Brandenburg v. Hous Auth Irvine

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

(/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
)LOH 1DPH DS

81,7('67$7(6&28572)$33($/6
)257+(6,;7+&,5&8,7
BBBBBBBBBBBBBBBBB

&+5,67,1( %5$1'(1%85* ;
3ODLQWLII$SSHOODQW 
&URVV$SSHOOHH 
 1RV

Y !


+286,1* $87+25,7< 2) 
,59,1( 3(55< 0($'( 
,QGLYLGXDOO\DQGDV 
&RPPLVVLRQHUDQG 

&KDLUSHUVRQRIWKH+RXVLQJ 
$XWKRULW\RI,UYLQHs$1( 
%5<$17 720 :,//,$06 
*/(11 &2; DQG +8*+ 
+$0,/721,QGLYLGXDOO\DQG 
DV&RPPLVVLRQHUVRIWKH 

+RXVLQJ$XWKRULW\RI,UYLQH 
'HIHQGDQWV$SSHOOHHV 
&URVV$SSHOODQWV 

1
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH(DVWHUQ'LVWULFWRI.HQWXFN\DW/H[LQJWRQ
1Rn.DUO6)RUHVWHU&KLHI'LVWULFWsXGJH
$UJXHG)HEUXDU\


 %UDQGHQEXUJY+RXVLQJ 1RV 1RV %UDQGHQEXUJY+RXVLQJ 
$XWKRULW\RI,UYLQHHWDO $XWKRULW\RI,UYLQHHWDO

'HFLGHGDQG)LOHGsXQH ,,,&21&/86,21
%HIRUH'$8*+75(<DQG*,/0$1&LUFXLWsXGJHV )RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 WKH
&2//,(5'LVWULFWsXGJH
GLVWULFW FRXUWjV RUGHU JUDQWLQJ VXPPDU\ MXGJPHQW WR
'HIHQGDQWV$SSHOOHHVRQDOORI3ODLQWLII$SSHOODQWjVIHGHUDO
BBBBBBBBBBBBBBBBB FODLPVDQGGLVPLVVLQJKHUVWDWHODZFODLPVZLWKRXWSUHMXGLFH
&2816(/
$5*8('$QQH0LOWRQ0F0LOOLQ*$5'1(5(:,1*
628=$ /RXLVYLOOH .HQWXFN\ IRU $SSHOODQW  sHIIUH\ &
0DQGR$'$0667(31(5:2/7(50$11 '86,1*
&RYLQJWRQ.HQWXFN\IRU$SSHOOHHV21%5,()$QQH0
0F0LOOLQ &KDUOHV ' (ZLQJ *$5'1(5 (:,1*
628=$/RXLVYLOOH .HQWXFN\+HLGL%(QJHO&KDUOHV(
sRKQVRQs2+1621 (1*(/:LQFKHVWHU.HQWXFN\IRU
$SSHOODQW  sHIIUH\ & 0DQGR $'$06 67(31(5
:2/7(50$11  '86,1* &RYLQJWRQ .HQWXFN\ IRU
$SSHOOHHV
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
&857,6 / &2//,(5 'LVWULFW sXGJH  &KULVWLQH
%UDQGHQEXUJ IRUPHU ([HFXWLYH 'LUHFWRU RI WKH +RXVLQJ
$XWKRULW\ RI ,UYLQH .HQWXFN\ EURXJKW VXLW SXUVXDQW WR
 86& †  FODLPLQJ 'HIHQGDQWV$SSHOOHHV +XJK
+DPLOWRQ *OHQQ &R[ 7RP :LOOLDPV sDQH %U\DQW 3HUU\
0HDGH DQG WKH +RXVLQJ $XWKRULW\ FROOHFWLYHO\ m+$,l
YLRODWHG KHU )LUVW DQG )RXUWHHQWK $PHQGPHQW ULJKWV E\
UHWDOLDWLQJ DJDLQVW KHU IRU HQJDJLQJ LQ SURWHFWHG VSHHFK
3ODLQWLII$SSHOODQWDOVRDOOHJHGYDULRXVVWDWHODZYLRODWLRQV
%UDQGHQEXUJDQGWKH+$,ILOHGFURVVPRWLRQVIRUVXPPDU\
MXGJPHQWRQsXQH,QDQRUGHUHQWHUHG$XJXVW

7KH +RQRUDEOH &XUWLV / &ROOLHU 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH
(DVWHUQ 'LVWULFW RI 7HQQHVVHH VLWWLQJ E\ GHVLJQDWLRQ
 %UDQGHQEXUJY+RXVLQJ 1RV 1RV %UDQGHQEXUJY+RXVLQJ 
$XWKRULW\RI,UYLQHHWDO $XWKRULW\RI,UYLQHHWDO

HPSOR\PHQW FRQWUDFW LV QRW VXIILFLHQW WR LQYRNH WKH WKHGLVWULFWFRXUWJUDQWHGWKH+$,jVPRWLRQIRUVXPPDU\
VXEVWDQWLYH FRPSRQHQW RI WKH 'XH 3URFHVV &ODXVH MXGJPHQWDQGGHQLHG%UDQGHQEXUJjVPRWLRQFRQFOXGLQJWKDW
)XUWKHUPRUHWKH6XSUHPH&RXUWKDVKHOGDFDXVHRIDFWLRQ DOWKRXJK%UDQGHQEXUJKDGHQJDJHGLQSURWHFWHGVSHHFKWKH
FDQQRW EH EDVHG LQ VXEVWDQWLYH GXH SURFHVV ZKHUH D PRUH +$,jV LQWHUHVW LQ WKH HIILFLHQW SURYLVLRQ RI SXEOLF VHUYLFHV
VSHFLILFFRQVWLWXWLRQDOSURYLVLRQLVDSSOLFDEOH6HH$OEULJKW RXWZHLJKHGKHULQWHUHVWLQVSHDNLQJ
Y 2OLYHU  86    m:KHUH D SDUWLFXODU
$PHQGPHQW µSURYLGHV DQ H[SOLFLW WH[WXDO VRXUFH RI %RWKSDUWLHVILOHGWLPHO\QRWLFHVRIDSSHDOWRWKLVFRXUW2Q
FRQVWLWXWLRQDO SURWHFWLRQj DJDLQVW D SDUWLFXODU VRUW RI DSSHDO%UDQGHQEXUJDUJXHVWKHGLVWULFWFRXUWHUUHGLQJUDQWLQJ
JRYHUQPHQW EHKDYLRU µWKDW $PHQGPHQW QRW WKH PRUH WKH+$,jVPRWLRQIRUVXPPDU\MXGJPHQWZLWKUHVSHFWWRKHU
JHQHUDOL]HGQRWLRQRIVXEVWDQWLYHGXHSURFHVVPXVWEHWKH IHGHUDOFODLPVGLVPLVVLQJKHUVWDWHODZFODLPVDQGGHQ\LQJ
JXLGH IRU DQDO\]LQJ WKHVH FODLPVjl TXRWLQJ *UDKDP Y KHUPRWLRQIRUVXPPDU\MXGJPHQW7KH+$,DSSHDOVWKDWSDUW
&RQQRU86$VDUHVXOWWKHGLVWULFW RIWKHGLVWULFWFRXUWjVRUGHUKROGLQJ%UDQGHQEXUJHQJDJHGLQ
FRXUWFRUUHFWO\KHOGWKH+$,ZDVHQWLWOHGWRMXGJPHQWDVD VSHHFK SURWHFWHG E\ WKH )LUVW $PHQGPHQW  :H KDYH
PDWWHURIODZZLWKUHVSHFWWR%UDQGHQEXUJjVVXEVWDQWLYHGXH MXULVGLFWLRQRYHUERWKDSSHDOVSXUVXDQWWR86&†
SURFHVVFODLP )RUWKHIROORZLQJUHDVRQVZH$)),50WKHGHFLVLRQRIWKH
GLVWULFWFRXUW
' 6WDWH/DZ&ODLPV
,%$&.*5281'
)LQDOO\ ZH FRQFOXGH WKH GLVWULFW FRXUW DSSURSULDWHO\
GLVPLVVHG ZLWKRXW SUHMXGLFH %UDQGHQEXUJjV FODLPV XQGHU $ )DFWXDO%DFNJURXQG
.HQWXFN\ VWDWH ODZ  $ GLVWULFW FRXUWjV UXOLQJ GHFOLQLQJ
VXSSOHPHQWDO MXULVGLFWLRQ ZLOO QRW EH GLVWXUEHG DEVHQW DQ 7KH+$,DJRYHUQPHQWRUJDQL]DWLRQFUHDWHGE\.HQWXFN\
DEXVHRIGLVFUHWLRQ6HH:HHNVY3RUWDJH&RXQW\([HFXWLYH ODZLVUHVSRQVLEOHIRUSODQQLQJDQGPDQDJHPHQWRISXEOLF
2IILFHV)GWK&LU%UDQGHQEXUJ KRXVLQJLQ,UYLQH.HQWXFN\7KH8QLWHG6WDWHV'HSDUWPHQW
KDVSURYLGHGWKLVFRXUWZLWKQRODZRUIDFWVWRVXJJHVWVXFKDQ RI+RXVLQJDQG8UEDQ'HYHORSPHQWm+8'lVXEVLGL]HVDQG
DEXVHKDVRFFXUUHG,QIDFWWKHXVXDOFRXUVHLVIRUWKHGLVWULFW UHJXODWHVWKH+$,ZKLFKLVJRYHUQHGE\D%RDUGRI'LUHFWRUV
FRXUWWRGLVPLVVWKHVWDWHODZFODLPVZLWKRXWSUHMXGLFHLIDOO m%RDUGlHDFKPHPEHURIZKLFKLVDSSRLQWHGE\WKH0D\RU
IHGHUDOFODLPVDUHGLVSRVHGRIRQVXPPDU\MXGJPHQW6HH RI,UYLQH%UDQGHQEXUJZRUNHGIRUWKH+$,IURPXQWLO
8QLWHG0LQH:RUNHUVRI$PHULFDY*LEEV86 KHUUHVLJQDWLRQRQsXO\$WWKHWLPHVKHUHVLJQHG
m,IWKHIHGHUDOFODLPVDUHGLVPLVVHGEHIRUHWULDO %UDQGHQEXUJZDVWKH([HFXWLYH'LUHFWRU$FFRUGLQJWRKHU
WKHVWDWHFODLPVVKRXOGEHGLVPLVVHGDVZHOOl$FFRUGLQJO\ MRE GHVFULSWLRQ %UDQGHQEXUJ DFWHG DV WKH m&KLHI
ZH ZLOO QRW VHFRQGJXHVV WKH GLVWULFW FRXUWjV GHFLVLRQ WR $GPLQLVWUDWLYH 2IILFHU DQG 6HFUHWDU\7UHDVXUHU RI WKH
GHFOLQHVXSSOHPHQWDOMXULVGLFWLRQRYHUWKHUHPDLQLQJVWDWHODZ +RXVLQJ$XWKRULW\lDQGZDVUHVSRQVLEOHmIRUWKHPDQDJHPHQW
FODLPVLQWKLVFDVH RIDOO+RXVLQJ$XWKRULW\DFWLYLWLHVDVRXWOLQHGE\WKH%RDUGRI
&RPPLVVLRQHUV 6WDWH DQG )HGHUDO /HJLVODWLRQV >VLF@ DQG
'HSDUWPHQW RI +RXVLQJ DQG 8UEDQ 'HYHORSPHQW
5HJXODWLRQVl  ,Q DGGLWLRQ WR PDQDJHPHQW RI WKH +$,jV
KRXVLQJXQLWV%UDQGHQEXUJZDVFKDUJHGZLWKH[HFXWLRQRI
mWKHGHFLVLRQVDQGSROLFLHVRIWKH%RDUGRI&RPPLVVLRQHUVl
 %UDQGHQEXUJY+RXVLQJ 1RV 1RV %UDQGHQEXUJY+RXVLQJ 
$XWKRULW\RI,UYLQHHWDO $XWKRULW\RI,UYLQHHWDO

