Court Opinion

ID: 2969833
Source: CourtListenerOpinion
Date Created: 2015-09-22 15:58:13.655226+00
Date Added: 2024-06-11T11:43:26.349989
License: Public Domain

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

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

                      BBBBBBBBBBBBBBBBB                                                  )LOH 1DPH DS

                       &21&855(1&(
                      BBBBBBBBBBBBBBBBB                                 81,7('67$7(6&28572)$33($/6
  6,/(5&LUFXLWsXGJHFRQFXUULQJ,FRQFXULQWKHUHVXOWLQ                         )257+(6,;7+&,5&8,7
WKLVFDVHWKDWLVWKDWWKHGLVWULFWFRXUWSURSHUO\GLVPLVVHGWKH                       BBBBBBBBBBBBBBBBB
SHWLWLRQ XQGHU  86&   DV XQWLPHO\  +RZHYHU ,
ZRXOGOHDYHWRDQRWKHUGD\WKHGHFLVLRQRIZKHWKHUHTXLWDEOH
WROOLQJDSSOLHVWRWKHRQH\HDUSHULRGRIOLPLWDWLRQLQKDEHDV           +25$&( /(( '81/$3              ;
FRUSXV FDVHV DQG ZKDW WKH VWDQGDUGV IRU HTXLWDEOH WROOLQJ               3HWLWLRQHU$SSHOODQW     
PLJKWEH                                                                                               
                                                                                                             1R
  ,Q WKLV FDVH DV H[SODLQHG LQ WKH PDMRULW\ RSLQLRQ HYHQ                 Y                    
XQGHU WKH EHVW VFHQDULR VHW RXW E\ WKH SHWLWLRQHU HTXLWDEOH                                      !
WROOLQJXQGHUDQ\DUJXDEOHVWDQGDUGZRXOGQRWEHDSSURSULDWH                                             
                                                                         81,7(' 67$7(6 2) $0(5,&$ 
7KXV P\ FRQFOXVLRQ LV WKDW ZLWKRXW GHFLGLQJ ZKHWKHU                     5HVSRQGHQW$SSHOOHH 
HTXLWDEOH WROOLQJ LV DSSOLFDEOH LQ KDEHDV FRUSXV FDVHV
'XQODSjVFDVHZDVFRUUHFWO\GLVPLVVHG                                                                   1
                                                                              $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
                                                                            IRUWKH0LGGOH'LVWULFWRI7HQQHVVHHDW1DVKYLOOH
                                                                           1Rn7KRPDV$+LJJLQV'LVWULFWsXGJH
                                                                                          $UJXHG0DUFK
                                                                                     'HFLGHGDQG)LOHG0D\
                                                                           %HIRUH.(,7+6,/(5DQG&/$<&LUFXLWsXGJHV
                                                                                           BBBBBBBBBBBBBBBBB
                                                                                                &2816(/
                                                                        $5*8('3DWULFN70F1DOO\+2//,16:$*67(5	
                                                                        <$5%528*+1DVKYLOOH7HQQHVVHHIRU$SSHOODQW9DQ6
                                                                        9LQFHQW $66,67$17 81,7(' 67$7(6 $77251(<
                                                                        1DVKYLOOH7HQQHVVHHIRU$SSHOOHH21%5,()3DWULFN7
                                                                        0F1DOO\ +2//,16 :$*67(5 	 <$5%528*+
                                                                        1DVKYLOOH 7HQQHVVHH IRU $SSHOODQW  9DQ 6 9LQFHQW
                                                                        $66,67$17 81,7(' 67$7(6 $77251(< 1DVKYLOOH
                                                                        7HQQHVVHHIRU$SSHOOHH

                                                                                                     
     'XQODSY8QLWHG6WDWHV                        1R       1R                      'XQODSY8QLWHG6WDWHV       

  &/$< s GHOLYHUHG WKH RSLQLRQ RI WKH FRXUW LQ ZKLFK       HDUOLHUSHWLWLRQVZLWKRXWSUHMXGLFH:HPXVWDVVXPHVLQFH
.(,7+sMRLQHG6,/(5sSGHOLYHUHGDVHSDUDWH           3HWLWLRQHUKDVQRWDUJXHGWRWKHFRQWUDU\WKDW3HWLWLRQHUZDV
FRQFXUULQJRSLQLRQ                                                    ZHOODZDUHRIWKHGDWHWKDWKLVGLUHFWDSSHDOZDVGHFLGHGDQG
                                                                       KLVREOLJDWLRQWRILOHDWLPHO\SHWLWLRQIRUWKHZULWRIKDEHDV
                     BBBBBBBBBBBBBBBBB                                 FRUSXV DV GHPRQVWUDWHG E\ WKH ILOLQJ RI KLV WZR HDUOLHU
                                                                       SHWLWLRQV$EVHQWDVDWLVIDFWRU\H[SODQDWLRQIRUKLVIDLOXUHWR
                         23,1,21                                       WLPHO\ILOHKLVKDEHDVSHWLWLRQ3HWLWLRQHUKDVIDLOHGWRH[HUFLVH
                     BBBBBBBBBBBBBBBBB                                 GXH GLOLJHQFH LQ SXUVXLQJ KLV FODLP 3HWLWLRQHUjV FDVH LV
                                                                       WKHUHIRUHQRWDSSURSULDWHIRUWKHGRFWULQHRIHTXLWDEOHWROOLQJ
  &/$< &LUFXLW sXGJH  3HWLWLRQHU +RUDFH /HH 'XQODS
DSSHDOV IURP WKH GLVWULFW FRXUWjV GLVPLVVDO RI KLV KDEHDV                             &21&/86,21
SHWLWLRQILOHGSXUVXDQWWR86&DVXQWLPHO\7KH
GLVWULFWFRXUWLVVXHGDFHUWLILFDWHRIDSSHDODELOLW\VSHFLILFDOO\        :KLOHWKHGRFWULQHRIHTXLWDEOHWROOLQJPD\EHLQYRNHGWR
RQ WKH TXHVWLRQ RI ZKHWKHU HTXLWDEOH WROOLQJ DSSOLHV WR WKH   WROOWKHRQH\HDUOLPLWDWLRQSHULRGDSSOLFDEOHWRKDEHDV
RQH\HDUSHULRGRIOLPLWDWLRQLQKDEHDVFDVHVDQGZKHWKHULQ         SHWLWLRQV3HWLWLRQHUKDVIDLOHGWRGHPRQVWUDWHWKDWKLVFDVH
DQ\ HYHQW HTXLWDEOH WROOLQJ ZRXOG EH DSSOLFDEOH LQ             SUHVHQWVFLUFXPVWDQFHVDSSURSULDWHIRUDSSO\LQJWKHGRFWULQH
3HWLWLRQHUjVFDVH)RUWKHUHDVRQVWKDWIROORZZHFRQFOXGH           $FFRUGLQJO\ ZH $)),50 WKH GLVWULFW FRXUWjV RUGHU
WKDW HTXLWDEOH WROOLQJ GRHV DSSO\ WR WKH RQH\HDU OLPLWDWLRQ   GLVPLVVLQJ3HWLWLRQHUjVKDEHDVSHWLWLRQ
SHULRG DSSOLFDEOH WR KDEHDV SHWLWLRQV EXW $)),50 WKH
GLVWULFWFRXUWjVRUGHUGLVPLVVLQJ3HWLWLRQHUjVKDEHDVSHWLWLRQ
LQDVPXFK DV 3HWLWLRQHU KDV IDLOHG WR GHPRQVWUDWH WKDW
HTXLWDEOHWROOLQJLVDSSURSULDWHLQKLVFDVH
                       %$&.*5281'
   3HWLWLRQHUZDVLQGLFWHGRQ2FWREHULQWKH8QLWHG
6WDWHV 'LVWULFW &RXUW IRU WKH 0LGGOH 'LVWULFW RI 7HQQHVVHH
7KHLQGLFWPHQWFKDUJHG3HWLWLRQHULQFRXQWVRQHDQGWZRZLWK
YLRODWLQJ  86&  J ZKLFK FULPLQDOL]HV WKH
SRVVHVVLRQRIDILUHDUPE\DFRQYLFWHGIHORQLQFRXQWWKUHHRI
WKH LQGLFWPHQW 3HWLWLRQHU ZDV FKDUJHG ZLWK SRVVHVVLQJ D
ILUHDUP ZLWK DQ REOLWHUDWHG VHULDO QXPEHU LQ YLRODWLRQ RI
86&ND%3HWLWLRQHUZDVWULHGDQG
FRQYLFWHG RI FRXQWV RQH DQG WZR RI WKH LQGLFWPHQW FRXQW
WKUHHZDVGLVPLVVHGRQPRWLRQRIWKHJRYHUQPHQW3HWLWLRQHU
ZDV WKHUHDIWHU VHQWHQFHG WR FRQFXUUHQW OLIH VHQWHQFHV RQ
FRXQWV RQH DQG WZR RI WKH LQGLFWPHQW DQG ILYH \HDUV RI
VXSHUYLVHGUHOHDVHRQHDFKFRXQWWRUXQFRQFXUUHQWO\
  2Q GLUHFW DSSHDO WKLV &RXUW DIILUPHG KLV FRQYLFWLRQ RQ
sDQXDU\WKH&RXUWjVPDQGDWHLVVXHGRQ)HEUXDU\
    'XQODSY8QLWHG6WDWHV                        1R       1R                       'XQODSY8QLWHG6WDWHV         

