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 /,1'(// 9 5,''/(DQG ; '(%25$+ / ,59,1( 3ODLQWLIIV$SSHOODQWV 1RV ! s2+1 0 0$126DQG 0,&+$(/ $ ,$&2%(//, s5 $WWRUQH\V$SSHOODQWV Y 0$5*$5(7 (*(163(5*(5 /(21$5' ) &$55 *(25*( $5*,( 7+20$6 s 6/,9(56 &+5,6 6211+$/7(5 '2/25(6 ./$)7$ 6+(/'21 62&2/2)) 52/$1' 5 =$9$5(//$ +2:$5' $ */,&.0$1 $/ .$< *(12 0$1)5(', &+$5/(6 * 321$DQG&,7< 2) 0$<),(/' +(,*+76 'HIHQGDQWV$SSHOOHHV 5LGGOHHWDOY 1RV (JHQVSHUJHUHWDO 0$57+$ ( 0&&5$5<DQG 0$5< &/$5( %86+0$1 'HIHQGDQWV 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG 1Rn'RQDOG&1XJHQW'LVWULFWsXGJH $UJXHG$XJXVW 'HFLGHGDQG)LOHG6HSWHPEHU %HIRUH0225(DQG&/$<&LUFXLWsXGJHV+22' 'LVWULFWsXGJH BBBBBBBBBBBBBBBBB &2816(/ $5*8('5REHUW(GG\*$//$*+(56+$53)8/721 1250$1 &OHYHODQG 2KLR 5LFKDUG ' (LVHQEHUJ =,00(50$1&$7,&&+,2(,6(1%(5* 02',&$ /\QGKXUVW 2KLR IRU $SSHOODQWV / %U\DQ &DUU &$55 )(1(/, &$5%21( 0D\ILHOG +HLJKWV 2KLR IRU $SSHOOHHV 21 %5,() 5REHUW (GG\ *DU\ ) :HUQHU *$//$*+(56+$53)8/721 1250$1&OHYHODQG 2KLR5LFKDUG'(LVHQEHUJ=,00(50$1&$7,&&+,2 (,6(1%(5* 02',&$/\QGKXUVW2KLRIRU$SSHOODQWV / %U\DQ &DUU /HRQDUG ) &DUU &$55 )(1(/, &$5%21(0D\ILHOG+HLJKWV2KLR3KLOOLSs&DPSDQHOOD &$/)((+$/7(5 *5,6:2/'&OHYHODQG2KLR*LQR 3=DYDUHOODsU&OHYHODQG2KLRIRU$SSHOOHHV 7KH +RQRUDEOH 'HQLVH 3DJH +RRG 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ 5LGGOHHWDOY 1RV 1RV 5LGGOHHWDOY (JHQVSHUJHUHWDO (JHQVSHUJHUHWDO FDQQRWFRQFOXGHDVWKHUHVWRIWKHSDQHOGRHVWRGD\WKDWWKH +22''sGHOLYHUHGWKHRSLQLRQRIWKHFRXUW&/$<s GLVWULFW FRXUW DEXVHG LWV GLVFUHWLRQ LQ GHWHUPLQLQJ WKDW WKH SSGHOLYHUHGDVHSDUDWHRSLQLRQFRQFXUULQJLQWKH GHIHQGDQWVjDJJUHVVLYHUHVSRQVHWRWKHSODLQWLIIVjODZVXLWZDV UHVXOW 0225( s SS GHOLYHUHG D VHSDUDWH UHDVRQDEOH GLVVHQWLQJRSLQLRQ 3XWVLPSO\WKHGLVWULFWFRXUWGLGQRWHUULQGHWHUPLQLQJWKDW BBBBBBBBBBBBBBBBB JLYHQWKHIDFWVRIWKLVFDVHWKHSODLQWLIIVDQGWKHLUFRXQVHOKDG HQJDJHGLQWKHVRUWRImHJUHJLRXVlDQGRUmYH[DWLRXVlFRQGXFW 23,1,21 IRUZKLFKIHHVPD\EHDZDUGHGXQGHUWKHVWDWXWHVLQTXHVWLRQ BBBBBBBBBBBBBBBBB 7KHPHUHIDFWWKDWWKHSODLQWLIIVEURXJKWWKLVVXLWXQGHUFLYLO ULJKWVVWDWXWHVVKRXOGQRWLQVXODWHWKHPRUWKHLUFRXQVHOIURP '(1,6(3$*(+22''LVWULFWsXGJH2Q'HFHPEHU WKH FRQVHTXHQFHV RI WKHLU FKRLFHV )RU WKLV UHDVRQ , 3ODLQWLIIV$SSHOODQWV /LQGHOO 5LGGOH DQG 'HERUDK UHVSHFWIXOO\GLVVHQW ,UYLQHILOHGDVXLWDJDLQVWWKH'HIHQGDQWV$SSHOOHHVWKH&LW\ RI 0D\ILHOG +HLJKWV YDULRXV &LW\ RIILFLDOV DQG LQGLYLGXDO 'HIHQGDQW 5RODQG 5 =DYDUHOOD D UHVLGHQW PHPEHU RI WKH &RPPXQLW\5HLQYHVWPHQW$UHD+RXVLQJ&RXQFLOIRUWKH&LW\ DSSRLQWHGE\WKH0D\RU5LGGOHDQG,UYLQHZHUHUHSUHVHQWHG E\0LFKDHO,DFREHOOLDQGsRKQ00DQRVDOVR$SSHOODQWVLQ WKHLQVWDQWDSSHDO 3ODLQWLIIVFODLPHGFLYLOULJKWVYLRODWLRQVXQGHU86& DQGEDVHGRQ5LGGOHjV)LUVW)RXUWKDQG )RXUWHHQWK$PHQGPHQWULJKWVDQGVWDWHODZFODLPVIRUIDOVH DUUHVW PDOLFLRXV SURVHFXWLRQ FRQVSLUDF\ LQWHQWLRQDO LQIOLFWLRQ RI HPRWLRQDO GLVWUHVV DQG ORVV RI FRQVRUWLXP E\ ,UYLQH7KH'LVWULFW&RXUWJUDQWHG'HIHQGDQWVj0RWLRQIRU 6XPPDU\sXGJPHQWGLVPLVVLQJWKH&RPSODLQWRQ)HEUXDU\ 2QDSULRUDSSHDOWKLV&RXUWDIILUPHGWKH'LVWULFW &RXUWjVUXOLQJRQ$SULO6HH5LGGOHY(JHQVSHUJHU 1R :/ WK &LU $SU XQSXEOLVKHGRSLQLRQ 7KH&LW\RI0D\ILHOGYDULRXV&LW\RIILFLDOVDQG=DYDUHOOD ILOHG0RWLRQVIRU$WWRUQH\Vj)HHVDQG&RVWVSXUVXDQWWR 86&DQGRU86&ZKLFKZDVJUDQWHGE\ WKH'LVWULFW&RXUWRQ1RYHPEHU2Q0D\ WKH'LVWULFW&RXUWHQWHUHGDQRUGHUDZDUGLQJLQ DWWRUQH\IHHVDQGFRVWVDJDLQVW3ODLQWLIIV5LGGOHDQG,UYLQHDQG WKHLUODZ\HUV,DFREHOOLDQG0DQRV7LPHO\DSSHDOVZHUHILOHG 5LGGOHHWDOY 1RV 1RV 5LGGOHHWDOY (JHQVSHUJHUHWDO (JHQVSHUJHUHWDO IURPWKH'LVWULFW&RXUWjV1RYHPEHUDQG0D\ UHODWHG VWDWH FODLPV 5LGGOHjV FODLPV ZHUH IULYRORXV RUGHUV XQUHDVRQDEOHDQGZLWKRXWIRXQGDWLRQDQGWKDWWKHSODLQWLIIV VKRXOGKDYHGLVPLVVHGWKHVHFODLPVDIWHUGLVFRYHU\KDGVKRZQ 7KH'LVWULFW&RXUWDGRSWHGWKH0DJLVWUDWHsXGJHjVILQGLQJ WKDWWKH\ZHUHZLWKRXWIDFWXDOVXSSRUW7KHGLVWULFWFRXUWWKXV WKDWZLWKWKHH[FHSWLRQRIWKH)RXUWK$PHQGPHQWFODLPDQG DZDUGHG WKH PRYDQWV DWWRUQH\ IHHV IRU WKH SUHSDUDWLRQ RI UHODWHGVWDWHFODLPVRIIDOVHDUUHVWDQGPDOLFLRXVSURVHFXWLRQ PRWLRQVIRUVXPPDU\MXGJPHQWSHUWDLQLQJWRDOORI5LGGOHjV 3ODLQWLIIVjFODLPVZHUHIULYRORXVXQUHDVRQDEOHDQGZLWKRXW FODLPVH[FHSWWKH)RXUWK$PHQGPHQWDQGUHODWHGVWDWHFODLPV IRXQGDWLRQ s$ SS 7KH 'LVWULFW &RXUW ZHQW ,QDGGLWLRQWKHGLVWULFW FRXUWJUDQWHGWKHPRYDQWVDWWRUQH\ EH\RQG WKH UHFRPPHQGDWLRQ RI WKH 0DJLVWUDWH sXGJH WKDW IHHVIRUGLVFRYHU\FRVWVUHODWHGWRWKHJURXQGOHVVFODLPVEDVHG 'HIHQGDQWVZHUHHQWLWOHGWRDWWRUQH\IHHVDVVRFLDWHGRQO\ZLWK