6KH DOVR NHSW WKH m%RDUG RI &RPPLVVLRQHUV LQIRUPHG LQ :HJLYHDJUHDWGHDORIGHIHUHQFHWRWKH+$,jVRSLQLRQLQ
PDWWHUVUHTXLUHGIRUFRPSOLDQFHlZLWKDSSOLFDEOHODZVDQG WKLVPDWWHU6HH&RQQLFN86DWm:KHQFORVH
UHJXODWLRQV ZRUNLQJ UHODWLRQVKLSV DUH HVVHQWLDO WR IXOILOOLQJ SXEOLF
UHVSRQVLELOLWLHVDZLGHGHJUHHRIGHIHUHQFHWRWKHHPSOR\HUjV
%UDQGHQEXUJjVSRVLWLRQDV([HFXWLYH'LUHFWRUUHTXLUHGKHU MXGJPHQWLVDSSURSULDWHl%HFDXVH%UDQGHQEXUJjVDFWLRQV
WRZRUNFORVHO\ZLWKWKH%RDUG,QILJKWLQJDQGG\VIXQFWLRQ FUHDWHGDFWXDOWHQVLRQLQKHUUHODWLRQVKLSZLWKWKH%RDUGDQG
ZHUHWKHUHIRUHWKHVHHPLQJO\LQHYLWDEOHFRQVHTXHQFHVZKHQ SRVHG D UHDO WKUHDW WR WKH +$,jV HIIHFWLYH IXQFWLRQLQJ ZH
WHQVLRQEHJDQWRPDQLIHVWLQEHWZHHQ3ODLQWLII$SSHOODQW FRQFOXGHWKH+$,jVLQWHUHVWLQHIIHFWLYHRSHUDWLRQRXWZHLJKHG
DQG 2UYLOOH 3HUU\ 0HDGH D ORFDO EXVLQHVVPDQ ZKR KDG %UDQGHQEXUJjV LQWHUHVW LQ IUHH VSHHFK RQ WKHVH PDWWHUV RI
UHFHQWO\ MRLQHG WKH %RDUG  7KH +$, DOOHJHV %UDQGHQEXUJ SXEOLFFRQFHUQ$VDUHVXOWEHFDXVH%UDQGHQEXUJjVVSHHFK
EHFDPHFRQIURQWDWLRQDOKRVWLOHDQGZRXOGVRPHWLPHVVKRXW IDLOVWRSDVVWKHVHFRQGSDUWRIWKH3LFNHULQJWHVWKHU)LUVW
DW0HDGH'XULQJWKHFRXUVHRIWKLVOLWLJDWLRQWKH+$,KDV $PHQGPHQWFODLPIDLOVDVDPDWWHURIODZDQGWKHGLVWULFW
DOVR DFFXVHG %UDQGHQEXUJ RI YDULRXV RWKHU LPSURSULHWLHV FRXUWGLGQRWHUULQJUDQWLQJVXPPDU\MXGJPHQWWRWKH+$,RQ
LQFOXGLQJ WKH XQDXWKRUL]HG SXUFKDVH RI D YDQ IRU WKH +$, WKLVLVVXH
$OWKRXJK %UDQGHQEXUJ GHQLHV DOO RI WKHVH DOOHJDWLRQV DQG
GLVSXWHVWKH+$,jVFKDUDFWHUL]DWLRQRIKHUUHODWLRQVKLSZLWK & 6XEVWDQWLYH'XH3URFHVV&ODLP
WKH%RDUGDVmFRQWHQWLRXVlWKHUHFRUGLQGLFDWHVDWWKHYHU\
OHDVW0HDGHZKRZDVDSSRLQWHG&KDLUPDQLQZDVQRW 7KH GLVWULFW FRXUW ZDV DOVR FRUUHFW LQ JUDQWLQJ VXPPDU\
VDWLVILHGZLWKKHUSHUIRUPDQFH MXGJPHQWWRWKH+$,ZLWKUHVSHFWWR%UDQGHQEXUJjVFODLPIRU
YLRODWLRQRIKHU)RXUWHHQWK$PHQGPHQWULJKWWRVXEVWDQWLYH
)RU H[DPSOH RQH RI %UDQGHQEXUJjV GXWLHV DV 6HFUHWDU\ GXH SURFHVV  %UDQGHQEXUJ FLWHV WR %HFNZLWK Y &LW\ RI
7UHDVXUHU ZDV WDNLQJ PLQXWHV DW HYHU\ %RDUG PHHWLQJ DQG 'D\WRQD%HDFK6KRUHV)GWK&LUIRUWKH
GHOLYHULQJ WKHP WR HDFK %RDUG PHPEHU EHIRUH WKH QH[W SURSRVLWLRQ D VHFWLRQ  FODLP DOOHJLQJ D YLRODWLRQ RI
PHHWLQJ  $FFRUGLQJ WR 0HDGH %UDQGHQEXUJjV PLQXWHV VXEVWDQWLYHGXHSURFHVVEDVHGRQWKHIXQGDPHQWDOULJKWWRIUHH
IUHTXHQWO\ FRQWDLQHG HUURUV DQG RPLWWHG WKH %RDUGjV VSHHFKLVGLVWLQFWIURPDVHFWLRQFODLPEDVHGGLUHFWO\RQ
LQVWUXFWLRQVWRKHU0HDGHDOVRFODLPHG%UDQGHQEXUJRIWHQ DYLRODWLRQRIWKH)LUVW$PHQGPHQWjVIUHHVSHHFKJXDUDQWHH
IDLOHGWRSUHSDUHWKHPLQXWHVLQDWLPHO\IDVKLRQ(YHQWXDOO\ ,QUHDOLW\%HFNZLWKVLPSO\UHDIILUPVWKHZHOOHVWDEOLVKHGUXOH
WKH%RDUGUHPRYHG%UDQGHQEXUJDV6HFUHWDU\RQsDQXDU\ WKDW mDOPRVW DOO †  FODLPV UHO\ RQ WKH VXEVWDQWLYH
DQGUHSODFHGKHUZLWKDQRWKHU%RDUGPHPEHU FRPSRQHQWRIWKH'XH3URFHVV&ODXVHEHFDXVHLWLVWKURXJK
WKDWYHKLFOHWKDWIXQGDPHQWDOULJKWVDUHLQFRUSRUDWHGDJDLQVW
7ZRFRQWURYHUVLHVLQSDUWLFXODUOHGWRWKHGHWHULRUDWLRQRI WKHVWDWHVl,GDWVHHDOVR*URVMHDQY$PHULFDQ3UHVV
%UDQGHQEXUJjV UHODWLRQVKLS ZLWK WKH %RDUG LQ JHQHUDO DQG &R86
0HDGHLQGLYLGXDOO\)LUVWLQVKRUWO\EHIRUH0HDGHZDV
DSSRLQWHG&KDLUPDQ%UDQGHQEXUJEHFDPHFRQFHUQHGDERXW $Q\FODLPIRUDYLRODWLRQRI%UDQGHQEXUJjVVXEVWDQWLYHGXH
DSRVVLEOHFRQIOLFWRILQWHUHVWRQKLVSDUW0HDGHRZQHGRWKHU SURFHVV ULJKW WR IUHH VSHHFK LV GXSOLFDWLYH RI KHU )LUVW
DSDUWPHQWVLQWRZQWKDWLQ%UDQGHQEXUJjVRSLQLRQFRPSHWHG $PHQGPHQWUHWDOLDWLRQFODLPDQGVKHKDVQRWSRLQWHGWRDQ\
ZLWK+$,SURSHUWLHV+HDOVRRZQHGDORFDOKDUGZDUHVWRUH RWKHUIXQGDPHQWDOULJKWVWKDWKDYHEHHQYLRODWHGE\WKH+$,
ZLWKZKLFKWKH+$,RFFDVLRQDOO\GLGEXVLQHVV+8'TXLFNO\ 6HH &KDUOHV Y %DHVOHU  )G  WK &LU 
KROGLQJYLRODWLRQRIDQHPSOR\HHjVSURSHUW\ULJKWVXQGHUDQ
 %UDQGHQEXUJY+RXVLQJ 1RV 1RV %UDQGHQEXUJY+RXVLQJ 
$XWKRULW\RI,UYLQHHWDO $XWKRULW\RI,UYLQHHWDO

