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 s$/$3(12 3523(57< ; 0$1$*(0(17 //& 3ODLQWLII$SSHOODQW 1R Y ! *(25*( '8.$6 s867,1( '8.$6 'HIHQGDQWV$SSHOOHHV 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI7HQQHVVHHDW.QR[YLOOH 1Rn&XUWLV/&ROOLHU'LVWULFWsXGJH $UJXHGsXQH 'HFLGHGDQG)LOHG6HSWHPEHU %HIRUH%$7&+(/'(5DQG0225(&LUFXLWsXGJHV %(57(/60$1'LVWULFWsXGJH 7KH +RQRUDEOH :LOOLDP 2 %HUWHOVPDQ 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH (DVWHUQ 'LVWULFW RI .HQWXFN\ VLWWLQJ E\ GHVLJQDWLRQ sDODSHQR3URSHUW\Y'XNDVHWDO 1R BBBBBBBBBBBBBBBBB &2816(/ $5*8(' 'DYLG ' 3DYHN '$9,' 3$9(. $662&,$7(6'HQYHU&RORUDGRIRU$SSHOODQW'RXJODV/ 'XQQ 0255,621 7<5(( '811 .QR[YLOOH 7HQQHVVHH IRU $SSHOOHHV 21%5,() 'DYLG ' 3DYHN /LVD07RGG'$9,'3$9(. $662&,$7(6'HQYHU &RORUDGR IRU $SSHOODQW 'RXJODV / 'XQQ 0255,621 7<5(( '811.QR[YLOOH7HQQHVVHHIRU$SSHOOHHV 0225(sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK %(57(/60$1'sMRLQHG%$7&+(/'(5sSS GHOLYHUHGDVHSDUDWHFRQFXUULQJRSLQLRQ BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB .$5(1 1(/621 0225( &LUFXLW sXGJH 3ODLQWLII $SSHOODQWsDODSHQR3URSHUW\0DQDJHPHQW//&EURXJKWVXLW WRHQIRUFHDMXGJPHQWDJDLQVW'HIHQGDQWV$SSHOOHHV*HRUJH DQGsXVWLQH'XNDVIRUOLDELOLW\RQDGHIDXOWHGSURPLVVRU\QRWH ZKLFK WKH 'XNDVHV KDG JXDUDQWHHG 7KH GLVWULFW FRXUW GLVPLVVHGsDODSHQRjVFODLPDVEDUUHGE\WKHDSSOLFDEOHVWDWH VWDWXWHRIOLPLWDWLRQVDQGUHIXVHGWRDSSO\DORQJHUIHGHUDO VWDWXWH RI OLPLWDWLRQV IRXQG LQ WKH )HGHUDO 'HEW &ROOHFWLRQ 3URFHGXUHV $FW m)'&3$l 86& HW VHT sDODSHQR DSSHDOV WKH GLVWULFW FRXUWjV GLVPLVVDO )RU WKH IROORZLQJUHDVRQVZH5(9(56(WKHMXGJPHQWRIWKHGLVWULFW FRXUW ,%$&.*5281' 7KLVFDVHUHYROYHVDURXQGDQRZGHIDXOWHGSURPLVVRU\QRWH ZKLFK ZDV H[HFXWHG RQ 6HSWHPEHU E\ D SROLWLFDO FDPSDLJQFRPPLWWHHm7HQQHVVHDQVIRU7\UHHlDQGVLJQHGE\ WKH FDPSDLJQjV FKDLUPDQ 3 'RXJODV 0RUULVRQ IRU WKH SXUSRVH RI IXQGLQJ FDQGLGDWH 5DQG\ 7\UHHjV sDODSHQR3URSHUW\Y'XNDVHWDO 1R 1R sDODSHQR3URSHUW\Y'XNDVHWDO 'XNDVHVEHFDPHILQDO6LQFHWKHWLPHIRUWDNLQJDQDSSHDO JXEHUQDWRULDOUDFHLQ7HQQHVVHH,QH[FKDQJHIRUWKHQRWH IURP WKLV MXGJPHQW KDG H[SLUHG E\ WKH WLPH WKH 'XNDVHV ZKLFKZDVSD\DEOHRQGHPDQGRULQWKHHYHQWRIQRGHPDQG VRXJKW UHFRQVLGHUDWLRQ 5XOH E FDQ DIIRUG QR UHOLHI ZLWKLQ GD\V DIWHU H[HFXWLRQ RI WKH QRWH WKH 8QLWHG 3LHUFH)GDW6LQFHWKHMXGJPHQWZDVQRWYRLG $PHULFDQ %DQN m8$%l ORDQHG 7HQQHVVHDQV IRU 7\UHH ZLWKLQ WKH PHDQLQJ RI 5XOH E WKH GLVWULFW FRXUW 2Q1RYHPEHU*HRUJHDQGsXVWLQH HUURQHRXVO\UHFRQVLGHUHGLWVUHQHZDORIWKHMXGJPHQWDJDLQVW 'XNDV7\UHHjVLQODZVVLJQHGDEURDGO\ZRUGHGm&RQWLQXLQJ WKH 'XNDVHV $OWKRXJK WKLV UHVXOW PLJKW UHLQVWDWH D UXOLQJ *XDUDQW\lZKLFKJXDUDQWHHGDOORI7HQQHVVHDQVIRU7\UHHjV SUHPLVHG XSRQ PLVFRQFHSWLRQV RI WKH ODZ D 5XOH E GHEWVmQRZH[LVWLQJRUKHUHDIWHUDULVLQJlIRUDQmXQOLPLWHGl PRWLRQFDQQRWVXEVWLWXWHIRUDQDSSHDO+RSSHU)GDW VXPRIPRQH\8$%VXEVHTXHQWO\IDLOHGLQ0D\DQG $FFRUGLQJO\ , MRLQ WKH PDMRULW\ LQ UHYHUVLQJ WKH WKH)HGHUDO'HSRVLW,QVXUDQFH&RUSRUDWLRQm)',&lDFWLQJ MXGJPHQWRIWKHGLVWULFWFRXUW LQLWVFRUSRUDWHFDSDFLW\SXUFKDVHGWKHGHIDXOWHGSURPLVVRU\ QRWHDQGRWKHUDVVHWVRIWKHEDQNIURPWKHEDQNjVUHFHLYHU 7KH&RQWLQXLQJ*XDUDQW\ZDVIRXQGLQ8$%jVILOHVZLWKWKH QRWHDSSDUHQWO\LWKDGEHHQLQFOXGHGLQWKHILOHWRVXSSRUWWKH ORDQV WR 7HQQHVVHDQV IRU 7\UHH ZKHQ WKH EDQN ZDV EHLQJ LQYHVWLJDWHGE\IHGHUDOEDQNLQJRIILFLDOV 7KLV OLWLJDWLRQ EHJDQ RQ 1RYHPEHU ZKHQ WKH )',& ILOHG D FRPSODLQW LQ IHGHUDO GLVWULFW FRXUW DJDLQVW 7HQQHVVHDQVIRU7\UHH5DQG\7\UHH3'RXJODV0RUULVRQ DQG*HRUJHDQGsXVWLQH'XNDVDVPHPEHUVRIWKHSROLWLFDO FDPSDLJQVHHNLQJWRHQIRUFHWKHGHIDXOWHGSURPLVVRU\QRWH WKH)',&DOVRVRXJKWWRKROGWKH'XNDVHVOLDEOHDVJXDUDQWRUV RI WKH QRWH 7KH SDUWLHV ILOHG FURVVPRWLRQV IRU VXPPDU\ MXGJPHQW 2Q sXO\ WKH GLVWULFW FRXUW JUDQWHG VXPPDU\ MXGJPHQW LQ IDYRU RI 7\UHH 0RUULVRQ DQG WKH 'XNDVHV DV PHPEHUV RI WKH SROLWLFDO FDPSDLJQ FRPPLWWHH 7KH GLVWULFW FRXUW UHIXVHG KRZHYHU WR JUDQW VXPPDU\ MXGJPHQWIRUWKH'XNDVHVLQWKHLUUROHDVJXDUDQWRUVRIWKH QRWH2Q)HEUXDU\WKHGLVWULFWFRXUWJUDQWHGWKH 7KH QRWH EHDUV LQWHUHVW IURP WKH GDWH RI WKH ORDQ DW . SHUFHQW LQ H[FHVV RI WKH EDVH RU SULPH UDWH RI LQWHUHVW LQ HIIHFW IURP WLPH WR WLPH DW 8$% sRLQW $SSHQGL[ ms$l DW ,W LV XQFOHDU KRZ WKH GLVWULFW FRXUW GLVSRVHG RI WKH FDXVH RI DFWLRQ DJDLQVW 7HQQHVVHDQV IRU 