZLWK WR WKH RZQHU RU
    ,QWHUQDO 5HYHQXH &RGH RI  UHODWLQJ WR WKH VHL]XUH IRUIHLWXUH                SRVVHVVRU RU WR D SHUVRQ GHOHJDWHG E\ WKH RZQHU RU SRVVHVVRU
    DQG GLVSRVLWLRQ RI ILUHDUPV DV GHILQHG LQ VHFWLRQ D RI WKDW                XQOHVV WKH UHWXUQ RI WKH ILUHDUPV RU DPPXQLWLRQ ZRXOG SODFH WKH
    &RGH VKDOO VR IDU DV DSSOLFDEOH H[WHQG WR VHL]XUHV DQG                         RZQHU RU SRVVHVVRU RU KLV GHOHJDWH LQ YLRODWLRQ RI ODZ $Q\
    IRUIHLWXUHV XQGHU WKH SURYLVLRQV RI WKLV FKDSWHU     3URYLGHG    7KDW           DFWLRQ RU SURFHHGLQJ IRU WKH IRUIHLWXUH RI ILUHDUPV RU DPPXQLWLRQ
    XSRQ DFTXLWWDO RI WKH RZQHU RU SRVVHVVRU RU GLVPLVVDO RI WKH                     VKDOO EH FRPPHQFHG ZLWKLQ RQH KXQGUHG DQG WZHQW\ GD\V RI VXFK
    FKDUJHV DJDLQVW KLP RWKHU WKDQ XSRQ PRWLRQ RI WKH *RYHUQPHQW                      VHL]XUH
    SULRU WR WULDO RU ODSVH RI RU FRXUW WHUPLQDWLRQ RI WKH UHVWUDLQLQJ            86&  G
1R                 8QLWHG6WDWHVY1LQHW\7KUHH                  8QLWHG6WDWHVY1LQHW\7KUHH                  1R
                                           )LUHDUPVHWDO                     )LUHDUPVHWDO

IRUIHLWXUHVXQGHUWKHSURYLVLRQVRIWKLVFKDSWHUl2QHVXFK           SURSHUW\l  7KH SXUSRVH RI DGPLQLVWUDWLYH SURFHHGLQJV DV
SURYLVLRQ86&LQFRUSRUDWHVWKHSURYLVLRQVRI              VWDWHG E\ WKH 7ZHOYH )LUHDUPV FRXUW mLV WR SURYLGH LI
WKH FXVWRPV IRUIHLWXUH ODZV ZKLFK SURYLGH LQ  86&           SRVVLEOHDPHFKDQLVPIRUWKHJRYHUQPHQWDQGSULYDWHSDUWLHV
  IRU D ILYH\HDU VWDWXWH RI OLPLWDWLRQV IRU EULQJLQJ D   WRUHVROYHWKHLUIRUIHLWXUHUHODWHGGLVSXWHVZLWKRXWWKHQHHGIRU
MXGLFLDO IRUIHLWXUH DFWLRQ  6HH  86&   m7KH         MXGLFLDODFWLRQVl7ZHOYH)LUHDUPV)6XSSGDW
SURYLVLRQVRIODZDSSOLFDEOHWRWKHUHPLVVLRQRUPLWLJDWLRQE\           $VWKH6XSUHPH&RXUWQRWHGLQDGHFLVLRQLQYROYLQJWKHSRVW
WKH6HFUHWDU\RIIRUIHLWXUHVXQGHUWKHFXVWRPVODZVVKDOODSSO\          VHL]XUHILOLQJRIDMXGLFLDOIRUIHLWXUHDFWLRQ
WRIRUIHLWXUHVLQFXUUHGRUDOOHJHGWRKDYHEHHQLQFXUUHGXQGHU
WKH LQWHUQDO UHYHQXH ODZVl  %HFDXVH ZH DVVHVV WKH SODLQ        $QLPSRUWDQWMXVWLILFDWLRQIRUGHOD\LQJWKHLQLWLDWLRQRI
PHDQLQJE\ORRNLQJDWmWKHODQJXDJHDQGGHVLJQRIWKHVWDWXWH              IRUIHLWXUHSURFHHGLQJVLVWRVHHZKHWKHUWKH6HFUHWDU\jV
DVDZKROHlZHPXVWFRQVLGHUGjVH[SUHVVODQJXDJH               GHFLVLRQ RQ WKH SHWLWLRQ IRU UHPLVVLRQ ZLOO REYLDWH WKH
DSSO\LQJ SURYLVLRQV LQ WKH ,QWHUQDO 5HYHQXH &RGH WR                 QHHGIRUMXGLFLDOSURFHHGLQJV7KLVGHOD\FDQIDYRUERWK
IRUIHLWXUHVXQGHUGZKHQZHDWWHPSWWRGLVFHUQWKH               WKHFODLPDQWDQGWKH*RYHUQPHQW,QPDQ\FDVHV WKH
VWDWXWHjV PHDQLQJ  6HH &KRLFH  )G DW  FLWDWLRQ         *RYHUQPHQWjVHQWLWOHPHQWWRWKHSURSHUW\LVFOHDUDQG
RPLWWHG6XUHO\GjVLQFOXVLRQRIUHOHYDQW,QWHUQDO             WKHFODLPDQWjVRQO\SURVSHFWIRUUHDFTXLULQJWKHSURSHUW\
5HYHQXH&RGHSURYLVLRQVDQGKHQFHWKHILYH\HDUVWDWXWHRI               LVWKDWWKH6HFUHWDU\ZLOOIDYRUDEO\H[HUFLVHKLVGLVFUHWLRQ
OLPLWDWLRQV IRU MXGLFLDO IRUIHLWXUH DFWLRQV PXVW KDYH VRPH         DQGDOORZUHPLVVLRQRUPLWLJDWLRQ,IWKH*RYHUQPHQW
EHDULQJRQMXGLFLDOIRUIHLWXUHDFWLRQVLQWKHILUHDUPFRQWH[W             ZHUH IRUFHG WR LQLWLDWH MXGLFLDO SURFHHGLQJV ZLWKRXW
,QRXUHVWLPDWLRQWKLVILYH\HDUVWDWXWHRIOLPLWDWLRQVEHFRPHV           UHJDUGWRDGPLQLVWUDWLYHSURFHHGLQJVWKHFODLPDQWZRXOG
DSSOLFDEOHRQFHDQDGPLQLVWUDWLYHDFWLRQKDVWROOHGWKH               ORVHWKLVEHQHILW)XUWKHUDGPLQLVWUDWLYHSURFHHGLQJVDUH