,Q RUGHU WR MXVWLI\ D UHVWULFWLRQ RQ VSHHFK RI SXEOLF ZDLYHG WKH VHFRQG FRQIOLFW DQG WKH +$, FRQWLQXHG WR
FRQFHUQ E\ D SXEOLF HPSOR\HH SODLQWLII
V VSHHFK PXVW SHULRGLFDOO\SXUFKDVHPDWHULDOVIURPWKHVWRUH
LPSDLUGLVFLSOLQHE\VXSHULRUVKDYHDGHWULPHQWDOLPSDFW
RQFORVHZRUNLQJUHODWLRQVKLSVXQGHUPLQHDOHJLWLPDWH %UDQGHQEXUJFRQWDFWHG5REHUW.XKQOHWKH&KLHI&RXQVHO
JRDORUPLVVLRQRIWKHHPSOR\HULPSHGHWKHSHUIRUPDQFH IRU+8'LQ/RXLVYLOOHUHJDUGLQJWKHSRVVLEOHFRQIOLFWDULVLQJ
RI WKH VSHDNHU
V GXWLHV RU LPSDLU KDUPRQ\ DPRQJ RXWRI0HDGHjVRZQHUVKLSRIDOOHJHGO\FRPSHWLQJSURSHUWLHV
FRZRUNHUV  7KH VWDWH EHDUV WKH EXUGHQ RI VKRZLQJ D .XKQOHjV UHVSRQVH ZDV LQFRQFOXVLYH VR %UDQGHQEXUJ WKHQ
OHJLWLPDWHMXVWLILFDWLRQIRUGLVFLSOLQH$VLQ5DQNLQZH ZURWHDOHWWHUWRWKH.HQWXFN\$WWRUQH\*HQHUDOjVRIILFHWRDVN
ORRNIRUHYLGHQFHRIWKHLPSDFWRIWKHVWDWHPHQWRQWKH IRU DGYLFH RQ WKH PDWWHU  7KRPDV (PHUVRQ WKH $VVLVWDQW
FLW\
VOHJLWLPDWHRUJDQL]DWLRQDOLQWHUHVWV $WWRUQH\*HQHUDOZKRUHVSRQGHGWR%UDQGHQEXUJjVUHTXHVW
FRQFOXGHGEDVHGRQWKHIDFWVDVSUHVHQWHGE\%UDQGHQEXUJ
)GDWFLWDWLRQVRPLWWHG$V([HFXWLYH'LUHFWRURI DFRQIOLFWRILQWHUHVWGLGH[LVWEXWKHVXJJHVWHGWKHPDWWHU
WKH+$, %UDQGHQEXUJZDVDQDJHQWRIWKH%RDUGFKDUJHG VKRXOGEHUHVROYHGE\WKH%RDUG7KH0D\RUDQGWKH%RDUG
ZLWKLPSOHPHQWLQJWKH%RDUGjVSROLFLHVDQGGHFLVLRQVDVZHOO GLGQRWUHFHLYHQRWLILFDWLRQRI%UDQGHQEXUJjVFRPPXQLFDWLRQ
DVNHHSLQJWKH%RDUGLQIRUPHGRIWKHGD\WRGD\RSHUDWLRQV ZLWKWKH$WWRUQH\*HQHUDOjVRIILFHXQWLOODWHLQ
UHJDUGLQJWKH+$,jVSURSHUWLHV*LYHQWKH%RDUGjVUHOLDQFH
RQWKH([HFXWLYH'LUHFWRUWRLPSOHPHQWLWVGLUHFWLYHVDQGWR $W WKH 0D\RUjV UHTXHVW 0LNH 0RUHODQG WKH +$,jV
SURYLGH FRQWLQXLQJ XSGDWHV UHJDUGLQJ WKH VWDWXV RI WKH DWWRUQH\ LQYHVWLJDWHG %UDQGHQEXUJjV DOOHJDWLRQV LQ ODWH
SURSHUWLHV WUXVW DQG D FRRSHUDWLYH ZRUNLQJ UHODWLRQVKLS 2FWREHU$URXQGWKHVDPHWLPH%UDQGHQEXUJJDYHD
EHWZHHQWKH%RDUGDQG%UDQGHQEXUJZHUHFUXFLDOHOHPHQWVLQ FRS\RI(PHUVRQjVOHWWHUWR0DU\$QQ5XVVDQRWKHU+8'
WKH SHUIRUPDQFH RI KHU GXWLHV  'DPDJH WR %UDQGHQEXUJjV RIILFLDOZKRFRQFOXGHGZLWKRXWIXUWKHULQYHVWLJDWLRQWKDWD
UHODWLRQVKLSZLWKWKH%RDUGZRXOGKDYHSUHGLFWDEO\LQKLELWHG FRQIOLFWRILQWHUHVWPDQGDWLQJ0HDGHjVUHVLJQDWLRQGLGLQIDFW
WKHVXFFHVVRIWKH+$, H[LVW0RUHODQGKRZHYHUGHWHUPLQHGQRFRQIOLFWH[LVWHGDQG
H[SUHVVHGWKLVRSLQLRQLQDOHWWHUWR5XVV2Q$SULO
0RUHODQGWKH+$,jVDWWRUQH\VWDWHGDVPXFKLQKLVsDQXDU\ WKH %RDUG DGRSWHG 0RUHODQGjV OHWWHU DV WKH XQDQLPRXV
OHWWHUWR%UDQGHQEXUJH[SODLQLQJWKHUHSULPDQGZKHQKH RSLQLRQRIWKH+$,6XEVHTXHQWO\.XKQOHUHVSRQGHGWRWKDW
VDLG m>7@KH ([HFXWLYH 'LUHFWRU VKRXOG EH VXSSRUWLYH RI OHWWHUVWDWLQJ+8'ZDVQRWRIWKHRSLQLRQDFRQIOLFWH[LVWHG
%RDUGSROLFLHVDVVKHLVGLUHFWO\UHVSRQVLEOHWRWKH%RDUGDQG DQGWKDWWKH'HSDUWPHQWZRXOGQRORQJHULQYROYHLWVHOILQWKH
LVWKH%RDUGjVHPSOR\HH7KH([HFXWLYH'LUHFWRUGRHVQRW PDWWHU
PDNHSROLF\EXWVKRXOGVWULYHWRFDUU\RXW%RDUGSROLF\
7KLV KDV QRW EHHQ WKH FDVHl  +H ZHQW RQ WR GLVFXVV WKH 7KHVHFRQGPDMRUIODVKSRLQWLQ%UDQGHQEXUJjVUHODWLRQVKLS
QHZVSDSHUDUWLFOHDWLVVXHVD\LQJm7KLVLVVXH>RIWKHFRQIOLFW ZLWKWKH%RDUGLQYROYHGDSURSRVHGUHQRYDWLRQDQGUHGHVLJQ
RILQWHUHVW@KDVORQJEHHQODLGWRUHVWDQGUHYLYLQJWKHLVVXH RIFHUWDLQ+$,SXEOLFKRXVLQJXQLWV(DUO\LQWKH+$,
VHUYHVQRJRRGSXUSRVHDQGZDVGLUHFWO\GLVSDUDJLQJRIWKH GHFLGHGWRFRPSOHWHO\UHQRYDWHWKHODUJHVWRIWKH+$,KRXVLQJ
%RDUG LWV SROLFLHV DQG PHPEHUVl  0RUHODQGjV OHWWHU DOVR VLWHVDW+LFNRU\+LOOV7RIXQGWKHSURSRVHGUHQRYDWLRQWKH
H[SODLQHGKRZ%UDQGHQEXUJjVVWDWHPHQWVWRWKHQHZVSDSHU +$,KDGWRDSSO\IRUPRQH\WKURXJK+8'jV&RPSUHKHQVLYH
KDGWKHSRWHQWLDOLQWKH+$,jVRSLQLRQWRGDPDJHWKH+$,jV ,PSURYHPHQW$VVLVWDQFH3URJUDPm&,$3l$VSDUWRIWKH
HIIHFWLYHQHVV DSSOLFDWLRQ SURFHVV VHYHUDO +8' RIILFLDOV YLVLWHG +LFNRU\
+LOOV  +8' VXEVHTXHQWO\ UHFRPPHQGHG WKH +$, VKRXOG
 %UDQGHQEXUJY+RXVLQJ 1RV 1RV %UDQGHQEXUJY+RXVLQJ 
$XWKRULW\RI,UYLQHHWDO $XWKRULW\RI,UYLQHHWDO