RQWKHSODLQWLIIVjOLWLJDWLRQWDFWLFV 'HIHQGDQWVj SUHSDUDWLRQ RI WKH PRWLRQV IRU VXPPDU\ MXGJPHQW DQG DZDUGHG DWWRUQH\ IHHV DQG FRVWV UHODWLQJ WR ,Q UHYLHZLQJ WKH GLVWULFW FRXUWjV DZDUG RI DWWRUQH\ IHHV GLVFRYHU\ DV ZHOO s$ SS $IWHU IXUWKHU EDVHG RQ WKLV UHFRUG , DP QRW mILUPO\ FRQYLQFHG WKDW D VXEPLVVLRQRIDIILGDYLWVLQVXSSRUWRIWKHUHTXHVWHGDWWRUQH\ PLVWDNH KDV EHHQ PDGHl $GFRFN/DGG Y 6HFUHWDU\ RI IHHV DQG FRVWV WKH 'LVWULFW &RXUW DGRSWHG WKH 0DJLVWUDWH 7UHDVXU\ )G WK &LU TXRWDWLRQ sXGJHjV 5HSRUW DQG 5HFRPPHQGDWLRQ RUGHULQJ 3ODLQWLIIV RPLWWHG $OWKRXJK WKH UHFRUG LQGLFDWHV WKDW 0D\RU 5LGGOHDQG,UYLQHDQGWKHLUDWWRUQH\VRIUHFRUG0DQRVDQG (JHQVSHUJHUDQGWKHRWKHUGHIHQGDQWVGLGQRWOLNH5LGGOHWKH ,DFREHOOL WR SD\ WR 'HIHQGDQW =DYDUHOOD DQG SODLQWLIIV DQG WKHLU FRXQVHO ZHUH XQDEOH WR XQFRYHU DQ\ WRWKH&LW\RI0D\ILHOG+HLJKWVDQGYDULRXV&LW\ HYLGHQFH RI WKH DOOHJHG FRQVSLUDF\ WR YLRODWH 5LGGOHjV RIILFLDOVs$SS FRQVWLWXWLRQDOULJKWV7KHGLVWULFWFRXUWGHWHUPLQHGWKDWWKH SODLQWLIIVj SXUVXLW RI WKHVH JURXQGOHVV FODLPV DIWHU WKHLU 2QDSSHDO5LGGOHDQG,UYLQHDUJXHWKHIROORZLQJWKDW JURXQGOHVVQHVV ZDV DSSDUHQW ZDV VDQFWLRQDEOH DQG , DP WKH'LVWULFW&RXUWDEXVHGLWVGLVFUHWLRQLQDZDUGLQJDWWRUQH\ XQDEOH WR VWDWH WKDW WKLV GHWHUPLQDWLRQ ZDV DQ DEXVH RI IHHV WR WKH SUHYDLOLQJ 'HIHQGDQWV XQGHU 86& GLVFUHWLRQ EHFDXVH WKHLU FODLPV ZHUH QRW IULYRORXV XQUHDVRQDEOH RU ZLWKRXW IRXQGDWLRQ WKDW WKH 'LVWULFW &RXUW DEXVHG LWV 0RUHRYHUWKHGLVWULFWFRXUWjVDZDUGRIDWWRUQH\IHHVDQG GLVFUHWLRQLQILQGLQJWKDW3ODLQWLIIVDQGWKHLUDWWRUQH\VZHUH FRVWVDJDLQVWWKHSODLQWLIIVDQGWKHLUFRXQVHOIRUGLVFRYHU\ZDV MRLQWO\DQGVHYHUDOO\OLDEOHIRUDWWRUQH\IHHVZLWKRXWDGYLVLQJ VXUHO\LQIOXHQFHGE\WKHPDQQHULQZKLFKWKHSODLQWLIIVDQG 3ODLQWLIIVRIWKHFRQIOLFWRILQWHUHVWSRVHGE\WKHFRQWLQXHG WKHLUFRXQVHOSXUVXHGWKLVOLWLJDWLRQ)RUH[DPSOHZKHQWKH UHSUHVHQWDWLRQRIWKHLUDWWRUQH\VGXULQJWKHSHQGHQF\RIWKH GHIHQGDQWV UHTXHVWHG WKDW WKH SODLQWLIIV DQG WKHLU FRXQVHO DWWRUQH\ IHH SHWLWLRQ WKDW WKH 'LVWULFW &RXUW DEXVHG LWV SURYLGH D OLVW RI LQGLYLGXDOV ZLWK LQIRUPDWLRQ UHODWLQJ WR GLVFUHWLRQ EHFDXVH WKH 3ODLQWLIIVj DELOLW\ WR SD\ ZDV QRW 5LGGOHjVFODLPVWKHSODLQWLIIVSURYLGHGWKHGHIHQGDQWVZLWKD FRQVLGHUHG DQG WKDW WKH KRXUV DQG IHHV ELOOHG ZHUH OLVWRIDSSUR[LPDWHO\QDPHVWKDWLQFOXGHGVXFKQRWDEOHV GXSOLFDWLYHDQGWKHKRXUO\UDWHVZHUHQRWDSSURSULDWHIRUWKH DVIRUPHU866HQDWRU+RZDUG0HW]HQEDXP$WRQHSRLQW H[SHULHQFHRIWKHDWWRUQH\VDFWXDOO\GRLQJWKHZRUN WKH SODLQWLIIV FODLPHG WKDW 6HQDWRU 0HW]HQEDXP KDG LQIRUPDWLRQUHJDUGLQJWKHSODLQWLIIVj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jV DZDUG RI IHHV DQG FRVWV DQG WKH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH1RUWKHUQ'LVWULFWRI WKH'LVWULFW&RXUWDEXVHGLWVGLVFUHWLRQLQGHWHUPLQLQJWKH 2KLRQDPLQJIRXUWHHQLQGLYLGXDOGHIHQGDQWVDVZHOODVWKH DPRXQW RI IHHV DQG FRVWV XQGHU 86& DQG &LW\ RI 0D\ILHOG +HLJKWV DV GHIHQGDQWV 7KH FRPSODLQW 86& DOOHJHGJHQHUDOO\WKDWWKHFULPLQDOWUHVSDVVSURVHFXWLRQDORQJ ZLWK VHYHUDO RWKHU DGYHUVH DFWLRQV ZDV WKH UHVXOW RI D )RUWKHUHDVRQVVHWIRUWKEHORZWKH'LVWULFW&RXUWjVRUGHUV FRQVSLUDF\RQWKHSDUWRIWKHGHIHQGDQWVWRUHWDOLDWHDJDLQVW DZDUGLQJDWWRUQH\IHHVDQGFRVWVDUH5(9(56(' 5LGGOHIRUH[HUFLVLQJKLV)LUVW$PHQGPHQWULJKWWRFULWLFL]H WKH PD\RUj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jV FRQVRUWLXP FODLP DQG D FODLP DJDLQVW WKH &LW\ RI ILQGLQJ LV IDFWXDOO\ VXSSRUWHG ,G m,Q OLJKW RI D GLVWULFW 0D\ILHOG+HLJKWV FRXUWjV VXSHULRU XQGHUVWDQGLQJ RI WKH OLWLJDWLRQ DQG WKH GHVLUDELOLW\ RI DYRLGLQJ IUHTXHQW DSSHOODWH UHYLHZ RI ZKDW 7KH GLVWULFW FRXUW JUDQWHG WKH GHIHQGDQWVj PRWLRQ IRU HVVHQWLDOO\ DUH IDFWXDO PDWWHUV DQ DZDUG RI DWWRUQH\Vj IHHV VXPPDU\MXGJPHQWRQWKHIHGHUDOFRXQWVDQGGLVPLVVHGWKH XQGHU LV HQWLWOHG WR VXEVWDQWLDO GHIHUHQFHl 6HH VWDWH FODLPV ZLWKRXW SUHMXGLFH 7KH GHIHQGDQWV ZLWK WKH :LOVRQ6LPPRQV Y /DNH &RXQW\ 6KHULIIjV 'HSjW )G H[FHSWLRQRI%XVKPDQWKHQPRYHGIRUDWWRUQH\IHHVDQGFRVWV WK&LU DJDLQVWERWK5LGGOHDQG,UYLQHSXUVXDQWWR86& DQG WKHLU DWWRUQH\V 0DQRV DQG ,DFREHOOL SXUVXDQW WR % 86& 86&7KHGLVWULFWFRXUWFRQFOXGHGWKDWZLWKWKH 7KHm$PHULFDQ5XOHlZLWKUHJDUGWRDWWRUQH\IHHVLVWKDW H[FHSWLRQ RI 5LGGOHjV )RXUWK $PHQGPHQW FODLP DQG WKH HDFKSDUW\LQFOXGLQJWKHSUHYDLOLQJSDUW\PXVWEHDUKLVRUKHU RZQ DWWRUQH\ IHHV $O\HVND 3LSHOLQH 6HUYLFH &R Y :LOGHUQHVV 6RFLHW\ 86 %XQQLQJ Y 7KH LQGLYLGXDO GHIHQGDQWV QDPHG ZHUH 0DUJDUHW (JHQVSHUJHU WKH .HQWXFN\)GWK&LU7KHUHDUH FHUWDLQVWDWXWHVWKDWSURYLGHIRUWKHDZDUGRIDWWRUQH\IHHVWR PD\RU