GD\UHTXLUHPHQWIRULQLWLDWLRQRIDQDGPLQLVWUDWLYHIRUIHLWXUH             OHVV IRUPDO DQG H[SHQVLYH WKDQ MXGLFLDO IRUIHLWXUH
DFWLRQRUDMXGLFLDOIRUIHLWXUHSURFHHGLQJ                                SURFHHGLQJV*LYHQWKHJUHDWSHUFHQWDJHRIVXFFHVVIXO
                                                                           SHWLWLRQVDOORZLQJWKH*RYHUQPHQWWRZDLWIRUDFWLRQRQ
   $ UHTXLUHPHQW WKDW ERWK DGPLQLVWUDWLYH DQG MXGLFLDO               DGPLQLVWUDWLYH SHWLWLRQV HOLPLQDWHV XQQHFHVVDU\ DQG
SURFHHGLQJVEHLQLWLDWHGZLWKLQWKHVDPHGD\SHULRGGRHV               EXUGHQVRPH FRXUW SURFHHGLQJV  )LQDOO\ D V\VWHP
QRWPDNHVHQVHIRUWZRSULPDU\UHDVRQVDGPLQLVWUDWLYH                ZKHUHE\ WKH MXGLFLDO SURFHHGLQJ RFFXUV DIWHU
IRUIHLWXUHVDUHIDYRUHGDQGWKHRSSRUWXQLW\IRUEULQJLQJD            DGPLQLVWUDWLYHDFWLRQVSDUHVOLWLJDQWVDQGWKH*RYHUQPHQW
MXGLFLDOIRUIHLWXUHDFWLRQFRXOGEHORVWZKLOHWKHSDUWLHVDZDLW           IURPWKHEXUGHQRIVLPXOWDQHRXVO\SDUWLFLSDWLQJLQWZR
DGHFLVLRQRQWKHDGPLQLVWUDWLYHIRUIHLWXUHSURFHHGLQJ6HH               IRUXPV
JHQHUDOO\8QLWHG6WDWHVY(LJKW7KRXVDQG(LJKW+XQGUHG	
)LIW\'ROODUVLQ8QLWHG6WDWHV&XUUHQF\86               86DWFLWDWLRQVRPLWWHG
QRWLQJWKDWSHUPLWWLQJWKHJRYHUQPHQWWRZDLWIRU
DGHFLVLRQRQDQDGPLQLVWUDWLYHIRUIHLWXUHDFWLRQLVEHQHILFLDO            &RQVLVWHQWZLWKWKH6XSUHPH&RXUWjVDQDO\VLVLQZH
WR WKH FODLPDQW JRYHUQPHQW DQG FRXUW V\VWHP 6L[W\             EHOLHYHWKDWGGRHVQRWPDQGDWHWKDWMXGLFLDODFWLRQV
)LUHDUPV  ) 6XSS G DW  VWDWLQJ WKDW EHFDXVH          EH EURXJKW ZLWKLQ  GD\V RI WKH VHL]XUH DV ORQJ DV DQ
DGPLQLVWUDWLYHIRUIHLWXUHSURFHHGLQJVDOOHYLDWHWKHQHHGIRU             DGPLQLVWUDWLYH SURFHHGLQJ KDV EHHQ EURXJKW ZLWKLQ WKDW
MXGLFLDO DFWLRQ m>L@W PDNHV OLWWOH VHQVH WR UHTXLUH WKH         WLPHIUDPH$VWKH&RXUWVXJJHVWVLQSHUPLWWLQJWKH
JRYHUQPHQWWRLQLWLDWHERWKDQDGPLQLVWUDWLYHSURFHHGLQJDQG             JRYHUQPHQW WR DZDLW D GHFLVLRQ RQ WKH DGPLQLVWUDWLYH
DMXGLFLDOIRUIHLWXUHDFWLRQZLWKLQGD\VRIVHL]XUHRIWKH           IRUIHLWXUH SURFHHGLQJ SURWHFWV WKH FRXUWV IURP RYHUO\
1R                  8QLWHG6WDWHVY1LQHW\7KUHH                  8QLWHG6WDWHVY1LQHW\7KUHH                   1R
                                            )LUHDUPVHWDO                     )LUHDUPVHWDO

EXUGHQVRPH OLWLJDWLRQ FRQVHUYHV HFRQRPLF UHVRXUFHV DQG             )6XSSDWFLWLQJ&RQJ5HF+$SULO
SUHVHUYHV D FODLPDQWjV RSSRUWXQLW\ IRU UHPLVVLRQ RU                 :KDW6KRUWIDLOVWRUHDOL]HLVWKDWWKLVFRXUWKDVVWDWHG
PLWLJDWLRQ  6HH LG  ,I SDUWLHV ZHUH UHTXLUHG WR EULQJ ERWK   WKDW OHJLVODWLYH KLVWRU\ LV XVHG ZKHQ mWH[WXDO DQDO\VLV LV
SURFHHGLQJVZLWKLQWKHGD\SHULRGDFODLPDQWDZDLWLQJD              XQFOHDURUOHDGVWRDPELJXRXVRUXQUHDVRQDEOHUHVXOWVl7KH
UHVSRQVHRQWKHDGPLQLVWUDWLYHDFWLRQDQGHDJHUO\DQWLFLSDWLQJ            /LPLWHG,QF)GDW$OWKRXJKWKHZRUGmDQ\lLQ
UHPLVVLRQ PD\ KDYH WR IRUHJR KLV FKDQFH WR FKDOOHQJH WKH         GLVDPELJXRXVWKHWH[WXDODQDO\VLVRIWKHHQWLUH
IRUIHLWXUHLQDFRXUWRIODZ6HHLG,QDVLWXDWLRQZKHUHD            VWDWXWHFRPELQHGZLWKDQDVVHVVPHQWRIWKHVWDWXWHjVVWUXFWXUH
VWDWXWRU\ SURYLVLRQ LV DPELJXRXV RXU mSHUFHSWLRQ WKDW D           OHDGVXVWRDUHDVRQDEOHQRWXQUHDVRQDEOHUHVXOWRQHWKDW
SDUWLFXODU UHVXOW ZRXOG EH XQUHDVRQDEOHl PXVW SOD\ DQ              XSKROGVWKHIDYRUHGVWDWXVRIDGPLQLVWUDWLYHSURFHHGLQJVDQG
LPSRUWDQWUROHLQRXULQWHUSUHWDWLRQSURFHVV$VSKDOW3URGV             DOORZV IRU MXGLFLDO SURFHHGLQJV VWLOO WR EH EURXJKW DIWHU DQ
&R  86 DW   7KXV DIWHU FRQVLGHULQJ WKH mWKH         DGPLQLVWUDWLYHIRUIHLWXUHKDVIDLOHG0RUHRYHUDVSUHYLRXV