GHPROLVK VHYHUDO RI WKH EXLOGLQJV DOWRJHWKHU LQVWHDG RI UHWDOLDWLRQDQGWKDWKLVFRQVWDQW LUULWDWLQJUHPLQGHUVRIWKH
DWWHPSWLQJ D FRPSOHWH UHQRYDWLRQ  7KH +8' RIILFLDOV PRQH\ WKHLU XQLW ZDV FRVWLQJ WKH GHSDUWPHQW GLG QRW
DSSDUHQWO\ EHOLHYHG WKH WLJKWO\ FRPSDFWHG EXLOGLQJV ZHUH HQFRPSDVV PDWWHUV RI SXEOLF FRQFHUQ EHFDXVH WKH\ GLG QRW
SUREOHPDWLFIRUVHYHUDOUHDVRQVDQGKDGIXUWKHUFRQFOXGHG DGGUHVV mDFWXDO RU SRWHQWLDO ZURQJGRLQJ RU DQ\ EUHDFK RI
EHFDXVHWKHUHZHUHDOZD\VVHYHUDOYDFDQFLHVDW+LFNRU\+LOOV SXEOLFWUXVWl*HQHUDOO\m>S@XEOLFLQWHUHVWLVQHDULWV]HQLWK
GHPROLWLRQ ZRXOG GLVSODFH IHZ LI DQ\ UHVLGHQWV ZKHQHQVXULQJWKDWSXEOLFRUJDQL]DWLRQVDUHEHLQJRSHUDWHGLQ
$GGLWLRQDOO\ +8' UHFRPPHQGHG WKH +$, PDQDJHPHQW DFFRUGDQFHZLWKWKHODZl0DURKQLFY:DONHU)G
RIILFHZKLFKKDGEHHQORFDWHGDWRQHRIWKHVPDOOHUKRXVLQJ WK&LU+HUH%UDQGHQEXUJjVVSHHFKFRQFHUQHGWKUHH
VLWHV EH PRYHG WR +LFNRU\ +LOOV  %UDQGHQEXUJ RSHQO\ VXEMHFWVKHUFULWLFLVPRIWKHGHPROLWLRQSURMHFWDW+LFNRU\
RSSRVHG ERWK VXJJHVWLRQV  +HU RSSRVLWLRQ WR PRYLQJ WKH +LOOV DQG KHU V\PSDWK\ IRU WKH UHVLGHQWV ZKR ZRXOG EH
PDQDJHPHQW RIILFH ZDV DSSDUHQWO\ UHODWHG WR DQ DOOHJHG GLVSODFHGKHUEHOLHIPRYLQJWKHPDQDJHPHQWRIILFHIURP
VKRUWDJH RI SDUNLQJ DW WKH +LFNRU\ +LOOV ORFDWLRQ LWVSUHYLRXVORFDWLRQWRWKH+LFNRU\+LOOVVLWHZDVDmZDVWHRI
1HYHUWKHOHVVWKH%RDUGDGRSWHG+8'jVSURSRVDOV    PRQH\l DQG  KHU FRQFHUQV DERXW 0HDGHjV SRWHQWLDO
FRQIOLFWRILQWHUHVW
,Q6HSWHPEHU%HWK&XUOLQDUHSRUWHUIRU7KH&LWL]HQ
9RLFH  7LPHV ,UYLQHjV ORFDO QHZVSDSHU FRQWDFWHG 2QRQHKDQG%UDQGHQEXUJjVVSHHFKRQHDFKRIWKHVHWKUHH
%UDQGHQEXUJ DERXW WKH +LFNRU\ +LOOV SURMHFW  7KH WZR LVVXHV GLG LQ VRPH UHVSHFWV WRXFK XSRQ LVVXHV VXFK DV
ZRPHQGLVFXVVHGWKHGHPROLWLRQSURSRVDODQG%UDQGHQEXUJ ZKHWKHU WKH %RDUG ZDV DFWLQJ LQ WKH FRPPXQLW\jV EHVW
H[SUHVVHGKHUGLVSOHDVXUHZLWKZKDW+8'DQGWKH%RDUGKDG LQWHUHVWVWKDWPLJKWEHRIVRPHFRQFHUQWRWKHSXEOLFDWODUJH