LVVXH RI HTXLWDEOH WROOLQJ  :H WKHUHIRUH VHH QR UHDVRQ WR   8QLWHG6WDWHVY'XQODS1R:/
GHSDUW IURP WKH WHVW WKDW ZH KDYH XQLIRUPO\ DSSOLHG WR WKH   WK&LUsDQSHUFXULDP
LVVXHRIHTXLWDEOHWROOLQJLQWKLV&LUFXLW
                                                                          3ULRUWRWKLV&RXUWjVGHFLVLRQLQ3HWLWLRQHUjVGLUHFWDSSHDO
   :KLOH ZH YDOXH FRQWLQXLW\ LQ VWDQGDUGV ZLWK RXU VLVWHU      3HWLWLRQHU RQ 0DUFK   ILOHG D SUR VH SHWLWLRQ IRU
FLUFXLWVZHWKLQNLWPRUHLPSRUWDQWWREHFRQVLVWHQWZLWKLQ           KDEHDVFRUSXVUHOLHISXUVXDQWWR86&2Q0DUFK
RXU RZQ &LUFXLW DV WR WKH VWDQGDUGV ZH DUH WR DSSO\  :H     WKH GLVWULFW FRXUW GLVPLVVHG 3HWLWLRQHUjV DFWLRQ
WKHUHIRUHKROGWKDWKHUHDIWHUHTXLWDEO\WROOLQJVKDOORQO\EH          ZLWKRXWSUHMXGLFHEHFDXVHKLVXQGHUO\LQJFRQYLFWLRQZDVQRW
DSSURSULDWHLQKDEHDVDQGDOORWKHUFDVHVDIWHUDFRXUWKDV          \HWILQDO$IWHUWKHGLVPLVVDORIWKHILUVWSHWLWLRQ3HWLWLRQHU
SURSHUO\ FRQVLGHUHG DQG EDODQFHG WKH IDFWRUV VHW RXW LQ        ILOHGDVHFRQGSURVHSHWLWLRQRQ0DUFK$JDLQWKH
$QGUHZVY2UUXQOHVVWKHUHLVFRQJUHVVLRQDODXWKRULW\WRWKH          GLVWULFWFRXUWGLVPLVVHGWKHDFWLRQZLWKRXWSUHMXGLFHEHFDXVH
FRQWUDU\                                                              KLVGLUHFWDSSHDOZDVVWLOOSHQGLQJEHIRUHWKLV&RXUW
  &RQVLGHULQJ WKH IDFWRUV VHW RXW LQ $QGUHZV Y 2UU ZH         2Q$SULO3HWLWLRQHUILOHGDWKLUGKDEHDVSHWLWLRQ
FRQFOXGH WKDW 3HWLWLRQHU KDV IDLOHG WR PHHW KLV EXUGHQ RI     2Q0D\WKHJRYHUQPHQWILOHGDPRWLRQWRGLVPLVVRU
SURRI  ,Q WKH LQVWDQW FDVH 3HWLWLRQHU ILOHG WZR SUHPDWXUH   LQWKHDOWHUQDWLYHIRUDQH[WHQVLRQRIWLPHWRUHVSRQG,QLWV
KDEHDVSHWLWLRQVERWKRIZKLFKWKHGLVWULFWFRXUWGLVPLVVHG           PRWLRQWRGLVPLVVWKHJRYHUQPHQWDUJXHGWKDW3HWLWLRQHUjV
ZLWKRXWSUHMXGLFHVWDWLQJWKDWWKH\ZHUHSUHPDWXUHEHFDXVH            KDEHDVSHWLWLRQZDVXQWLPHO\EHFDXVHLWZDVILOHGPRUHWKDQ
3HWLWLRQHUjVFRQYLFWLRQ ZDVQRWILQDOLHWKHFDVHKDGQRW         RQH \HDU DIWHU KLV FRQYLFWLRQ EHFDPH ILQDO ZKLFK ZDV
EHHQUHVROYHGRQGLUHFWDSSHDO7KHGLVWULFWFRXUWWKHUHIRUH          )HEUXDU\
SXW3HWLWLRQHURQQRWLFHWKDWDOWKRXJKKHQHHGHGWRILOHKLV
SHWLWLRQWLPHO\KHKDGWRZDLWXQWLOKLVGLUHFWDSSHDOKDGEHHQ         &RXQVHOZDVDSSRLQWHGWRUHSUHVHQW3HWLWLRQHURQ0D\
UHVROYHG                                                            7KHUHDIWHU3HWLWLRQHUjVFRXQVHOILOHGDUHVSRQVHWRWKH
                                                                       JRYHUQPHQWjVPRWLRQWRGLVPLVV
   3HWLWLRQHUjVFRQYLFWLRQEHFDPHILQDORQsDQXDU\
WKH&RXUWjVPDQGDWHZDVLVVXHGRQ)HEUXDU\<HW               7KHGLVWULFWFRXUWUHIHUUHGWKHPDWWHUWRDPDJLVWUDWHMXGJH
3HWLWLRQHUGLGQRWILOHKLVWKLUGSHWLWLRQIRUKDEHDVFRUSXVXQWLO     WKH+RQRUDEOHsRH%%URZQZKRRQ6HSWHPEHU
$SULO    3HWLWLRQHU RIIHUV QR H[SODQDWLRQ IRU WKLV    LVVXHG D 5HSRUW DQG 5HFRPPHQGDWLRQ LQ ZKLFK KH
GHOD\ GHVSLWH WKH GLVWULFW FRXUWjV UHTXHVW WKDW KH GR VR    UHFRPPHQGHGWKDWWKHKDEHDVSHWLWLRQEHGLVPLVVHGEHFDXVH
3HWLWLRQHU VLPSO\ UHOLHV RQ WKH IDFW WKDW KH KDG ILOHG WZR   LW ZDV WLPHEDUUHG E\ WKH RQH\HDU OLPLWDWLRQ SHULRG
HDUOLHUSUHPDWXUHSHWLWLRQV:HGRQRWFRQVLGHU3HWLWLRQHUjV          SUHVFULEHGE\86&7KHGLVWULFWFRXUWRYHUUXOHG
UHDVRQFRPSHOOLQJ                                                     3HWLWLRQHUjVREMHFWLRQVWRWKH5HSRUWDQG5HFRPPHQGDWLRQ
                                                                       DQG DGRSWHG LW LQ LWV HQWLUHW\  2Q 2FWREHU   WKH
  $OWKRXJK WKH IDFW WKDW 3HWLWLRQHU ILOHG WKH WZR HDUOLHU      GLVWULFW FRXUW GLVPLVVHG 3HWLWLRQHUjV KDEHDV SHWLWLRQ ZLWK
SHWLWLRQVVKRZVKLVFRQFHUQDQGLQWHUHVWLQKLVDELOLW\WRDYDLO       SUHMXGLFH
KLPVHOI RI WKH UHPHGLHV RI WKH ZULW RI KDEHDV FRUSXV
3HWLWLRQHUjVLQDELOLW\WRH[SODLQZK\KHGLGQRWILOHKLVWKLUG           3HWLWLRQHUILOHGDWLPHO\QRWLFHRIDSSHDO7KHGLVWULFWFRXUW
SHWLWLRQ XQWLO RYHU WZR PRQWKV RXWVLGH RI WKH VWDWXWH RI      JUDQWHGDFHUWLILFDWHRIDSSHDODELOLW\RQ1RYHPEHU
OLPLWDWLRQVPRUHWKDQIRXUWHHQPRQWKVDIWHUKLVFRQYLFWLRQ            WRDGGUHVVWKHLVVXHRIZKHWKHUHTXLWDEOHWROOLQJLVDSSOLFDEOH
ZDVILQDOVXJJHVWVDODFNRIGXHGLOLJHQFH+HUHWKHGLVWULFW       WRWKHRQH\HDUOLPLWDWLRQSHULRGXQGHUDQGZKHWKHU
FRXUW DGYLVHG 3HWLWLRQHU H[DFWO\ ZK\ LW GLVPLVVHG KLV WZR      HTXLWDEOHWROOLQJZRXOGEHDSSURSULDWHLQWKHLQVWDQWFDVH
       'XQODSY8QLWHG6WDWHV                             1R        1R                       'XQODSY8QLWHG6WDWHV        

