Blue Diamond Coal Co v. Trustee of UMWA

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21  %OXH'LDPRQG&RDOY 1RV 3XUVXDQW WR 6L[WK &LUFXLW 5XOH  7UXVWHHVRI80:$HWDO (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS GHWHUPLQDWLRQWKDWLQWKLVFDVHWKHGLVWULFWFRXUWDEXVHGLWV GLVFUHWLRQLQJUDQWLQJVXFKUHOLHI 81,7('67$7(6&28572)$33($/6 ,9 )257+(6,;7+&,5&8,7 $FFRUGLQJO\ WKH GLVWULFW FRXUWjV GHFLVLRQ WR JUDQW SRVW BBBBBBBBBBBBBBBBB MXGJPHQWUHOLHILV5(9(56('7KHFDVHLV5(0$1'('WR WKHGLVWULFWFRXUWIRUWKHUHHQWU\RIILQDOMXGJPHQWLQIDYRURI WKHGHIHQGDQWDSSHOODQWV %/8( ',$021' &2$/ &2 ; 3ODLQWLII$SSHOOHH    1RV Y  !  75867((6 2) 7+( 80:$  &20%,1(' %(1(),7 )81'  'HIHQGDQW$SSHOODQW       6(&5(7$5< 2) +($/7+ $1'  +80$1 6(59,&(6  'HIHQGDQW$SSHOODQW        1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI7HQQHVVHHDW.QR[YLOOH 1Rn7KRPDV*+XOO'LVWULFWsXGJH $UJXHG6HSWHPEHU 'HFLGHGDQG)LOHG0D\   %OXH'LDPRQG&RDOY 1RV 1RV %OXH'LDPRQG&RDOY  7UXVWHHVRI80:$HWDO 7UXVWHHVRI80:$HWDO %HIRUH%2**6DQG68+5+(,15,&+&LUFXLWsXGJHV LVUHODWHGWRDQRWKHUHTXLWDEOHLQWHUHVWoWKDWSDUWLHVUHO\RQ $/'5,&+'LVWULFWsXGJH ILQDO MXGJPHQWV RQFH WKH GLVSXWHV KDYH EHHQ IXOO\ DQG YLJRURXVO\DGMXGLFDWHG6HH&KLFRW&RXQW\'UDLQDJH'LVWY BBBBBBBBBBBBBBBBB %D[WHU 6WDWH %DQN  86     QRWLQJ WKDW m4XHVWLRQVRIULJKWVFODLPHGWRKDYHEHFRPHYHVWHGRIVWDWXV &2816(/ RI SULRU GHWHUPLQDWLRQV GHHPHG WR KDYH ILQDOLW\ DQG DFWHG XSRQ DFFRUGLQJO\l DUH LPSRUWDQW FRQVLGHUDWLRQV ZHLJKHG $5*8('  3HWHU %XVFHPL 025*$1 /(:,6 DJDLQVWmDQDOOLQFOXVLYHVWDWHPHQWRIDSULQFLSOHRIDEVROXWH %2&.,86 :DVKLQJWRQ '& sHIIUH\ &ODLU 81,7(' UHWURDFWLYHLQYDOLGLW\l 5LWWHU)GDW QRWLQJ 67$7(6'(3$570(172)s867,&(&,9,/',9,6,21 WKHUH LV D mJUHDWHU LQWHUHVW LQ ILQDOLW\l RQFH D MXGJPHQW LV $33(//$7( 67$)) :DVKLQJWRQ '& IRU $SSHOODQWV H[HFXWHGJLYHQWKDWSDUWLHVUHO\RQWKRVHRXWFRPHV  sRKQ 5 /HDWKHUV %8&+$1$1 ,1*(562// 352)(66,21$/ &25325$7,21 3LWWVEXUJK ,Q WKLV FDVH WKH LQWHUHVW LQ ILQDOLW\ LV XQGLVSXWHG  7KH 3HQQV\OYDQLDIRU$SSHOOHH21%5,()3HWHU%XVFHPL GLVWULFWFRXUWjVGHFLVLRQLQ,QUH%OXH'LDPRQG&RDO&R 025*$1/(:,6 %2&.,86:DVKLQJWRQ'&sHIIUH\ %5GLVSRVHGRIDOORI%OXH'LDPRQGjVFODLPVLQDIXOO\ &ODLU 81,7(' 67$7(6 '(3$570(17 2) s867,&( H[HFXWHGILQDOMXGJPHQW%OXH'LDPRQGjVDSSHDOZDVDOVR &,9,/',9,6,21$33(//$7(67$)):DVKLQJWRQ'& GLVSRVHGRIE\WKLV&RXUWDQGWKH6XSUHPH&RXUWEHIRUHWKH IRU $SSHOODQWV  sRKQ 5 /HDWKHUV %8&+$1$1 FKDQJH LQ GHFLVLRQDO ODZ ZDV DQQRXQFHG LQ (DVWHUQ ,1*(562// 352)(66,21$/ &25325$7,21 (QWHUSULVHV6HH,QUH%OXH'LDPRQG&RDO&R)G 3LWWVEXUJK3HQQV\OYDQLD'DQ'5KHD$51(77'5$3(5 FHUWGHQLHG860RUHRYHUWKHUHOLDQFHLQWHUHVW +$*22'.QR[YLOOH7HQQHVVHHIRU$SSHOOHH RI WKH &RPELQHG )XQG RQ WKH SUHYLRXV ILQDO MXGJPHQW LV VXEVWDQWLDO  )RXU \HDUV KDG HODSVHG EHWZHHQ WKH GLVWULFW BBBBBBBBBBBBBBBBB FRXUWjVGHFODUDWRU\MXGJPHQWDQGLWVVXEVHTXHQWJUDQWRISRVW MXGJPHQW UHOLHI  'XULQJ WKDW WLPH SD\PHQWV PDGH WR WKH 23,1,21 &RPELQHG)XQGSXUVXDQWWRWKHSUHYLRXVGHFLVLRQZHUHXVHG BBBBBBBBBBBBBBBBB WR FRYHU WKH PHGLFDO