SODQQHGIRU+LFNRU\+LOOV%UDQGHQEXUJDOVRSURYLGHG&XUOLQ 6HH HJ &KDUYDW Y (DVWHUQ 2KLR 5HJLRQDO :DVWHZDWHU
ZLWKWKHFRUUHVSRQGHQFHUHODWHGWR0HDGHjVDOOHJHGFRQIOLFW $XWKRULW\BB)GBB:/
WK&LU$SULO
RILQWHUHVW&DUOLQWKHQFRQWDFWHG0HDGHDQGJDYHKLP DQ KROGLQJWKDWDVXSHUYLVRUjVUHSRUWLQJRIHQYLURQPHQWDO
RSSRUWXQLW\WRUHVSRQGWR%UDQGHQEXUJjVFRPPHQWV$WWKH YLRODWLRQV E\ KLV ZDVWHZDWHU WUHDWPHQW IDFLOLW\ WRXFKHG RQ
QH[W%RDUGPHHWLQJRQ6HSWHPEHU0HDGHEURXJKW PDWWHUVRISXEOLFFRQFHUQ,QPDQ\RWKHUUHVSHFWVKRZHYHU
XS KLV FRQYHUVDWLRQ ZLWK &XUOLQ  7KH %RDUG GHFLGHG WR KHU VSHHFK OLNH PDQ\ SHUVRQDO HPSOR\HH JULHYDQFHV
FRQYHQH D VSHFLDO PHHWLQJ RQHZHHN ODWHU IROORZLQJ DQ DSSHDUHGWREHPRWLYDWHGE\VHOILQWHUHVWDQG%UDQGHQEXUJjV
DUUDQJHGPHHWLQJZLWK0HDGHDQRWKHU%RDUGPHPEHUDQG GLVVDWLVIDFWLRQZLWKWKH%RDUGDVKHUHPSOR\HU,QDQ\HYHQW
&XUOLQ  'XULQJ WKH 6HSWHPEHU  PHHWLQJ WKH %RDUG ZHQHHGQRWGHFLGHZKHWKHU%UDQGHQEXUJjVVSHHFKWRXFKHG
XQDQLPRXVO\ UHSULPDQGHG %UDQGHQEXUJ mIRU D ODFN RI XSRQ PDWWHUV RI SXEOLF FRQFHUQ EHFDXVH HYHQ LI KHU
FRRSHUDWLRQ DQG DGYHUVDULDO DSSURDFK WR WKH %RDUG DQG LWV FRPPHQWDU\VDWLVILHVWKHILUVWSDUWRIWKH3LFNHULQJWHVWLWIDLOV
PHPEHUVl  7KH %RDUG IXUWKHU ZDUQHG %UDQGHQEXUJ mDQ\ WKHVHFRQGDVWKH+$,jVLQWHUHVWLQWKHHIILFLHQWSURYLVLRQRI
FRQWLQXDWLRQRIWKLVDGYHUVDULDODSSURDFKPD\UHVXOWLQ>KHU@ SXEOLFKRXVLQJVHUYLFHVRXWZHLJKHG%UDQGHQEXUJjVLQWHUHVWLQ
VXVSHQVLRQRUGLVPLVVDOl VSHDNLQJRQWKHVHLVVXHV
6KRUWO\ DIWHU WKH UHSULPDQG RQ 2FWREHU   7KH ,Q 0H\HUV Y &LW\ RI &LQFLQQDWL  )G  WK
&LWL]HQ9RLFH 7LPHVSXEOLVKHGDQDUWLFOHZLWKWKHKHDGOLQH &LUDSDQHORIWKLV&RXUWRXWOLQHGWKHFRQVLGHUDWLRQVD
m'HPROLWLRQVDQHZEHJLQQLQJIRU+LFNRU\+LOOV"l$ERYH FRXUWPXVWWDNHLQWRDFFRXQWZKHQXWLOL]LQJWKHEDODQFLQJWHVW
WKHDUWLFOHZDVDODUJHSLFWXUHRI%UDQGHQEXUJSRLQWLQJWRRQH
RIWKHEXLOGLQJVVFKHGXOHGIRUGHPROLWLRQ%UDQGHQEXUJKDG
 %UDQGHQEXUJY+RXVLQJ 1RV 1RV %UDQGHQEXUJY+RXVLQJ 
$XWKRULW\RI,UYLQHHWDO $XWKRULW\RI,UYLQHHWDO