ODQJXDJHDQGGHVLJQRIWKHVWDWXWHDVDZKROHl0H\HUV               FRXUWVKDYHLQGLFDWHGmLI&RQJUHVVKDGLQWHQGHGWKDWWKHWLPH
)GDWDQGDIWHUmPDNLQJHYHU\HIIRUWWRLQWHUSUHWD          OLPLWSURYLGHGLQGVKRXOGDOZD\VDSSO\WRWKHILOLQJ
SURYLVLRQLQDPDQQHUlFRQVLVWHQWZLWKWKHUHVWRIWKHVWDWXWH           RI D MXGLFLDO FRPSODLQW IRU ILUHDUPV HYHQ ZKHQ DQ
&DIDUHOOL)GDWZHFRQFOXGHWKDWGjV                DGPLQLVWUDWLYH SURFHHGLQJ KDV DOVR EHHQ LQLWLDWHG LW FRXOG
DPELJXRXV VWDWXWRU\ ODQJXDJH mDQ\ DFWLRQ RU SURFHHGLQJl             KDYHHDVLO\VSHFLILHGVRLQWKHVWDWXWHl7ZHOYH)LUHDUPV
VKRXOGQRWEHLQWHUSUHWHGWRPHDQmHYHU\lEXWUDWKHUmHLWKHUl             )6XSSGDW6KRUWjVUHOLDQFHRQRQHVWUD\FRPPHQWLQ
D MXGLFLDO DFWLRQ RU DQ DGPLQLVWUDWLYH SURFHHGLQJ                  WKHOHJLVODWLYHKLVWRU\FDQQRWRYHUULGHWKHVWDWXWHjVVWUXFWXUH
)XUWKHUPRUH ZH DJUHH WKDW EHFDXVH WKH DGPLQLVWUDWLYH               PHDQLQJDQGSXUSRVH&RQJUHVVYRWHVRQWKHVWDWXWHLQLWV
IRUIHLWXUHSURFHHGLQJZDVEURXJKWZLWKLQGD\VDMXGLFLDO             HQWLUHW\ QRW RQ WKH +RXVH VSRQVRUjV FRPPHQWV DORQH
IRUIHLWXUH DFWLRQ EURXJKW ZLWKLQ ILYH \HDUV DV SURYLGHG LQ       0RUHRYHU WKH VSRQVRUjV FRPPHQW LV QRW DW RGGV ZLWK RXU
  ZDV ZLWKLQ WKH VWDWXWH RI OLPLWDWLRQV  7KLV             LQWHUSUHWDWLRQ7KHFRPPHQWjVHPSKDVLVLVRQWKHWLPLQJRI
LQWHUSUHWDWLRQ DOORZV IRU FRQVLGHUDWLRQ RI WKH VWDWXWHjV            MXGLFLDOSURFHHGLQJVUHFRJQL]LQJWKDWVXFKSURFHHGLQJVQHHG
ODQJXDJHLQLWVHQWLUHW\JLYHVPHDQLQJWR,QWHUQDO5HYHQXH               VRPHWLPHOLPLW2XUKROGLQJWRGD\DOVRUHFRJQL]HV)23$jV
&RGH SURYLVLRQV DQG IRVWHUV WKH IDYRUHG VWDWXV RI                 FRQFHUQZLWKEULQJLQJWLPHO\SURFHHGLQJVDQGGHWHUPLQHVWKDW
DGPLQLVWUDWLYHDFWLRQV                                                   WKHGD\OLPLWZLOODSSO\WRMXGLFLDOSURFHHGLQJVZKHQQR
                                                                          DGPLQLVWUDWLYHIRUIHLWXUHDFWLRQZDVEURXJKWWRWROOWKH
  6KRUW FULWLFL]HV WKH GLVWULFW FRXUWjV UHOLDQFH RQ 7ZHOYH         GD\UHTXLUHPHQW
)LUHDUPV DV HUURU EHFDXVH WKDW GHFLVLRQ FRQVLGHUHG
GjVODQJXDJHDPELJXRXVEXWQHYHUWKHOHVVIDLOHGWR                 2QDILQDOQRWH6KRUWDUJXHVWKDWWKHILYH\HDUVWDWXWHRI
FRQVLGHUOHJLVODWLYHKLVWRU\6KRUWFLWLQJ)RXUWHHQ9DULRXV             OLPLWDWLRQVLQZKHQSURSHUO\DSSOLHGUXQVIURPWKH
)LUHDUPV SRVLWV WKDW WKH OHJLVODWLYH KLVWRU\ VXSSRUWV KLV         GDWH WKH DOOHJHG RIIHQVH ZDV GLVFRYHUHG QRW WKH GDWH RI
DUJXPHQWWKDWERWKDGPLQLVWUDWLYHDQGMXGLFLDOSURFHHGLQJV                VHL]XUH DV LQ  G  6KRUW WKHQ SURFHHGV WR DUJXH
PXVWFRPPHQFHZLWKLQWKHGD\SHULRG7KH)RXUWHHQ                    ZLWKRXWFLWLQJDQ\DXWKRULW\WKDWDQHDUOLHUGDWHRIGLVFRYHU\
9DULRXV)LUHDUPVFRXUWQRWHGWKDWWKHVSRQVRURIWKH)LUHDUPV             VKRXOGDSSO\LQKLVFDVHEHFDXVHWKHJRYHUQPHQWNQHZKHKDG
2ZQHUVj 3URWHFWLRQ $FW m)23$l WKH VWDWXWH FUHDWLQJ               DIHORQ\FRQYLFWLRQIRUSRVVHVVLRQRIILUHDUPVLQDQG
GFULWLFL]HGLWVDOWHUQDWLYHWKH+XJKHVELOOEHFDXVH         ZDV DZDUH WKDW KH SRVVHVVHG ILUHDUPV LQ DGYDQFH RI WKH
mµ>WKH ODWWHU GLG@ QRW UHTXLUH DQ DJHQF\ WR EULQJ MXGLFLDO       H[HFXWLRQRIWKHVHDUFKZDUUDQW6KRUWVXJJHVWVWKDWEHFDXVH
DFWLRQV ZLWKLQ  GD\V RU DQ\ RWKHU OLPLW RI D VHL]XUHjl    KHRSHQO\SXUFKDVHGKLVILUHDUPVWKURXJKUHJLVWHUHGGHDOHUV
1R                8QLWHG6WDWHVY1LQHW\7KUHH                8QLWHG6WDWHVY1LQHW\7KUHH                   1R
                                          )LUHDUPVHWDO                   )LUHDUPVHWDO

WKHJRYHUQPHQWZDVFRQVWUXFWLYHO\DZDUHWKDWKHKDGWKHVH             DQGWKXVWKHQHHGIRUWKHILUHDUPVDVHYLGHQFHRIWKHFULPH