KHDOWK EHQHILWV RI QXPHURXV UHWLUHHV $/'5,&+ 'LVWULFW sXGJH  'HIHQGDQW$SSHOODQWV WKH *LYHQWKHSXEOLFSROLF\LQIDYRURIWKHILQDOLW\RIMXGJPHQW 6HFUHWDU\RI+HDOWKDQG+XPDQ6HUYLFHVDQGWKH7UXVWHHVRI DQG WKH OHQJWK RI WLPH EHWZHHQ ILQDO MXGJPHQW DQG 5XOH WKH8QLWHG0LQH:RUNHUVRI$PHULFD&RPELQHG%HQHILW)XQG  E  UHOLHIHTXLW\FOHDUO\IDYRUVDGKHULQJWRWKHGLVWULFW DSSHDODGLVWULFWFRXUWjVRUGHUYDFDWLQJDSULRUMXGJPHQWXQGHU FRXUWjVILQDOMXGJPHQW )HG 5 &LY 3  E    )RU WKH IROORZLQJ UHDVRQV ZH $VDILQDOQRWHWKLV&RXUWUHFRJQL]HVWKDWWKHGHFLVLRQWR 5(9(56(WKHRUGHURIWKHGLVWULFWFRXUWDQG5(0$1'WKH JUDQW 5XOH  E   UHOLHI LV D FDVHE\FDVH LQTXLU\ WKDW FDVHZLWKLQVWUXFWLRQVIRUWKHUHHQWU\ RI ILQDOMXGJPHQWLQ UHTXLUHV WKH WULDO FRXUW WR LQWHQVLYHO\ EDODQFH QXPHURXV IDYRURIWKHGHIHQGDQWDSSHOODQWV IDFWRUV LQFOXGLQJ WKH FRPSHWLQJ SROLFLHV RI WKH ILQDOLW\ RI MXGJPHQWV DQG WKH LQFHVVDQW FRPPDQG RI WKH FRXUW V FRQVFLHQFH WKDW MXVWLFH EH GRQH LQ OLJKW RI DOO WKH IDFWV *ULIILQ Y 6ZLP7HFK &RUS )G   WK &LU 7KH +RQRUDEOH $QQ $OGULFK 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH   FLWDWLRQV RPLWWHG   2XU GHFLVLRQ WRGD\ LV PHUHO\ D 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ  %OXH'LDPRQG&RDOY 1RV 1RV %OXH'LDPRQG&RDOY  7UXVWHHVRI80:$HWDO 7UXVWHHVRI80:$HWDO 5XOH E  UHOLHIZKHUHSDUW\IDLOHGWRDSSHDOEXWVRPH , RWKHU SDUW\jV DSSHDO RQ VDPH OHJDO JURXQGV ZDV JUDQWHG  ,QGHHGRQHRWKHUGLVWULFWFRXUWFRQWHPSODWLQJ5XOH E  7KLV DSSHDO DULVHV RXW RI OLWLJDWLRQ FRQFHUQLQJ WKH UHOLHI IRU D VXSHU UHDFKEDFN FRPSDQ\ DIIHFWHG E\ D SUH FRQVWLWXWLRQDOLW\RIWKH&RDO,QGXVWU\5HWLUHH+HDOWK%HQHILW (DVWHUQ (QWHUSULVHV GHFLVLRQ KDV QRWHG WKH GLIILFXOWLHV RI $FWRI WKHm&RDO$FWl 86&††7KH EDVLQJ VXFK UHOLHI RQ WKH DPRXQW RI PRQH\ SDLG  6HH IDFWXDOFLUFXPVWDQFHVVXUURXQGLQJWKHDGRSWLRQRIWKH&RDO 7HPSOHWRQ&RDO&RY$SIHO1R7+&7+VOLSRS $FW DQG LWV DSSOLFDELOLW\ WR WKH SODLQWLIIDSSHOOHH %OXH DW  6' ,QG 1RY    QRWLQJ WKDW LI 5XOH 'LDPRQG &RDO &RPSDQ\ m%OXH 'LDPRQGl  KDYH EHHQ  E  UHOLHIZHUHEDVHGVROHO\RQDPRXQWRIPRQH\SDLG H[SODLQHG LQ GHWDLO E\ WKH 6XSUHPH &RXUW LQ (DVWHUQ FRXUWV ZRXOG KDYH WR HVWDEOLVK DQ DSSURSULDWH WKUHVKROG (QWHUSULVHVY$SIHO86  DQGE\WKLV DPRXQW IRU VXFK UHOLHI DQG ZKHWKHU VXFK UHOLHI VKRXOG EH &LUFXLWLQ,QUH%OXH'LDPRQG&RDO&R)G FRPSDUHGDJDLQVWDSDUW\jVQHWZRUWK  WK&LU  0RUHRYHURWKHULQWHUHVWVQRWFRQWHPSODWHGE\WKHGLVWULFW 6LQFHWKHVWKHFRDOLQGXVWU\KDVEHHQQHJRWLDWLQJZLWK FRXUWIDYRUDGKHULQJWRWKHILQDOMXGJPHQWRIWKLVFDVH&RXUWV WKH 8QLWHG 0LQH :RUNHUV RI $PHULFD WKH m80:$l KDYHQRWHGWKDW5XOH E  UHOLHILVHVSHFLDOO\DSSURSULDWH FRQFHUQLQJ HPSOR\HH KHDOWK EHQHILWV  7KURXJK D VHULHV RI LQFDVHVZKHUHWKHLQWHUHVWLQILQDOLW\LVVRPHKRZDEURJDWHG FROOHFWLYHEDUJDLQLQJDJUHHPHQWVEHJLQQLQJZLWKWKH.UXJ 6HH$GDPVY0HUULOO/\QFK)G WK /HZLV$JUHHPHQWRIVHYHUDOIXQGVZHUHHVWDEOLVKHGWR &LU   KROGLQJ 5XOH  E   UHOLHI DSSURSULDWH ZKHUH SURYLGH KHDOWK EHQHILWV IRU FRDO PLQHU UHWLUHHV DQG WKHLU GHFLVLRQDO ODZ FRQFHUQLQJ GLVPLVVHG DUELWUDWLRQ FODLPV