7\UHH 7KH GLVWULFW FRXUW QRWHG WKDW WKH JURXS GLG QRW PRYH IRU VXPPDU\ MXGJPHQW EXW LW WKHQ JUDQWHG VXPPDU\ MXGJPHQW DV WR DOO LQGLYLGXDO GHIHQGDQWV ZKR ZHUH PHPEHUV RI WKH JURXS 7KH GLVWULFW FRXUW DOVR VWDWHG WKDW WKH JURXS mLV SUREDEO\ QR ORQJHU LQ sDODSHQR3URSHUW\Y'XNDVHWDO 1R 1R sDODSHQR3URSHUW\Y'XNDVHWDO )',&jVPRWLRQIRUVXPPDU\MXGJPHQWDJDLQVWWKH'XNDVHVDV DOVR)ULHGPDQY(VWDWHRI3UHVVHU)GWK JXDUDQWRUVRIWKHQRWHsXGJPHQWZDVHQWHUHGIRUWKH)',&LQ &LU QRWLQJ WKDW ZKHUH IDFWV RI VHUYLFH DUH QRW LQ WKHDPRXQWRISOXVLQWHUHVWDQGDWWRUQH\jVIHHV GLVSXWH DGHTXDF\ RI VHUYLFH RI SURFHVV SUHVHQWV D SXUH LQDFFRUGDQFHZLWKWKHWHUPVRIWKHQRWH2Q0DUFK TXHVWLRQRIODZ8QGHU5XOHmWKHUHLVQRJXDUDQWHHWKDW WKH)',&ILOHGDQRWLFHRIDSSHDOVWDWLQJWKDWLWDSSHDOHGWKH WKHSDUW\SHUVRQDOO\ZLOOUHFHLYHQRWLFH,WFDQJHQHUDOO\EH GLVWULFWFRXUWjVsXO\MXGJPHQWXSRQWKHFRQFOXVLRQ SUHVXPHG KRZHYHU WKDW D SDUW\jV DWWRUQH\ ZLOO QRWLI\ WKH RI WKH DFWLRQ E\ WKH )HEUXDU\ MXGJPHQW 7KH SDUW\RILPSRUWDQWGHYHORSPHQWVDQGWDNHDSSURSULDWHDFWLRQ 'XNDVHVFURVVDSSHDOHGIURPWKHGLVWULFWFRXUWjVMXGJPHQWRI WRSURWHFWWKHSDUW\jVLQWHUHVWVl%DUORZY*URXQG)G )HEUXDU\ WK&LU7RDIIRUGFRQVWLWXWLRQDOO\DGHTXDWH GXH SURFHVV VHUYLFH RI SURFHVV PXVW EH mUHDVRQDEO\ ,Q DQ XQSXEOLVKHG RSLQLRQ )',& Y 0RUULVRQ 1RV FDOFXODWHGXQGHUDOOWKHFLUFXPVWDQFHVWRDSSULVHLQWHUHVWHG :/WK&LU$SU SDUWLHV RI WKH SHQGHQF\ RI WKH DFWLRQ DQG DIIRUG WKHP DQ D SDQHO RI WKLV FRXUW DIILUPHG WKH GLVWULFW FRXUWjV JUDQW RI RSSRUWXQLW\WRSUHVHQWWKHLUREMHFWLRQVl0XOODQHY&HQWUDO VXPPDU\ MXGJPHQW IRU WKH )',& DV WR LWV FODLP DJDLQVW +DQRYHU %DQN 7UXVW &R 86 *HRUJHDQGsXVWLQH'XNDVEXWUHYHUVHGWKHJUDQWRIVXPPDU\ FLWDWLRQV RPLWWHG $SSO\LQJ WKLV VWDQGDUG WKH )',& MXGJPHQWIRU7\UHHDQG0RUULVRQDQGUHPDQGHGIRUIXUWKHU FRPSOLHGZLWK5XOHE\VHUYLQJRSSRVLQJFRXQVHORIUHFRUG SURFHHGLQJV 7KH )',& WKHQ ILOHG D 0RWLRQ IRU (QWU\ RI ZLWKWKHPRWLRQIRUUHQHZDORIWKHMXGJPHQWDQGRQWKHIDFWV sXGJPHQW6SHFLI\LQJ6XP&HUWDLQLQWKHGLVWULFWFRXUWLQWKH RI WKLV FDVH VHUYLFH RQ WKH FRXQVHO RI UHFRUG SURYLGHG DPRXQWRIZKLFKLQFOXGHGWKHSULQFLSDODPRXQW DGHTXDWHQRWLFHWRWKH'XNDVHV6HH*XDP(FRQ'HY$XWK RI WKH ORDQ SOXV LQWHUHVW DQG DWWRUQH\jV IHHV 7KH PRWLRQ Y 8OORD )G WK &LU KROGLQJ WKDW DYHUUHGWKDWm>W@KHWLPHIRUDQ\IXUWKHUDSSHDORQWKLVPDWWHU VHUYLFHXSRQWKHDWWRUQH\RIUHFRUGVDWLVILHVWKHIHGHUDOUXOHV KDVH[SLUHGlDQGWKDWWKHMXGJPHQWLVmILQDOls$DW2Q HYHQLIWKDWODZ\HUQRORQJHUUHSUHVHQWVWKHOLWLJDQW7KDWWKH 6HSWHPEHUWKHGLVWULFWFRXUWHQWHUHGDsXGJPHQWIRU 'XNDVHV LQ IDFW OLWLJDWHG WKH PRWLRQ IRU UHFRQVLGHUDWLRQ 6XP&HUWDLQIRUWKHDPRXQWUHTXHVWHG2Q0D\WKH WKURXJK GLIIHUHQW FRXQVHO GRHV QRW DOWHU WKLV FRQFOXVLRQ )',&DSSOLHGIRUD:ULWRI([HFXWLRQWRVDWLVI\WKHMXGJPHQW EHFDXVHWKH'XNDVHVGLGQRWLQIRUPWKHFRXUWRIWKHUHWHQWLRQ DJDLQVWWKH'XNDVHVZKLFKZDVJUDQWHGE\WKHGLVWULFWFRXUW RIQHZFRXQVHOSULRUWRWKHILOLQJRIWKH)',&jVPRWLRQWR DQG H[HFXWHG XSRQ ORFDO EDQNV 7KH ZULWV ZHUH QHYHU UHQHZWKHMXGJPHQW,IWKHFRXQVHORIUHFRUGIDLOHGWRFRQWDFW VDWLVILHG HLWKHU WKH 'XNDVHV WKHPVHOYHV RU WKHLU QHZ UHSUHVHQWDWLYH XSRQ EHLQJ VHUYHG ZLWK WKH )',&jV PRWLRQ DQ DFWLRQ IRU 2Q $XJXVW LQ DFFRUGDQFH ZLWK WKLV FRXUWjV PDOSUDFWLFHPLJKWOLHEXWVXFKHYHQWXDOLWLHVGRQRWDOWHUWKH PDQGDWHWKHGLVWULFWFRXUWKHOGDEHQFKWULDORQWKH)',&jV GXH SURFHVV DQDO\VLV 0RUHRYHU WKH 'XNDVHV KDYH QRW FODLPVDJDLQVW7HQQHVVHDQVIRU7\UHH0RUULVRQDQG7\UHH FKDOOHQJHG WKH VXIILFLHQF\ RI SURFHVV DQG GLG QRW VHHN UHFRQVLGHUDWLRQRQWKDWJURXQG H[LVWHQFHl s$ DW 2Q DSSHDO KRZHYHU WKLV FRXUW VWDWHG WKDW WKH )RUWKHVHUHDVRQVZKHQWKHGLVWULFWFRXUWHQWHUHGWKHRUGHU GLVWULFW FRXUW KDG JUDQWHG VXPPDU\ MXGJPHQW LQ IDYRU RI 7HQQHVVHDQV IRU UHQHZLQJWKHMXGJPHQWWKHFRXUWGLGQRWDFWmLQDPDQQHU 7\UHH )',& Y 0RUULVRQ 1RV :/ LQFRQVLVWHQWZLWKGXHSURFHVVRIODZl$QWRLQH)GDW WK &LU $SU 7KHUHIRUHWKHFRXUWGLGQRWHQWHUDYRLGMXGJPHQW$W PRVW UHQHZDO RI WKH MXGJPHQW LPSOLFLWO\ UHVWHG XSRQ DQ 7KLV FRXUWjV UXOLQJ OHIW WKH SXUSRUWHG JUDQW RI VXPPDU\ MXGJPHQW WR LQFRUUHFW FDOFXODWLRQ RI WKH GDWH WKH MXGJPHQW DJDLQVW WKH 7HQQHVVHDQV IRU 7\UHH XQWRXFKHG sDODSHQR3URSHUW\Y'XNDVHWDO 1R 1R sDODSHQR3URSHUW\Y'XNDVHWDO FRQVWLWXWHV DQ DIILUPDWLYH GHIHQVH WR OLDELOLW\ QRW D LQZKLFKWKH)',&VRXJKWWRKROGWKHODWWHUWZRGHIHQGDQWV MXULVGLFWLRQDOEDUWRHQWU\RIDZULWRIH[HFXWLRQRUWRRWKHU SHUVRQDOO\OLDEOHIRUWKHSURPLVVRU\QRWH$WWKHFRQFOXVLRQ MXGLFLDOHQIRUFHPHQWDFWLRQ7(11 5 &,9 3 UHTXLULQJ RI WKH WULDO WKH GLVWULFW FRXUW IRXQG WKDW QHLWKHU 7\UHH QRU SDUWLHVGHIHQGLQJDFWLRQVWRSOHDGDIILUPDWLYHO\WKHmVWDWXWHRI 0RUULVRQZHUHOLDEOHIRUWKHQRWHQRUKDGWKH\LQWHQGHGWR OLPLWDWLRQVDQGDQ\RWKHUPDWWHUFRQVWLWXWLQJDQDYRLGDQFH PLVOHDGEDQNLQJDXWKRULWLHVWKHGLVWULFWFRXUWDOVRHQWHUHGD RU DIILUPDWLYH GHIHQVHl 6HH DOVR HJ (SHUVRQ Y GHIDXOW MXGJPHQW DJDLQVW 7HQQHVVHDQV IRU 7\UHH ILQGLQJ LW 5REHUWVRQ 6: 7HQQ %DOODUG Y OLDEOHRQWKHSURPLVVRU\QRWHLQWKHDPRXQWRI 6FUXJJV6:7HQQ$FFRUGLQJO\WKH SOXVIRUDWWRUQH\jVIHHVH[SHQVHVDQGFRVWV GLVWULFWFRXUWjVRUGHUUHQHZLQJMXGJPHQWDJDLQVWWKH'XNDVHV DWPRVWUHSUHVHQWVDQHUURQHRXVMXGJPHQWEHFDXVHLWLPSOLFLWO\ 7KH)',&WKHQILOHGDQRWLFHRIDSSHDODVWRWKHMXGJPHQW UHVWVXSRQDQLQFRUUHFWXQGHUVWDQGLQJRIZKHQWKHMXGJPHQW HQWHUHGLQIDYRURI7\UHHDQG0RUULVRQ$QRWKHUSDQHORIWKLV DJDLQVWWKHPEHFDPHILQDO7KHUHIRUHWKHGLVWULFWFRXUWHUUHG FRXUWDIILUPHGWKHMXGJPHQWRIWKHGLVWULFWFRXUWLQ)',&Y E\ UHFRQVLGHULQJ LWV MXGJPHQW $OWKRXJK , XQGHUVWDQG WKH 7HQQHVVHDQVIRU7\UHH)GWK&LUWKH PDMRULW\jVGHVLUHWRDUWLFXODWHDEULJKWOLQHUXOHLQWKLVFLUFXLW PDQGDWHIRUWKDWGHFLVLRQLVVXHGRQ2FWREHU UHJDUGLQJ WKH DSSOLFDELOLW\ RI 5XOH E WKH SURFHGXUDO SRVWXUHRIWKLVFDVHSUHFOXGHVVXFKDQHIIRUWE\OLPLWLQJWKH 2QsXO\DOPRVWWHQ\HDUVDIWHUWKLVFRXUWjVODVW LQTXLU\WRWKHPRUHQDUURZLVVXHRIZKHWKHUWKHGLVWULFWFRXUW PDQGDWHLQWKHOLWLJDWLRQWKH)',&ILOHGD0RWLRQWR5HQHZ KDGMXULVGLFWLRQWRUHQHZWKHMXGJPHQW%HFDXVH,FRQFOXGH sXGJPHQWFODLPLQJWKDWWKHMXGJPHQWHQWHUHGE\WKHGLVWULFW WKDWLWGLGWKHUHQHZDORIWKHMXGJPHQWZDVQRWDYRLGRUGHU FRXUW DJDLQVW WKH 'XNDVHV RQ 6HSWHPEHU KDG QRW DQG,DJUHHWKDWWKHGLVWULFWFRXUWHUUHGLQUHFRQVLGHULQJWKDW EHHQ VDWLVILHG &LWLQJ 7HQQ &RGH $QQ WKH UXOLQJ )',&DVVHUWHGWKDWm>W@KHVWDWXWRU\SHULRGRIWHQ\HDUV VLQFHWKHHQWU\RIWKHMXGJPHQWKDVQRWH[SLUHGGXHWRWKHIDFW $V D FRQFOXGLQJ QRWH , DGG WKDW DOWKRXJK WKH 'XNDVHV WKDWWKLVPDWWHUZDVDSSHDOHGDQGWKHWLPHGXULQJZKLFKWKH IDLOHG WR UHVSRQG WR WKH )',&jV PRWLRQ WR UHQHZ WKH DSSHDO ZDV SHQGLQJ LV QRW FRXQWHG IRU SXUSRVHV RI MXGJPHQWWKHGLVWULFWFRXUWjVUHQHZDORIWKHMXGJPHQWGLGQRW GHWHUPLQLQJWKHH[SLUDWLRQGDWHRIDMXGJPHQWls$DW RFFXUmLQDPDQQHULQFRQVLVWHQWZLWKGXHSURFHVVlVRDVWR UHQGHUWKDWRUGHUYRLG$QWRLQH)GDW7KHUHFRUG 7KH'XNDVHVIDLOHGWRUHVSRQGWRWKLVPRWLRQEHFDXVHLWZDV VKRZVWKDWWKH)',&VHUYHGWKHPRWLRQWRUHQHZWKHMXGJPHQW QRWVHUYHGRQWKHLUFXUUHQWFRXQVHO2Q$XJXVWWKH XSRQWKH'XNDVHVjFRXQVHORIUHFRUGDVRI5XOHE GLVWULFW FRXUW GHWHUPLQHG WKDW WKH MXGJPHQW DJDLQVW WKH SURYLGHVWKDWVHUYLFHRIDSDUW\UHSUHVHQWHGE\FRXQVHOmVKDOO 'XNDVHV KDG QRW H[SLUHG DQG WKDW WKH )',& ZDV RZHG EHPDGHXSRQWKHDWWRUQH\lm6HUYLFHXSRQWKHDWWRUQH\ SOXVLQWHUHVWDVZDVHQWHUHGLQWKH6HSWHPEHU VKDOOEHPDGHE\GHOLYHULQJDFRS\WRWKHDWWRUQH\l)(' MXGJPHQWWKHFRXUWWKHQRUGHUHGWKDWWKHMXGJPHQW 5 &,9 3 E7KLVFRXUWmH[HUFLVH>V@SOHQDU\UHYLHZRYHU DJDLQVWWKH'XNDVHVEHUHQHZHGDQGWKHOLHQFRQWLQXHGIRU OHJDOLVVXHVLQYROYLQJWKHDGHTXDF\RIVHUYLFH>@l/6s,QY DQRWKHUWHQ\HDUV2Q2FWREHUWKH'XNDVHVILOHGD &RY2/',QF)GWK&LU6HH 0RWLRQ WR 6HW $VLGH 2UGHU 5HQHZLQJ sXGJPHQW RQ WKH JURXQGWKDWWKHDSSOLFDEOHWHQ\HDUVWDWXWHRIOLPLWDWLRQVXQGHU , DJUHH ZLWK WKH PDMRULW\ WKDW UHVROXWLRQ RI WKLV DSSHDO EDVHG RQ FRQVLGHUDWLRQ RI WKH DSSOLFDELOLW\ RI 5XOH E REYLDWHV WKH QHHG WR 7KH VWDWXWH SURYLGHV IRU D WHQ\HDU VWDWXWH RI OLPLWDWLRQV DIWHU WKH H[DPLQH WKH DYDLODELOLW\ RI WKH \HDU VWDWXWH RI OLPLWDWLRQV XQGHU WKH FDXVH RI DFWLRQ KDV DFFUXHG IRU m>D@FWLRQV RQ MXGJPHQWV DQG GHFUHHV RI )HGHUDO 'HEW &ROOHFWLRQ 3URFHGXUH $FW FRXUWV RI UHFRUG RI WKLV VWDWHl 7 & $ sDODSHQR3URSHUW\Y'XNDVHWDO 1R 1R s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sDODSHQR 3URSHUW\ 0DQDJHPHQW RPLWWHG 6HH DOVR $QWRLQH )G DW VWDWLQJ WKDW D //&2Q2FWREHUsDODSHQRILOHGDQ$SSOLFDWLRQIRU MXGJPHQWLVYRLGXQGHU5XOHERQO\mLIWKHFRXUWWKDW :ULWRI([HFXWLRQWRVDWLVI\WKHMXGJPHQWDJDLQVWWKH'XNDVHV UHQGHUHGLWODFNHGMXULVGLFWLRQRIWKHVXEMHFWPDWWHURURIWKH IRUWKHDPRXQWRIZKLFKLQFOXGHGWKHDPRXQW SDUWLHV RU LI LW DFWHG LQ D PDQQHU LQFRQVLVWHQW ZLWK GXH RIWKHRULJLQDOMXGJPHQWSOXVLQWHUHVWIURP$XJXVW SURFHVVRIODZlTXRWLQJ,QUH(GZDUGV)G WK&LU7KLVGLVWLQFWLRQEHWZHHQYRLGDQGHUURQHRXV ,Q UHVSRQVH WR WKH 'XNDVHVj 0RWLRQ WR 6HW $VLGH 2UGHU MXGJPHQWVVHUYHVWRSUHYHQWWKHXVHRIWKH5XOHDVDVXEVWLWXWH