                            ',6&866,21                                         WKHUH LV D FROODWHUDO DWWDFN RI D FRQYLFWLRQ LV HTXDOO\
                                                                               XQDYDLOLQJLQDVPXFKDVWKH$QGUHZVY2UUWHVWGRHVQRWWUHDW
                                    ,                                         SUHMXGLFHDVDQLQGHSHQGHQWIDFWRU3UHMXGLFHPD\RQO\EH
                                                                               FRQVLGHUHGLIRWKHUIDFWRUVRIWKHWHVWDUHPHWDQGWKHUHIRUH
  :HUHYLHZWKHGLVWULFWFRXUWjVGHFLVLRQWRJUDQWRUGHQ\D                   FDQRQO\ZHLJKLQWKHJRYHUQPHQWjVIDYRU6HH$QGUHZV
ZULWRIKDEHDVFRUSXVGHQRYRKRZHYHUWKHGLVWULFWFRXUWjV                   )GDW)XUWKHUPRUHWKLV&RXUWjVIUDPHZRUNRULJLQDOO\
IDFWXDOILQGLQJVZLOOQRWEHGLVWXUEHGXQOHVVWKH\DUHFOHDUO\                 ODLG RXW LQ $QGUHZV Y 2UU IRU DSSO\LQJ HTXLWDEOH WROOLQJ
HUURQHRXV  *RQ]DOHV Y (OR  )G   WK &LU             SURYLGHV JXLGDQFH WR WKH SDUWLHV DV WR ZKDW LV UHTXLUHG RI
4XHVWLRQVRIVWDWXWRU\FRQVWUXFWLRQDUHDOVRUHYLHZHG                  WKHP7KH$QGUHZVY2UUWHVWDOVRJLYHVWKHGLVWULFWFRXUWV
GHQRYRsRUGDQY0LFK&RQIHUHQFHRI7HDPVWHUV:HOIDUH                      JXLGDQFHDQGFLUFXPVFULEHGODWLWXGHLQMXGJLQJHDFKFDVH
)XQG)GWK&LU
                                                                                  $UHYLHZRIWKHFDVHVWKDWKDYHDGRSWHGWKHmH[WUDRUGLQDU\
   7KHTXHVWLRQQRZEHIRUHWKLV&RXUWLVZKHWKHUWKHRQH\HDU                  FLUFXPVWDQFHVlRUmUDUHDQGH[FHSWLRQDOFLUFXPVWDQFHVlWHVW
OLPLWDWLRQSHULRGDSSOLFDEOHWRDQGVLPLODUO\                  GRHVQRWUHYHDODFRQFHUQRUDQHHGWRDGRSWWKLVVWDQGDUGWKDW
KDEHDVSHWLWLRQVLVDVWDWXWHRIOLPLWDWLRQVVXEMHFWWRHTXLWDEOH              LVSDUWLFXODUWRKDEHDVFDVHV7KHFRXUWVWKDWKDYHDSSOLHGWKH
WROOLQJRUDMXULVGLFWLRQDOSUHUHTXLVLWHZKLFKEDUVUHYLHZE\                  mUDUH DQG H[FHSWLRQDO FLUFXPVWDQFHVl RU mH[WUDRUGLQDU\
WKH IHGHUDO FRXUWV LI LW LV QRW VDWLVILHG  $OWKRXJK ZH KDYH        FLUFXPVWDQFHVl WHVW DFWXDOO\ DSSO\ WKH WHVW WR DOO FDVHV
HQFRXQWHUHGWKLVTXHVWLRQEHIRUHZHKDYH\HWWRDQVZHU LW                    LQYROYLQJHTXLWDEOHWROOLQJQRWVLPSO\KDEHDVFDVHV,QIDFW
GHILQLWLYHO\6HHHJ'RUDQY%LUNHWW1R                  WKH&DOGHURQ&RXUWLQDSSO\LQJWKHWHVWWRWKHKDEHDVFDVH
:/WK&LU0DU6OXGHUY8QLWHG6WDWHV                   EHIRUHLWFLWHG$OYDUH]0DFKDLQY8QLWHG6WDWHV)G
1R:/WK&LU'HF:H                      WK&LUDFLYLOFDVHZKHUHLQWKH3ODLQWLII
QRZMRLQRXUVLVWHUFLUFXLWVWKDWKDYHWRGDWHDGGUHVVHGWKLV                  DVVHUWHGFODLPVXQGHUWKH)HGHUDO7RUW&ODLPV$FWDJDLQVWWKH
LVVXHDQGKROGWKDWWKHRQH\HDUOLPLWDWLRQSHULRGLVDVWDWXWH                JRYHUQPHQW DQG FHUWDLQ JRYHUQPHQW RIILFLDOV IRU WKH
RIOLPLWDWLRQ%HFDXVHWKHUHLVDUHEXWWDEOHSUHVXPSWLRQWKDW                SURSRVLWLRQWKDWHTXLWDEOHWROOLQJVKRXOGRQO\EHDSSOLHGLQ
                                                                               H[WUDRUGLQDU\FLUFXPVWDQFHV)GDW6LPLODUO\
                                                                               RWKHU FDVHV DSSO\LQJ WKH mH[WUDRUGLQDU\ FLUFXPVWDQFHVl RU
    