ZHDSRQVZHOOEHIRUH$XJXVW7KHUHFRUGLVHQWLUHO\          KDGFHDVHGWKHJRYHUQPHQWGHOD\HGDQRWKHUWZR\HDUVEHIRUH
YRLGRIDQ\HYLGHQFHLQVXSSRUWRIWKLVDUJXPHQW0RUHRYHU          LQVWLWXWLQJMXGLFLDOIRUIHLWXUHSURFHHGLQJV
6KRUWZDLYHGWKLVDUJXPHQWE\IDLOLQJWRUDLVHLWEHIRUHWKH
GLVWULFWFRXUW7KLVFRXUWKDVUHSHDWHGO\KHOGWKDWLWmZLOOQRW        7KH EDODQFLQJ WHVW LQ %DUNHU Y :LQJR  86 
FRQVLGHUDUJXPHQWVUDLVHGIRUWKHILUVWWLPHRQDSSHDOXQOHVV          SURYLGHV WKH IUDPHZRUN WKDW ZH XVH WR GHWHUPLQH
RXU IDLOXUH WR FRQVLGHU WKH LVVXH ZLOO UHVXOW LQ D SODLQ    ZKHQWKHJRYHUQPHQWjVGHOD\LQEULQJLQJDMXGLFLDOIRUIHLWXUH
PLVFDUULDJHRIMXVWLFHl,QUH+RRG)GWK          DFWLRQYLRODWHVWKH)LIWK$PHQGPHQWULJKWDJDLQVWGHSULYDWLRQ
&LU  TXRWDWLRQ RPLWWHG  +HUH RXU GHFLVLRQ QRW WR   RISURSHUW\ZLWKRXWGXHSURFHVV86DW
DGGUHVV6KRUWjVIDFWXDOO\DQGOHJDOO\XQVXSSRUWHGDUJXPHQW            7KHRULJLQDOWHVWDSSOLHGLQ%DUNHUZKHQWKHJRYHUQPHQWjV
GRHVQRWUHVXOWLQDPLVFDUULDJHRIMXVWLFH                          GHOD\DEULGJHGWKHULJKWWRDVSHHG\WULDOZHLJKVIRXUIDFWRUV
                                                                      WKHOHQJWKRIWKHGHOD\WKHUHDVRQIRUWKHGHOD\WKHFODLPDQWjV
%'XH3URFHVV                                                       DVVHUWLRQ RI KLV ULJKW DQG WKH SUHMXGLFH WR WKH FODLPDQW
                                                                      %DUNHU86DW7KH&RXUWKDVFODULILHGWKDWQRQHRI
   6KRUWQH[WDOOHJHVWKDWWKHJRYHUQPHQWjVGHOD\LQEULQJLQJ         WKHVHIDFWRUVLVmQHFHVVDU\lRUmVXIILFLHQWlEXWUDWKHUWKH\DUH
WKHMXGLFLDOIRUIHLWXUHDFWLRQYLRODWHGKLVULJKWWRGXHSURFHVV     WREHXVHGDVJXLGHVLQEDODQFLQJWKHLQWHUHVWVRIWKHFODLPDQW
+HUHOLHVRQWKHJRYHUQPHQWjVIDLOXUHWRJLYHDQ\UHDVRQIRU          DJDLQVWWKRVHRIWKHJRYHUQPHQW86DW
LWVILYH\HDUGHOD\DIWHUKHDVVHUWHGDULJKWWRWKHSURSHUW\LQ      7KH&RXUWKDVLQVWUXFWHGWKHORZHUFRXUWVWRDSSO\WKHWHVWmRQ
7KHJRYHUQPHQWRQWKHRWKHUKDQGDUJXHVWKDWLWZDV          DQDGKRFEDVLVlWRGHWHUPLQHLIWKHmIOH[LEOHUHTXLUHPHQWVRI
MXVWLILHG LQ ZDLWLQJ IRU D GHFLVLRQ RQ 6KRUWjV UHPLVVLRQ      GXH SURFHVV KDYH EHHQ PHWl  ,G DW  LQWHUQDO
SHWLWLRQDQGWKDWLWSURSHUO\DZDLWHGWKHWHUPLQDWLRQRI6KRUWjV      TXRWDWLRQV RPLWWHG  5HFRJQL]LQJ WKDW WKH WHVW ZDV QRW
FULPLQDOSURFHHGLQJV7KHJRYHUQPHQWFRQFOXGHVWKDWHYHQ             GHVLJQHG IRU VFLHQWLILF SUHFLVLRQ WKH &RXUW SURYLGHG VRPH
LIWKHUHPDLQLQJWZR\HDUGHOD\ZDVQRWMXVWLILHGLWGLGQRW         JXLGDQFH  m>W@KH OHQJWK RI WKH GHOD\ LV WR VRPH H[WHQW D
ULVHWRWKHOHYHORIDGXHSURFHVVYLRODWLRQ7KHGLVWULFWFRXUW    WULJJHULQJ PHFKDQLVP  8QWLO WKHUH LV VRPH GHOD\ ZKLFK LV
FLWLQJIRXQG6KRUWjVGXHSURFHVVFODLPWREHmGHYRLG          SUHVXPSWLYHO\ SUHMXGLFLDO WKHUH LV QR QHFHVVLW\ IRU LQTXLU\
RIPHULWls$DW'LVW&W2U:HUHYLHZGHQRYRD          LQWRWKHRWKHUIDFWRUVWKDWJRLQWRWKHEDODQFHl%DUNHU
GLVWULFWFRXUWjVOHJDOFRQFOXVLRQVDVWRZKHWKHUDFODLPDQWjV         86DW
FRQVWLWXWLRQDOULJKWVZHUHYLRODWHG6HH6FKUR\HUY)UDQNHO
)GWK&LU                                     ,QWKHLQVWDQWFDVHEHFDXVHZHEHOLHYHWKHGHOD\jVOHQJWKLV
                                                                      ERWKVXEVWDQWLDODQGSUHVXPSWLYHO\SUHMXGLFLDOZHHQJDJHLQ
  $VZHVWDWHGSUHYLRXVO\WKHILUHDUPVDWLVVXHZHUHVHL]HG          DQ DQDO\VLV RI WKH UHPDLQLQJ WKUHH IDFWRUV  6HH LG  :LWK
RQ$XJXVW7KDWVDPH\HDU6KRUWILOHGKLVSHWLWLRQ         UHVSHFW WR WKH UHDVRQ IRU WKH GHOD\ WKH JRYHUQPHQW KDV
IRUUHPLVVLRQDVVHUWLQJKLVULJKWWRWKHILUHDUPVZKLFKZDV         SURIIHUHGDPSOHMXVWLILFDWLRQIRULWVLQLWLDOWKUHH\HDUGHOD\LQ