sDODSHQRDGYDQFHGWZRDOWHUQDWLYHDUJXPHQWVILUVWWKDWWKH IRUDQDSSHDO+RSSHU)GDWm7KHSDUWLHVPD\QRW MXGJPHQW DJDLQVW WKH 'XNDVHV GLG QRW H[SLUH SULRU WR WKH XVHD5XOHEPRWLRQDVDVXEVWLWXWHIRUDQDSSHDOlm>,@I )',&jVILOLQJRILWV0RWLRQWR5HQHZsXGJPHQWEHFDXVHWKH DSDUW\IDLOVWRDSSHDODQDGYHUVHMXGJPHQWDQGWKHQILOHVD MXGJPHQWGLGQRWDFFUXHXQWLO2FWREHUZKHQWKLV 5XOHEPRWLRQDIWHUWKHWLPHSHUPLWWHGIRUDQRUGLQDU\ FRXUW LVVXHG LWV PDQGDWH DIILUPLQJ WKH GLVWULFW FRXUWjV DSSHDO KDV H[SLUHG WKH PRWLRQ ZLOO QRW VXFFHHG PHUHO\ GLVPLVVDORIWKHUHPDLQLQJFODLPVDJDLQVW7\UHHDQG0RUULVRQ EHFDXVH WKH VDPH DUJXPHQW ZRXOG KDYH VXFFHHGHG RQ DQGWKHULJKWVRIDOOSDUWLHVKDGEHHQDGMXGLFDWHGDQGLQWKH DSSHDOl.RFKHUY'RZ&KHP&R)G DOWHUQDWLYH WKDW WKH )'&3$jV WZHQW\\HDU VWDWXWH RI WK&LUFLWDWLRQRPLWWHG OLPLWDWLRQVJRYHUQHGsDODSHQRjVFODLP ,QOLJKWRIWKHVHSULQFLSOHVWKHTXHVWLRQEHIRUHWKLVFRXUWLV 2Q )HEUXDU\ WKH GLVWULFW FRXUW JUDQWHG WKH DQDUURZRQHZKHWKHUWKHGLVWULFWFRXUWODFNHGMXULVGLFWLRQWR 'XNDVHVj0RWLRQWR6HW$VLGH2UGHUSXUVXDQWWRLWVDXWKRULW\ HQWHUWKHRUGHUUHQHZLQJWKHMXGJPHQWDJDLQVWWKH'XNDVHV XQGHU )HG 5 &LY 3 E 7KH GLVWULFW FRXUW ILUVW 5HO\LQJRQ5XOHEsDODSHQRDVVHUWVWKDWLQUHFRQVLGHULQJ GHWHUPLQHG WKDW WKH )'&3$ 86& ZKLFK LWVSULRURUGHUWKHGLVWULFWFRXUWLQFRUUHFWO\FDOFXODWHGWKHGDWH SURYLGHV IRU D WZHQW\\HDU VWDWXWH RI OLPLWDWLRQV RQ WKH RQ ZKLFK 7HQQHVVHHjV WHQ\HDU VWDWXWH RI OLPLWDWLRQV IRU UHFRYHU\ RI DOO MXGJPHQW OLHQV RZHG WR WKH 8QLWHG 6WDWHV EULQJLQJDFWLRQVRQMXGJPHQWVEHJDQWRUXQ1RWKLQJDERXW XQGHUWKH$FWGLGQRWJRYHUQsDODSHQRjVFODLP7KHGLVWULFW WKLVDUJXPHQWLPSOLFDWHVWKHMXULVGLFWLRQRIWKHGLVWULFWFRXUW FRXUWDJUHHGZLWKWKH'XNDVHVWKDWEHFDXVHWKHRULJLQDOGHEW WRHQWHUDQRUGHUUHQHZLQJWKHMXGJPHQWDJDLQVWWKH'XNDVHV DURVHEHWZHHQWZRSULYDWHSDUWLHV8$%DQG7HQQHVVHDQVIRU :KLOH WKH PDMRULW\ H[SUHVVHV LWV RSLQLRQ WKDW WKH )HGHUDO 7\UHH WKH )'&3$jV VWDWXWRU\ H[FOXVLRQ IRU GHEWV mRZLQJ &LUFXLW ZURQJO\ GHFLGHG .LQJ ,QVWUXPHQW &RUS Y 2WDUL XQGHUWKHWHUPVRIDFRQWUDFWRULJLQDOO\HQWHUHGLQWRE\RQO\ &RUS)G)HG&LUDQGDQQRXQFHVWKDW SHUVRQV RWKHU WKDQ WKH 8QLWHG 6WDWHVl 86& 5XOH E DSSOLHV GXULQJ DOO SKDVHV RI OLWLJDWLRQ WKHVH %UHQGHUHGWKHVWDWXWHLQDSSOLFDEOHs$DW FRQFOXVLRQVJRZHOOEH\RQGWKHTXHVWLRQEHIRUHWKHFRXUWLQ 7KHGLVWULFWFRXUWWKHQKHOGWKDWWKH)',&GLGQRWPRYHWR WKLVDSSHDODQGDUHQRWQHFHVVDU\IRULWVUHVROXWLRQ:KDWHYHU UHQHZWKHMXGJPHQWZLWKLQWKHWHQ\HDUVWDWXWHRIOLPLWDWLRQV DSSOLFDWLRQ5XOHEKDVLQWKLVPDWWHUXQGHU7HQQHVVHH SHULRGSURYLGHGE\VWDWHODZ7KHFRXUWUHDVRQHGWKDWEHFDXVH ODZ WKH WHQ\HDU VWDWXWH RI OLPLWDWLRQV LQ VHFWLRQ sDODSHQR3URSHUW\Y'XNDVHWDO 1R 1R sDODSHQR3URSHUW\Y'XNDVHWDO PRYDQWjV PRWLRQ WR YDFDWH WKH MXGJPHQW XQGHU 5XOH WKHMXGJPHQWDJDLQVWWKH'XNDVHVEHFDPHILQDORQ2FWREHU El$QWRLQHY$WODV7XUQHU,QF)G WKLUW\GD\VDIWHUWKHGLVWULFWFRXUWjV6HSWHPEHU WK&LUTXRWLQJ8QLWHG6WDWHVY,QGRRU&XOWLYDWLRQ MXGJPHQWDJDLQVWWKHPDQG WKH)',&GLGQRWILOHLWV (TXLSIURP+LJK7HFK,QGRRU*DUGHQ6XSSO\)G 0RWLRQWR5HQHZXQWLODIWHU2FWREHUZKLFKZDVWKH WK&LU6HHDOVR&+$5/(6 $/$1 :5,*+7 WHQ\HDUH[SLUDWLRQGDWHWKH)',&jVPRWLRQZDVXQWLPHO\ $57+85 5 0,//(5 0$5< .$< .$1( )('(5$/ 35$&7,&( 7KHGLVWULFWFRXUWVSHFLILFDOO\UHMHFWHGsDODSHQRjVDUJXPHQW $1' 352&('85(GHGm7KHUHLVQRTXHVWLRQ WKDWSXUVXDQWWR)HG5&LY3EILQDOMXGJPHQWZDVQRW RIGLVFUHWLRQRQWKHSDUWRIWKHFRXUWZKHQDPRWLRQLVXQGHU HQWHUHG XQWLO 2FWREHU WKLV FRXUWjV XOWLPDWH 5XOH El $V PDQ\ FLUFXLWV KDYH UHFRJQL]HG WKH GLVSRVLWLRQRIWKHFDVH DEVHQFH RI GLVFUHWLRQ XQGHU 5XOH E QHFHVVLWDWHV GH QRYRUHYLHZ6HD/DQG6HUY,QFY&HUDPLFD(XURSD,, sDODSHQRWLPHO\DSSHDOHGWKHGLVWULFWFRXUWjVMXGJPHQW ,QF)GVW&LU&DUWHUY)HQQHU )GWK&LU:LOPHUY%RDUGRI&RXQW\ ,,$1$/<6,6 &RPPjUVRI/HDYHQZRUWK&RXQW\)GWK &LU ,QGRRU &XOWLYDWLRQ (TXLS )G DW $6WDQGDUGRI5HYLHZ ([SRUW*URXSY5HHI,QGXV,QF)GWK &LU3DJHY6FKZHLNHU)GG&LU 7KHGLVWULFWFRXUWJUDQWHGWKH'XNDVHVj0RWLRQWR6HW$VLGH )RUWKLVUHDVRQnDQGQRWEHFDXVHRIDQ\DUJXPHQWV 2UGHU5HQHZLQJsXGJPHQWSXUVXDQWWR)HG5&LY3E WKHSDUWLHVGLGRUGLGQRWPDNHnGHQRYRUHYLHZLVSURSHULQ 3UHOLPLQDULO\ZHQRWHWKDWLWLVXQFOHDUXQGHUZKLFKSURYLVLRQ WKLVFDVH RI5XOHEWKHGLVWULFWFRXUWUHOLHYHGWKH'XNDVHVIURPLWV RULJLQDOMXGJPHQW%DVHGRQVHYHUDOREOLTXHUHIHUHQFHVLQWKH %HFDXVH5XOHEHPERGLHVDQLPSRUWDQWGLVWLQFWLRQ GLVWULFWFRXUWjVRSLQLRQWR5XOHEZHSUHVXPHWKDWWKH EHWZHHQDYRLGMXGJPHQWDQGDQHUURQHRXVRQH&KDPEHUVY GLVWULFWFRXUWDFWHGSXUVXDQWWRWKDWSURYLVLRQZKLFKJUDQWV $UPRQWURXW)GWK&LUm>$@MXGJPHQW WKHGLVWULFWFRXUWSRZHUWRmUHOLHYHDSDUW\RUDSDUW\jVOHJDO LV QRW YRLG PHUHO\ EHFDXVH LW LV HUURQHRXVl TXRWDWLRQ UHSUHVHQWDWLYHIURPDILQDOMXGJPHQWlIRUDQ\UHDVRQRWKHU RPLWWHG D UHYLHZLQJ FRXUW RQO\ H[DPLQHV ZKHWKHU WKH WKDQ WKH ILUVW ILYH UHDVRQV HQXPHUDWHG LQ WKH 5XOH ZKLFK MXGJPHQWUHFRQVLGHUHGLVYRLG mMXVWLI>LHV@ UHOLHI IURP WKH RSHUDWLRQ RI WKH MXGJPHQWl )(' 5 &,9 3 E $YRLGMXGJPHQWLVWREHGLVWLQJXLVKHGIURPDQHUURQHRXV RQHLQWKDWWKHODWWHULVVXEMHFWRQO\WRGLUHFWDWWDFN$ 7\SLFDOO\ D GLVWULFW FRXUW PD\ JUDQW UHOLHI XQGHU 5XOH YRLGMXGJPHQWLVRQHZKLFKIURPLWVLQFHSWLRQZDVD ERQO\IRUmH[FHSWLRQDORUH[WUDRUGLQDU\FLUFXPVWDQFHV FRPSOHWHQXOOLW\DQGZLWKRXWOHJDOHIIHFW,QWKHLQWHUHVW ZKLFKDUHQRWDGGUHVVHGE\WKHILUVWILYHQXPEHUHGFODXVHVRI RI ILQDOLW\ WKH FRQFHSW RI YRLG MXGJPHQWV LV QDUURZO\ WKH5XOHl%OXH'LDPRQG&RDO&RY7UXVWHHVRIWKH80:$ FRQVWUXHG:KLOHDEVHQFHRIVXEMHFWPDWWHUMXULVGLFWLRQ &RPELQHG%HQHILW)XQG)GWK&LU PD\ PDNH D MXGJPHQW YRLG VXFK WRWDO ZDQW RI TXRWLQJ2OOHY+HQU\ :ULJKW&RUS)G MXULVGLFWLRQPXVWEHGLVWLQJXLVKHGIURPDQHUURULQWKH WK&LU1HLWKHUSDUW\KDVEULHIHGRUDUJXHGWRWKLV H[HUFLVH RI MXULVGLFWLRQ $ FRXUW KDV WKH SRZHU WR FRXUW WKDW WKH GLVWULFW FRXUW HUUHG E\ JUDQWLQJ WKH 'XNDVHVj GHWHUPLQH LWV RZQ MXULVGLFWLRQ DQG DQ HUURU LQ WKDW PRWLRQ SXUVXDQW WR WKH mH[WUDRUGLQDU\ FLUFXPVWDQFHVl GHWHUPLQDWLRQZLOOQRWUHQGHUWKHMXGJPHQWYRLG2QO\LQ UHTXLUHPHQWLQKHUHQWLQ5XOHEUHOLHILQVWHDGsDODSHQR DQGWKH'XNDVHVERWKDGGUHVVWKHPHULWVRIWKHFODLPVWKDW ZHUHEHIRUHWKHGLVWULFWFRXUW7KHUHIRUHZHZLOOQRWFRQVLGHU sDODSHQR3URSHUW\Y'XNDVHWDO 1R 1R sDODSHQR3URSHUW\Y'XNDVHWDO ZKHWKHU WKH GLVWULFW FRXUWjV MXGJPHQW ZDV EDVHG RQ DQ E,QDWWHPSWLQJWRGLVFHUQWKHFODXVHRI5XOHE LPSURSHU XVH RI 5XOH E EXW LQVWHDG ZLOO WXUQ RXU XQGHU ZKLFK WKH 'XNDVHV EURXJKW WKHLU PRWLRQ WKLV FRXUW DWWHQWLRQWRWKHPHULWVRIWKLVOLWLJDWLRQ $OWKRXJKZHUHYLHZ ORRNVWRWKHVXEVWDQFHRIWKHUHOLHIUHTXHVWHG6HH)XWHUQLFN DGLVWULFWFRXUWjVJUDQWRIDPRWLRQWRUHFRQVLGHUXQGHU5XOH Y 6XPSWHU 7RZQVKLS )G WK &LU EIRUDQDEXVHRIGLVFUHWLRQVHH%OXH'LDPRQG 6XQILUH&RDO&RY8QLWHG0LQH:RUNHUVRI$P)G )G DW ZH WUHDW WKH GLVWULFW FRXUWjV LQWHUSUHWDWLRQ DQG WK &LU $FFRUG 3UXGHQWLDO 5HDO (VWDWH DSSOLFDWLRQ RI WKH )HGHUDO 5XOHV RI &LYLO 3URFHGXUH DV D $IILOLDWHV,QFY3355HDOW\,QF)GWK&LU TXHVWLRQRIODZDQGDVZLWKDOOOHJDOTXHVWLRQVUHYLHZWKLV m>7@KHODEHODWWDFKHGWRDPRWLRQGRHVQRWFRQWUROLWV DQDO\VLVGHQRYR6HH,QGLDQD/XPEHUPHQV0XW,QV&RY VXEVWDQFHlTXRWLQJ8QLWHG6WDWHVY6WDWHRI2UHJRQ 7LPEHUODQG3DOOHW /XPEHU&R)GWK&LU )GQWK&LU,QWKHLUPRWLRQWKH 'XNDVHV VRXJKW WR VHW DVLGH WKH RUGHU RI WKH GLVWULFW FRXUW UHQHZLQJWKH)',&jVMXGJPHQWDJDLQVWWKHPRQWKHJURXQG %7HQQHVVHHjV7HQL@IWKHXQGHUO\LQJMXGJPHQWLVYRLGLW IURP LWV RUGHU WKDW LW ZDV FRQYLQFHG E\ WKH 'XNDVHVj DUJXPHQW WKDW WKH LVDSHUVHDEXVHRIGLVFUHWLRQIRUDGLVWULFWFRXUWWRGHQ\D DSSOLFDEOH VWDWXWH RI OLPLWDWLRQV KDG UXQ DQG WKDW WKLV FUHDWHG DQ H[WUDRUGLQDU\ FLUFXPVWDQFH ZDUUDQWLQJ UHOLHI $OWKRXJK ZH FRXOG KDYH DQDO\]HG WKLV LQIHUHQFH WR GHWHUPLQH ZKHWKHU WKH UXQQLQJ RI WKH VWDWXWH RI OLPLWDWLRQV SUHVHQWHG DQ mH[WUDRUGLQDU\ FLUFXPVWDQFHl VXIILFLHQW WR $UJXDEO\ WKH PRWLRQ FRXOG DOVR KDYH EHHQ EURXJKW XQGHU 5XOH ZDUUDQW 5XOH E UHOLHI QHLWKHU SDUW\ EULHIHG RU DUJXHG WKLV LVVXH WR E ZKLFK SHUPLWV UHOLHI LQ WKH FDVH RI mPLVWDNHl 7KLV FRXUW KDV WKLV FRXUW :H WKHUHIRUH UHYLHZ WKH GLVWULFW FRXUWjV H[SOLFLW UHDVRQLQJ LQ UHDG WKLV EDVLV IRU UHOLHI XQGHU 5XOH E DV H[WHQGLQJ WR FODLPV RI OHJDO JUDQWLQJ WKH 'XNDVHVj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mH[FHSWLRQDO FLUFXPVWDQFHl XQGHU RXU 5XOH E H[SLUHG 7KHUHIRUH WKH 'XNDVHVj PRWLRQ FDQ RQO\ EH RQH EURXJKW XQGHU MXULVSUXGHQFH 5XOH E sDODSHQR3URSHUW\Y'XNDVHWDO 1R 1R sDODSHQR3URSHUW\Y'XNDVHWDO BBBBBBBBBBBBBBBBB OLWLJDWLRQ&DOFXODWHGIURPWKDWODWHUGDWHsDODSHQRDUJXHV WKDWWKH)',&jVPRWLRQWRUHQHZPXVWEHFRQVLGHUHGWLPHO\ &21&855(1&( XQGHU7HQQHVVHHODZ BBBBBBBBBBBBBBBBB sDODSHQRJURXQGVLWVDUJXPHQWLQWKHODQJXDJHRI)HG5 $/,&(0%$7&+(/'(5&LUFXLWsXGJHFRQFXUULQJ, &LY3EZKLFKJRYHUQVMXGJPHQWXSRQPXOWLSOHFODLPV MRLQ WKH PDMRULW\ LQ FRQFOXGLQJ WKDW WKH GLVWULFW FRXUW RULQYROYLQJPXOWLSOHSDUWLHV7KH5XOHSURYLGHV FRPPLWWHGUHYHUVLEOHHUURUE\JUDQWLQJWKH'XNDVHVj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m0RWLRQWR6HW$VLGHWKH2UGHU5HQHZLQJsXGJPHQWl/LNH