      (YHU\ FLUFXLW WKDW KDV GHFLGHG WKLV LVVXH KDV KHOG WKDW WKH RQH\HDU
                                                                               mUDUH DQG H[FHSWLRQDO FLUFXPVWDQFHVl WHVW KDYH DSSDUHQWO\
OLPLWDWLRQ SHULRG XQGHU   RU   LV D VWDWXWH RI OLPLWDWLRQV        IROORZHG WKH GLFWDWHV RI ,UZLQ Y 'HSDUWPHQW RI 9HWHUDQV
VXEMHFW WR WKH GRFWULQH RI HTXLWDEOH WROOLQJ UDWKHU WKDQ D MXULVGLFWLRQDO     $IIDLUV  86   D FLYLO FDVH LQYROYLQJ
UHTXLUHPHQW $00 +DUULV Y +XWFKLQVRQ  )G   WK &LU          HPSOR\PHQWGLVFULPLQDWLRQDQGKDYHPDGHQRPHQWLRQRID
 KROGLQJ RQH\HDU OLPLWDWLRQ SHULRG XQGHU   VXEMHFW WR              VSHFLDOQHHGWRDGRSWWKLVVWDQGDUGVLPSO\EHFDXVHWKHVWDWXWH
HTXLWDEOH WROOLQJ 6PLWK Y 0F*LQQLV  )G   G &LU 
VDPH 7DOLDQL Y &KUDQV  )G   WK &LU  VDPH
                                                                               RIOLPLWDWLRQVSHUWDLQVWRDKDEHDVFDVH6HHHJ*LEVRQ
6DQGYLN Y 8QLWHG 6WDWHV  )G   WK &LU 
                                                                               )GDW6DQGYLN)GDW0LOOHU)G
KROGLQJ WKDW RQH\HDU OLPLWDWLRQ SHULRG XQGHU   LV VXEMHFW WR            DW2WKHUFDVHVKDYHVLPSO\IROORZHG&DOGHURQWKHFDVHV
HTXLWDEOH WROOLQJ 0RRUH Y 8QLWHG 6WDWHV  )G   WK &LU      FLWHGWKHUHLQRUHPSOR\PHQWGLVFULPLQDWLRQFDVHV6HHHJ
 VDPH 'DYLV Y sRKQVRQ  )G   WK &LU            +DUULV)GDWTXRWLQJ$OYDUH]0DFKDLQ)G
KROGLQJ RQH\HDU OLPLWDWLRQ SHULRG XQGHU   VXEMHFW WR HTXLWDEOH
WROOLQJ 0LOOHU Y 1s 6WDWH 'HSjW RI &RUU  )G   G &LU
                                                                               DW  'DYLV Y sRKQVRQ  )G   WK &LU
 VDPH 0LOOHU Y 0DUU  )G   WK &LU 
                                                                                FLWLQJ HPSOR\PHQW GLVFULPLQDWLRQ FDVHV  1RQH RI
&DOGHURQ Y 8 6 'LVW &W IRU WKH &HQW 'LVW RI &DO  )G         WKHVHFRXUWVKRZHYHUDGRSWHGDVWDQGDUGGLIIHUHQWIURPWKH
WK &LU  VDPH RYHUUXOHG RQ RWKHU JURXQGV E\  )G          VWDQGDUGWKH\ZRXOGDSSO\LQDQ\RWKHUFDVHDGGUHVVLQJWKH
WK &LU  HQ EDQF 2QO\ RQH FRXUW KDV UHDFKHG WKH RSSRVLWH
    'XQODSY8QLWHG6WDWHV                          1R       1R                          'XQODSY8QLWHG6WDWHV           