RI 0D\ILHOG +HLJKWV /HRQDUG &DUU WKH FLW\jV ODZ GLUHFWRU *HRUJH $UJLH WKH FLW\ SURVHFXWRU 7KRPDV 6OLYHUV WKH IRUPHU FKLHI RI SROLFH &KULV 6RQQKDOWHU D GHWHFWLYH LQ WKH 0D\ILHOG +HLJKWV 3ROLFH 'HSDUWPHQW WKH SUHYDLOLQJ SDUW\ $ SUHYDLOLQJ SDUW\ LQ D 86& 0DU\ &ODUH %XVKPDQ 6KHOGRQ 6RFRORII WKH EXLOGLQJ GLUHFWRU 5RODQG DQGFLYLOULJKWVDFWLRQDWWKHGLVFUHWLRQ =DYDUHOOD DQ DGYLVRU WR WKH PD\RU 'RORUHV .ODIWD D FLW\ SDUNV DQG RIWKHWULDOFRXUWLVHQWLWOHGWRDWWRUQH\IHHVDVSDUWRIFRVWV UHFUHDWLRQ FRPPLVVLRQHU DQG FLW\ FRXQFLOSHUVRQV $O .D\ +RZDUG 86&E$QDZDUGRIDWWRUQH\IHHVDJDLQVWD *OLFNPDQ *HQR 0DQIUHGL 0DUWKD 0F&UDU\ DQG &KDUOHV 3RQD ORVLQJSODLQWLIILQDFLYLOULJKWVDFWLRQmLVDQH[WUHPHVDQFWLRQ 'HIHQGDQWV %XVKPDQ DQG =DYDUHOOD ZHUH QRW QDPHG LQ WKH DQGPXVWEHOLPLWHGWRWUXO\HJUHJLRXVFDVHVRIPLVFRQGXFWl FKDUJHV DV WKH\ DUH QRW VWDWH DFWRUV sRQHVY7KH&RQWLQHQWDO&RUS)GWK 5LGGOHHWDOY 1RV 1RV 5LGGOHHWDOY (JHQVSHUJHUHWDO (JHQVSHUJHUHWDO &LUm$SUHYDLOLQJGHIHQGDQWVKRXOGRQO\UHFRYHUXSRQ DERXWDQDGGLWLRQWKDWKDGEHHQPDGHWRWKH%XVKPDQKRXVH DILQGLQJE\WKHGLVWULFWFRXUWWKDWµWKHSODLQWLIIjVDFWLRQZDV LQ:KHQ0HJJDQWROG5LGGOHWKDWWKH%XVKPDQVKDG IULYRORXVXQUHDVRQDEOHRUZLWKRXWIRXQGDWLRQHYHQWKRXJK QHYHUPDGHDQDGGLWLRQWRWKHLUKRPH5LGGOHVKRZHG0HJJDQ QRW EURXJKW LQ VXEMHFWLYH EDG IDLWKjl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jV SODLQWLIIGLGQRWXOWLPDWHO\SUHYDLOKLVDFWLRQPXVWKDYH QDPH0HJJDQODWHUWROGSROLFHWKDWVKHmILJXUHGVLQFHKHKDG EHHQXQUHDVRQDEOHRUZLWKRXWIRXQGDWLRQ7KLVNLQGRI DOO WKHVH SDSHUV DQG VWXII WKDW KH ZDV VRPHERG\ IURP WKH KLQGVLJKWORJLFFRXOGGLVFRXUDJHDOOEXWWKHPRVWDLUWLJKW &LW\ls$DW FODLPVIRUVHOGRPFDQDSURVSHFWLYHSODLQWLIIEHVXUHRI XOWLPDWHVXFFHVV1RPDWWHUKRZKRQHVWRQHjVEHOLHIWKDW $IWHU5LGGOHOHIWWKHSURSHUW\0HJJDQFDOOHGKHUPRWKHUDW KHKDVEHHQWKHYLFWLPRIGLVFULPLQDWLRQQRPDWWHUKRZ ZRUN DQG WROG KHU WKDW D FLW\ RIILFLDO KDG EHHQ DVNLQJ PHULWRULRXV RQHj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jVDWWRUQH\jVIHHVXQOHVVDFRXUWILQGVWKDWKLV ILOHDFRPSODLQWZKLFKVKHGLGWKHIROORZLQJGD\ FODLPZDVIULYRORXVXQUHDVRQDEOHRUJURXQGOHVVRUWKDW WKHSODLQWLIIFRQWLQXHGWROLWLJDWHDIWHULWFOHDUO\EHFDPH %DVHGRQ0UV%XVKPDQjVFRPSODLQW5LGGOHZDVDUUHVWHG VR DQGFKDUJHGZLWKFULPLQDOWUHVSDVVE\GHFHSWLRQ)ROORZLQJ D EHQFK WULDO LQ /\QGKXUVW 0XQLFLSDO &RXUW 5LGGOH ZDV &KULVWLDQVEXUJ86DWLWDOLFVDGGHG7RGHWHUPLQH FRQYLFWHGRIFULPLQDOWUHVSDVVLQYLRODWLRQRIWKH0D\ILHOG ZKHWKHUDFODLPLVIULYRORXVXQUHDVRQDEOHRUJURXQGOHVVWKH +HLJKWV&RGLILHG2UGLQDQFHV 7KHVWDWHFRXUWRI FRXUWPXVWGHWHUPLQHSODLQWLIIjVEDVLVIRUILOLQJWKHVXLW6PLWK DSSHDOVKRZHYHUVXEVHTXHQWO\UHYHUVHG5LGGOHjVFRQYLFWLRQ Y6P\WKH&UDPHU&R)GWK&LU EHFDXVHWKHFLW\KDGIDLOHGWRSURYHDQHOHPHQWRIWKHFKDUJHG RIIHQVH6HH&LW\RI0D\ILHOG+HLJKWVY5LGGOH1(G 7KH 'LVWULFW &RXUW DZDUGHG DWWRUQH\ IHHV EDVHG RQ WKH 2KLR&W$SS 0DJLVWUDWH sXGJHjV 5HSRUW DQG 5HFRPPHQGDWLRQ WKDW 3ODLQWLIIVjFODLPVH[FHSWIRUWKH)RXUWK$PHQGPHQW&ODLP 5LGGOHHWDOY 1RV 1RV 5LGGOHHWDOY (JHQVSHUJHUHWDO (JHQVSHUJHUHWDO BBBBBBBBBBBBBBB DQG UHODWHG VWDWH FODLPV RI IDOVH DUUHVW DQG PDOLFLRXV SURVHFXWLRQ ZHUH IULYRORXV XQUHDVRQDEOH DQG ZLWKRXW ',66(17 IRXQGDWLRQ 'LVW &UW 2S 9RO , s$ 7KH BBBBBBBBBBBBBBB 0DJLVWUDWHsXGJHUHFRPPHQGHGWKDWDWWRUQH\IHHVEHDZDUGHG LQ SUHSDULQJ WKRVH SRUWLRQV RI WKH PRWLRQV IRU VXPPDU\ .$5(1 1(/621 0225( &LUFXLW sXGJH GLVVHQWLQJ MXGJPHQWDQGPHPRUDQGDLQVXSSRUWSHUWDLQLQJWRDOOFODLPV $OWKRXJK WKH DZDUGLQJ RI DWWRUQH\ IHHV mDJDLQVW D ORVLQJ RWKHUWKDQWKHDOOHJHG)RXUWK$PHQGPHQWYLRODWLRQDQGVWDWH SODLQWLII LQ D FLYLO ULJKWV DFWLRQ LV DQ H[WUHPH VDQFWLRQl FODLPVUHODWHGWKHUHWRVXFKDVWKHIDOVHDUUHVWDQGPDOLFLRXV DSSURSULDWH RQO\ LQ mWUXO\ HJUHJLRXV FDVHV RI PLVFRQGXFWl SURVHFXWLRQFODLPV5HS 5HF9RO,s$7KH sRQHVY&RQWLQHQWDO&RUS)GWK&LU 0DJLVWUDWHsXGJHjVUHFRPPHQGDWLRQZDVEDVHGRQWKH'LVWULFW ,DPXQDEOHWRFRQFOXGHWKDWWKHGLVWULFWFRXUWDEXVHG &RXUWjV DFFHSWDQFH RI WKH 0DJLVWUDWH sXGJHjV ILQGLQJV DQG LWVGLVFUHWLRQLQDZDUGLQJWKHPLQWKHSUHVHQWFDVH)RUWKLV UHFRPPHQGDWLRQ RQ 'HIHQGDQWVj 0RWLRQ IRU 6XPPDU\ UHDVRQ,UHVSHFWIXOO\GLVVHQW sXGJPHQWQRWLQJWKDWWKH'LVWULFW&RXUWFRQFOXGHGWKDWWKHUH ZDV QR HYLGHQFH WR VXSSRUW D MXVWLILDEOH LQIHUHQFH RI m,QOLJKWRI>WKH@GLVWULFWFRXUWjVVXSHULRUXQGHUVWDQGLQJRI FRQVSLUDF\ WKDW 3ODLQWLII ZDV DEOH WR H[HUFLVH KLV ULJKW WR WKHOLWLJDWLRQlWKHDZDUGRIDWWRUQH\IHHVLQVXFKFDVHVmLV VSHDN DW SXEOLF PHHWLQJV WKDW WKHUH ZDV QR HYLGHQFH HQWLWOHGWRVXEVWDQWLDOGHIHUHQFHl:LOVRQ6LPPRQVY/DNH 