GHQLHG7KHJRYHUQPHQWGLGQRWEHJLQLWVMXGLFLDOIRUIHLWXUH         LWV DSSHOODWH EULHI  )LUVW WKH JRYHUQPHQW ZDLWHG XQWLO D
DFWLRQ XQWLO $XJXVW   DIWHU QHDUO\ ILYH \HDUV KDG    GHWHUPLQDWLRQ ZDV PDGH RQ 6KRUWjV SHWLWLRQ IRU UHPLVVLRQ
HODSVHGVLQFHVHL]XUH$OWKRXJK6KRUWjVFULPLQDOWULDOZDV           6HH86DWm$QLPSRUWDQWMXVWLILFDWLRQIRU
SHQGLQJGXULQJ D SRUWLRQRIWKLVSHULRGRQFHWKH6XSUHPH           GHOD\LQJ WKH LQLWLDWLRQ RI IRUIHLWXUH SURFHHGLQJV LV WR VHH
&RXUWGHQLHGKLVSHWLWLRQIRUFHUWLRUDULRQsXQHWKRVH      ZKHWKHUWKH6HFUHWDU\jVGHFLVLRQRQWKHSHWLWLRQIRUUHPLVVLRQ
SURFHHGLQJVFDPHWRDFORVH$IWHUWKHFULPLQDOWULDOHQGHG         ZLOOREYLDWHWKHQHHGIRUMXGLFLDOSURFHHGLQJVl6HFRQGWKH
1R                 8QLWHG6WDWHVY1LQHW\7KUHH                8QLWHG6WDWHVY1LQHW\7KUHH                   1R
                                           )LUHDUPVHWDO                   )LUHDUPVHWDO

JRYHUQPHQW SURSHUO\ DZDLWHG D UHVXOW LQ 6KRUWjV FULPLQDO          7KH ILQDO IDFWRU ZH FRQVLGHU LV ZKDW SUHMXGLFH 6KRUW
SURFHHGLQJV6HHLGDWm3HQGLQJFULPLQDOSURFHHGLQJV          VXIIHUHGE\YLUWXHRIWKHGHOD\$VWKH&RXUWVWDWHGLQ
SUHVHQW VLPLODU MXVWLILFDWLRQV IRU GHOD\ LQ LQVWLWXWLQJ FLYLO   m7KHSULPDU\LQTXLU\KHUHLVZKHWKHUWKHGHOD\KDVKDPSHUHG
IRUIHLWXUHSURFHHGLQJVl:HQRWHWKDWWKHVHMXVWLILFDWLRQV          WKHFODLPDQWLQSUHVHQWLQJDGHIHQVHRQWKHPHULWVWKURXJK
DGHTXDWHO\ FRYHU WKH LQLWLDO WKUHH\HDU GHOD\ EXW ZH           IRU H[DPSOH WKH ORVV RI ZLWQHVVHV RU RWKHU LPSRUWDQW
HPSKDVL]HWKDWWKHJRYHUQPHQWZDLWHGDQDGGLWLRQDOWZR\HDUV           HYLGHQFHl    86 DW   6KRUW KDV IDLOHG WR
EHIRUH LQLWLDWLQJ SURFHHGLQJV IRU ZKLFK LW KDV RIIHUHG QR      SURYLGH WKLV FRXUW ZLWK DQ\ HYLGHQFH RI KRZ WKH GHOD\ LQ
MXVWLILFDWLRQ                                                         EULQJLQJWKHMXGLFLDOSURFHHGLQJKDVSUHMXGLFHGKLVGHIHQVH
                                                                       $FFRUGLQJO\ZHPXVWFRQFOXGHWKDWQRVXFKSUHMXGLFHH[LVWV
   7KLVOHDGVXVWRWKHWKLUGIDFWRU6KRUWjVDVVHUWLRQRIKLV
ULJKWWRWKHSURSHUW\6RRQDIWHUWKHZDUUDQWZDVH[HFXWHG             &RQVLGHULQJWKHPL[RIIDFWRUVSUHVHQWHGLQWKLVFDVHZH
6KRUWILOHGDSHWLWLRQIRUUHPLVVLRQEXWKHQHYHUUHTXHVWHGWKH        GHWHUPLQH WKDW WKH GLVWULFW FRXUW FRUUHFWO\ IRXQG QR GXH
LQLWLDWLRQRIDMXGLFLDOIRUIHLWXUHDFWLRQ6HHJHQHUDOO\LGDW      SURFHVVYLRODWLRQ$GPLWWHGO\WKHJRYHUQPHQWSURYLGHGRQO\
QRWLQJDFODLPDQWjVSRZHUWRmWULJJHUUDSLGILOLQJRID           SDUWLDOMXVWLILFDWLRQIRUWKHGHOD\E\IDLOLQJWRDFFRXQWIRUWKH
IRUIHLWXUH DFWLRQl DQG WKDW IDLOXUH WR XVH WKH DYDLODEOH      DGGLWLRQDO WZR\HDU GHOD\ DIWHU WKH FULPLQDO WULDO ZDV
UHPHGLHVmFDQEHWDNHQDVVRPHLQGLFDWLRQWKDW>WKHFODLPDQW@          FRQFOXGHG,QWKHHQGKRZHYHULUUHVSHFWLYHRI6KRUWjVWKHQ
GLGQRWGHVLUHDQHDUO\MXGLFLDOKHDULQJl,QDGGLWLRQDVWKH       SURVHVWDWXVZHDUHSHUVXDGHGWKDWWKHEDODQFLQJRIIDFWRUV
JRYHUQPHQWQRWHV6KRUWFRXOGKDYHPRYHGIRUWKHUHWXUQRI             SURKLELWV D ILQGLQJ WKDW 6KRUWjV GXH SURFHVV ULJKWV ZHUH
KLVVHL]HGSURSHUW\XQGHU)HGHUDO5XOHRI&ULPLQDO3URFHGXUH           YLRODWHG:HFDQQRWFRQVWUXHWKLVDVDGXHSURFHVVYLRODWLRQ
H)HG5&ULP3Hm$SHUVRQDJJULHYHGE\WKH       EHFDXVH6KRUWKDVIDLOHGWRPDNHPRUHWKDQDVLQJOHFDVXDO
GHSULYDWLRQRISURSHUW\PD\PRYHWKHGLVWULFWFRXUWIRUWKH           GHPDQG IRU WKH UHWXUQ RI KLV SURSHUW\ DQG KH KDV IDLOHG WR
GLVWULFWLQZKLFKWKHSURSHUW\ZDVVHL]HGIRUWKHUHWXUQRIWKH        VKRZ KRZ KH ZDV SUHMXGLFHG E\ WKH GHOD\ LQ EULQJLQJ WKH