IDPLOLHV%HQHILWVZHUHIXQGHGRQDmSD\DV\RXJRlEDVLVE\ FKDQJHG ZKLOH RWKHU FODLPV ZHUH VWLOO SHQGLQJ EHIRUH WKH DVVHVVLQJ D UR\DOW\ RQ FRDO SURGXFWLRQ  'XH WR QXPHURXV GLVWULFW FRXUW  5LWWHU  )G DW  KROGLQJ 5XOH FLUFXPVWDQFHV o LQFOXGLQJ DQ LQFUHDVH LQ EHQHILWV RSWRXW  E  UHOLHIDSSURSULDWHZKHUHmHUURQHRXVILQDOMXGJPHQW SURYLVLRQVLQWKHFROOHFWLYHEDUJDLQLQJDJUHHPHQWVWKHUDSLG RIWKLVFRXUWKDGQRWEHHQH[HFXWHGl 0DWDUHVH)GDW HVFDODWLRQ RI KHDOWK FDUH WKH UHWLUHPHQW RI D JHQHUDWLRQ RI  KROGLQJ KDEHDV SURFHHGLQJV KDYH QR mFRQYHQWLRQDO PLQHUVDQGDGHFOLQHLQFRDOSURGXFWLRQoWKHVHYDULRXVKHDOWK QRWLRQVRIILQDOLW\l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m&RPELQHG)XQGl ,QVWHDGRIWKHmSD\DV H[UHO7KRPDVY*UDPOH\)6XSS 1',OO \RX JRl IXQGLQJ VWUXFWXUH WKH &RDO $FW DVVLJQHG DQ   QRWLQJ5XOH E  UHOLHIJUDQWHGZKHUHGLVSRVLWLYH LQGLYLGXDOPLQHUDQGKLVHOLJLEOHGHSHQGDQWVWRDSDUWLFXODU FKDQJHLQGHFLVLRQDO ODZRFFXUUHGZKLOHFDVHZDVSHQGLQJ FRDO FRPSDQ\ EDVHG RQ FULWHULD VXFK DV WKH OHQJWK RI WLPHO\DSSHDOLQWHUHVWLQHQKDQFLQJHIILFLHQF\DQGSURPRWLQJ HPSOR\PHQWZLWKWKDWFRPSDQ\DQGZKHWKHUWKDWFRPSDQ\ WKHVPRRWKIORZRIOLWLJDWLRQMXVWLI\UHOLHIZKHUHDSSHDOFRXUW SDUWLFLSDWHG LQ SUHYLRXV FROOHFWLYH EDUJDLQLQJ DJUHHPHQWV LVKLJKO\OLNHO\WRUHYHUVHGHFLVLRQ 7KLVLQWHUHVWLQILQDOLW\ ([LVWLQJ FRDO FRPSDQLHV ZHUH DOVR UHTXLUHG WR SD\ DQ  %OXH'LDPRQG&RDOY 1RV 1RV %OXH'LDPRQG&RDOY  7UXVWHHVRI80:$HWDO 7UXVWHHVRI80:$HWDO DGGLWLRQDOSUHPLXPWRFRYHUUHWLUHHVZKRZHUHmRUSKDQHGl UHIXQGRISUHPLXPVIURPWKH&RPELQHG)XQGGXHWRDSUH ZKHQWKHHPSOR\HUVUHVSRQVLEOHIRUWKHLUKHDOWKEHQHILWVZHQW (DVWHUQ (QWHUSULVHV ILQDO MXGJPHQW RU VHWWOHPHQW  6HH RXWRIEXVLQHVV &RUUHFWHGs$YRO VHDOHG DW7KHWKLUGIDFWRUWKDW WKH&RDO$FWGLUHFWVWKH&RPELQHG)XQGWRmUHSD\lSUHPLXPV 7RSUHYHQWWKHFRQVROLGDWLRQRIOLDELOLW\XSRQDUHODWLYHO\ PDGH LQ HUURU LV DOVR LQDSSOLFDEOH  8QGHU  86& VPDOOQXPEHURIFRDOSURGXFHUVWKH&RDO$FWDOVRFRQWDLQHG †  I  FRPSDQLHV PD\ FKDOOHQJH DQ DVVLJQPHQW RI WKH ZKDWKDVEHFRPHNQRZQDVDmVXSHUUHDFKEDFNlSURYLVLRQ KHDOWKEHQHILWOLDELOLW\RIDSDUWLFXODUFRDOPLQHUUHWLUHHE\ 86& †  D    6HH /LQGVH\ &RDO 0LQLQJ &R Y UHTXHVWLQJ WKH &RPPLVVLRQHU RI 6RFLDO 6HFXULW\ WR IXUQLVK 6KDODOD)6XSSQ :'3HQQ ,QUH mGHWDLOHGLQIRUPDWLRQDVWRWKHZRUNKLVWRU\RIWKHEHQHILFLDU\ %OXH 'LDPRQG &RDO &R  %5   (' 7HQQ DQG WKH EDVLV RI WKH DVVLJQPHQWl   86& †  I    8QGHUWKLVSURYLVLRQFRPSDQLHVZHUHDVVLJQHGWKH &OHDUO\WKLVVHFWLRQRIWKH&RDO$FWGHDOVZLWKDUHYLHZRIWKH KHDOWKEHQHILWOLDELOLWLHVRIDFRDOPLQHUUHWLUHHEDVHGXSRQKLV SDUWLFXODUIDFWVFRQFHUQLQJDSDUWLFXODUUHWLUHHDQGGRHVQRW OHQJWK RI HPSOR\PHQW ZLWK WKDW FRPSDQ\ XQGHU SUH FRQWHPSODWHWKHJHQHUDODSSOLFDELOLW\RUFRQVWLWXWLRQDOLW\RI FROOHFWLYH EDUJDLQLQJ DJUHHPHQWV  6HH  86& WKHVXSHUUHDFKEDFNSURYLVLRQ †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s$YRO VHDOHG DW FROOHFWLYHEDUJDLQLQJDJUHHPHQWQRUKDVLWHPSOR\HGXQLRQ ODERU VLQFH   1RQHWKHOHVV XQGHU †  D   %OXH +RZHYHUWKHDPRXQWRIPRQH\%OXH'LDPRQGKDVSDLGWR 'LDPRQG ZDV UHVSRQVLEOH IRU WKH KHDOWK EHQHILWV RI