HQWU\RIMXGJPHQW,QWKHDEVHQFHRIVXFKGHWHUPLQDWLRQ WKH PDMRULW\ , GR QRW GRXEW WKDW WKH GLVWULFW FRXUW DFWHG DQG GLUHFWLRQ DQ\ RUGHU RU RWKHU IRUP RI GHFLVLRQ SXUVXDQWWR5XOHE8QOLNHWKHPDMRULW\KRZHYHU, KRZHYHUGHVLJQDWHGZKLFKDGMXGLFDWHVIHZHUWKDQDOOWKH WKLQN WKDW EHFDXVH WKH SDUWLFXODU SURYLVLRQ WKDW XOWLPDWHO\ FODLPVRUWKHULJKWVDQGOLDELOLWLHVRIIHZHUWKDQDOOWKH JRYHUQVWKH'XNDVHVjPRWLRQZLOOGHWHUPLQHWKHVWDQGDUGRI SDUWLHV VKDOO QRW WHUPLQDWH WKH DFWLRQ DV WR DQ\ RI WKH UHYLHZDQGWKHVXEVWDQWLYHOHJDOUXOHVIRUDSSOLFDWLRQLQWKLV FODLPVRUSDUWLHVDQGWKHRUGHURURWKHUIRUPRIGHFLVLRQ DSSHDOWKHSDUWLHVjIDLOXUHWRDUJXHZKHWKHUWKHGLVWULFWFRXUW LV VXEMHFW WR UHYLVLRQ DW DQ\ WLPH EHIRUH WKH HQWU\ RI LPSURSHUO\XVHG5XOHEFDQQRWVLPSO\EHLJQRUHG,Q MXGJPHQWDGMXGLFDWLQJDOOWKHFODLPVDQGWKHULJKWVDQG IDFWWKHPDMRULW\jVIDLOXUHWRH[DPLQHWKLVTXHVWLRQOHDGVWR OLDELOLWLHVRIDOOWKHSDUWLHV WKH LQFRQJUXRXV UHVXOW WKDW DOWKRXJK WKLV FRXUW QRUPDOO\ UHYLHZV D GLVWULFW FRXUWjV JUDQW RI D PRWLRQ WR UHFRQVLGHU )(' 5 &,9 3 E 5XOH D VWDWHV WKDW D MXGJPHQW XQGHU 5XOH E IRU DEXVH RI GLVFUHWLRQ WKH PDMRULW\ mLQFOXGHVDGHFUHHDQGDQ\RUGHUIURPZKLFKDQDSSHDOOLHVl SURFHHGV GLUHFWO\ WR D GH QRYR UHYLHZ RI WKH PHULWV RI WKH )(' 5 &,9 3 DsDODSHQRDUJXHVWKDWWKH6HSWHPEHU OLWLJDWLRQ6XFKDFRXUVHLQYLWHVWKLVFRXUWDQGOLWLJDQWVWR RUGHUFRXOGQRWKDYHEHHQDILQDODSSHDODEOHMXGJPHQW RYHUORRN WKH SURFHGXUDO SRVWXUH LQ ZKLFK FDVHV SUHVHQW EHFDXVH ZKHQ PXOWLSOH SDUWLHV DUH LQYROYHG DQG D FRXUWjV WKHPVHOYHVIRUDSSHOODWHUHYLHZVXEMHFWVMXGJPHQWVRIWKH RUGHUGRHVQRWUHVROYHDOORIWKHSDUWLHVjFODLPVmWKHFRXUW GLVWULFWFRXUWHQWLWOHGWRGHIHUHQFHWRLQDSSURSULDWHO\H[DFWLQJ PD\GLUHFWWKHHQWU\RIDILQDOMXGJPHQWDVWRRQHRUPRUHEXW VFUXWLQ\ DQG UXQV FRXQWHU WR WKH DFFHSWHG SULQFLSOH WKDW D IHZHU WKDQ DOO RI WKH SDUWLHV RQO\ XSRQ DQ H[SUHVV 5XOHEPRWLRQGRHVQRWEULQJWKHXQGHUO\LQJMXGJPHQWXS GHWHUPLQDWLRQWKDWWKHUHLVQRMXVWUHDVRQIRUGHOD\DQGXSRQ IRUUHYLHZ+RRGY+RRG)GWK&LUSHU DQH[SUHVVGLUHFWLRQIRUWKHHQWU\RIMXGJPHQWl)(' 5 &,9 FXULDPFLWDWLRQVRPLWWHG 3 EHPSKDVLVDGGHG,QWKLVFDVHWKHGLVWULFWFRXUWjV 6HSWHPEHURUGHUGLGQRWUHVROYHWKHOLWLJDWLRQDVWR 7KH PDMRULW\ FRXOG UHDGLO\ DYRLG WKH XQXVXDO FRXUVH RI DOOSDUWLHVLWRUGHUHGMXGJPHQWRQO\DJDLQVWWKH'XNDVHVEXW UHYLHZLQJ GH QRYR D TXHVWLRQ QRUPDOO\ FRPPLWWHG WR WKH GLGQRWWHUPLQDWHWKHOLWLJDWLRQDVWRSODLQWLIIjVFODLPVDJDLQVW VRXQGGLVFUHWLRQRIWKHGLVWULFWFRXUWE\VLPSO\UHFRJQL]LQJ 7HQQHVVHDQV IRU 7\UHH 7\UHH RU 0RUULVRQ 7KH GLVWULFW WKH 'XNDVHVj PRWLRQ IRU ZKDW LW LV D PRWLRQ XQGHU 5XOH sDODSHQR3URSHUW\Y'XNDVHWDO 1R 1R sDODSHQR3URSHUW\Y'XNDVHWDO FRXUWjVRUGHUDOVRIDLOHGWRFRPSO\ZLWK5XOHELQWKDWLW DSSOLFDELOLW\ RI D IHGHUDO VWDWXWH RI OLPLWDWLRQV XQGHU WKH ODFNHGDFHUWLILFDWLRQRIILQDOLW\DQGLWIDLOHGWRILQGWKDWWKHUH )'&3$ )RU WKH IRUJRLQJ UHDVRQV ZH 5(9(56( WKH ZDV QR MXVW UHDVRQ IRU GHOD\ 7KHUHIRUH DFFRUGLQJ WR MXGJPHQWRIWKHGLVWULFWFRXUW DQG5(0$1'WKLVFDVHIRU sDODSHQRWKH6HSWHPEHUMXGJPHQWDVWRWKH'XNDVHV IXUWKHUSURFHHGLQJVFRQVLVWHQWZLWKWKLVRSLQLRQ ZDVQRWDILQDOMXGJPHQWIRUSXUSRVHVRIDSSHDO 7KH GLVWULFW FRXUW UHMHFWHG sDODSHQRjV DUJXPHQW UHO\LQJ XSRQ.LQJ,QVWUXPHQW&RUSY2WDUL&RUS)G )HG &LU IRU WKH SULQFLSOH WKDW 5XOH E KDV QR DSSOLFDWLRQDIWHUDFODLPKDVEHHQKHDUGRQDSSHDO$FFRUGLQJ WRWKHGLVWULFWFRXUWm5XOHEGRHVQRWDSSO\VLQFHWKH5XOH FRQFHUQVWKHSRZHURIWKHWULDOFRXUWEHIRUHDSSHDODQGWKH &RXUWRI$SSHDOVKDGDOUHDG\UHYLHZHGWKHRULJLQDOGHFLVLRQ LQWKLVFDVHls$DW ,Q.LQJWKH)HGHUDO&LUFXLWSHUPLWWHG2WDULWKHGHIHQGDQW WRDSSHDOWKHGLVWULFWFRXUWjVHQWU\RIMXGJPHQWZLWKRXW5XOH EFHUWLILFDWLRQIRUSDUWLDOGDPDJHVIRUWKHSODLQWLII7KH )HGHUDO&LUFXLWKDGLQDSULRUDSSHDODIILUPHGRQHDZDUGIRU GDPDJHVIRUWKHSODLQWLIIEXWKDGUHYHUVHGDQGUHPDQGHGD UHODWHGGDPDJHVDZDUG2QUHPDQGWKHGLVWULFWFRXUWHQWHUHG DQGH[HFXWHGWKHSRUWLRQRIWKHGDPDJHVDZDUGZKLFKKDG EHHQDIILUPHGFRQWLQXHGDQLQMXQFWLRQEXWGLGQRWUHVROYH WKHSODLQWLIIjVUHPDLQLQJFODLPIRUGDPDJHV$GGUHVVLQJWKH TXHVWLRQ ZKHWKHU LW KDG MXULVGLFWLRQ WR HQWHUWDLQ 2WDULjV VHFRQGDSSHDOSULRUWRWKHGLVWULFWFRXUWjVGLVSRVLWLRQRIWKH UHPDLQLQJGDPDJHVFODLPWKH)HGHUDO&LUFXLWGHWHUPLQHGWKDW MXULVGLFWLRQ ZDV SURSHU XQGHU ERWK 86& D EHFDXVHWKHGLVWULFWFRXUWjVRUGHUFRQWLQXHGDQLQMXQFWLRQDQG 86&7KH)HGHUDO&LUFXLWIRXQGMXULVGLFWLRQ XQGHU WKH ODWWHU VWDWXWH SXUVXDQW WR WKH )RUJD\ GRFWULQH ZKLFKWKH)HGHUDO&LUFXLWKHOGDOORZVIRULPPHGLDWHDSSHDO 7KLV VWDWXWH SURYLGHV WKDW WKH FRXUWV RI DSSHDO VKDOO KDYH MXULVGLFWLRQ RYHU m>L@QWHUORFXWRU\ RUGHUV RI WKH GLVWULFW FRXUWV JUDQWLQJ FRQWLQXLQJ RU UHIXVLQJ WR GLVVROYH RU PRGLI\ LQMXQFWLRQV l 86& D 8QGHU WKLV VWDWXWH DSSHOODWH FRXUWV KDYH MXULVGLFWLRQ RYHU mDSSHDOV IURP DOO ILQDO GHFLVLRQV RI WKH GLVWULFW FRXUWV l 86& sDODSHQR3URSHUW\Y'XNDVHWDO 1R 1R sDODSHQR3URSHUW\Y'XNDVHWDO GHVLJQDWHGZKLFKDGMXGLFDWHVWKHULJKWVDQGOLDELOLWLHVRI IURPDQRUGHUH[HFXWLQJWKHLPPHGLDWHWUDQVIHURISURSHUW\ IHZHUWKDQDOOWKHSDUWLHVVKDOOQRWWHUPLQDWHWKHDFWLRQDVWR 6HH.LQJ)GDWGLVFXVVLQJ)RUJD\Y&RQUDG DQ\RIWKHFODLPVRUSDUWLHVDQGWKHRUGHURURWKHUIRUPRI 86 +RZ 2QFH WKH .LQJ FRXUW GHFLVLRQLVVXEMHFWWRUHYLVLRQDWDQ\WLPHEHIRUHWKHHQWU\RI GHWHUPLQHGWKDWLWKDGMXULVGLFWLRQRYHUWKHDSSHDOLWWKHQKHOG MXGJPHQW DGMXGLFDWLQJ DOO WKH FODLPV DQG WKH ULJKWV DQG WKDWLWFRXOGDIILUPWKHGLVWULFWFRXUWjVJUDQWRIGDPDJHVDVWR OLDELOLWLHVRIDOOWKHSDUWLHVl1RWKLQJLQWKLVODQJXDJHQRULQ SDUW EXW QRW DOO RI WKH SODLQWLIIjV FODLP GHVSLWH 2WDULjV DQ\ FRQWUROOLQJ SUHFHGHQW ZH ZHUH DEOH WR XQFRYHU FRPSODLQWWKDWWKLVZRXOGYLRODWH5XOHE7KHFRXUWLQ HQFRXUDJHVXVWREHOLHYHWKDWWKH5XOHLVDQ\OHVVDSSOLFDEOH UHMHFWLQJ 2WDULjV DUJXPHQW KHOG WKDW 5XOH E ZDV WR SURFHHGLQJV LQ WKH GLVWULFW FRXUW DIWHU WKH FDVH KDV EHHQ LQDSSOLFDEOHEHFDXVHLWRQO\mFRQFHUQVWKHSRZHURIWKHWULDO KHDUGLQDILUVWDSSHDOWKDQEHIRUHLW7KHUHIRUHZHUHMHFWWKH FRXUWEHIRUHDSSHDOl,GDW .LQJFRXUWjVLQWHUSUHWDWLRQRI5XOHEDQGKROGWKDWWKH 5XOHPXVWEHFRPSOLHGZLWKGXULQJDOOVWDJHVRIOLWLJDWLRQLQ sDODSHQRDWWHPSWVWRGLVWLQJXLVK.LQJE\DUJXLQJILUVWWKDW WKHGLVWULFWFRXUWQRWMXVWWKHSHULRGEHIRUHDILUVWDSSHDO WKHFDVHLVQRWDSSOLFDEOHEHFDXVHLWLQYROYHGPXOWLSOHFODLPV QRWPXOWLSOHSDUWLHVDVLQWKHLQVWDQWFDVHDQGVHFRQGWKDW $SSO\LQJWKLVSULQFLSOHWRWKHLQVWDQWFDVHZHFRQFOXGHWKDW .LQJZDVZURQJO\GHFLGHGEHFDXVHLWFRQWUDYHQHVWKHH[SUHVV WKH GLVWULFW FRXUWjV 6HSWHPEHU MXGJPHQW GLG QRW ODQJXDJHRIWKH5XOH:HDJUHHZLWKsDODSHQRWKDW.LQJZDV EHJLQWKHUXQQLQJRIWKHVWDWXWHRIOLPLWDWLRQVIRUSXUSRVHVRI ZURQJO\GHFLGHG,QGHHGZHGHFOLQHWRIROORZ.LQJEHFDXVH DSSHDO7KHRUGHUGLGQRWDGMXGLFDWHWKHULJKWVDQGOLDELOLWLHV ZH FRQFOXGH WKDW WKH )HGHUDO &LUFXLWjV DQDO\VLV RI LWV RIDOOWKHSDUWLHVQRUZDVLWFHUWLILHGSXUVXDQWWR5XOHE MXULVGLFWLRQZDVHUURQHRXVRQVHYHUDOOHYHOV)LUVWWKH.LQJ DVLWFRXOGKDYHEHHQKDGWKH'XNDVHVVRXJKWWKHDSSURSULDWH FRXUW FRQIXVHG WKH GLVWLQFWLRQ EHWZHHQ D ILQGLQJ RI FHUWLILFDWLRQ7KHUHIRUHWKHMXGJPHQWGLGQRWmWHUPLQDWHWKH MXULVGLFWLRQXQGHU86&SXUVXDQWWRWKH)RUJD\ DFWLRQ DV WR DQ\ RI WKH SDUWLHVl DQG WKH MXGJPHQW ZDV GRFWULQHDQGWKHSXUSRVHRI5XOHE$VVXPLQJDUJXHQGR mVXEMHFWWRUHYLVLRQlE\WKHGLVWULFWFRXUWXQWLOWKHWHUPLQDWLRQ WKDWWKH)HGHUDO&LUFXLWFRUUHFWO\IRXQGMXULVGLFWLRQXQGHU RI WKH OLWLJDWLRQ DJDLQVW WKH UHPDLQLQJ GHIHQGDQWV :KHQ 86&SXUVXDQWWRWKH)RUJD\GRFWULQHZKLFKSRLQW YLHZHGLQWKLVOLJKWLWEHFRPHVFOHDUERWKWKDWWKHWHQ\HDU ZHODWHUGLVSXWHWKHFRXUWKDGQRQHHGWRFRQVLGHUZKHWKHU VWDWXWHRIOLPLWDWLRQVGLGQRWEHJLQWRUXQXQWLODIWHUWKLVFRXUW WKHGLVWULFWFRXUWjVRUGHUIDLOHGWRFRPSO\ZLWK5XOHE KDGLVVXHGLWVVHFRQGPDQGDWHRQ2FWREHUZKLFK 7KLVLVVREHFDXVH5XOHEFHUWLILFDWLRQLVDQDOWHUQDWLYH FRQFOXGHGWKHOLWLJDWLRQDVWRmWKHULJKWVDQGOLDELOLWLHVRIDOO PHDQV RI FRQIHUULQJ MXULVGLFWLRQ XSRQ DQ DSSHOODWH FRXUW WKHSDUWLHVlDQGWKDWsDODSHQRjV0RWLRQWR5HQHZZDVWLPHO\ XQGHU 86& 6HH 6HDUV 5RHEXFN &R Y ILOHG 0DFNH\86QRWLQJWKDW5XOHE mGRHV QRW VXSHUVHGH DQ\ VWDWXWH FRQWUROOLQJ DSSHOODWH ,,,&21&/86,21 MXULVGLFWLRQlDQGWKDWWKH5XOHmVFUXSXORXVO\UHFRJQL]HVWKH VWDWXWRU\UHTXLUHPHQWRIDµILQDOGHFLVLRQjXQGHUDVD %HFDXVH ZH FRQFOXGH WKDW WKH GLVWULFW FRXUW LPSURSHUO\ EDVLFUHTXLUHPHQWIRUDQDSSHDOWRWKH&RXUWRI$SSHDOVl FDOFXODWHGWKHUXQQLQJRIWKHVWDWHVWDWXWHRIOLPLWDWLRQVZH 7KHUHIRUH WKH .LQJ FRXUWjV GLVFXVVLRQ RI 5XOH E LV QHHGQRWDGGUHVVWKHSDUWLHVjDOWHUQDWLYHDUJXPHQWDERXWWKH DUJXDEO\GLFWDEHFDXVHLQOLJKWRILWVILQGLQJRIMXULVGLFWLRQ SXUVXDQW WR WKH)RUJD\ GRFWULQH LW ZDV XQQHFHVVDU\ WR WKH FRXUWjVDQDO\VLV $V QRWHG DW RUDO DUJXPHQW WKH SDUWLHV FRXOG KDYH FKDOOHQJHG WKH MXGJPHQW RQ D QXPEHU RI JURXQGV LQFOXGLQJ WKH GLVWULFW FRXUWjV FRPSXWDWLRQ RI LQWHUHVW sDODSHQR3URSHUW\Y'XNDVHWDO 1R 1R sDODSHQR3URSHUW\Y'XNDVHWDO $OWKRXJKZHFDQQRWGLVFHUQIURPWKH.LQJFRXUWjVRSLQLRQ RI DSSHOODWH UHYLHZ DQG WKH QHHG WR PDNH WKH DSSHOODWH ZKHWKHUWKHFDVHLQYROYHGDQDSSHDOIURPDSDUWLDODZDUGRI SURFHVVDYDLODEOHLQPXOWLFODLPRUPXOWLSDUW\OLWLJDWLRQWR GDPDJHVIRUDVLQJOHFODLPDVRSSRVHGWRDQDSSHDOIURPWKH VHUYH WKH EHVW LQWHUHVWV RI WKH SDUWLHV 6HH *RRG Y 2KLR GLVSRVLWLRQRIRQHRIPDQ\FODLPVZHQRWHWKDWLIWKHFDVH (GLVRQ &R )G WK &LU *HQ LQYROYHG WKH IRUPHU SURFHGXUDO SRVWXUH WKHQ 5XOH E $FTXLVLWLRQ,QF)GDW5XOHEDOVRHOLPLQDWHV ZRXOGEHFRPSOHWHO\LQDSSOLFDEOHWRWKHFRXUWjVMXULVGLFWLRQDO GRXEW DERXW ZKHQ D SDUW\ PXVW ILOH DQ DSSHDO 6HH DQDO\VLVDVWKH5XOHGRHVQRWDSSO\WRVLQJOHFODLPWZRSDUW\ :5,*+7 0,//(5 .