'HIHQGDQWVWRRNDQ\DFWLRQWRLQWHUIHUHZLWKWKRVHULJKWVDQG &RXQW\ 6KHULIIjV 'HSjW )G WK &LU WKDWWKH)RXUWK$PHQGPHQWFODLPZDVWKHRQO\YLDEOHFODLP TXRWDWLRQ RPLWWHG $OWKRXJK WKH SDQHOjV RSLQLRQ PDNHV ZKLFKH[LVWHGDIWHUGLVFRYHU\ZDVFRPSOHWHG6SHFLILFDOO\ UHIHUHQFHWRWKHXQXVXDOIDFWVRIWKLVFDVHDWYDULRXVSRLQWV WKH0DJLVWUDWHsXGJHVWDWHG WKH GLVWULFW FRXUWjV GHFLVLRQ WR DZDUG DWWRUQH\ IHHV LQ WKH SUHVHQWFDVHLVXQGHUVWDQGDEOHRQO\ZKHQFRQVLGHUHGLQWKH ,Q 'HFHPEHU SODLQWLIIV /LQGHOO 5LGGOH DQG RYHUDOOFRQWH[WRI5LGGOHjVFLYLOULJKWVODZVXLWDJDLQVW0D\RU 'HERUDK/,UYLQHILOHGDFRPSODLQWDJDLQVWWKHYDULRXV (JHQVSHUJHU DQG WKH RWKHU GHIHQGDQWV 7KH DOOHJHG GHIHQGDQWV DOOHJLQJ YLRODWLRQV RI 86& FRQVSLUDF\WRYLRODWH5LGGOHjVFRQVWLWXWLRQDOULJKWVDWLVVXHLQ DQGDVZHOODVVWDWHFODLPVIRUIDOVHDUUHVW WKLV FDVH VWHPPHG IURP D 0D\ILHOG +HLJKWV FLW\ FRXQFLO PDOLFLRXVSURVHFXWLRQFRQVSLUDF\LQWHQWLRQDOLQIOLFWLRQ PHHWLQJKHOGRQ1RYHPEHU$WWKLVPHHWLQJ5LGGOH RIHPRWLRQDOGLVWUHVVDQGORVVRIFRQVRUWLXP%RWKWKLV DVVHUWHGWKDW0D\RU(JHQVSHUJHUKDGEXLOWDURRPDGGLWLRQWR FRXUWDQGsXGJH1XJHQWGHWHUPLQHGWKDWSODLQWLIIVjFODLPV KHUKRXVHVHYHQ\HDUVHDUOLHUGHVSLWHKDYLQJRQO\REWDLQHGD VKRXOG EH GLVPLVVHG RQ VXPPDU\ MXGJPHQW %RWK SHUPLWWREXLOGDSDWLRHQFORVXUH5LGGOHDVHOIGHVFULEHG RSLQLRQV UHFRJQL]HG WKDW SODLQWLIIVj FHQWUDO DQG RQO\ FRPPXQLW\DFWLYLVWH[SODLQHGWKDWDVDUHVXOWRIWKHPD\RUjV YLDEOHFODLPDURVHRXWRIKLVDUUHVWDQGSURVHFXWLRQIRU IDLOXUHWRREWDLQWKHSURSHUSHUPLWVWKHSURSHUWD[HVZHUHQRW WUHVSDVVDQGFRQFOXGHGWKDWWKHFODLPPXVWEHGLVPLVVHG EHLQJSDLG RQ VXPPDU\ MXGJPHQW EHFDXVH WKHUH H[LVWHG SUREDEOH FDXVHIRUWKHDUUHVWsXGJH1XJHQWDJUHHGZLWKWKLVFRXUW $IWHUWKLVPHHWLQJ5LGGOHZHQWWRWKHKRPHRIWKHPD\RUj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sXGJH1XJHQWFRQFOXGHGWKDWµWKHUHLVQRHYLGHQFHWR DWWRUQH\jV IHHV RQ WKH FLYLO ULJKWV SODLQWLII ZKR ILOHV D VXSSRUWDMXVWLILDEOHLQIHUHQFHRIFRQVSLUDF\LQWKLVFDVH UHDVRQDEO\IRXQGHGFODLPEXWXOWLPDWHO\ORVHV KLVFDVHRQ j6OLSRSDWQ7KHFRXUWIXUWKHUSRLQWHGRXW VXPPDU\ MXGJPHQW DIWHU GLVFRYHU\ LV FRPSOHWHG 7R KROG WKDW DV WR WKH DOOHJHG )LUVW $PHQGPHQW YLRODWLRQ WKH RWKHUZLVH ZRXOG XQMXVWLILDEO\ DGG WR WKH MXULVSUXGHQFH HYLGHQFH VKRZHG WKDW 0U 5LGGOH IUHTXHQWO\ DQG DZDUGLQJDWWRUQH\jVIHHVWRFLYLOULJKWVGHIHQGDQWVZKLFKLQ YLJRURXVO\ H[HUFLVHG KLV ULJKW WR VSHDN DW SXEOLF WXUQ PD\ XOWLPDWHO\ GLVVXDGH IXWXUH FLYLO ULJKWV SODLQWLIIV PHHWLQJV7KHUHZDVQRHYLGHQFHWKDWGHIHQGDQWVWRRN IURP SURFHHGLQJ ZLWK SRWHQWLDOO\ PHULWRULRXV FODLPV WKXV DQ\ DFWLRQ WR LQWHUIHUH ZLWK WKRVH ULJKWV $V WR WKH VWLIOLQJWKHHQIRUFHPHQWRIWKHFLYLOULJKWVVWDWXWHVFRQWUDU\WR )RXUWHHQWK $PHQGPHQW FODLP EDVHG RQ 0U 5LGGOHjV FRQJUHVVLRQDOLQWHQW6HH1HZPDQ86DW DUUHVWWKDWFODLPZDVH[SOLFLWO\SUHFOXGHGE\$OEULJKWY 2OLYHU86 6LPLODUO\EHFDXVH,GRQRWEHOLHYHWKDW3ODLQWLIIVjFRXQVHO LQWHQWLRQDOO\ SXUVXHG PHULWOHVV FODLPV , DJUHH ZLWK sXGJH ,QVKRUWWKH)RXUWK$PHQGPHQWFODLPZDVWKHRQO\ +RRGWKDWWKHGLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQLQDZDUGLQJ RQHIRUZKLFKDYLDEOHDUJXPHQWH[LVWHGDIWHUGLVFRYHU\ 'HIHQGDQWVj IHHV XQGHU 86& , SHUFHLYH WKH ZDV FRPSOHWHG $OO RWKHU IHGHUDO FODLPV VKRXOG KDYH DFWLRQV RI 3ODLQWLIIVj FRXQVHO KHUH WR EH FRQVLVWHQW ZLWK EHHQGLVPLVVHGE\SODLQWLIIVRQWKHEDVLVRILQVXIILFLHQW QRUPDOYLJRURXVDGYRFDF\H[KLELWHGE\DSODLQWLIIjVFRXQVHO IDFWXDODQGRUOHJDOEDVLV LQWKHULJKWQHVVRIKLVFDXVHKRZHYHUZURQJKHXOWLPDWHO\ PD\EH7RWKHH[WHQWWKDW3ODLQWLIIVjFRXQVHOPD\KDYHEHHQ s$SS RYHU ]HDORXV 'HIHQGDQWVj FRXQVHO DV ZHOO DSSHDUV WR KDYH EHHQMXVWDVRYHUEHDULQJLQWKLVFDVH 7KH 'LVWULFW &RXUW DQG WKH 0DJLVWUDWH sXGJHIRXQGWKDW 5LGGOHDQG,UYLQHDOOHJHGDYLDEOHFODLPXQGHUWKH)RXUWK )RUWKHDERYHVWDWHGUHDVRQV,MRLQLQWKHUHVXOWUHDFKHGE\ $PHQGPHQW'HIHQGDQWVGRQRWTXHVWLRQWKLVILQGLQJRWKHU sXGJH+RRGILQGLQJWKDWWKHGLVWULFWFRXUWDEXVHGLWVGLVFUHWLRQ WKDQ DUJXLQJ WKDW WKH )RXUWK $PHQGPHQW FODLP ZDV mGH LQ DZDUGLQJ 'HIHQGDQWV DWWRUQH\jV IHHV XQGHU 86& PLQLPLVl$VWRWKHUHPDLQLQJFODLPVWKH)LUVW$PHQGPHQW DQG86& DQG FRQVSLUDF\ FODLPV ZH WXUQ WR WKH UHFRUG WR GHWHUPLQH ZKHWKHU WKRVH FODLPV ZHUH mIULYRORXV XQUHDVRQDEOH DQG ZLWKRXWIRXQGDWLRQl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µYLOLILHGj 5LGGOH RSSRVLWLRQ EULHI DW DQG WZR EHHQXQUHDVRQDEOHRUZLWKRXWIRXQGDWLRQl LQFLGHQWV LQ ZKLFK =DYDUHOOD DOOHJHGO\ EDLWHG 5LGGOH GXULQJDFLW\FRXQFLOPHHWLQJ 8QGHUWKHIDFWVRIWKLVFDVHLWLVWKLVUHVXOWWKDWDGYDQFHV &RQJUHVVjLQWHQWRIHQWUXVWLQJWKHYLJRURXVHQIRUFHPHQWRIWKH FLYLOULJKWVVWDWXWHVWRSODLQWLIIVZKRVHUYHLQWKLVUHJDUGDV