WKH&RPELQHG)XQGLQWKLVFDVHWKRXJKVXEVWDQWLDOLVQRWE\ DSSUR[LPDWHO\OLYLQJEHQHILFLDULHVGHVSLWHKDYLQJRSWHG LWVHOI VXIILFLHQW UHDVRQ IRU D GLVWULFW FRXUW WR JUDQW 5XOH RXWRIWKHFROOHFWLYHEDUJDLQLQJDJUHHPHQWVDVVLJQLQJKHDOWK  E  UHOLHI7KLV&RXUWFRQVLVWHQWZLWKRWKHUFRXUWVKDV EHQHILWOLDELOLW\DOPRVWWKUHHGHFDGHVDJR SUHYLRXVO\KHOGWKDWmSD\PHQWRIPRQH\GDPDJHVSXUVXDQWWR WKHFRQVHQWMXGJPHQWVLPSO\GRHVQRWULVHWRWKHOHYHORIDQ *LYHQ WKLV UHWURDFWLYH DOORFDWLRQ RI OLDELOLW\ WKH H[FHVVLYH EXUGHQ RU KDUGVKLS ZDUUDQWLQJ >@ H[WUDRUGLQDU\ FRQVWLWXWLRQDOLW\RIWKHVXSHUUHDFKEDFNSURYLVLRQRIWKH&RDO UHOLHISURYLGHGE\5XOH E  l:DVWH&RQYHUVLRQ,QFY $FWZDVKLJKO\FRQWHVWHG%OXH'LDPRQGZDVRQHRIWKHILUVW .HOOH\1R)G:/DW  FRUSRUDWLRQV WR WHVW WKH $FW DUJXLQJ WKDW VXFK UHWURDFWLYH WK&LU$SULO VHHDOVR,QUH)LQH3DSHU$QWLWUXVW OLDELOLW\ZDVDQXQFRQVWLWXWLRQDOWDNLQJDQGDYLRODWLRQRIGXH /LWLJDWLRQ)G G&LU  KROGLQJmILQDO SURFHVV,Q,QUH%OXH'LDPRQG&RDO&R%5 (' PRQH\MXGJPHQWlQRWDQH[WUDRUGLQDU\FLUFXPVWDQFHPHULWLQJ  %OXH'LDPRQG&RDOY 1RV 1RV %OXH'LDPRQG&RDOY  7UXVWHHVRI80:$HWDO 7UXVWHHVRI80:$HWDO 1RULVWKLV&RXUWSHUVXDGHGWKDWUHIXVDOWRH[WHQGWKHmVDPH 7HQQ WKHGLVWULFWFRXUWXSKHOGWKHFRQVWLWXWLRQDOLW\RI WUDQVDFWLRQlOLQH RI FDVHVWRWKLVVLWXDWLRQLVWDQWDPRXQWWR WKH&RDO$FWHQWHULQJDILQDOMXGJPHQWDJDLQVW%OXH'LDPRQG SULYLOHJLQJmWRUWODZSULQFLSOHVlRYHUWKHmHTXDODSSOLFDWLRQ DQGLQIDYRURIWKHJRYHUQPHQWDQGWKH&RPELQHG)XQG%OXH RIFRQVWLWXWLRQDOULJKWVl%OXH'LDPRQGjV)LQDO%UDW 'LDPRQG DSSHDOHG DQG WKLV &LUFXLW FRQVLVWHQW ZLWK WKH 7KLV&RXUWUHFRJQL]HVWKDWJHQHUDOO\VSHDNLQJRXUV\VWHPRI UXOLQJVRIRWKHUFLUFXLWFRXUWVWRDGGUHVVWKHLVVXHXSKHOGWKH ODZ GRHV QRW SULYLOHJH FHUWDLQ ULJKWV FRQVWLWXWLRQDO RU QRW FRQVWLWXWLRQDOLW\RIWKH$FWDQGDIILUPHGWKHMXGJPHQWRIWKH RYHURWKHUV6HH%XW]Y(FRQRPRX86  GLVWULFWFRXUW6HH,QUH%OXH'LDPRQG&RDO&R)G 5HKQTXLVW s FRQFXUULQJ LQ SDUW DQG GLVVHQWLQJ LQ SDUW VHHDOVR'DYRQ,QFY6KDODOD)G WK&LU  m7KDW WKH )UDPHUV WKRXJKW VRPH ULJKWV VXIILFLHQWO\ (DVWHUQ(QWHUSULVHVY&KDWHU)G VW&LU  VXVFHSWLEOH RI OHJLVODWLYH GHURJDWLRQ WKDW WKH\ VKRXOG EH %OXH'LDPRQGWKHQDSSHDOHGWRWKH6XSUHPH&RXUWZKLFK HQVKULQHG LQ WKH &RQVWLWXWLRQ GRHV QRW QHFHVVDULO\ LQGLFDWH GHQLHGFHUWLRUDULRQsDQXDU\6HH%OXH'LDPRQG&RDO WKDWWKH)UDPHUVOLNHZLVHLQWHQGHGWRHVWDEOLVKDQLPPXWDEOH &RY&KDWHU86   KLHUDUFK\ RI ULJKWV LQ WHUPV RI WKHLU LPSRUWDQFH WR LQGLYLGXDOVl 6XFKFULWLFLVPKRZHYHULVLQDSSOLFDEOHLQWKLV +RZHYHURQsXQHWKH6XSUHPH&RXUWGHFLGHG FDVH2XUUHIXVDOWRH[WHQGWKHmVDPHWUDQVDFWLRQlUHDVRQLQJ (DVWHUQ(QWHUSULVHVY$SIHO86  ,QWKDW LVVLPSO\DUHFRJQLWLRQWKDWOLDELOLW\IRUPHUO\DVVLJQHGXQGHU FDVH(DVWHUQ(QWHUSULVHVDFRPSDQ\DVVLJQHGOLDELOLW\XQGHU WKH VXSHU UHDFKEDFN SURYLVLRQ RI WKH &RDO $FW LV QRW D † D  FKDOOHQJHGWKDWSURYLVLRQRIWKH&RDO$FWDVD FRPPRQ WUDQVDFWLRQ VLPLODU WR D FDU DFFLGHQW RU D YLRODWLRQ RI WKH 7DNLQJV &ODXVH DQG GXH SURFHVV  7KH VKDUHKROGHUV DJUHHPHQW  6HH *RQGHFN  86 DW  6XSUHPH&RXUWKHOGWKDW† D  ZDVXQFRQVWLWXWLRQDODV 1RUPDQ3GDW DSSOLHGEXWZDVGHHSO\GLYLGHGLQLWVUHDVRQLQJ:ULWLQJIRU