SURSHUW\RQWKHJURXQGWKDWVXFKSHUVRQLVHQWLWOHGWRODZIXO          MXGLFLDOIRUIHLWXUHDFWLRQ6HHLG
SRVVHVVLRQRIWKHSURSHUW\l5HFRJQL]LQJ6KRUWjVGHOLEHUDWH
LQDFWLYLW\ ZH QRQHWKHOHVV PXVW FRQVLGHU WKH WUDGLWLRQDO         6KRUW DOVR DOOHJHV WKDW WKH VL[PRQWK GHOD\ LQ VHUYLFH RI
OHQLHQF\H[WHQGHGWRSURVHOLWLJDQWV6HHJHQHUDOO\(VWHOOHY       SURFHVVYLRODWHGKLVGXHSURFHVVULJKWV7KHJRYHUQPHQWILOHG
*DPEOH  86    mD SUR VH FRPSODLQW         WKLVIRUIHLWXUHDFWLRQDJDLQVWWKHILUHDUPVRQ$XJXVW
KRZHYHU LQDUWIXOO\ SOHDGHG PXVW EH KHOG WR OHVV VWULQJHQW     EXW GLG QRW VHUYH 6KRUW ZLWK SURFHVV ZLWKLQ  GD\V DV
VWDQGDUGV WKDQ IRUPDO SOHDGLQJV GUDIWHG E\ ODZ\HUVl              UHTXLUHGE\)HGHUDO5XOHRI&LYLO3URFHGXUHP,WZDVQRW
TXRWDWLRQRPLWWHG$VLQGLFDWHGLQWKHUHFRUG6KRUWjVVROH        XQWLO )HEUXDU\ RI  WKDW 6KRUW UHFHLYHG D FRS\ RI WKH
DWWHPSWWRUHJDLQKLVSURSHUW\FRQVLVWHGRIDOHWWHUKHILOHG          FRPSODLQWIRUWKHMXGLFLDOIRUIHLWXUHDFWLRQ)HGHUDO5XOHRI
VKRUWO\DIWHUWKHVHL]XUHZKLFKZDVLQWHUSUHWHGDVDSHWLWLRQIRU      &LYLO3URFHGXUHPVWDWHVLQSHUWLQHQWSDUW
UHPLVVLRQ DQG ZDV VXEVHTXHQWO\ GHQLHG  $IWHU LWV GHQLDO
6KRUWQHJOHFWHGWRSXUVXHDQ\RIWKHP\ULDGRSWLRQVDYDLODEOH            ,I VHUYLFH RI WKH VXPPRQV DQG FRPSODLQW LV QRW PDGH
WRKLP7DNLQJRXUFXHIURPWKH6XSUHPH&RXUWjVGHFLVLRQLQ             XSRQDGHIHQGDQWZLWKLQGD\VDIWHUWKHILOLQJRIWKH
 ZH FRQFOXGH WKDW 6KRUWjV IDLOXUH WR SXUVXH KLV           FRPSODLQWWKHFRXUWXSRQPRWLRQRURQLWVRZQLQLWLDWLYH
SURSHUW\mFDQEHWDNHQDVVRPHLQGLFDWLRQWKDW>KH@GLGQRW              DIWHU QRWLFH WR WKH SODLQWLII VKDOO GLVPLVV WKH DFWLRQ
GHVLUHDQHDUO\MXGLFLDOKHDULQJl86DW             ZLWKRXW SUHMXGLFH DV WR WKDW GHIHQGDQW RU GLUHFW WKDW
                                                                         VHUYLFHEHHIIHFWHGZLWKLQDVSHFLILHGWLPHSURYLGHGWKDW
1R                 8QLWHG6WDWHVY1LQHW\7KUHH                     8QLWHG6WDWHVY1LQHW\7KUHH                       1R
                                           )LUHDUPVHWDO                        )LUHDUPVHWDO

  LIWKHSODLQWLIIVKRZVJRRGFDXVHIRUWKHIDLOXUHWKHFRXUW           VKRZLQJWKHUHLVDJHQXLQHLVVXHIRUWULDOl$QGHUVRQ
  VKDOO H[WHQG WKH WLPH IRU VHUYLFH IRU DQ DSSURSULDWH           86DWTXRWDWLRQRPLWWHG6KRUWDUJXHVWKDWEHFDXVHKH
  SHULRG                                                                ZDV SURFHHGLQJ SUR VH DIWHU EHLQJ GHQLHG KLV UHTXHVW IRU
                                                                         DSSRLQWHG FRXQVHO KH ZDV XQDZDUH RI WKH QHHG WR ILOH
)HG 5 &LY 3 P  $OWKRXJK WKH UXOH E\ LWV H[SUHVV       DIILGDYLWV DQG RWKHU UHVSRQVLYH SDSHUV LQ RSSRVLWLRQ WR WKH
ODQJXDJH SURYLGHV WKDW WKH FRXUW mVKDOOl GLVPLVV DQ DFWLRQ       JRYHUQPHQWjV PRWLRQ WR DYRLG VXPPDU\ MXGJPHQW DJDLQVW
ZKHQVHUYLFHLVQRWHIIHFWHGZLWKLQGD\VLWDOVRSURYLGHV           KLP,QVXSSRUWRIKLVDUJXPHQWKHFLWHVDXWKRULW\IURPWKH
VRPH IOH[LELOLW\ LQ WKDW LW DOORZV D FRXUW WR FKRRVH QRW WR   1LQWK DQG (OHYHQWK &LUFXLWV  5DQG Y 5RZODQG  )G
GLVPLVVEXWUDWKHUWRH[WHQGWKHVHUYLFHWLPHZKHQJRRGFDXVH            WK&LUDQG8QLWHG6WDWHVY2QH&ROW
LVVKRZQ                                                                3\WKRQ&DOLEHU5HYROYHU)GWK&LU
  ,Q WKH SUHVHQW FDVH WKH GLVWULFW FRXUW UHTXHVWHG WKH             7KHPDMRULW\RIFLUFXLWVKDYHKHOGWKDWDSURVHOLWLJDQWLV
JRYHUQPHQWWRVKRZFDXVHDVWRZK\LWGLGQRWVHUYH6KRUW                HQWLWOHGWRQRWLFHRIWKHFRQVHTXHQFHVRIDVXPPDU\MXGJPHQW