mSULYDWHDWWRUQH\>V@JHQHUDOl6HH1HZPDQY3LJJLH3DUN ,Q UHJDUG WR WKH .ODIWD VWDWHPHQWV WKHUH LV QR (QWHUV ,QF 86 m:KHQ WKH &LYLO HYLGHQFHWKDWGHIHQGDQWVFRQVSLUHGWRKDYH.ODIWDPDNH 5LJKWV $FW RI ZDV SDVVHG LW ZDV HYLGHQW WKDW WKH VWDWHPHQWV )XUWKHU WKHUH LV QR HYLGHQFH WKDW WKH HQIRUFHPHQWZRXOGSURYHGLIILFXOWDQGWKDWWKH1DWLRQZRXOG VWDWHPHQWVDWDQ\WLPHSUHYHQWHG5LGGOHjVH[HUFLVHRIKLV KDYH WR UHO\ LQ SDUW XSRQ SULYDWH OLWLJDWLRQ DV D PHDQV RI ULJKWWRIUHHVSHHFK1RUHDVRQDEOHMXU\FRXOGILQGWKDW VHFXULQJEURDGFRPSOLDQFHZLWKWKHODZl7REHVXUHLWLV 5LGGOHSURYHGWKHHOHPHQWVRIDFODLPEDVHG UDUHWKDWFLYLOULJKWVFDVHVDUHEDVHGRQGLUHFWHYLGHQFHVHH RQ.ODIWDj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jV)LUVW$PHQGPHQWULJKWV7KH IDFW WKDW VRPH GHIHQGDQWV DOO UHVLGHQWV RI 0D\ILHOG &/$< &LUFXLW sXGJH FRQFXUULQJ , UHVSHFWIXOO\ FDQQRW +HLJKWVFRPPXQLFDWHGZLWKHDFKRWKHUGRHVQRWVXSSRUW IXOO\ HPEUDFH WKH UHDVRQLQJ RI HLWKHU RI P\ OHDUQHG DQ LQIHUHQFH RI D FRQVSLUDF\ )LQDOO\ WKHUH LV QR FROOHDJXHjVRSLQLRQV+RZHYHUEHFDXVH,XOWLPDWHO\DJUHH HYLGHQFHWKDW5LGGOHVXEVHTXHQWO\ZDVXQDEOHWRH[HUFLVH WKDW WKH GLVWULFW FRXUW DEXVHG LWV GLVFUHWLRQ LQ DZDUGLQJ KLVULJKWRIIUHHH[SUHVVLRQDWFLW\FRXQFLOPHHWLQJVRU 'HIHQGDQWVDWWRUQH\jVIHHVDQGEHFDXVH,VKDUHLQWKHFRQFHUQ DQ\ZKHUH HOVH $ UHDVRQDEOH MXU\ FRXOG QRW ILQG D WKDWDZDUGLQJDWWRUQH\jVIHHVWRGHIHQGDQWVXQGHULQD YLRODWLRQRIXQGHUWKHVHIDFWV FDVH VXFK DV WKLV PD\ KDYH D FKLOOLQJ HIIHFW RQ SRWHQWLDOO\ PHULWRULRXVFLYLOULJKWVSODLQWLIIV,MRLQLQWKHUHVXOWUHDFKHG s$SS E\sXGJH+RRG $VWR5LGGOHjV)LUVW$PHQGPHQWFODLP5LGGOHKDVPHWWKH $V WKH 6XSUHPH &RXUW PDGH FOHDU LQ &KULVWLDQVEXUJ ILUVW HOHPHQW DV D ZDWFKGRJ RI WKH 0D\ILHOG +HLJKWV &LW\ *DUPHQW &R Y ((2& 86 IRU &RXQFLO DQG DQ RXWVSRNHQ FULWLF RI WKH &LW\ RIILFLDOV SROLF\ UHDVRQV D SUHYDLOLQJ FLYLO ULJKWV SODLQWLII LV m)UHHGRP WR FULWLFL]H SXEOLF RIILFLDOV DQG H[SRVH WKHLU SUHVXPSWLYHO\HQWLWOHGWRUHDVRQDEOHDWWRUQH\jVIHHVXQOHVVD ZURQJGRLQJLVDWWKHFRUHRI)LUVW$PHQGPHQWYDOXHVHYHQLI VKRZLQJRImVSHFLDOFLUFXPVWDQFHVlLVPDGH7KHVHSROLF\ WKHFRQGXFWLVPRWLYDWHGE\SHUVRQDOSLTXHRUUHVHQWPHQWl UHDVRQV LQFOXGH &RQJUHVVj FRQFHUQ IRU WKH YLJRURXV ,G DW $V WR WKH VHFRQG DQG WKLUG HOHPHQWV WKH HQIRUFHPHQW RI FLYLO ULJKWV DQG WKH UROH RI SODLQWLIIV LQ 0DJLVWUDWHsXGJHIRXQGWKDWm>D@IWHUFDUHIXOO\UHYLHZLQJWKH DFKLHYLQJ WKLV HQIRUFHPHQW ,G %HFDXVH SROLF\ SODLQWLIIjVPHPRUDQGXPLQRSSRVLWLRQDQGDOORIWKHH[KLELWV FRQVLGHUDWLRQV VXFK DV WKHVH DUH DEVHQW LQ WKH FDVH RI D RIIHUHG E\ WKH SDUWLHV WKH FRXUW ILQGV WKDW 5LGGOH KDV QRW SUHYDLOLQJ FLYLO ULJKWV GHIHQGDQW DWWRUQH\jV IHHV DUH RIIHUHGHYLGHQFHWKDWZRXOGVXSSRUWKLVFODLPRIUHWDOLDWLRQ SUHVXPSWLYHO\XQDYDLODEOHZKHUHVXFKIHHVDUHDZDUGHGRQO\ EDVHG RQ DOOHJHG SXEOLF ULGLFXOH RU DQ DOOHJHG DWWHPSWHG mXSRQ D ILQGLQJ WKDW WKH SODLQWLIIjV DFWLRQ ZDV IULYRORXV SURVHFXWLRQUHJDUGLQJDEXLOGLQJFRPPLWWHHPHHWLQJls$ XQUHDVRQDEOHRUZLWKRXWIRXQGDWLRQl,GDW,QGHHG SS5HJDUGLQJ5LGGOHjVFODLPWKDWKHZDVSURVHFXWHG m>D@ZDUGLQJDWWRUQH\jVIHHVWRSUHYDLOLQJGHIHQGDQWVLQFLYLO IRU FULPLQDO WUHVSDVV LQ UHWDOLDWLRQ IRU H[HUFLVLQJ KLV )LUVW ULJKWVDFWLRQVLQRQO\WKHPRVWH[WUHPHDQGHJUHJLRXVFDVHVRI $PHQGPHQWULJKWVWKH0DJLVWUDWHsXGJHIRXQGWKDWDOWKRXJK PLVFRQGXFW\HWDZDUGLQJDWWRUQH\>jV@IHHVWRSUHYDLOLQJFLYLO WKHUHLVHYLGHQFHRIIULFWLRQEHWZHHQ5LGGOHDQGYDULRXVFLW\ ULJKWVSODLQWLIIVRQDUHJXODUEDVLVXQGHUFRPSRUWV RIILFLDOV WKHUH LV QR HYLGHQFH WKDW OLQNV WKH IULFWLRQ WR WKH ZLWKWKHSXUSRVHRIDVDYHKLFOHIRUWKHHQIRUFHPHQWRI ILOLQJ RI WKH FULPLQDO FKDUJHV s$ SS 7KH FLYLOULJKWVDQGSUHYHQWVGHIHQGDQWVoZKRRIWHQWLPHVDUHLQ 0DJLVWUDWHsXGJHIXUWKHUQRWHG DVXSHULRUSRVLWLRQVLPSO\E\YLUWXHRIEHLQJDEOHWRDIIRUGWRS OHJDOFRXQVHOoIURPXVLQJDKHDY\KDQGWRSUHYHQWSODLQWLIIV 5LGGOHDUJXHVWKDWWKHSROLFHGHSDUWPHQWWKHQKDQGOHGWKH ZLWK SRWHQWLDOO\ PHULWRULRXV FODLPV IURP SXUVXLQJ WKRVH %XVKPDQUHSRUWGLIIHUHQWO\EHFDXVHRIILFLDOVZDQWHGWR FODLPVl5RDQHY&LW\RI0DQVILHOG1R:/ XVH WKH LQFLGHQW WR UHWDOLDWH DJDLQVW 5LGGOH IRU SDVW DW WK&LU$XJ&OD\sFLWLQJ 5LGGOHHWDOY 1RV 1RV 5LGGOHHWDOY (JHQVSHUJHUHWDO (JHQVSHUJHUHWDO YH[DWLRXVEHKDYLRU7KH'LVWULFW&RXUWDEXVHGLWVGLVFUHWLRQ SROLWLFDO VSHHFK )RU H[DPSOH 5LGGOH DUJXHV WKDW DQ LQDZDUGLQJDWWRUQH\IHHVXQGHU86& XQXVXDO QXPEHU RI FLW\ RIILFLDOV ZDV LQYROYHG LQ HYDOXDWLQJ KLV VLWXDWLRQ 3ROLFH &KLHI 6LOYHUV >VLF@ 7KHUHPDLQLQJLVVXHVQHHGQRWEHDGGUHVVHG KRZHYHUH[SODLQVWKDWµJLYHQ0U5LGGOHjVKLVWRU\LQWKH FLW\DQGWKHFOLPDWHEHWZHHQKLPVHOIDQGWKH0D\RU, ,,&21&/86,21 ZDQWHG WKLV