DIRXUMXVWLFHSOXUDOLW\sXVWLFH2j&RQQRUIRXQGWKDWWKHVXSHU ,Q DGGLWLRQ WR UHO\LQJ RQ WKH mVDPH WUDQVDFWLRQl OLQH RI UHDFKEDFN SURYLVLRQ RI WKH &RDO $FW DPRXQWHG WR DQ FDVHVWKHGLVWULFWFRXUWDOVRFLWHVWKUHHIDFWRUVZKLFKPLOLWDWH XQFRQVWLWXWLRQDOWDNLQJXQGHUWKH)LIWK$PHQGPHQW6HHLG LQIDYRURIJUDQWLQJ5XOH E  UHOLHI DWsXVWLFH.HQQHG\FRQFXUULQJLQSDUWDQGGLVVHQWLQJ LQ SDUW UHIXVHG WR H[WHQG D 7DNLQJV &ODXVH DQDO\VLV WR  WKHDPRXQWRIPRQH\LQYROYHG RYHU)RXUWHHQ0LOOLRQ HFRQRPLFOHJLVODWLRQWKDWGLGQRWLPSLQJHDVSHFLILFSURSHUW\ IURPDUHRUJDQL]HG&KDSWHUGHEWRU   WKHXQIDLUQHVV ULJKWDQGLQVWHDGIRXQGWKDW† D  ZDVDUDUHH[DPSOH RIWKHIDFWWKDW%OXH 'LDPRQGPD\EHWKHRQO\VXSHU RIFRQJUHVVLRQDOOHJLVODWLRQUXQQLQJDIRXORIGXHSURFHVV6HH UHDFKEDFNFRDOFRPSDQ\WRKDYHSDLGDQ\WKLQJLQWRWKH LG DW   sXVWLFH %UH\HU ZULWLQJ IRU D IRXUMXVWLFH &RPELQHG)XQGDQGILQDOO\  WKHIDFWWKDWWKH&RDO$FW GLVVHQWDJUHHGZLWKsXVWLFH.HQQHG\WKDWWKH7DNLQJV&ODXVH LWVHOIGLUHFWVWKH&RPELQHG)XQGWRmUHSD\lSUHPLXPV GRHVQRWH[WHQGWRHFRQRPLFOHJLVODWLRQVXFKDVWKH&RDO$FW SDLGSXUVXDQWWRDVVLJQPHQWVPDGHLQHUURU EXWIRXQGWKDW†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jVDUJXPHQWVoWKDWWKHFRPPRQ PDGHSD\PHQWVLQWRWKH&RPELQHG)XQGSXUVXDQWWRWKHVXSHU KLVWRU\ RI QHJRWLDWLRQ EHWZHHQ WKH FRDO LQGXVWU\ DQG WKH UHDFKEDFN SURYLVLRQ  +RZHYHU WKH JRYHUQPHQW DQG WKH 80:$OHDGLQJWRWKHSDVVDJHRIWKH&RDO$FWFRQVWLWXWHVD &RPELQHG)XQGUHIXVHGWRUHIXQGWKRVHFRPSDQLHVWKDWKDG mFRPPRQ WUDQVDFWLRQl o FRQWDLQ QR OLPLWLQJ SULQFLSOH SDLG SUHPLXPV SXUVXDQW WR D SUH(DVWHUQ (QWHUSULVHV ILQDO DQDORJRXV WR D VLQJXODU HYHQW VXFK DV D FDU DFFLGHQW RU D MXGJPHQWRUVHWWOHPHQWoWKLUWHHQFRPSDQLHVLQDOOLQFOXGLQJ VLQJXODU FRQWUDFW VXFK DV D VKDUHKROGHUV DJUHHPHQW  6HH %OXH'LDPRQG *RQGHFN86DW FDUDFFLGHQW 1RUPDQ3GDW  VKDUHKROGHUVDJUHHPHQW  %\PLG%OXH'LDPRQGKDGSDLGLQWR WKH &RPELQHG )XQG SXUVXDQW WR WKH GLVWULFW FRXUWjV  7KH GLVWULFW FRXUW LWVHOI UHFRJQL]HG WKH GLIILFXOWLHV RI RUGHU$VDUHVXOWRIWKHGHFLVLRQLQ(DVWHUQ(QWHUSULVHV DSSO\LQJWKHmVDPHWUDQVDFWLRQlOLQHRIFDVHVWRWKHFXUUHQW %OXH'LDPRQGEURXJKWDPRWLRQXQGHU5XOH E  RIWKH VLWXDWLRQ6HH%OXH'LDPRQG&RDO&R1R&9 )HGHUDO5XOHVRI&LYLO3URFHGXUHVHHNLQJSRVWMXGJPHQWUHOLHI VOLSRSDW VWDWLQJmWKH&RXUWUHFRJQL]HVWKDWWKLVLVQRWD RQ$XJXVW7KHGLVWULFWFRXUWJUDQWHGWKHPRWLRQ µVDPH DFFLGHQWj FDVH    l   +RZHYHU WKH GLVWULFW FRXUW YDFDWHGWKHSULRUMXGJPHQWDQGUHVWRUHGWKHFDVHWRWKHDFWLYH VWDWHGm2QHFRXOGDUJXHWKDWDOOVXSHUUHDFKEDFNFRPSDQLHV GRFNHW7KH&RPELQHG)XQGVXEVHTXHQWO\VRXJKWDQGZDV ZHUHSDUWRIWKHVDPHWUDQVDFWLRQDQGWKDWWKHLUFDVHVKDYH HYHQWXDOO\JUDQWHGFHUWLILFDWLRQIRULQWHUORFXWRU\DSSHDOXQGHU UHVXOWHGLQFRQIOLFWLQJMXGJPHQWVl,G7KLV&RXUWFDQQRW 86&† E 2QDSSHDOERWKWKHJRYHUQPHQWDQGWKH DFFHSW VXFK DQ H[WHQVLRQ RI UHOHYDQW DXWKRULW\  ,I WKH &RPELQHG )XQG DUJXH WKDW WKH GLVWULFW FRXUW LPSURSHUO\ FLUFXPVWDQFHVRIWKLVFDVHHVWDEOLVKHVWKHmVDPHWUDQVDFWLRQl JUDQWHG5XOH E  UHOLHI LW LV GLIILFXOW WR LPDJLQH DQ\ FRPSDQ\ ZKRVH LQGXVWU\ LV VXEMHFW WR H[WHQVLYH IHGHUDO UHJXODWLRQ WKDW ZRXOG QRW EH ,, HQWLWOHGWR5XOH