ZLWKLQ WKH DOORWWHG WLPH SHULRG  ,Q UHVSRQVH WR WKH FRXUWjV   PRWLRQDQGWKHUHTXLUHPHQWVRIWKHVXPPDU\MXGJPHQWUXOH
RUGHU WR VKRZ FDXVH WKH JRYHUQPHQW DGPLWWHG WKDW D              6HHHJ.OLQJHOHY(LNHQEHUU\)GWK&LU
mPLVFRPPXQLFDWLRQlEHKLQGWKHVFHQHVDW%$7)UHVXOWHGLQ                 UHDIILUPLQJLWVDJUHHPHQWZLWKWKHUXOHSURYLGLQJSUR
WKHIDLOXUHWRVHUYH6KRUW$OWKRXJKWKHGLVWULFWFRXUWGLGQRW         VH SULVRQHUV ZLWK QRWLFH RI WKH VXPPDU\ MXGJPHQW
H[SUHVVO\LQGLFDWHWKDWLWFKRVHWRmH[WHQGWKHWLPHIRUVHUYLFH         UHTXLUHPHQWV*UDKDPY/HZLQVNL)GG
IRU DQ DSSURSULDWH SHULRGl LW LV REYLRXV WKDW LW VR FKRVH     &LUKROGLQJWKDWmLQDOOIDLUQHVVlDSURVHOLWLJDQWZKR
EHFDXVH LW GLG QRW GLVPLVV WKH FDVH ZLWKRXW SUHMXGLFH EXW       LV XQDZDUH RI KLV REOLJDWLRQ WR UHVSRQG VKRXOG QRW KDYH
LQVWHDGDOORZHGWKHFDVHWRSURFHHGDIWHUWKHJRYHUQPHQWjV               VXPPDU\MXGJPHQWHQWHUHGDJDLQVWKLP2QH&ROW3\WKRQ
UHVSRQVHWRWKHVKRZFDXVHRUGHU7KHGLVWULFWFRXUWKDGWZR            &DO5HYROYHU)GDWm$PRWLRQIRUVXPPDU\
HTXDOO\ SHUPLVVLEOH RSWLRQV DQG LW ZDV QRW HUURU IRU WKH       MXGJPHQWVKRXOGRQO\EHJUDQWHGDJDLQVWDOLWLJDQWZLWKRXW
GLVWULFWFRXUWWRFKRRVHRQHRYHUWKHRWKHU                             FRXQVHO LI WKH FRXUW JLYHV FOHDU QRWLFH RI WKH QHHG WR ILOH
                                                                         DIILGDYLWV RU RWKHU UHVSRQVLYH PDWHULDOV DQG RI WKH
&3UR6H/LWLJDQWVDQG6XPPDU\sXGJPHQW                                FRQVHTXHQFHVRIGHIDXOWl/HZLVY)DXONQHU)G
                                                                         WK&LUm>:@HWKLQNLWDSSURSULDWHWROD\GRZQD
  6KRUWjVILQDODUJXPHQWRQDSSHDODOOHJHVWKDWWKHGLVWULFW             JHQHUDOUXOHWKDWDSULVRQHUZKRLVDSODLQWLIILQDFLYLOFDVH
FRXUWHUUHGLQIDLOLQJWRDOHUWKLPWRWKHFRQVHTXHQFHVRID             DQGLVQRWUHSUHVHQWHGE\FRXQVHOLVHQWLWOHGWRUHFHLYHQRWLFH
VXPPDU\MXGJPHQWPRWLRQDQGKLVUHVSRQVLELOLWLHVWRUHVSRQG             RIWKHFRQVHTXHQFHVRIIDLOLQJWRUHVSRQGZLWKDIILGDYLWVWRD
)HGHUDO5XOHRI&LYLO3URFHGXUHFSURYLGHVWKDWVXPPDU\              PRWLRQIRUVXPPDU\MXGJPHQWl5RVHERURY*DUULVRQ
MXGJPHQWLVSURSHUmLIWKHSOHDGLQJVGHSRVLWLRQVDQVZHUVWR            )GWK&LUUHTXLULQJWKDWWKHmSODLQWLIIEH
LQWHUURJDWRULHV DQG DGPLVVLRQV RQ ILOH WRJHWKHU ZLWK WKH
DIILGDYLWVLIDQ\VKRZWKDWWKHUHLVQRJHQXLQHLVVXHDVWRDQ\
PDWHULDO IDFW DQG WKDW WKH PRYLQJ SDUW\ LV HQWLWOHG WR D            
MXGJPHQWDVDPDWWHURIODZl)HG5&LY3F:KHQ                    6RPH FLUFXLWV H[WHQG WKLV OHQLHQF\ WR DOO SUR VH OLWLJDQWV ZKLOH RWKHUV

WKHPRYLQJSDUW\ILOHVDPRWLRQIRUVXPPDU\MXGJPHQWWKH                          )G   WK &LU  H[WHQGLQJ WKLV VSHFLDO
                                                                         OLPLW WKH OHQLHQF\ WR SULVRQHU SUR VH OLWLJDQWV   &RPSDUH sD[RQ Y &LUFOH

QRQPRYLQJSDUW\FDQQRWmUHVWXSRQWKHPHUHDOOHJDWLRQVRU               WUHDWPHQW WR QRQSULVRQHU SUR VH OLWLJDQWV                      
                                                                         . &RUS

                                                                         )G   	 Q WK &LU  UHIXVLQJ WR H[WHQG WKH UXOH WR
                                                                                                                       ZLWK sDFREVHQ Y )LOOHU
GHQLDOVRIKLVSOHDGLQJEXWPXVWVHWIRUWKVSHFLILFIDFWV
                                                                         QRQSULVRQHU SUR VH OLWLJDQWV
1R                 8QLWHG6WDWHVY1LQHW\7KUHH                 8QLWHG6WDWHVY1LQHW\7KUHH                 1R