FDVH KDQGOHG LQ WKH PRVW SURSHU ZD\ SRVVLEOHDQG,GLGQjWZDQWDQ\ERG\VD\LQJWKDWZHKDG )RUWKHUHDVRQVVWDWHGDERYHWKH'LVWULFW&RXUWjVRUGHUVDQG GRQHDQ\WKLQJZURQJRQWKLVj6LOYHUV>VLF@'HSDW MXGJPHQWJUDQWLQJDWWRUQH\IHHVXQGHU86&DQG %XVKPDQ RQO\ FRQVLGHUHG ZLWKGUDZLQJ KHU FRPSODLQW 86&DUH5(9(56(' EHFDXVH VKH ZDV FRQFHUQHG DSSDUHQWO\ FRUUHFWO\ WKDW 5LGGOH ZRXOG VXH KHU 7KH HYLGHQFH VKRZV WKDW 'HIHQGDQWV ZHUH FRQFHUQHG DERXW UHSHUFXVVLRQ IURP SURVHFXWLQJ5LGGOH 7KHUHLVQRHYLGHQFHWKDWQHJDWHVSUREDEOHFDXVHIRU 5LGGOHjV DUUHVW RU WKDW VKRZV WKDW UHWDOLDWLRQ ZDV D PRWLYDWLQJIDFWRU,I5LGGOHjVWKHRU\DORQHFRXOGSUHVHQW D MXU\ TXHVWLRQ QR FLWL]HQ ZKR LV FULWLFDO RI D ORFDO JRYHUQPHQW FRXOG EH DUUHVWHG RU SURVHFXWHG IRU DQ DOOHJHG FULPH EHFDXVH RI WKH VSHFWHU RI D FODLP RI UHWDOLDWLRQ s$SS 7KH 'LVWULFW &RXUW DQG WKH 0DJLVWUDWH sXGJHjV ILQGLQJV UHJDUGLQJ WKH DZDUG RI DWWRUQH\ IHHV ZHUH EDVHG RQ WKH ILQGLQJV RQ 'HIHQGDQWVj VXPPDU\ MXGJPHQW PRWLRQ DIWHU GLVFRYHU\ KDG WDNHQ SODFH DQG WKH SDUWLHV KDG ILOHG WKHLU UHVSHFWLYH EULHIV 1HLWKHU WKH 'LVWULFW &RXUW QRU WKH 0DJLVWUDWH sXGJH PDGH D ILQGLQJ WKDW WKH FODLPV ZHUH mJURXQGOHVVDWWKHRXWVHWlQRUDILQGLQJWKDW5LGGOHDQG,UYLQH FRQWLQXHGWROLWLJDWHDIWHULWmFOHDUO\l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sDQDQY7UDPPHOO)G ZDV UDLVHG E\ 'HIHQGDQWV DIWHU WKH SDUWLHV HQJDJHG LQ WK&LU$VWKH6XSUHPH&RXUWLQ&KULVWLDQVEXUJ H[WHQVLYHGLVFRYHU\ DQG DV QRWHG E\ WKH 6L[WK &LUFXLW LQ YDULRXV RSLQLRQV LQFOXGLQJ :LOVRQ6LPPRQV mLW LV LPSRUWDQW WKDW D GLVWULFW 7KH 'LVWULFW &RXUW VWDWHG LW ZDV DZDUH RI WKH H[WHQVLYH FRXUWUHVLVWWKHXQGHUVWDQGDEOHWHPSWDWLRQWRHQJDJHLQSRVW GLVFRYHU\LQWKLVFDVHm$GLVWULFWMXGJHVKRXOGQRWDZDLWWKH KRFUHDVRQLQJE\FRQFOXGLQJWKDWEHFDXVHDSODLQWLIIGLGQRW DJJUHJDWLRQRIZKDWKHFRQVLGHUVPXOWLSOHDFWVRIPLVFRQGXFW XOWLPDWHO\SUHYDLOKLVDFWLRQPXVWKDYHEHHQXQUHDVRQDEOHRU DQGWKHQOHY\DQDJJUHJDWHGVDQFWLRQZLWKRXWDWOHDVWZDUQLQJ ZLWKRXWIRXQGDWLRQl&KULVWLDQVEXUJ86DW WKH DWWRUQH\V DW WKH WLPH RI HDFK DFW RU UHVHUYLQJ GHFLVLRQ XSRQWLPHO\UHTXHVWVE\RSSRVLQJFRXQVHOl,QUH5XEHQ $SODLQWLIIZKRFRQWLQXHVWROLWLJDWHFODLPVDIWHUGLVFRYHU\ )GDWm'LVFUHWHDFWVRIYH[DWLRXVFRQGXFWVKRXOGEH KDVFRQFOXGHGSURFHHGVWRVXPPDU\MXGJPHQWDQGDMXGJH LGHQWLILHGDQGDGHWHUPLQDWLRQPDGHZKHWKHUWKH\ZHUHGRQH WKHUHDIWHU UXOHV WKDW WKH FODLPV DUH ZLWKRXW PHULW GRHV QRW LQEDGIDLWKRUHYHQLIEDGIDLWKZDVQRWSUHVHQWZKHWKHUWKH\ QHFHVVDULO\VXSSRUWWKHFRQFOXVLRQWKDWWKHSODLQWLIIjVFODLPV PXOWLSOLHGWKHSURFHHGLQJVSXUVXDQWWR86&l ZHUH IULYRORXV XQUHDVRQDEOH RU JURXQGOHVV HVSHFLDOO\ LI 7KH 'LVWULFW &RXUW DOORZHG GLVFRYHU\ WR DFFRPPRGDWH WKHUHDUHYLDEOHFODLPVLQWHUWZLQHGWRWKHPHULWOHVVFODLPV 3ODLQWLIIVjH[WHQVLYHGLVFRYHU\DQG'HIHQGDQWVjUHVSRQVHWR (YHQ WKRXJK WKH FODLPV DIWHU GLVFRYHU\ DUH IRXQG WR EH VXFK GLVFRYHU\ 7KH 'LVWULFW &RXUW DSDUW IURP VXPPDULO\ ZLWKRXWPHULWE\DFRXUWVXFKDILQGLQJGRHVQRWHTXDWHZLWK QRWLQJWKDW3ODLQWLIIVHQJDJHGLQH[WHQVLYHGLVFRYHU\GLGQRW DGHWHUPLQDWLRQWKDWWKHFODLPVZHUHZLWKRXWIRXQGDWLRQZKHQ LGHQWLI\ GLVFUHWH DFWV RI YH[DWLRXV FRQGXFW E\ 3ODLQWLIIVj WKHFRPSODLQWZDVLQLWLDOO\ILOHG$OWKRXJKWKH'LVWULFW&RXUW FRXQVHO7KH'LVWULFW&RXUWUHDVRQHGWKDWLWZDVUHDVRQDEOH IRXQGWKDWWKHUHZDVQRHYLGHQFHWRVXSSRUWVRPHRI5LGGOHjV IRU'HIHQGDQWVWRHQJDJHLQH[WHQVLYHGLVFRYHU\LQRUGHUWR FODLPV WKH 'LVWULFW &RXUW QRWHG WKDW GLVFRYHU\ ZDV HYDOXDWH 3ODLQWLIIVj H[WHQVLYH FRPSODLQW DQG SUHSDUH WKH mQHFHVVDU\lWRHYDOXDWH3ODLQWLIIjVH[WHQVLYHFRPSODLQWDQGWR ILOLQJV QHFHVVDU\ WR REWDLQ VXPPDU\ MXGJPHQW 7KLV SUHSDUH WKH ILOLQJV mQHFHVVDU\l WR mREWDLQl VXPPDU\ UHDVRQLQJVKRZVWKDW3ODLQWLIIVj&RPSODLQWKDGVRPHPHULW MXGJPHQW,IWKHXQGHUO\LQJFODLPVDQG$SSHOODQWVjDFWLRQV VXIILFLHQW IRU WKH SDUWLHV WR HQJDJH LQ H[WHQVLYH GLVFRYHU\ ZHUHIULYRORXV'HIHQGDQWVFRXOGKDYHXVHG5XOHEWR 7KH 'LVWULFW &RXUWjV ILQGLQJ WKDW H[WHQVLYH GLVFRYHU\ ZDV QDUURZ WKH FODLPV DW WKH RQVHW RI WKH FDVH UDWKHU WKDQ UHTXHVWHGDQGUHVSRQGHGWRE\'HIHQGDQWVLQRUGHUWRSUHYDLO HQJDJLQJLQH[WHQVLYHGLVFRYHU\LQRUGHUWRmREWDLQlVXPPDU\ RQVXPPDU\MXGJPHQWGRHVQRWFRQVWLWXWHYH[DWLRXVFRQGXFW MXGJPHQW5XOHLVDWRROWRQDUURZWKHIDFWXDODQGOHJDO RQEHKDOIRI3ODLQWLIIVjFRXQVHO$VQRWHGE\WKH0DJLVWUDWH LVVXHVWREHEURXJKWWRWULDOEXWGRHVQRWQHFHVVDULO\PHDQWKDW sXGJHmGHIHQGDQWVPDGHDWDFWLFDOGHFLVLRQWRSDUWLFLSDWHLQ DILQGLQJQRWLQIDYRURIDSODLQWLIIPHDQVWKDWWKHSODLQWLIIKDV D VFRUFKHG HDUWK DSSURDFK UDWKHU WKDQ WR PLWLJDWH WKHLU QR EDVLV IRU ILOLQJ D FRPSODLQW m'HFLVLYH IDFWV PD\ QRW GDPDJHV,WLVQRZWRRODWHWRFKDQJHFRXUVHls$S