$1( )('(5$/ 35$&7,&( OLWLJDWLRQ%HFDXVHZHVXVSHFWWKDWWKHRULJLQDOOLWLJDWLRQLQ 352&('85(DWm,IWKHFRXUWGRHVQRW .LQJ ,QVWUXPHQWV LQYROYHG D VLQJOH FODLP IRU SDWHQW HQWHUD5XOHERUGHUWKHOLWLJDQWNQRZVWKDWZDLWLQJXQWLO LQIULQJHPHQWZKLFKKDGEHHQSDUWLDOO\DGMXGLFDWHGZHEHOLHYH WKHGLVSRVLWLRQRIWKHHQWLUHFDVHEHIRUHVHHNLQJDQDSSHDOZLOO WKDWRQWKLVEDVLVDOVRWKH)HGHUDO&LUFXLWLPSURSHUO\LQYRNHG QRWORVHWKHULJKWWRKDYHWKHRUGHUUHYLHZHGl%\FUHDWLQJ 5XOHE HDV\WRIROORZJXLGHOLQHVSDUWLHVFDQEHFHUWDLQRIWKHWLPLQJ RIWKHLUDSSHDOVDQGZLOOUHIUDLQIURPXQQHFHVVDU\ILOLQJVLQ :KHWKHU RU QRW WKH )HGHUDO &LUFXLWjV GLVFXVVLRQ RI 5XOH WKH DSSHOODWH FRXUWV ,QGHHG WR IDFLOLWDWH 5XOH EjV EZDVGLFWDZHEHOLHYHWKDWLWVDQDO\VLVLVXQVXSSRUWDEOH SXUSRVHV ZH UHTXLUH VWULFW FRPSOLDQFH ZLWK WKH UXOH 6HH E\WKHODQJXDJHRIWKH5XOHDQGUXQVFRQWUDU\WRWKH5XOHjV *HQ$FTXLVLWLRQ,QF)GDWVWDWLQJWKDWIRU5XOH PDQLIROGSXUSRVHV$VWRWKHODWWHUSRLQW5XOHESHUPLWV EFHUWLILFDWLRQGLVWULFWFRXUWPXVWH[SUHVVO\mGLUHFWWKH mLPPHGLDWHUHYLHZRIFHUWDLQGLVWULFWFRXUWRUGHUVSULRUWRWKH HQWU\RIILQDOMXGJPHQWDVWRRQHRUPRUHEXWIHZWKDQDOOWKH XOWLPDWH GLVSRVLWLRQ RI D FDVHl *HQ $FTXLVLWLRQ ,QF Y FODLPVRUSDUWLHVlmPXVWH[SUHVV>O\@GHWHUPLQ>H@WKDWWKHUHLV *HQ&RUS ,QF )G WK &LU ,W LV QRMXVWUHDVRQWRGHOD\DSSHOODWHUHYLHZlDQGPXVWSURYLGH GHVLJQHG WR VWULNH D EDODQFH EHWZHHQ WKH XQGHVLUDELOLW\ RI UHDVRQLQJ WR VXSSRUW LWV FRQFOXVLRQV LQWHUQDO TXRWDWLRQ SLHFHPHDODSSHDOVZLWKWKHLUDWWHQGDQWGHOD\DQGGXSOLFDWLRQ PDUNVRPLWWHG.QDIHOY3HSVL&ROD%RWWOHUVRI$NURQ,QF )GWK&LUUHMHFWLQJGLVWULFWFRXUWjV 5XOH E FHUWLILFDWLRQ EHFDXVH FRXUW IDLOHG WR FRQVLGHU SURSHUO\WKHIDFWRUVUHOHYDQWWRWKHFHUWLILFDWLRQGHFLVLRQ :H QRWH WKDW WKH )HGHUDO &LUFXLWjV DVVXPSWLRQ WKDW LW KDG MXULVGLFWLRQ XQGHU WKH )RUJD\ GRFWULQH ZDV DOVR LQ RXU PLQG HUURU 7KH )RUJD\ 1HLWKHURIWKHSXUSRVHVRIWKH5XOHnWREDODQFHMXGLFLDO GRFWULQH LV D QDUURZ H[FHSWLRQ WR WKH ILQDOLW\ RI MXGJPHQW UXOH LW DOORZV LPPHGLDWH DSSHOODWH FRXUW UHYLHZ RI GLVWULFW FRXUW RUGHUV ZKLFK DGMXGLFDWH HIILFLHQF\ ZLWK WKH SDUWLHVj LQWHUHVWV DQG WR HOLPLQDWH SDUW RI RQH FODLP E\ GLUHFWLQJ WKH LPPHGLDWH GHOLYHU\ RI SURSHUW\ IURP RQH FRQIXVLRQRYHUWKHWLPLQJRIDSSHDOVnDUHGLPLQLVKHGE\WKH SDUW\ WR DQRWKHU ZKHQ WKHUH LV WKH SRVVLELOLW\ WKDW WKH ORVLQJ SDUW\ ZLOO FLUFXPVWDQFH WKDW D FDVH KDV DOUHDG\ EHHQ KHDUG RQFH RQ 6HH DSSHDO,QGHHGLQFRPSOH[OLWLJDWLRQLWLVQRWLPSUREDEOH $ :5,*+7 0,//(5 &223(5 H[SHULHQFH LUUHSDUDEOH KDUP LI DSSHDO RI WKH H[HFXWLRQ LV QRW DOORZHG )RUJD\ VHH DOVR WKDWWKHDFWLRQZLOODGYDQFHWRWKHDSSHOODWHVWDJHPRUHWKDQ )('(5$/ 35$&7,&( 352&('85( DW QRWLQJ WKDW 86 DW )RUJD\ GRFWULQH mLV OLNHO\ WR EH DSSOLHG RQO\ WR RUGHUV WKDW LPSURYLGHQWO\ RQFH ,Q VXFK FLUFXPVWDQFHV DV LQ WKH LQVWDQW FDVH VWULFW GLUHFW LPPHGLDWH H[HFXWLRQ RI MXGJPHQWV WKDW LQYROYH SDUW RI WKH PHULWV RI FRPSOLDQFH ZLWK 5XOH E LV HVVHQWLDO IRU HDVH RI D FODLP DQG DUH RXWVLGH WKH OLPLWV RI 5XOH El 7KH mLUUHSDUDEOH KDUPl DGPLQLVWUDWLRQERWKIRUWKHFRXUWVDQGIRUWKHSDUWLHV IDFWRU LV FUXFLDO WR WKH DQFLHQW )RUJD\ GRFWULQH EXW WKH .LQJ FRXUW QRZKHUH PDNHV D ILQGLQJ WKDW 2WDUL ZRXOG H[SHULHQFH LUUHSDUDEOH KDUP LI 1RWRQO\WKHUHIRUHGRHVWKH.LQJFRXUWjVUXOHFRQIOLFWZLWK PRQH\ GDPDJHV ZHUH FRQYH\HG IURP LW WR WKH SODLQWLII ,QGHHG LQ PRVW 5XOH EjV DLPV EXW LW DOVR FRQIOLFWV ZLWK LWV ODQJXDJH VLWXDWLRQV WKH WUDQVIHU RI PRQH\ LV XQOLNHO\ WR FUHDWH LUUHSDUDEOH KDUP IRU PRQH\ FDQ XVXDOO\ EH UHWXUQHG LI LPSURYLGHQWO\ JLYHQ :LWKRXW D ILQGLQJ 5XOH E FOHDUO\ VWDWHV WKDW m>L@Q WKH DEVHQFH RI VXFK RI LUUHSDUDEOH KDUP ZH EHOLHYH WKH )HGHUDO &LUFXLW LPSURSHUO\ IRXQG >FHUWLILFDWLRQ@DQ\RUGHURURWKHUIRUPRIGHFLVLRQKRZHYHU MXULVGLFWLRQ XQGHU WKH mQDUURZl )RUJD\ GRFWULQH