 WK &LU   ,Q $QGUHZV Y 2UU ZH VSHFLILFDOO\       HTXLWDEOHWROOLQJDSSOLHVWRVWDWXWHVRIOLPLWDWLRQDQGWKHUHLV
LGHQWLILHG ILYH IDFWRUV WR FRQVLGHU ZKHQ GHWHUPLQLQJ WKH          QR LQGLFDWLRQ WKDW &RQJUHVV GLG QRW LQWHQG IRU HTXLWDEOH
DSSURSULDWHQHVVRIHTXLWDEO\WROOLQJDVWDWXWHRIOLPLWDWLRQV           WROOLQJWRDSSO\WRWKHOLPLWDWLRQSHULRGLQKDEHDVFDVHVWKH
WKHSHWLWLRQHUjVODFNRIQRWLFHRIWKHILOLQJUHTXLUHPHQW       RQH\HDUVWDWXWHRIOLPLWDWLRQVLQLVVXEMHFWWRHTXLWDEOH
WKHSHWLWLRQHUjVODFNRIFRQVWUXFWLYHNQRZOHGJHRIWKHILOLQJ            WROOLQJ6HHHJ,UZLQY'HSjWRI9HWHUDQV$IIDLUV86
UHTXLUHPHQW  GLOLJHQFH LQ SXUVXLQJ RQHjV ULJKWV           
DEVHQFH RI SUHMXGLFH WR WKH UHVSRQGHQW DQG  WKH
SHWLWLRQHUjVUHDVRQDEOHQHVVLQUHPDLQLQJLJQRUDQWRIWKHOHJDO             )HGHUDOSULVRQHUVPD\ILOHDSHWLWLRQIRUDZULWRIKDEHDV
UHTXLUHPHQW IRU ILOLQJ KLV FODLP  *UDKDP+XPSKUH\V Y            FRUSXVSXUVXDQWWR86&KRZHYHUWKHKDEHDV
0HPSKLV%URRNV0XVHXPRI$UW,QF)GWK               SHWLWLRQLVVXEMHFWWRDRQH\HDUSHULRGRIOLPLWDWLRQ8QGHU
&LU                                                            
   5HVSRQGHQW XUJHV WKLV &RXUW WR IROORZ WKH mUDUH DQG             $>RQH@\HDUSHULRGRIOLPLWDWLRQVKDOODSSO\WRDPRWLRQ
H[FHSWLRQDOFLUFXPVWDQFHVlRUmH[WUDRUGLQDU\FLUFXPVWDQFHVl                XQGHUWKLVVHFWLRQ7KHOLPLWDWLRQSHULRGVKDOOUXQIURP
WHVW5HVSRQGHQWDUJXHVWKDWLIWKLV&RXUWZHUHWRDSSO\WKH              WKHODWHVWRIo
ILYHSURQJWHVWLQ$QGUHZVY2UUFRXUWVZRXOGEHUHTXLUHG                 WKH GDWH RQ ZKLFK WKH MXGJPHQW RI FRQYLFWLRQ
WRHQJDJHLQWKHFXPEHUVRPHOLWLJDWLRQRIZKHWKHUWKHIDFWRUV              EHFRPHVILQDO
KDYHEHHQVDWLVILHG5HVSRQGHQWIXUWKHUDUJXHVWKDWXQOLNH               WKHGDWHRQZKLFKWKHLPSHGLPHQWWRPDNLQJDPRWLRQ
GHIHQGDQWV LQ HPSOR\PHQW GLVFULPLQDWLRQ FDVHV ZKHUH ZH               FUHDWHG E\ JRYHUQPHQW DFWLRQ LQ YLRODWLRQ RI WKH
KDYH DSSOLHG WKH $QGUHZV Y 2UU WHVW WKH JRYHUQPHQW LV           &RQVWLWXWLRQRUODZVRIWKH8QLWHG6WDWHVLVUHPRYHGLI
DOZD\VSUHMXGLFHGZKHQWKHILQDOLW\RIDFULPLQDOFRQYLFWLRQ               WKHPRYDQWZDVSUHYHQWHGIURPPDNLQJDPRWLRQE\VXFK
LVDWWDFNHG                                                               JRYHUQPHQWDODFWLRQ
                                                                            WKH GDWH RQ ZKLFK WKH ULJKW DVVHUWHG ZDV LQLWLDOO\
   :KLOH ZH VKDUH LQ 5HVSRQGHQWjV FRQFHUQ WKDW HTXLWDEOH            UHFRJQL]HGE\WKH6XSUHPH&RXUWLIWKDWULJKWKDVEHHQ
WROOLQJEHDSSOLHGVSDULQJO\ZHGRQRWEHOLHYHWKDWWKHWHVWVHW          QHZO\ UHFRJQL]HG E\ WKH 6XSUHPH &RXUW DQG PDGH
RXWLQ$QGUHZVY2UUXQGHUPLQHVWKHFRXUWVjDELOLW\WRVR                 UHWURDFWLYHO\DSSOLFDEOHWRFDVHVRQFROODWHUDOUHYLHZRU
DSSO\ LW VSDULQJO\  :H GR QRW ILQG SHUVXDVLYH WKH                WKHGDWHRQZKLFKWKHIDFWVVXSSRUWLQJWKHFODLPRU
JRYHUQPHQWjVDUJXPHQWWKDWWKHGHWHUPLQDWLRQRIZKHWKHUWKH                FODLPVSUHVHQWHGFRXOGKDYHEHHQGLVFRYHUHGWKURXJKWKH
IDFWRUVRXWOLQHGLQ$QGUHZVY2UUDUHSUHVHQWZLOOUHTXLUH                H[HUFLVHRIGXHGLOLJHQFH
XQWROG DQG FXPEHUVRPH OLWLJDWLRQ  7KHUH LV QR UHDVRQ WR
EHOLHYHWKDWWKHWHVWVHWRXWLQ$QGUHZVY2UUZLOOVHUYHWKH           86&
SXUSRVHRIWKHRQH\HDUOLPLWDWLRQSHULRGDQ\OHVVDSWO\WKDQ
WKHWHVWDSSOLHGE\RWKHUFRXUWVLQDVPXFKDVWKHFLUFXPVWDQFHV              7RGHWHUPLQHZKHWKHUWKHOLPLWDWLRQSHULRGLQLVD
XQGHUZKLFKWKLV&RXUWKDVIRXQGHTXLWDEOHWROOLQJDSSURSULDWH           VWDWXWHRIOLPLWDWLRQVRUDMXULVGLFWLRQDOUHTXLUHPHQWZHPXVW
DUH LQ IDFW IHZ LQ QXPEHU  6HH HJ 7UXLWW Y &RXQW\ RI   FRQVLGHUWKHODQJXDJHRIWKHVWDWXWHWKHOHJLVODWLYHKLVWRU\DQG
:D\QH  )G   WK &LU  :LOVRQ Y             WKHVWDWXWRU\SXUSRVH=LSHVY7UDQV:RUOG$LUOLQHV,QF
*UXPPDQ2KLR&RUS)GWK&LU)R[
Y(DWRQ&RUS)GWK&LU/HDNHY8QLY
RI&LQFLQQDWL)GWK&LU5HVSRQGHQWjV               FRQFOXVLRQ 6HH *LOHV Y 8QLWHG 6WDWHV  ) 6XSS G   ('
DUJXPHQW WKDW WKH JRYHUQPHQW LV DOZD\V SUHMXGLFHG ZKHQ            0LFK  DIIjG RQ RWKHU JURXQGV VXE QRP 8QLWHG 6WDWHV Y *LOHV 1R
                                                                           :/  WK &LU 1RY  
     'XQODSY8QLWHG6WDWHV                          1R       1R                            'XQODSY8QLWHG6WDWHV            