E  UHOLHIXSRQDFKDQJHLQWKHMXGLFLDO LQWHUSUHWDWLRQRIWKHDSSOLFDEOHODZ)RUH[DPSOHWKHDLUOLQH 5XOH E DOORZVDGLVWULFWFRXUWWRYDFDWHDILQDOMXGJPHQW LQGXVWU\ WKH DXWRPRELOH PDQXIDFWXULQJ LQGXVWU\ DQG WKH IRUWKHIROORZLQJUHDVRQV WHOHFRPPXQLFDWLRQVLQGXVWU\DUHDOOOLQNHGE\WKHLUUHVSHFWLYH FRPPRQKLVWRULHVoKLVWRULHVWKDWLQFOXGHH[WHQVLYHIHGHUDO  PLVWDNHLQDGYHUWHQFHVXUSULVHRUH[FXVDEOHQHJOHFW UHJXODWLRQDQGIHGHUDOLQYROYHPHQW0RUHRYHUFKDQJHVLQWKH  QHZO\GLVFRYHUHGHYLGHQFHZKLFKE\GXHGLOLJHQFH MXGLFLDOLQWHUSUHWDWLRQRIWKHODZDUHFRPPRQDQGQHFHVVDULO\ FRXOGQRWKDYHEHHQGLVFRYHUHGLQWLPHWR PRYHIRUD UHVXOWLQGLYHUJHQWMXGJPHQWV$OORZLQJDOOWKHVHFRPSDQLHV QHZWULDOXQGHU5XOH E   IUDXG ZKHWKHUKHUHWRIRUH WR VHHN 5XOH  E   UHOLHI EDVHG RQ WKH QRWLRQ WKDW WKHLU GHQRPLQDWHGLQWULQVLFRUH[WULQVLF PLVUHSUHVHQWDWLRQRU mFRPPRQKLVWRU\lOHGWRWKHSDVVDJHRIDSDUWLFXODUODZRU RWKHUPLVFRQGXFWRIDQDGYHUVHSDUW\  WKHMXGJPHQWLV UHJXODWLRQZKLFKLVVXEVHTXHQWO\LQYDOLGDWHGGXHWRDFKDQJH YRLG   WKH MXGJPHQW KDV EHHQ VDWLVILHG UHOHDVHG RU LQ MXGLFLDO LQWHUSUHWDWLRQ QHFHVVDULO\ UHVXOWLQJ LQ GLYHUJHQW GLVFKDUJHGRUDSULRUMXGJPHQWXSRQZKLFKLWLVEDVHG MXGJPHQWV ZRXOG UHQGHU RXU OHJDO V\VWHPjV VWURQJ KDVEHHQUHYHUVHGRURWKHUZLVHYDFDWHGRULWLVQRORQJHU SUHVXPSWLRQ LQ IDYRU RI WKH mILQDOLW\ RI MXGJPHQWV DQG HTXLWDEOH WKDW WKH MXGJPHQW VKRXOG KDYH SURVSHFWLYH WHUPLQDWLRQRIOLWLJDWLRQlPHDQLQJOHVV:DLIHUVRQJ/WG,QF DSSOLFDWLRQRU  DQ\RWKHUUHDVRQMXVWLI\LQJUHOLHIIURP )GDW WKHRSHUDWLRQRIWKHMXGJPHQW  %OXH'LDPRQG&RDOY 1RV 1RV %OXH'LDPRQG&RDOY  7UXVWHHVRI80:$HWDO 7UXVWHHVRI80:$HWDO DSSOLFDEOH WR WKH HQWLUH WUDQVDFWLRQ ZDV DXWKRULWDWLYHO\ $ GLVWULFW FRXUWjV JUDQW RI SRVWMXGJPHQW UHOLHI XQGHU 5XOH FODULILHGl,G  E LVUHYLHZHGIRUDQDEXVHRIGLVFUHWLRQ6HH%URZGHUY 'LUHFWRU'HSjWRI&RUUHFWLRQV86Q   %OXH 'LDPRQGjV DUJXPHQWV WKRXJK QRYHO DUH QRW :LQGVRUY8QLWHG6WDWHV'HSjWRIsXVWLFH)G WK SHUVXDVLYH:KLOHFRXUWVPLJKWKDYHGLVFUHWLRQXQGHU5XOH &LU $ILQGLQJRIDQDEXVHRIGLVFUHWLRQUHTXLUHVmD  E   WR UHVROYH GLYHUJHQW MXGJPHQWV LQ WKH mVDPH GHILQLWHDQGILUPFRQYLFWLRQWKDWWKHWULDOFRXUWFRPPLWWHGD WUDQVDFWLRQlVXFKUHDVRQLQJLVLQDSSOLFDEOHKHUH$VDQLQLWLDO FOHDUHUURURIMXGJPHQWl'DYLVYsHOOLFR&RPPXQLW\+RVS PDWWHU WZR RI WKH FDVHV FLWHG E\ %OXH 'LDPRQG DQG WKH ,QF)G WK&LU  FLWDWLRQVRPLWWHG  GLVWULFW FRXUW EDVH PXFK RI WKHLU MXVWLILFDWLRQ IRU SRVW +RZHYHUUHOLHIXQGHU5XOH E LVmFLUFXPVFULEHGE\SXEOLF MXGJPHQW UHOLHI RQ WKH RXWFRPHGHWHUPLQDWLYH WHVW RI (ULH SROLF\ IDYRULQJ ILQDOLW\ RI MXGJPHQWV DQG WHUPLQDWLRQ RI 55&RY7RPSNLQV86  6HH3LHUFH OLWLJDWLRQl:DLIHUVRQJ/WG,QFY&ODVVLF0XVLF9HQGLQJ )G DW  m,Q GLYHUVLW\ MXULVGLFWLRQ FDVHV WKH UHVXOWV LQ )G WK&LU 7KLVLVHVSHFLDOO\WUXHLQ IHGHUDOFRXUWVKRXOGEHVXEVWDQWLDOO\WKHVDPHDVWKRVHLQVWDWH DQDSSOLFDWLRQRIVXEVHFWLRQ  RI5XOH E ZKLFKDSSOLHV FRXUW OLWLJDWLRQ DULVLQJ RXW RI WKH VDPH WUDQVDFWLRQ RU mRQO\LQH[FHSWLRQDORUH[WUDRUGLQDU\FLUFXPVWDQFHVZKLFKDUH RFFXUUHQFHl )LUVW$P1DWjO%DQN)5'DW VDPH  QRWDGGUHVVHGE\WKHILUVWILYHQXPEHUHGFODXVHVRIWKH5XOHl 