HPHUJH XQWLO GLVFRYHU\ RU WULDO 7KH ODZ PD\ FKDQJH RU 7KH UHFRUGGRHVQRWVKRZWKDW3ODLQWLIIVjFRXQVHOIDLOHGWR FODULI\LQWKHPLGVWRIOLWLJDWLRQl&KULVWLDQVEXUJ86 FRPSO\ZLWKGLVFRYHU\RUDQ\RWKHUSUHWULDORUGHUVQRUGLG DW $ SRWHQWLDO SODLQWLIIjV IHDU RI DQ LQFUHDVHG ULVN RI 'HIHQGDQWV ILOH DQ\ PRWLRQV WR FRPSHO GLVFRYHU\ IURP EHLQJ DVVHVVHG DWWRUQH\ IHHV DIWHU H[WHQVLYH GLVFRYHU\ KDV 3ODLQWLIIV2WKHUWKDQ'HIHQGDQWVjPRWLRQVIRUDWWRUQH\IHHV WDNHQSODFHDQGZKRFRQWLQXHVWRSURFHHGWRDUXOLQJRQD DQG FRVWV WKHUH LV QRWKLQJ RQ WKH UHFRUG WR VKRZ WKDW VXPPDU\MXGJPHQWPRWLRQZRXOGFUHDWHDGLVLQFHQWLYHWRWKH 3ODLQWLIIVj FRXQVHO ZDV HQJDJHG LQ XQUHDVRQDEOH DQG HQIRUFHPHQWRIFLYLOULJKWVODZVDQGZRXOGKDYHDFKLOOLQJ 5LGGOHHWDOY 1RV 1RV 5LGGOHHWDOY (JHQVSHUJHUHWDO (JHQVSHUJHUHWDO 7KH 'LVWULFW &RXUW IRXQG WKDW RQH RI WKH UHDVRQV IRU HIIHFWRQDSODLQWLIIZKRVHHNVWRHQIRUFHKLVKHUFLYLOULJKWV 'HIHQGDQWVj DSSURDFK WR GLVFRYHU\ ZDV D UHVSRQVH WR D HVSHFLDOO\DJDLQVWDJRYHUQPHQWRIILFLDO6HH'HDQY5LVHU VLWXDWLRQPDQXIDFWXUHGE\3ODLQWLIIVDQG3ODLQWLIIVjFRXQVHO )GWK&LU 7KH 'LVWULFW &RXUW KRZHYHU GLG QRW ILQG WKDW 3ODLQWLIIVj FRXQVHOVjDFWLRQVZHUHERWKXQUHDVRQDEOHDQGYH[DWLRXV7KH 7KH 'LVWULFW &RXUW DQG WKH 0DJLVWUDWH sXGJH HQJDJHG LQ 'LVWULFW&RXUWZDVDZDUHRIWKHH[WHQVLYHGLVFRYHU\UHTXHVWV KLQGVLJKW ORJLF ZKLFK WKH 6XSUHPH &RXUW GLVFRXUDJHV E\3ODLQWLIIVEXWGLGQRWILQGWKDWWKHUHTXHVWVZHUHYH[DWLRXV 5LGGOHjVFODLPVZHUHLQWHUUHODWHGWRKLV)RXUWK$PHQGPHQW ,I WKH 'LVWULFW &RXUW ZDV FRQFHUQHG WKDW WKH GLVFRYHU\ FODLP ZKLFK WKH 'LVWULFW &RXUW DQG WKH 0DJLVWUDWH sXGJH UHTXHVWHGE\3ODLQWLIIZDVXQUHDVRQDEOHLWKDGWKHDXWKRULW\ IRXQGZDVDYLDEOHFODLP5LGGOHDOOHJHVWKDWWKHLPSHWXVRI LQ OLJKW RI WKH &LYLO 5XOHV RI 3URFHGXUH DQG WKH 'LVWULFW WKH&RPSODLQWZDVEDVHGRQDQRFFXUUHQFHRQ'HFHPEHU &RXUWjVORFDOUXOHVWROLPLWRUQDUURZWKHGLVFRYHU\7RWKH ZKHUH5LGGOHZHQWWRWKHKRPHRI0DU\&ODUH%XVKPDQ FRQWUDU\ WKH 'LVWULFW &RXUW H[WHQGHG GLVFRYHU\ WR WKH0D\RUjVQH[WGRRUQHLJKERULQDQHIIRUWWRGHPRQVWUDWH DFFRPPRGDWH ERWK SDUWLHV 'HIHQGDQWV GLG QRW VHHN WKDW WKH 0D\RU KDG FRQVWUXFWHG DQ DGGLWLRQ WR KHU KRPH SURWHFWLYHRUGHUVWROLPLWWKHGLVFRYHU\UHTXHVWHGE\3ODLQWLIIV ZLWKRXWWKHUHTXLUHGSHUPLWVDQGWKHUHDIWHUHYDGHGSURSHUW\ QRUGLGWKH\ILOHDQ\PRWLRQWRLQLWLDOO\VHHNGLVPLVVDORIDQ\ WD[HV0UV%XVKPDQjVGDXJKWHU0HJDQ%XVKPDQZDVDW FODLPVWKH\WKRXJKWZHUHIULYRORXV5XOHVWRRIWKH KRPHDWWKHWLPHDQGVSRNHZLWK5LGGOHDERXWWKHSURSHUW\ )HGHUDO 5XOHV RI &LYLO 3URFHGXUHV VHW IRUWK YDULRXV ZD\V $IWHU5LGGOHOHIW0LVV%XVKPDQZKREHOLHYHG5LGGOHZDVD GLVFRYHU\ FDQ EH OLPLWHG $OVR m>Z@KHUH D FRPSODLQW &LW\RIILFLDOWHOHSKRQHGKHUPRWKHUDERXWWKHLQFLGHQW0UV FRQWDLQVµJODULQJOHJDOGHILFLHQFLHVjWKHGHILFLHQFLHVDQGDQ\ %XVKPDQ WKHQ FDOOHG WKH 0D\ILHOG +HLJKWV %XLOGLQJ DPELJXLWLHVFDQEHVRHDVLO\UHVROYHGE\PRWLRQWKDWLWLVQRW 'HSDUWPHQW ZDV WROG WKDW QR FLW\ RIILFLDO KDG EHHQ DW KHU XQGXO\EXUGHQVRPHWRGHIHQGl,QUH5XEHQ)GDW KRPHDQGZDVDGYLVHGWRFRQWDFWWKHSROLFH0UV%XVKPDQ m$VDQFWLRQLVJHQHUDOO\LPSURSHUZKHUHDVXFFHVVIXOPRWLRQ WKHUHDIWHUILOHGDFRPSODLQWDJDLQVW5LGGOHZLWKWKHSROLFH FRXOG KDYH DYRLGHG DQ\ DGGLWLRQDO OHJDO H[SHQVHV E\ $IWHU VLJQLQJ WKH &RPSODLQW 0UV %XVKPDQ WROG WKH &LW\ GHIHQGDQWVl,G'HIHQGDQWVKDGWKHRSSRUWXQLW\WROLPLWWKH SURVHFXWRU WKDW VKH GLG QRW ZDQW WR JR IRUZDUG ZLWK WKH VFRSHRIGLVFRYHU\DQGLVVXHVEHIRUHWKH'LVWULFW&RXUWEXW FRPSODLQWDQGSURVHFXWLRQ FKRVH QRW WR GR VR 'HIHQGDQWVj OLWLJDWLRQ WDFWLF ZDV WR HQJDJHLQIXOOEORZQGLVFRYHU\LQRUGHUWRPDNHFHUWDLQWKH\ 7KHUHZDVWHVWLPRQ\E\&RXQFLOPDQ'RQDOG0DQQRWKDW ZRXOGSUHYDLORQWKHLUPRWLRQIRUVXPPDU\MXGJPHQW7KH /DZ 'LUHFWRU /HRQDUG &DUU DFWLYHO\ SXUVXHG FRQVHQVXV 'LVWULFW&RXUWDOORZHGWKHSDUWLHVWRSURFHHGLQWKLVPDQQHU DPRQJ&RXQFLOPHPEHUVWRSURVHFXWH5LGGOHIRUKLVFRQGXFW DW D %XLOGLQJ &RPPLWWHH PHHWLQJ DQG WKDW VRPH &RXQFLO :KHQDSODLQWLIIILOHVDFRPSODLQWDJDLQVWDSXEOLFRIILFLDO PHPEHUVZHUHFRXQWLQJRQWKHFULPLQDOWUHVSDVVSURVHFXWLRQ WKHWULDOFRXUWmPXVWH[HUFLVHLWVGLVFUHWLRQVRWKDWRIILFLDOVDUH WRmFRRO>0U5LGGOHjV@MHWVDOLWWOHELWls$SS QRWVXEMHFWHGWRXQQHFHVVDU\DQGEXUGHQVRPHGLVFRYHU\RU &LW\ 3URVHFXWRU*HRUJH$UJLHWHVWLILHGWKDWKHPHW WULDOSURFHHGLQJVl&UDZIRUGY%ULWWRQ86 ZLWK/DZ'LUHFWRU&DUUDQGWKH0D\RUWRUHYLHZWKHSURSRVHG 6&W7KHGLVWULFWFRXUWVKRXOGUHVROYH FKDUJHV DJDLQVW 5LGGOH RQ sDQXDU\ SULRU WR WKH DQ\ LPPXQLW\ GHIHQVH mEHIRUH SHUPLWWLQJ GLVFRYHU\l ,G FULPLQDOFRPSODLQWEHLQJILOHGZKLFKZDVRXWVLGHWKHQRUPDO 'HIHQVH FRXQVHO GLG QRW ILOH DQ\ PRWLRQV UHJDUGLQJ WKH