860LOOHUY1s6WDWH'HSjWRI&RUU           )GWK&LU
)GG&LU$VPRVWRWKHUFLUFXLWVKDYH
FRQFOXGHG WKHVH FRQVLGHUDWLRQV PDNH FOHDU WKDW &RQJUHVV              %RWK3HWLWLRQHUDQG5HVSRQGHQWXUJHWKLVFRXUWWRDSSO\D
LQWHQGHG WKH OLPLWDWLRQ SHULRG WR RSHUDWH DV D VWDWXWH RI       GLIIHUHQWDOWKRXJKQRWQHFHVVDULO\GLYHUJHQWVWDQGDUGZKHQ
OLPLWDWLRQUDWKHUWKDQDMXULVGLFWLRQDOUHTXLUHPHQW                     GHWHUPLQLQJ   LI HTXLWDEOH WROOLQJ LV DSSURSULDWH LQ KDEHDV
                                                                         FDVHV,QWKHORZHUFRXUWWKH0DJLVWUDWHsXGJHDSSOLHGWKH
   ,Q=LSHVWKH6XSUHPH&RXUWKHOGWKDWWKHUHTXLUHPHQWRI              mUDUH DQG H[FHSWLRQDO FLUFXPVWDQFHVl RU mH[WUDRUGLQDU\
ILOLQJDWLPHO\FKDUJHRIGLVFULPLQDWLRQZLWKWKH((2&ZDV               FLUFXPVWDQFHVlWHVWWKDWKDVEHHQXVHGE\PRVWRWKHUFLUFXLWV
VLPLODUWRDVWDWXWHRIOLPLWDWLRQVDQGZDVQRWDMXULVGLFWLRQDO         DGGUHVVLQJWKLVLVVXH6HHHJ*LEVRQY.OLQJHU)G
SUHUHTXLVLWH86DW,QVRKROGLQJWKH&RXUWQRWHG            WK &LU  m$('3$jV RQH\HDU VWDWXWH RI
WKDW WKH SURYLVLRQ JUDQWLQJ WKH GLVWULFW FRXUW MXULVGLFWLRQ WR   OLPLWDWLRQVLVVXEMHFWWRHTXLWDEOHWROOLQJEXWRQO\µLQUDUHDQG
HQWHUWDLQVXFKFDVHVFRQWDLQHGQRUHIHUHQFHWRWKHWLPHOLQHVV            H[FHSWLRQDOFLUFXPVWDQFHVjlFLWDWLRQRPLWWHG+DUULV
RI ILOLQJ DQ ((2& FKDUJH  ,G DW   ,QVWHDG WKH       )G DW  6PLWK Y 0F*LQQLV  )G   G &LU
WLPHOLQHVVRIWKHILOLQJUHTXLUHPHQWZDVDGGUHVVHGLQDQRWKHU            VDPH0LOOHU)GDWHTXLWDEOHWROOLQJRQO\
SURYLVLRQZKLFKGLGQRWVSHDNLQMXULVGLFWLRQDOWHUPV,GDW          DSSOLHVLQmH[WUDRUGLQDU\FLUFXPVWDQFHVl&DOGHURQ)G
                                                                  DW  HTXLWDEOH WROOLQJ ZRXOG RQO\ EH JUDQWHG LI
                                                                         mH[WUDRUGLQDU\ FLUFXPVWDQFHVl EH\RQG SULVRQHUjV FRQWURO
   6LPLODUO\WKHODQJXDJHRIVXSSRUWVWKHFRQFOXVLRQ             PDNHLWLPSRVVLEOHWRILOHDSHWLWLRQRQWLPH8QGHUWKLVWHVW
WKDWWKHRQH\HDUOLPLWDWLRQSHULRGLVDVWDWXWHRIOLPLWDWLRQV         WKH VWDWXWH RI OLPLWDWLRQV PD\ RQO\ EH WROOHG ZKHUH WKH
7KHVWDWXWHLWVHOISURYLGHVWKDWWKHWLPHSHULRGLVDmSHULRGRI         FLUFXPVWDQFHVDUHERWKEH\RQGWKHSHWLWLRQHUjVFRQWURODQG
OLPLWDWLRQlWKHVWDWXWHGRHVQRWXVHWKHWHUPMXULVGLFWLRQRU           XQDYRLGDEOHHYHQZLWKGXHGLOLJHQFH6DQGYLN)GDW
RWKHUZLVHVSHDNLQMXULVGLFWLRQDOWHUPV86&              
DFFRUG6DQGYLNY8QLWHG6WDWHV)GWK
&LUFI+DUULVY+XWFKLQVRQ)GWK               3HWLWLRQHUXUJHVXVWRDGRSWWKHWHVWWKLV&RXUWKDVJHQHUDOO\
&LU0RUHRYHUWKHVWDWXWRU\VFKHPHJLYHVWKHGLVWULFW           IROORZHG LQ GHWHUPLQLQJ ZKHWKHU HTXLWDEOH WROOLQJ LV
FRXUW MXULVGLFWLRQ WR KHDU KDEHDV FDVHV LQ D SRUWLRQ RI WKH    DSSURSULDWH7KLVWHVWZDVVHWRXWLQ$QGUHZVY2UU)G
VWDWXWHGLYRUFHGIURPWKHOLPLWDWLRQVSURYLVLRQ6HH86&
6DQGYLN)GDW$VZLWKWKHODQJXDJHRI
WKHVWDWXWHLQ=LSHVWKHODQJXDJHRIWKHOLPLWDWLRQSHULRGLQ
WKH LQVWDQW FDVH VXSSRUWV WKH FRQFOXVLRQ WKDW WKH SHULRG         WKH GRFWULQH RI HTXLWDEOH WROOLQJ WR WKH SHWLWLRQHUjV KDEHDV FDVH 7KH FRXUW
                                                                         VWDWHG WKDW LQ PDWWHUV ZKHUH WKH IDFWV ZHUH XQGLVSXWHG LW ZRXOG UHYLHZ WKH
RSHUDWHVDVDVWDWXWHRIOLPLWDWLRQVDQGQRWDMXULVGLFWLRQDOEDU       GLVWULFW FRXUWjV GHFLVLRQ RQ HTXLWDEOH WROOLQJ GH QRYR 6HH LG
                                                                              ,Q WKLV &LUFXLW ZH KROG WKDW ZKHUH WKH IDFWV DUH XQGLVSXWHG RU WKH
  ,Q DGGLWLRQ WKH OHJLVODWLYH KLVWRU\ EHKLQG WKH RQH\HDU        GLVWULFW FRXUW UXOHV DV D PDWWHU RI ODZ WKDW HTXLWDEOH WROOLQJ LV XQDYDLODEOH
SHULRG RI OLPLWDWLRQ LQGLFDWHV WKDW &RQJUHVV LQWHQGHG WKH         ZH DSSO\ WKH GH QRYR VWDQGDUG RI UHYLHZ WR D GLVWULFW FRXUWjV UHIXVDO WR
SHULRG WR RSHUDWH DV D VWDWXWH RI OLPLWDWLRQV UDWKHU WKDQ D    DSSO\ WKH GRFWULQH RI HTXLWDEOH WROOLQJ LQ DOO RWKHU FDVHV ZH DSSO\ WKH

MXULVGLFWLRQDOEDU)RULQVWDQFHWKH&RQIHUHQFH5HSRUWGRHV            DEXVH RI GLVFUHWLRQ VWDQGDUG

QRW LQGLFDWH WKDW WKH RQH\HDU SHULRG RI OLPLWDWLRQ LV D            
MXULVGLFWLRQDOUHTXLUHPHQW7KHUHSRUWVLPSO\SURYLGHVWKDW                   8QSXEOLVKHG FDVHV DGGUHVVLQJ WKH HTXLWDEOH WROOLQJ LVVXH LQ KDEHDV
                                                                         FDVHV KDYH DSSOLHG ERWK VWDQGDUGV &I HJ 6OXGHU Y 8QLWHG 6WDWHV 1R
WKHVHFWLRQmVHWVDRQH\HDUOLPLWDWLRQRQDQDSSOLFDWLRQIRUD            :/  WK &LU 'HF   DSSO\LQJ $QGUHZV
KDEHDVZULWlLQRUGHUWRmFXUEWKHDEXVHRIWKHVWDWXWRU\ZULW           Y 2UU VWDQGDUG ZLWK &UDGGRFN Y 0RKU 1R   :/ 
                                                                         WK &LU 0D\   DSSO\LQJ H[WUDRUGLQDU\ FLUFXPVWDQFHV VWDQGDUG
       'XQODSY8QLWHG6WDWHV                             1R         1R                       'XQODSY8QLWHG6WDWHV           

RQH\HDUOLPLWDWLRQSHULRGLVDVWDWXWHRIOLPLWDWLRQVXEMHFWWR                 RI KDEHDV FRUSXV DQG WR DGGUHVV WKH DFXWH SUREOHPV RI
WKHGRFWULQHRIHTXLWDEOHWROOLQJ                                               XQQHFHVVDU\GHOD\DQGDEXVHLQFDSLWDOFDVHVl+5&RQI
                                                                                 5HS1RWK&RQJDWUHSULQWHGLQ
                                     ,,                                         86&&$12QWKHRWKHUKDQGDVWKHFDVHV
                                                                                 DGGUHVVLQJ WKLV LVVXH KDYH FKURQLFOHG WKH VWDWHPHQWV RI
  $OWKRXJKWKHRQH\HDUOLPLWDWLRQSHULRGLQLVVXEMHFW                   VHYHUDO RI WKH PHPEHUV RI &RQJUHVV PDNH FOHDU WKDW WKH
WRWKHGRFWULQHRIHTXLWDEOHWROOLQJZHQHYHUWKHOHVVILQGWKDW                  OLPLWDWLRQ SHULRG ZDV LQWHQGHG WR IXQFWLRQ DV D VWDWXWH RI
XQGHUWKHFLUFXPVWDQFHVRIWKHFDVHQRZEHIRUHWKH&RXUWWKH                    OLPLWDWLRQVDQGGLGQRWEHDURQWKHGLVWULFWFRXUWjVMXULVGLFWLRQ
GLVWULFW FRXUW SURSHUO\ GHFOLQHG WR LQYRNH WKH GRFWULQH LQ               WRHQWHUWDLQDKDEHDVSHWLWLRQ
3HWLWLRQHUjVFDVH
                                                                                   0DQ\PHPEHUVRI&RQJUHVVLQFOXGLQJ$('3$
VDXWKRUV
  :HUHYLHZGHQRYRWKHGLVWULFWFRXUWjVGHFLVLRQQRWWRDSSO\                     LQ WKH 6HQDWH DQG LWV VSRQVRUV LQ WKH +RXVHGLG
WKHGRFWULQHRIHTXLWDEOHWROOLQJLQDVPXFKDVWKHIDFWVLQWKLV                    KRZHYHU GHVFULEH VHFWLRQ  DV D VWDWXWH RI
FDVH DUH XQGLVSXWHG DQG WKH GLVWULFW FRXUW GHWHUPLQHG DV                   OLPLWDWLRQV6HHHJ&RQJ5HF6GDLO\HG
DPDWWHURIODZWKDWWKHUHZHUHQRJURXQGVWKDWZRXOGMXVWLI\                       $SU   VWDWHPHQW RI 6HQ 6SHFWHU $('3$
HTXLWDEOHWROOLQJLQ3HWLWLRQHUjVFDVH6HH0LOHVY3UXQW\                    GHVLJQHGWRLPSRVHDVWDWXWHRIOLPLWDWLRQVRQWKHILOLQJ
                                                                                   RIKDEHDVFRUSXVSHWLWLRQV&RQJ5HF6GDLO\
     