WKURXJKLWVHPSOR\HHVl3HUU\Y0F*LQQLV)G EHHQ TXRWHG WKURXJKRXW WKH DUWLFOH DV EHLQJ FULWLFDO RI WKH
WK&LU2QO\LIDQHPSOR\HHFDQVDWLVI\ERWK GHPROLWLRQ SODQV DQG VKH UHIHUUHG WR WKH PRYH RI WKH
SDUWVRIWKLVWHVWWKXVSURYLQJKLVRUKHUVSHHFKZDVSURWHFWHG PDQDJHPHQW RIILFH DV mD ZDVWH RI WD[SD\HUV >VLF@ PRQH\l
VKRXOGWKHFRXUWPRYHRQWRGHWHUPLQLQJZKHWKHUWKHODVWWZR 7KH DUWLFOH DOVR GLVFXVVHG %UDQGHQEXUJjV FRQFHUQ RYHU
HOHPHQWVRIDFDXVHRIDFWLRQIRUUHWDOLDWLRQnDGYHUVHDFWLRQ 0HDGHjV DOOHJHG FRQIOLFW RI LQWHUHVW  $SSDUHQWO\
DQGPRWLYDWLRQnDUHSUHVHQW %UDQGHQEXUJ WROG WKH QHZVSDSHU m>X@QWLO 0U 0HDGHjV ODVW
XQLWVZHUHEXLOWZHGLGQjWKDYHDORWRIYDFDQFLHVl)ROORZLQJ
,Q WKLV FDVH WKH UHFRUG LV FOHDU WKH %RDUG WRRN DGYHUVH WKHDUWLFOHjVSXEOLFDWLRQDWWKHYHU\QH[W%RDUGPHHWLQJWKH
DFWLRQ DJDLQVW %UDQGHQEXUJ DQG WKH %RDUGjV DFWLRQV ZHUH %RDUGUHPRYHG%UDQGHQEXUJjVDXWKRULW\WRZULWHFKHFNVRQ
PRWLYDWHG SULPDULO\ E\ %UDQGHQEXUJjV FRPPHQWV WR WKH WKH+$,jVEHKDOI7KH%RDUGDOVRLQFUHDVHGWKHQXPEHURI
QHZVSDSHU  7KH GHFLGLQJ LVVXH LV WKHUHIRUH ZKHWKHU WDVNVLWDVVLJQHGWR%UDQGHQEXUJRYHUWKHQH[WVL[PRQWKV
%UDQGHQEXUJjVVSHHFKZDVSURWHFWHGE\WKH)LUVW$PHQGPHQW ZKLFKVKHEHOLHYHGFRQVWLWXWHGKDUDVVPHQW
,Q JUDQWLQJ VXPPDU\ MXGJPHQW RQ EHKDOI RI WKH +$, WKH
GLVWULFWFRXUWFRQFOXGHG%UDQGHQEXUJjVVSHHFKGLGWRXFKXSRQ ,Q D OHWWHU GDWHG sDQXDU\   0RUHODQG WKH +$,jV
PDWWHUV RI SXEOLF FRQFHUQ VDWLVI\LQJ WKH ILUVW SDUW RI WKH DWWRUQH\H[SODLQHGWKHEDVLVRIWKH%RDUGjV6HSWHPEHU
3LFNHULQJWHVWEXWGHWHUPLQHGWKH+$,jVLQWHUHVWLQHIILFLHQW UHSULPDQGRI%UDQGHQEXUJWRKHUDWWRUQH\0RUHODQG
DGPLQLVWUDWLRQ RI LWV SXEOLF KRXVLQJ SURMHFWV RXWZHLJKHG VWDWHGWKH%RDUGZDVRIWKHRSLQLRQ%UDQGHQEXUJZDVKRVWLOH
%UDQGHQEXUJjVLQWHUHVWLQSXEOLFO\FRPPHQWLQJRQ0HDGHjV WR WKH %RDUG IDLOHG WR VXSSRUW LWV LQLWLDWLYHV DQG KDG
DOOHJHG FRQIOLFW RI LQWHUHVW DQG KHU GLVVDWLVIDFWLRQ ZLWK WKH DWWHPSWHGWRSXEOLFO\GDPDJHLWVUHSXWDWLRQLQWKHFRPPXQLW\
+$,jVSODQVIRU+LFNRU\+LOOV$FFRUGLQJO\WKHGLVWULFWFRXUW $V HYLGHQFH RI WKHVH FRQFOXVLRQV 0RUHODQG FLWHG WR DQG
KHOG%UDQGHQEXUJIDLOHGWRSURYHDQHVVHQWLDOHOHPHQWRIKHU TXRWHG H[WHQVLYHO\ IURP WKH 2FWREHU   QHZVSDSHU
)LUVW$PHQGPHQWUHWDOLDWLRQFODLPDQGWKH+$,ZDVHQWLWOHG DUWLFOH  ,Q FRQFOXVLRQ 0RUHODQG ZDUQHG %UDQGHQEXUJjV
WRMXGJPHQWDVDPDWWHURIODZ HPSOR\PHQWZLWKWKH%RDUGZDVLQGDQJHULIVKHFRQWLQXHGWR
IDLOLQKHUREOLJDWLRQVWREHmVXSSRUWLYHRI>WKH%RDUG@DVDQ\
$IWHUFRQGXFWLQJDGHQRYRUHYLHZRIWKHGLVWULFWFRXUWjV HPSOR\HHVKRXOGEHl%UDQGHQEXUJWRRNDOHDYHRIDEVHQFH
RSLQLRQZHFRQFOXGHWKLVFDVHSUHVHQWVDFORVHTXHVWLRQRQ IURP0DUFKXQWLOsXO\DWZKLFKWLPHVKH
ZKHWKHU %UDQGHQEXUJjV VSHHFK WRXFKHG XSRQ PDWWHUV RI UHVLJQHG
SXEOLFFRQFHUQ,QJHQHUDOVSHHFKLQYROYHVPDWWHUVRISXEOLF
FRQFHUQZKHQLWLQYROYHVmLVVXHVDERXWZKLFKLQIRUPDWLRQLV % 3URFHGXUDO%DFNJURXQG
QHHGHGRUDSSURSULDWHWRHQDEOH WKHPHPEHUVRIVRFLHW\WR
PDNH LQIRUPHG GHFLVLRQV DERXW WKH RSHUDWLRQ RI WKHLU 2Q$SULO%UDQGHQEXUJILOHGVXLWDJDLQVWWKH+$,
JRYHUQPHQWl0F.LQOH\Y&LW\RI(OR\)G LQWKH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH(DVWHUQ'LVWULFWRI
WK &LU   6XFK PDWWHUV RI SXEOLF FRQFHUQ DUH WR EH .HQWXFN\+HUFRPSODLQWDOOHJHGDFDXVHRIDFWLRQSXUVXDQW
FRQWUDVWHG ZLWK LQWHUQDO SHUVRQQHO GLVSXWHV RU FRPSODLQWV WR86&†IRUYLRODWLRQRIKHUFRQVWLWXWLRQDOULJKWV
DERXWDQHPSOR\HUjVSHUIRUPDQFH6HHHJ%URZQY&LW\RI WRIUHHVSHHFKDQGVXEVWDQWLYHGXHSURFHVV%UDQGHQEXUJDQG
7UHQWRQ)GWK&LUKROGLQJDOHWWHU WKH+$,ILOHGFURVVPRWLRQVIRUVXPPDU\MXGJPHQWRQsXQH
GHVFULELQJWKHSHUFHSWLRQVRIVL[GLVJUXQWOHGSROLFHSDWUROPHQ 7KHGLVWULFWFRXUWRQ$XJXVWJUDQWHGWKH
WKDW WKHLU FKLHIjV DOOHJLDQFHV ZHUH PLVSODFHG WKDW KLV +$,jVPRWLRQIRUVXPPDU\MXGJPHQWDQGGHQLHGWKHPRWLRQ
GHFLVLRQV ZHUH LQDSSURSULDWHO\ EDVHG RQ WKH IHDU RI XQLRQ
 %UDQGHQEXUJY+RXVLQJ 1RV 1RV %UDQGHQEXUJY+RXVLQJ 
$XWKRULW\RI,UYLQHHWDO $XWKRULW\RI,UYLQHHWDO