6LQFHWKLVFDVHGRHVQRWGHDOZLWKGLYHUJHQWUHVXOWVVWHPPLQJ 2OOHY+HQU\ :ULJKW&RUS)G WK&LU IURP D FKRLFH RI D IHGHUDO UDWKHU WKDQ D VWDWH IRUXP WKHVH   VHH DOVR /LOMHEHUJ Y +HDOWK 6HUYLFHV $FTXLVLWLRQ FDVHVDUHFOHDUO\GLVWLQJXLVKDEOH &RUS86  7KLVLVEHFDXVHmDOPRVW HYHU\ FRQFHLYDEOH JURXQG IRU UHOLHI LV FRYHUHGl XQGHU WKH 0RUHLPSRUWDQWWKHFDVHVFLWHGE\%OXH'LDPRQGDQGWKH RWKHUVXEVHFWLRQVRI5XOH E 2OOH)GDWVHH GLVWULFWFRXUWLQYROYHWUDQVDFWLRQVZLWKDPXFKWLJKWHUQH[XV DOVR+RSSHUY(XFOLG0DQRU1XUVLQJ+RPH,QF)G RIFRPPRQDFWLYLW\FRPPRQULJKWVDQGFRPPRQOLDELOLW\  WK&LU &RQVHTXHQWO\FRXUWVPXVWDSSO\ WKDQ D ODZ SDVVHG E\ &RQJUHVV WR UHJXODWH WKH SD\PHQW RI 5XOH E  UHOLHIRQO\LQmXQXVXDODQGH[WUHPHVLWXDWLRQV PHGLFDOKHDOWKEHQHILWVWRWKHUHWLUHHVRIDQHQWLUHLQGXVWU\ ZKHUHSULQFLSOHVRIHTXLW\PDQGDWHUHOLHIl2OOH)GDW 7R EH VXUH WKH VKDUHG KLVWRU\ RI WKH YDULRXV FRPSDQLHV  DIIHFWHGE\WKHVXSHUUHDFKEDFNSURYLVLRQRIWKH&RDO $FW GHILQH D IL[HG DQG LGHQWLILDEOH XQLYHUVH RI DIIHFWHG ,,, SDUWLHV6HH%OXH'LDPRQGjV)LQDO%UDW+RZHYHUWKH QDWXUH DQG H[WHQW RI WKH OLDELOLW\ IRUPHUO\ LPSRVHG E\ WKH ,W LV ZHOO HVWDEOLVKHG WKDW D FKDQJH LQ GHFLVLRQDO ODZ LV VXSHU UHDFKEDFN SURYLVLRQ YDULHV ZLWK HDFK SDUWLFXODU XVXDOO\ QRW E\ LWVHOI DQ mH[WUDRUGLQDU\ FLUFXPVWDQFHl FRPSDQ\jVLQYROYHPHQWZLWKWKHVHYHUDOKHDOWKEHQHILWIXQGV PHULWLQJ 5XOH  E   UHOLHI  6HH $JRVWLQL Y )HOWRQ  ZKLFK SUHFHGHG WKH &RPELQHG )XQG  6HH (DVWHUQ 86   m,QWHUYHQLQJGHYHORSPHQWVLQWKHODZ (QWHUSULVHV86DW GHWDLOLQJWKHHYHQWVOHDGLQJ E\ WKHPVHOYHV UDUHO\ FRQVWLWXWH WKH H[WUDRUGLQDU\ WRWKHSDVVDJHRIWKH&RDO$FW ,QUH%OXH'LDPRQG FLUFXPVWDQFHVUHTXLUHGIRUUHOLHIXQGHU5XOH E  l  &RDO &R  )G DW  GHVFULELQJ DVVLJQPHQW RI &LQFLQQDWL,QV&RY)ODQGHUV(OHF0RWRU6HUY,QF OLDELOLW\ XQGHU †  RI WKH &RDO $FW   0RUHRYHU HDFK )G WK&LU 7UDYHOHUV,QGHPQLW\&RY FRPSDQ\jVSDUWLFXODULQYROYHPHQWZLWKWKHVHSUHYLRXVIXQGV 6DUNLVLDQ  )G   G &LU   %HUU\KLOO Y ZDVHVWDEOLVKHGRYHUWKHFRXUVHRIVHYHUDOGHFDGHVLQDVHULHV 8QLWHG 6WDWHV  )G   WK &LU    7KLV RI GLVFUHWH DQG VHSDUDWH FROOHFWLYH EDUJDLQLQJ QHJRWLDWLRQV SULQFLSOHKROGVHYHQLIDODZLVLQYDOLGDWHGRQVWDWHRUIHGHUDO  %OXH'LDPRQG&RDOY 1RV 1RV %OXH'LDPRQG&RDOY  7UXVWHHVRI80:$HWDO 7UXVWHHVRI80:$HWDO FRQVWLWXWLRQDOJURXQGV6HH%DWWVY7RZ0RWRU)RUNOLIW&R DFFLGHQW UHVXOWHG IURP FKRLFH RI IHGHUDO UDWKHU WKDQ VWDWH )G WK&LU  m&KDQJHVLQGHFLVLRQDO IRUXP VLQFH IHGHUDO FRXUW EDVHG LWV GHFLVLRQ RQ VWDWH ODZ ODZEDVHGRQFRQVWLWXWLRQDOSULQFLSOHVDUHQRWRIWKHPVHOYHV VXEVHTXHQWO\ RYHUWXUQHG E\ 2NODKRPD 6XSUHPH &RXUW LQ H[WUDRUGLQDU\FLUFXPVWDQFHVVXIILFLHQWWRMXVWLI\5XOH E  UHODWHGFDVH )LUVW$P1DWjO%DQNY%RQGHG(OHYDWRU,QF UHOLHIl &ROOLQVY&LW\RI:LFKLWD)G G )5' :'.