                                                                                   HG sXQH   VWDWHPHQW RI 6HQ +DWFK XQGHU
      7KLV &RXUW KDV DSSOLHG YDU\LQJ VWDQGDUGV RI UHYLHZ WR D GLVWULFW             FXUUHQWODZWKHUHLVQRVWDWXWHRIOLPLWDWLRQVRQILOLQJ
FRXUWjV GHFLVLRQ WR DSSO\ RU QRW DSSO\ WKH GRFWULQH RI HTXLWDEOH WROOLQJ          KDEHDVSHWLWLRQV&RQJ5HF+GDLO\HG$SU
&I HJ *UDKDP+XPSKUH\V Y 0HPSKLV %URRNV 0XVHXP RI $UW ,QF
 )G   WK &LU  DSSO\LQJ DEXVH RI GLVFUHWLRQ VWDQGDUG
                                                                                   VWDWHPHQWRI5HS+\GH1RZZHKDYHD
RI UHYLHZ WR GLVWULFW FRXUWjV UHIXVDO WR DSSO\ GRFWULQH RI HTXLWDEOH WROOLQJ
                                                                                   \HDUVWDWXWHRIOLPLWDWLRQVLQKDEHDV&RQJ5HF
WR QLQHW\GD\ OLPLWDWLRQV SHULRG LQ 7LWOH 9,, FDVH DQG 7UXLWW Y &RXQW\ RI       6GDLO\HGsXQHVWDWHPHQWRI6HQ&RKHQ
:D\QH  )G   WK &LU  VDPH ZLWK 5RVH Y 'ROH             , VXSSRUW D VWDWXWH RI OLPLWDWLRQV IRU ILOLQJ KDEHDV
)G   WK &LU  SHU FXULDP DFNQRZOHGJLQJ WKDW                   SHWLWLRQVLGDW6VWDWHPHQWRI6HQ%LGHQ,
DSSOLFDWLRQ RI WKH GRFWULQH RI HTXLWDEOH WROOLQJ LV D TXHVWLRQ RI ODZ DQG
                                                                                   DJUHH ZLWK P\ 5HSXEOLFDQ FROOHDJXHV IURP 8WDK DQG
WKXV VXEMHFW WR GH QRYR UHYLHZ 0RUHRYHU WKLV &RXUW KDV \HW WR DGGUHVV
WKH SURSHU VWDQGDUG ZKHQ UHYLHZLQJ WKH DSSOLFDWLRQ RI WKH GRFWULQH RI
                                                                                   3HQQV\OYDQLD WKDW ZH RXJKW WR KDYH D VWULFW VWDWXWH RI
HTXLWDEOH WROOLQJ LQ WKH FRQWH[W RI D KDEHDV SHWLWLRQ                             OLPLWDWLRQVDQGDVWULFWOLPLWRQVXFFHVVLYHSHWLWLRQV
     ,Q 0ROR Y sRKQVRQ  )G   WK &LU  WKH FRXUW
DSSOLHG DQ DEXVH RI GLVFUHWLRQ VWDQGDUG WR GHWHUPLQH ZKHWKHU WKH GLVWULFW        &DOGHURQY86'LVW&WIRUWKH&HQW'LVWRI&DO
FRXUW HUUHG LQ UHIXVLQJ WR DSSO\ WKH GRFWULQH RI HTXLWDEOH WROOLQJ LQ D          )GWK&LURYHUUXOHGRQRWKHUJURXQGV
KDEHDV FDVH 7KH FRXUW QRWHG KRZHYHU WKDW ZKHUH WKH GLVWULFW FRXUW
                                                                                 E\)GWK&LUHQEDQFDFFRUG0LOOHU
GHWHUPLQHV DV D PDWWHU RI ODZ WKDW WKH SHWLWLRQHU LV QRW HQWLWOHG WR HTXLWDEOH
WROOLQJ LW ZRXOG UHYLHZ WKH GHFLVLRQ GH QRYR 6HH LG 7KH FRXUW
                                                                                 )GDWUHFRJQL]LQJWKHVDPHRUVLPLODUVWDWHPHQWVPDGH
FRQFOXGHG WKDW LQ WKDW FDVH WKH GLVWULFW FRXUW H[HUFLVHG LWV GLVFUHWLRQ LQ       E\PHPEHUVRI&RQJUHVV)ROORZLQJWKHWHDFKLQJVRI=LSHV
GHWHUPLQLQJ WKDW WKH SHWLWLRQHUjV FLUFXPVWDQFHV ZHUH QRW UDUH DQG                ZKHUHLQGHWHUPLQLQJWKDWWLPHSHULRGIRUILOLQJDFODLPZDV
H[FHSWLRQDO DQG WKXV DSSOLHG WKH DEXVH RI GLVFUHWLRQ VWDQGDUG 6HH LG VHH      OLNHDVWDWXWHRIOLPLWDWLRQVWKH&RXUWIRXQGLWVLJQLILFDQWWKDW
DOVR +HOWRQ Y 6HFj\ IRU WKH 'HSjW RI &RUU  )G   WK
                                                                                 mWKHWLPHSHULRGIRUILOLQJDFODLP>ZDVODEHOHG@DVDµSHULRG
&LU  DSSO\LQJ DEXVH RI GLVFUHWLRQ VWDQGDUG ZKHUH TXHVWLRQ ZDV
ZKHWKHU GLVWULFW FRXUW SURSHUO\ DSSOLHG WKH VWDQGDUG IRU HTXLWDEOH WROOLQJ
                                                                                 RIOLPLWDWLRQVjlZHFRQFOXGHWKDWWKHOHJLVODWLYHKLVWRU\LQ
UDWKHU WKDQ ZKHWKHU HTXLWDEOH WROOLQJ ZDV DYDLODEOH                            WKLV FDVH PDNHV FOHDU &RQJUHVVj LQWHQW WKDW WKH OLPLWDWLRQ
     ,Q 0LOHV Y 3UXQW\  )G   WK &LU  WKH FRXUW
DSSOLHG GH QRYR UHYLHZ WR WKH GLVWULFW FRXUWjV GHFLVLRQ UHIXVLQJ WR DSSO\
      'XQODSY8QLWHG6WDWHV                         1R      1R                       'XQODSY8QLWHG6WDWHV            