                                           )LUHDUPVHWDO                    )LUHDUPVHWDO

DGYLVHG RI KLV ULJKW WR ILOH FRXQWHUDIILGDYLWV RU RWKHU           7KHGLIILFXOWTXHVWLRQLQWKLVFDVHLVZKHWKHUWRFRQVLGHU
UHVSRQVLYHPDWHULDODQGDOHUWHGWRWKHIDFWWKDWKLVIDLOXUHWRVR      6KRUWDSULVRQHUSURVHOLWLJDQWRUDQRQSULVRQHUSURVHOLWLJDQW
UHVSRQG PLJKW UHVXOW LQ WKH HQWU\ RI VXPPDU\ MXGJPHQW           $WWKHWLPHWKHMXGLFLDOIRUIHLWXUHDFWLRQZDVEURXJKW6KRUW
DJDLQVWKLPl+XGVRQY+DUG\)G'&               UHPDLQHG LQFDUFHUDWHG ZLWK mOLWWOH FKRLFH LQ SURFHHGLQJ RQ
&LU  KROGLQJ WKDW mDW D EDUH PLQLPXPl WKH GLVWULFW      >KLV@ RZQ EHKDOIl %URFN  )G DW  EXW ZKHQ WKH
FRXUW ZDV UHTXLUHG WR SURYLGH D SUR VH SULVRQHU ZLWK IDLU     PRWLRQ IRU VXPPDU\ MXGJPHQW ZDV ILOHG 6KRUW KDG EHHQ
QRWLFHRIWKHVXPPDU\MXGJPHQWUXOHUHTXLUHPHQWVVHHDOVR             UHOHDVHG  &RQVLGHULQJ WKH UDWLRQDOH EHKLQG WKLV VSHFLDO
sD[RQ)GDWFLWLQJVRPHRIWKHDERYHOLVWHGFDVHV          WUHDWPHQWLWPDNHVVHQVHWRDIIRUG6KRUWWKHSURWHFWLRQRID
WR VXSSRUW LWV KROGLQJ WKDW WKH GLVWULFW FRXUW DEXVHG LWV      SULVRQHUSURVHOLWLJDQWEHFDXVHKHZDVDSULVRQHUZKHQWKH
GLVFUHWLRQ E\ IDLOLQJ WR SURYLGH WKH SODLQWLII SUR VH FLYLO   LQLWLDOIRUIHLWXUHDFWLRQZDVILOHGDQGHYHQDIWHUKLVUHOHDVHKH
OLWLJDQW mD PHDQLQJIXO RSSRUWXQLW\ WR UHPHG\ WKH REYLRXV        VWLOOZDVXQVXFFHVVIXOLQVHFXULQJFRXQVHO1RQHWKHOHVVWKHUH
GHIHFWV LQ KLV VXPPDU\ MXGJPHQW PDWHULDOVl TXRWDWLRQ             LVQRQHHGIRUXVWRDGGUHVVWKLVTXHVWLRQEHFDXVHDQ\HUURU
RPLWWHG+RZHYHUWKLVFRXUWFOHDUO\KDVKHOGWKDWQRVXFK           KHUHLVKDUPOHVV6KRUWLQGLFDWHVWKDWKHGLGQRWUHVSRQGWR
UXOH SURYLGLQJ mVSHFLDO DVVLVWDQFHl H[LVWV ZLWK UHVSHFW WR       WKH JRYHUQPHQWjV PRWLRQ DQG WKDW KH KDV mPHULWRULRXV
QRQSULVRQHUSURVHOLWLJDQWV%URFNY+HQGHUVKRWW)G           DUJXPHQWVlEXWKHIDLOVWRRIIHUXVHYHQDKLQWRIZKDWWKHVH
 WK&LU7KH%URFNFRXUWUHO\LQJRQWKH             DUJXPHQWV ZRXOG KDYH EHHQ  7KXV ZH FRQFOXGH WKDW DQ\
UDWLRQDOHRIWKH1LQWK&LUFXLWVWDWHGWKDWSURKLELWLQJVSHFLDO         DIILGDYLWVRUUHVSRQVLYHSDSHUVWKDW6KRUWZRXOGKDYHILOHG
WUHDWPHQW IRU QRQSULVRQHU SUR VH OLWLJDQWV ZDV RQO\ IDLU        ZRXOG QRW KDYH UDLVHG JHQXLQH LVVXHV RI PDWHULDO IDFW DQG
EHFDXVHSDUWLHVFKRRVLQJWRKDYHFRXQVHOmPXVWEHDUWKHULVN            ZRXOG QRW KDYH DOWHUHG WKH GHFLVLRQ WR JUDQW VXPPDU\
RI WKHLU DWWRUQH\jV PLVWDNHVl DQG WKXV mD µOLWLJDQW ZKR       MXGJPHQW
FKRRVHVKLPVHOIDVDOHJDOUHSUHVHQWDWLYHVKRXOGEHWUHDWHGQR
GLIIHUHQWO\jl,GTXRWLQJsDFREVHQY)LOOHU)G                              ,,,&21&/86,21
WK&LU+RZHYHUWKLVFRXUWVSHFLILFDOO\
QRWHGLQ%URFNWKDWm>W@KLVDSSURDFKZDVFDUHIXOO\KHOGQRWWR            )RUWKHUHDVRQVVHWIRUWKDERYHZH$)),50WKHGLVWULFW
EHDSSOLFDEOHWRSULVRQHUVSURFHHGLQJZLWKRXWFRXQVHOVLQFH             FRXUWjV JUDQW RI WKH JRYHUQPHQWjV PRWLRQ IRU VXPPDU\
WKH\ RIWHQ KDYH OLWWOH FKRLFH LQ SURFHHGLQJ RQ WKHLU RZQ       MXGJPHQW
EHKDOIl,GEXWVHH:LOOLDPVY%URZPDQ)G
WK&LUGHFLGLQJWKDW5XOHZDVVDWLVILHGZKHUHWKH
GHIHQGDQWSULVRQHUjVW\SHZULWWHQIRUPFRPSODLQWZDVYHULILHG
DQGKDVmWKHVDPHIRUFHDQGHIIHFWDVDQDIILGDYLWl:KLOH
WKH:LOOLDPVFRXUWVWDWHGWKDWWKLVFLUFXLWKDVmQRDXWKRULW\
IRUWKHSURSRVLWLRQWKDWDGLVWULFWFRXUWPXVWDGYLVHDSURVH
SULVRQHU RI KLV ULJKW WR ILOH FRXQWHUDIILGDYLWV RU RWKHU
UHVSRQVLYHPDWHULDORUWKDWKHPXVWEHDOHUWHGWRWKHIDFWWKDW
KLVIDLOXUHWRVRUHVSRQGZLWKVXFKPDWHULDOPLJKWUHVXOWLQ
HQWU\ RI VXPPDU\ MXGJPHQW DJDLQVW KLPl LW IDLOHG WR FLWH
%URFN ZKLFK DSSHDUV WR UHDFK WKH RSSRVLWH FRQFOXVLRQ
:LOOLDPV)GDW