ILOHGE\%UDQGHQEXUJ%RWK SDUWLHVILOHGWLPHO\QRWLFHVRI SXEOLF LQWHUHVW E\ YLUWXH RI SXEOLF HPSOR\PHQWl  7KH
DSSHDOWRWKLVFRXUW JRYHUQPHQWPD\KRZHYHUH[HUFLVHEURDGHUSRZHUWRUHJXODWH
WKHVSHHFKRILWVHPSOR\HHVWKDQRYHUSULYDWHFLWL]HQV ,G
,,$1$/<6,6 7KLVGLIIHUHQFHLVGXHWRWKHIDFWWKHJRYHUQPHQWjVLQWHUHVWLQ
WKHHIILFLHQWSURYLVLRQRISXEOLFVHUYLFHVLVVXEVWDQWLDOO\PRUH
$ 6WDQGDUGRI5HYLHZ VLJQLILFDQW ZKHQ LW LV DFWLQJ DV HPSOR\HU UDWKHU WKDQ
VRYHUHLJQ
:HUHYLHZGHQRYRWKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\
MXGJPHQW6HHHJ+ROORZD\Y%UXVK)G 7KH JRYHUQPHQWjV LQWHUHVW LQ DFKLHYLQJ LWV JRDOV DV
WK&LU6XPPDU\MXGJPHQWLVSURSHUZKHQWKHUHDUH HIILFLHQWO\DQGHIIHFWLYHO\DVSRVVLEOHLVHOHYDWHGIURPD
QRJHQXLQHLVVXHVRIPDWHULDOIDFWLQGLVSXWHDQGWKHPRYLQJ UHODWLYHO\VXERUGLQDWHLQWHUHVWWRDVLJQLILFDQWRQHZKHQ
SDUW\LVHQWLWOHGWRMXGJPHQWDVDPDWWHURIODZ)HG5&LY LWDFWVDVDQHPSOR\HU7KHJRYHUQPHQWFDQQRWUHVWULFW
3 F,QGHFLGLQJDPRWLRQIRUVXPPDU\MXGJPHQWWKH WKH VSHHFK RI WKH SXEOLF DW ODUJH MXVW LQ WKH QDPH RI
FRXUW PXVW YLHZ WKH HYLGHQFH DQG GUDZ DOO UHDVRQDEOH HIILFLHQF\  %XW ZKHUH WKH JRYHUQPHQW LV HPSOR\LQJ
LQIHUHQFHVLQIDYRURIWKHQRQPRYLQJSDUW\6HH0DWVXVKLWD VRPHRQHIRUWKHYHU\SXUSRVHRIHIIHFWLYHO\DFKLHYLQJLWV
(OHF,QGXV&RY=HQLWK5DGLR&RUS86 JRDOVVXFKUHVWULFWLRQVPD\ZHOOEHDSSURSULDWH
  7KH MXGJH LV QRW WR mZHLJK WKH HYLGHQFH DQG
GHWHUPLQHWKHWUXWKRIWKHPDWWHUEXWWRGHWHUPLQHZKHWKHU :DWHUVY&KXUFKLOO86
WKHUHLVDJHQXLQHLVVXHIRUWULDOl$QGHUVRQY/LEHUW\/REE\
,QF  86     $ JHQXLQH LVVXH IRU WULDO 7R DFFRPPRGDWH WKH FRPSHWLQJ LQWHUHVWV RI WKH FLWL]HQ
H[LVWVRQO\ZKHQWKHUHLVVXIILFLHQWmHYLGHQFHRQZKLFKWKH HPSOR\HHDQGWKHJRYHUQPHQWHPSOR\HUWKH6XSUHPH&RXUW
MXU\FRXOGUHDVRQDEO\ILQGIRUWKHSODLQWLIIl,GDW KDV GHYHORSHG D WZRSDUW WHVW IRU GHWHUPLQLQJ ZKHWKHU DQ
HPSOR\HHjVVSHHFKZDVSURWHFWHGXQGHUWKH)LUVW$PHQGPHQW
% )LUVW$PHQGPHQW&ODLP 3LFNHULQJY%GRI(GXF86$VLQRWKHU
FRQWH[WVWKHLVVXHRIZKHWKHUDSODLQWLIIHQJDJHGLQSURWHFWHG
7KHGLVWULFWFRXUWGLGQRWHUULQJUDQWLQJWKH+$,jVPRWLRQ VSHHFKLVDTXHVWLRQRIODZIRUWKHFRXUW&RQQLFN86
IRUVXPPDU\MXGJPHQWRQ%UDQGHQEXUJjVFODLPRIUHWDOLDWLRQ DWDQGWKHHPSOR\HHEHDUVWKHEXUGHQRISURYLQJKLVRU
LQ YLRODWLRQ RI KHU )LUVW $PHQGPHQW ULJKW WR IUHHGRP RI KHUDFWLRQVZHUHFRQVWLWXWLRQDOO\SURWHFWHGLQWKHSDUWLFXODU
VSHHFK$SODLQWLIIVHHNLQJWRHVWDEOLVKDFDVHRIUHWDOLDWLRQ FLUFXPVWDQFHVsDFNVRQY/HLJKWRQ)GWK
IRUVSHHFKSURWHFWHGXQGHUWKH)LUVW$PHQGPHQWPXVWSRLQW &LU7KHILUVWSDUWRIWKHWHVWUHTXLUHVWKHFRXUWWRDVN
WR HYLGHQFH VXIILFLHQW WR HVWDEOLVK WKUHH HOHPHQWV  WKH ZKHWKHU WKH VSHHFK DW LVVXH DGGUHVVHG D PDWWHU RI SXEOLF
SODLQWLIIHQJDJHGLQFRQVWLWXWLRQDOO\SURWHFWHGVSHHFKWKH FRQFHUQ6HH5DQNLQY0F3KHUVRQ86
SODLQWLIIZDVVXEMHFWHGWRDGYHUVHDFWLRQRUZDVGHSULYHGRI m7KH WKUHVKROG TXHVWLRQ LQ DSSO\LQJ WKLV EDODQFLQJ WHVW LV
VRPHEHQHILWDQGWKHSURWHFWHGVSHHFKZDVDmVXEVWDQWLDOl ZKHWKHU>WKHHPSOR\HHjV@VSHHFKPD\EHµIDLUO\FKDUDFWHUL]HG
RUDmPRWLYDWLQJIDFWRUlLQWKHDGYHUVHDFWLRQ0W+HDOWK\ DV FRQVWLWXWLQJ VSHHFK RQ D PDWWHU RI SXEOLF FRQFHUQjl
&LW\6FKRRO'LVW%GRI(GXFY'R\OH86 FLWDWLRQVRPLWWHG1H[WWKHFRXUWPXVWGHFLGHZKHWKHUmWKH
GHDOLQJZLWKUHWDOLDWRU\WHUPLQDWLRQRIHPSOR\PHQW LQWHUHVW RI WKH HPSOR\HH DV D FLWL]HQ LQ FRPPHQWLQJ RQ
,Q&RQQLFNY0H\HUV86WKH8QLWHG PDWWHUVRISXEOLFFRQFHUQRXWZHLJKVWKHHPSOR\HUjVLQWHUHVW
6WDWHV 6XSUHPH &RXUW KHOG mD SXEOLF HPSOR\HH GRHV QRW LQSURPRWLQJWKHHIILFLHQF\RIWKHSXEOLFVHUYLFHVLWSHUIRUPV
UHOLQTXLVK)LUVW$PHQGPHQWULJKWVWRFRPPHQWRQPDWWHUVRI