SHULRG RSHUDWH DV D VWDWXWH RI OLPLWDWLRQV UDWKHU WKDQ D         DSULVRQHUjVFRQWUROPDNHLWLPSRVVLEOHWRILOHDSHWLWLRQ
MXULVGLFWLRQDOUHTXLUHPHQW86DW                             RQWLPH:HKDYHQRGRXEWWKDWGLVWULFWMXGJHVZLOOWDNH
                                                                          VHULRXVO\ &RQJUHVVjV GHVLUH WR DFFHOHUDWH WKH IHGHUDO
   )LQDOO\ WKH SXUSRVH XQGHUO\LQJ WKH RQH\HDU OLPLWDWLRQ          KDEHDVSURFHVVDQGZLOORQO\DXWKRUL]HH[WHQVLRQVZKHQ
SHULRGWRFXUEXQGXHGHOD\VDQGDEXVHVRIWKHZULWRIKDEHDV             WKLVKLJKKXUGOHLVVXUPRXQWHG
FRUSXV LV VHUYHG E\ D VWDWXWH RI OLPLWDWLRQV  %HFDXVH WKH
VWDWXWH RI OLPLWDWLRQV FDQ RQO\ EH WROOHG LQ FHUWDLQ OLPLWHG    )G DW  DFFRUG 0LOOHU  )G DW 
FLUFXPVWDQFHV HTXLWDEOH WROOLQJ ZRXOG QRW XQGHUPLQH WKH          m&RQVWUXLQJGDVDVWDWXWHRIOLPLWDWLRQFOHDUO\
VWDWXWHjVSXUSRVHWRFXUEXQGXHGHOD\VDQGDEXVHV                      VHUYHV>WKHSXUSRVHRIFXUELQJDEXVHVRIWKHKDEHDVSURFHVV@
                                                                        ,WSURYLGHVDRQH\HDUOLPLWDWLRQSHULRGWKDWZLOOFRQVLGHUDEO\
  ,Q *LOHV Y 8QLWHG 6WDWHV  ) 6XSS G   ('    VSHHGXSWKHKDEHDVSURFHVVZKLOHUHWDLQLQJMXGLFLDOGLVFUHWLRQ
0LFKKROGLQJWKDWWKHRQH\HDUSHULRGRIOLPLWDWLRQV            WRHTXLWDEO\WROOLQH[WUDRUGLQDU\FLUFXPVWDQFHVl
ZDV D MXULVGLFWLRQDO UHTXLUHPHQW QRW VXEMHFW WR HTXLWDEOH
WROOLQJWKHFRXUWUHDVRQHGWKDWLWZDVUHTXLUHGWRUHDGWKHRQH          6LPLODUO\+DUULVUHMHFWHGWKHDUJXPHQWDGYDQFHGLQ*LOHV
\HDUOLPLWDWLRQSHULRGDVDMXULVGLFWLRQDOUHTXLUHPHQWWRJLYH          WKDWWKHLQFOXVLRQRIVXESDUWVRQHWKURXJKIRXULQGLFDWHVWKDW
HIIHFWWRWKHVWDWXWHDQGWKHSXUSRVHXQGHUO\LQJLW7KHFRXUW         &RQJUHVVGLGQRWLQWHQGIRUWKHUHWREHHTXLWDEOHWROOLQJRIWKH
IXUWKHUUHDVRQHGWKDW                                                   SHULRG RI OLPLWDWLRQ  7KLV DUJXPHQW WKH FRXUW FRQFOXGHG
                                                                        mUHDGV WRR PXFK LQWR DQ\ QHJDWLYH LQIHUHQFH WKDW PD\
    WKH ODQJXDJH RI >@   LQGLFDWHV WKDW &RQJUHVV           UHDVRQDEO\EHGUDZQIURPWKHH[FHSWLRQVl+DUULV)G
    LQWHQGHGWROLPLWDIHGHUDOFRXUWjVGLVFUHWLRQLQWROOLQJWKH       DW
    RQH\HDUOLPLW6HFWLRQH[SUHVVO\OLVWVIRXUGLIIHUHQW
    HYHQWV WKH ODWHVW RI ZKLFK GHWHUPLQHV ZKHQ WKH                7KH H[FHSWLRQV    VLPSO\ PDNH WKH ZULW DYDLODEOH WR
    OLPLWDWLRQVSHULRGEHJLQVWRUXQ7KHGHWDLORI               DGGUHVVODWHUDULVLQJFLUFXPVWDQFHV:LWKRXWWKHVH
    DQGLWVGLUHFWDQGH[SUHVVGHWHUPLQDWLRQRIZKHQWKHWLPH             H[FHSWLRQVDSHWLWLRQHUFRXOGLQDSSURSULDWHO\EHGHQLHG
    OLPLW EHJLQV LQGLFDWHV WKDW &RQJUHVV GLG QRW LQWHQG WR        WKH ZULW DOWRJHWKHU mULVNLQJ LQMXU\ WR DQ LPSRUWDQW
    SHUPLWFRXUWVWRUHDGRWKHUXQPHQWLRQHGDQGRSHQHQGHG                LQWHUHVW LQ KXPDQ OLEHUW\l  7KH LQFOXVLRQ RI WKHVH
    HTXLWDEOHH[FHSWLRQVLQWRWKHVWDWXWH                                VWDWXWRU\SURYLVLRQVGRHVQRWJLYHULVHWRWKHLQIHUHQFH
                                                                          WKDW WKH DSSOLFDWLRQ RI WKH OLPLWDWLRQ SHULRG PXVW
,GDW                                                             RWKHUZLVHEHDEVROXWHDVPLJKWEHWKHFDVHLIWKHSHULRG
                                                                          ZHUHMXULVGLFWLRQDO
  7KHUDWLRQDOHLQ*LOHVKRZHYHUKDVEHHQH[SUHVVO\UHMHFWHG
E\ WKH FLUFXLW FRXUWV DGGUHVVLQJ WKLV LVVXH  7KH &DOGHURQ     ,GFLWDWLRQRPLWWHG,QIDFWWKHFRXUWLQ0LOOHUVWDWHGWKDW
&RXUW WKH ILUVW WR GHFLGH WKH LVVXH UHMHFWHG WKH DUJXPHQW    WKHLQFOXVLRQRIWKHVHH[FHSWLRQVPDNHVLWPRUHDSSDUHQWWKDW
DGYDQFHGLQ*LOHVVWDWLQJ                                             mµWKHGUDIWHUVHQYLVLRQHG>WKHRQH\HDUOLPLWDWLRQSHULRG@WR
                                                                        IXQFWLRQ DV D W\SLFDO VWDWXWH RI OLPLWDWLRQV UDWKHU WKDQ D
    >D@RQH\HDUVWDWXWHRIOLPLWDWLRQZLOOVHUYHWKLVJRDO       MXULVGLFWLRQDOOLPLWDWLRQjl)GDWFLWDWLRQRPLWWHG
    TXLWHZHOOQRWDVZHOODVDVWULFWMXULVGLFWLRQDOEDUWREH
    VXUHEXW>
V@WLPHOLPLWZLOOGRXEWOHVVVSHHGXSWKH            %HFDXVHZHFRQFOXGHWKDWWKHUDWLRQDOHRIRXUVLVWHUFLUFXLWV
    KDEHDVSURFHVVFRQVLGHUDEO\(TXLWDEOHWROOLQJZLOOQRW            LV PRUH VRXQG WKDQ WKDW RI WKH FRXUW LQ*LOHV ZH OLNHZLVH
    EH DYDLODEOH LQ PRVW FDVHV DV H[WHQVLRQV RI WLPH ZLOO     UHMHFWWKHDUJXPHQWVDGYDQFHGWKHUHLQDQGFRQFOXGHWKDWWKH
    RQO\EHJUDQWHGLImH[WUDRUGLQDU\FLUFXPVWDQFHVlEH\RQG