\  JUDQWLQJ5XOH E  &LU   KROGLQJ WKDW LQYDOLGDWLRQ E\ WKH 8QLWHG 6WDWHV UHOLHI ZKHUH GLYHUJHQW RXWFRPHV IRU WZR SODLQWLIIV VHHNLQJ 6XSUHPH&RXUWRI.DQVDVVWDWXWHWKDWZDVEDVLVRISUHYLRXV UHFRYHU\XQGHUWKHVDPHSURPLVVRU\QRWHUHVXOWHGIURPFKRLFH ILQDO MXGJPHQW LQVXIILFLHQW WR HVWDEOLVK mH[WUDRUGLQDU\ RIIHGHUDOUDWKHUWKDQVWDWHIRUXPVLQFHIHGHUDOFRXUWEDVHGLWV FLUFXPVWDQFHVlWRPHULW5XOH E  UHOLHI ,QVWHDGFRXUWV GHFLVLRQRQVWDWHODZVXEVHTXHQWO\LQYDOLGDWHGE\.HQWXFN\ KDYHUHOLHGRQDQDSSOLFDEOHFKDQJHLQGHFLVLRQDOODZFRXSOHG 6XSUHPH&RXUWLQUHODWHGFDVH 1RUPDQY1LFKLUR*\RJ\R ZLWK VRPH RWKHU VSHFLDO FLUFXPVWDQFH LQ RUGHU WR JUDQW .DLVKD/WG3G $ODV  JUDQWLQJSRVW 5XOH E  UHOLHI6HH5LWWHUY6PLWK)G MXGJPHQWUHOLHIXQGHU$ODVNDUXOHLGHQWLFDOWR5XOH E  WK&LU  m2XULQYHVWLJDWLRQWKXVOHDGVXVWRFRQFOXGH ZKHUHGLYHUJHQWRXWFRPHIRUWZRSODLQWLIIVVHHNLQJUHFRYHU\ WKDW VRPHWKLQJ PRUH WKDQ D µPHUHj FKDQJH LQ WKH ODZ LV XQGHU WKH VDPH VKDUHKROGHUV DJUHHPHQW UHVXOWHG IURP QHFHVVDU\WRSURYLGHWKHJURXQGVIRU5XOH E  UHOLHIl  VXEVHTXHQWO\ LQYDOLGDWHG LQWHUSUHWDWLRQ RI $ODVND ODZ LQ 0DWDUHVHY/H)HYUH)G G&LU  m:H UHODWHGFDVH  WKLQN LW SDUWLFXODUO\ DSSURSULDWH IRU WKH GLVWULFW FRXUW WR HQWHUWDLQD5XOH E  PRWLRQLQWKHFRQWH[WRIDKDEHDV %OXH'LDPRQGDUJXHVWKDWWKLVmVDPHWUDQVDFWLRQlOLQHRI SURFHHGLQJ LQ ZKLFK FRQYHQWLRQDO QRWLRQV RI ILQDOLW\ RI FDVHVLVDSSOLFDEOHLQWKLVFDVH%OXH'LDPRQGVWDWHVm>WKH@ OLWLJDWLRQ KDYH QR SODFHl  LQWHUQDO TXRWHV DQG FLWDWLRQV VXEVWDQWLDOO\LGHQWLFDOKLVWRULFDOFRQWUDFWXDODFWLYLW\ZLWK RPLWWHG 2YHUEHHY9DQ:DWHUV 5RJHUV)G WKH80:$ZKLFKEURXJKW>WKHFRDOLQGXVWU\@LQWRWKH  WK&LU  KROGLQJWKDWVLQFHWKHMXGJPHQWZDVQRW >WKHVXSHUUHDFKEDFNSURYLVLRQjV@UHWURDFWLYHJUDVSlVXJJHVWV ILQDODQGWKH2KLR6XSUHPH&RXUWUHYHUVLQJLWVHOIZLWKLQRQH WKDWWKHQXPHURXVFRDOFRPSDQLHVDIIHFWHGE\WKH&RDO \HDUZDVXQXVXDOWKHGLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQLQQRW $FW ZHUH PXOWLSOH SDUWLHV WR D FRPPRQ WUDQVDFWLRQ  %OXH JUDQWLQJ5XOH E  UHOLHI  'LDPRQGjV)LQDO%UDW%OXH'LDPRQGIXUWKHUDUJXHVWKDW HYHQWKRXJKWKHDOOHJHGFRPPRQWUDQVDFWLRQLQWKLVFDVHWKH 7KHGLVWULFWFRXUWEDVHVPXFKRILWVGHFLVLRQRQDOLQHRI &RDO$FWLVQRWDmWRUWLRXVDFFLGHQWlRUmFRPPRQFRQWUDFWl FDVHV HVWDEOLVKLQJ WKDW SRVWMXGJPHQW UHOLHI FDQ EH JUDQWHG VXFKDXWKRULW\DSSOLHVVLQFHWKLV&RXUWPXVWQRWSULYLOHJHmWRUW ZKHQ D FKDQJH LQ GHFLVLRQDO ODZ JHQHUDWHV GLYHUJHQW ODZSULQFLSOHVlRYHUWKHmHTXDODSSOLFDWLRQRIFRQVWLWXWLRQDO MXGJPHQWVIRUOLWLJDQWVLQYROYHGLQWKHVDPHWUDQVDFWLRQRU ULJKWVl,GDWFLWLQJ3DUQHOOY5DSLGHV3DULVK6FK LQMXU\6HH%OXH'LDPRQG&RDO&RY6HFUHWDU\RI+HDOWK %G)G WK&LU  m>7KH&RQVWLWXWLRQLV@ DQG+XPDQ6HUYLFHV1R&9VOLSRSDW (' QRW JHDUHG WR SDWFKZRUN JHRJUDSK\  ,W WROHUDWHV QR 7HQQ 1RY   VHH DOVR *RQGHFN Y 3DQ $P :RUOG LQGHSHQGHQW HQFODYHVl   &RQVHTXHQWO\ %OXH 'LDPRQG $LUZD\V  86     JUDQWLQJ SRVWMXGJPHQW DUJXHVWKHmVDPHWUDQVDFWLRQlUHDVRQLQJLVDSSOLFDEOHKHUH UHOLHIZKHUHGLYHUJHQWUHVXOWVIRUWKHVXUYLYRUVRIWZRSHRSOH VLQFH mPXOWLSOH SDUWLHV LQMXUHG FRQWHPSRUDQHRXVO\ LQ D NLOOHGLQWKHVDPHFDUDFFLGHQWUHVXOWHGIURPDFLUFXLWVSOLWLQ FRPPRQ WUDQVDFWLRQ ZLOO UHFHLYH IXQGDPHQWDOO\ GLIIHUHQW VWDWXWRU\LQWHUSUHWDWLRQ 3LHUFHY&RRN &R)G PHDVXUHV RI OHJDO SURWHFWLRQ    VROHO\ EHFDXVH    WKHLU  WK &LU   JUDQWLQJ 5XOH  E   UHOLHI ZKHUH FODLPV ZHQW WR ILQDO DGYHUVH MXGJPHQWV EHIRUH WKH ODZ GLYHUJHQW UHVXOWV IRU WZR SODLQWLIIV LQMXUHG LQ WKH VDPH FDU