SURFHVVIRUH[HUFLVLQJSURVHFXWRULDOGLVFUHWLRQs$S LPPXQLW\GHIHQVHSULRUWRWKHLUVXPPDU\MXGJPHQWPRWLRQV 7KH &KLHI RI 3ROLFH 7KRPDV 6OLYHUV WHVWLILHG WKDW VXEMHFWLQJWKHSXEOLFRIILFLDOVWRGLVFRYHU\ZKLFKPD\KDYH LPPHGLDWHO\ IROORZLQJ 0UV %XVKPDQjV UHSRUW WR WKH &LW\ 5LGGOHHWDOY 1RV 1RV 5LGGOHHWDOY (JHQVSHUJHUHWDO (JHQVSHUJHUHWDO %XLOGLQJ 'HSDUWPHQW RI D VWUDQJHU DW KHU KRPH 6KHOGRQ s$SS,QDZDUGLQJDWWRUQH\IHHVIRUWKHGLVFRYHU\ 6RFRORIIRIWKH&LW\jV%XLOGLQJ'HSDUWPHQWQRWLILHGKLPRI WKH'LVWULFW&RXUWQRWHGWKDWLWZDVDZDUHRIWKHH[WHQWRIWKH WKH LQFLGHQW 0U 6RFRORII XSRQ OHDUQLQJ RI 5LGGOHjV GLVFRYHU\DQGWKDWLWDGMXVWHGWKHGHDGOLQHVWRDFFRPPRGDWH SUHVHQFH DW WKH EXLOGLQJ 'HSDUWPHQW IDFLOLW\ FDOOHG &KLHI WKHSDUWLHVjGLVFRYHU\6SHFLILFDOO\WKH'LVWULFW&RXUWIRXQG 6OLYHUVZKRLPPHGLDWHO\ZHQWWRWKH%XLOGLQJ'HSDUWPHQWORW DQGWRRNSKRWRVRI5LGGOHWRJLYH5LGGOHmDWDVWHRIKLVRZQ 7KH 0DJLVWUDWH sXGJH DSSHDUHG WR EDVH KHU PHGLFLQHls$SS3KRWRJUDSKVZHUHWDNHQ UHFRPPHQGDWLRQWKDWGLVFRYHU\FRVWVEHGHQLHGRQWKH E\&KLHI6OLYHUVDWSPRQ'HFHPEHU7KH PLVFRQFHSWLRQWKDWWKH&RXUWGLGQRWNQRZRI3ODLQWLIIVj QH[WPRUQLQJRQ'HFHPEHU&KLHI6OLYHUVFRQYHQHG H[WHQVLYH GLVFRYHU\ DQG ZRXOG KDYH UHLQHG WKHP LQ LI D PHHWLQJ ZLWK WZR GHWHFWLYHV DQG WKH LQFLGHQW UHSRUW ZDV 'HIHQGDQWVKDGREMHFWHG$VLWKDSSHQVWKH&RXUWZDV LPPHGLDWHO\FRPSOHWHGs$SS5LGGOHZDV ZHOODZDUHRIWKHH[WHQWRIWKHGLVFRYHU\GHSRVLWLRQVWKDW IRXQG JXLOW\ RI WKH FULPLQDO WUHVSDVV FKDUJH ZKLFK ZDV ZHUHWDNHQ0RUHRYHUWKH&RXUWDGMXVWHGWKHGLVFRYHU\ UHYHUVHGE\WKH2KLR&RXUWRI$SSHDOV6HH&LW\RI0D\ILHOG GHDGOLQHVWRDFFRPPRGDWH3ODLQWLIIVjH[WHQVLYHGLVFRYHU\ +HLJKWVY/LQGHOO5LGGOH1R(LJKWK'LVWULFW&RXUWRI DQG'HIHQGDQWVjUHVSRQVHWRVXFKGLVFRYHU\ $SSHDOVRI2KLR'HFHPEHU7KHUHZDVHYLGHQFH SUHVHQWHGWKDWVXEVHTXHQWWRWKH'HFHPEHULQFLGHQW 'HIHQGDQWVjFRXQVHOFRUUHFWO\QRWHWKDWLIWKH\KDGQRW 5LGGOH DWWHQGHG &LW\ &RXQFLO PHHWLQJV ZKHUH KLV ULJKW WR GHSRVHGPDQ\RIWKHZLWQHVVHVOLVWHGE\3ODLQWLIIVWKHQ VSHDNDWVRPHRIWKHPHHWLQJVZDVOLPLWHGRUGHQLHGs$ DVVHUWLRQVRISURIHVVLRQDOPDOSUDFWLFHFRXOGKDYHEHHQ SS &RXQFLO PHPEHU OHYLHGDJDLQVW'HIHQVHFRXQVHOIRUIDLOLQJWRDGHTXDWHO\ 0DQQR WHVWLILHG WKDW D FRQIURQWDWLRQ EHWZHHQ 5LGGOH DQG SUHSDUHWKLVFDVHIRUVXPPDU\MXGJPHQWDQGWULDO7KH 'HIHQGDQW=DYDUHOODDSROLWLFDODSSRLQWHHRIWKH0D\RUZDV QXPEHURIGHSRVLWLRQVWLPHDQGIHHVLQWKLVFDVHZHUH FRRUGLQDWHGE\=DYDUHOODDQGWKH&LW\/DZ'LUHFWRU/HRQDUG SUHRUGDLQHGE\WKH3ODLQWLIIVDQG3ODLQWLIIVjFRXQVHOE\ &DUUs$S WKHPDQQHULQZKLFKWKH3ODLQWLIIVILOHGWKHLU&RPSODLQW DQGSURFHHGHGZLWKWKHLUGLVFRYHU\DQGOLWLJDWLRQWDFWLFV 7KH LQYROYHPHQW RI WKH &LW\jV FLYLO DWWRUQH\ &DUU LQ D FULPLQDO PDWWHU WKH VZLIWQHVV RI WKH LQYHVWLJDWLRQ WKH 'HIHQGDQWVjDSSURDFKWRGLVFRYHU\ZDVDUHDVRQDEOH PHHWLQJVEHWZHHQWKH0D\RUDQGRWKHUFLW\RIILFLDOVUHJDUGLQJ UHVSRQVH WR D VLWXDWLRQ WKDW ZDV PDQXIDFWXUHG E\ WKHLQFLGHQWWKHFRPPHQWVE\&LW\&RXQFLOPHPEHUVDERXW 3ODLQWLIIVDQG3ODLQWLIIVjFRXQVHO7KHGLVFRYHU\WDNHQE\ WKHLQFLGHQWDQG5LGGOHjVEHOLHIWKDWKLVULJKWWRVSHDNDWWKH 'HIHQGDQWV ZDV QHFHVVDU\ WR HYDOXDWH 3ODLQWLIIVj &RXQFLOPHHWLQJVWKHUHDIWHUZHUHOLPLWHGRUGHQLHGIRUPHG H[WHQVLYHFRPSODLQWDQGSUHSDUHWKHILOLQJVQHFHVVDU\WR WKHEDVLVRI5LGGOHjV&RPSODLQWRIFRQVSLUDF\YLRODWLRQVRI REWDLQ VXPPDU\ MXGJPHQW 7KH &RXUW KDV UHYLHZHG )RXUWK DQG )LUVW $PHQGPHQWV ULJKWV DQG UHODWHG VWDWH ODZ 'HIHQGDQWVj H[WHQVLYH HIIRUWV LQ WKH EULHIV ILOHG LQ FODLPV $OWKRXJK 5LGGOH GLG QRW XOWLPDWHO\ SUHYDLO DIWHU VXSSRUW RI VXPPDU\ MXGJPHQW DQG LQ WKH ILOLQJV H[WHQVLYH GLVFRYHU\ ZDV FRQGXFWHG E\ DOO SDUWLHV DQG SHUWDLQLQJWR'HIHQGDQWVj0RWLRQIRU$WWRUQH\V)HHVDQG VXPPDU\MXGJPHQWPRWLRQVZHUHKHDUGWKHUHZDVVXIILFLHQW ILQGV WKDW WKH HIIRUW H[SHQGHG E\ 'HIHQGDQWV ZDV HYLGHQFH RQ WKH UHFRUG WR VXSSRUW WKH EDVLV RI VRPH RI QHFHVVDU\WRHVWDEOLVKWKDW'HIHQGDQWVZHUHHQWLWOHGWR 5LGGOHjVFODLPV7KH0DJLVWUDWHsXGJHVSHFLILFDOO\IRXQGWKDW sXGJPHQWDVDPDWWHURIODZRQ3ODLQWLIIVj&RPSODLQW WKH )RXUWK $PHQGPHQW FODLP mXQGHUOLHV HDFK RI 5LGGOHjV FRQVWLWXWLRQDOFODLPVls$S%RWKWKH'LVWULFWsXGJH s$S 5LGGOHHWDOY 1RV 1RV 5LGGOHHWDOY (JHQVSHUJHUHWDO (JHQVSHUJHUHWDO NHSWDGHWDLOHGFKURQRORJ\RIHYHQWVZKLFKVXSSRUWHGKLV DQGWKH0DJLVWUDWHsXGJHUHIHUUHGWRIDFWVZKLFKFDPHWROLJKW DOOHJDWLRQVDQGFRXQVHOIXUWKHUVWDWHGWKDWKHXQGHUWRRN GXULQJWKHH[WHQVLYHGLVFRYHU\WRVXSSRUWWKHRUGHUVJUDQWLQJ LQYHVWLJDWLRQRIYDULRXVIDFWVWRGHWHUPLQHWKHYDOLGLW\RI VXPPDU\ MXGJPHQW DQG WKH DWWRUQH\ IHH DZDUGV 7KH SODLQWLIIVjFODLPV 0DJLVWUDWHsXGJHDQGWKH'LVWULFW&RXUWFDQQRWHQJDJHLQSRVW KRFDQDO\VLVEDVHGRQWKHLUILQGLQJVLQIDYRURI'HIHQGDQWVRQ 7KLVFDVHZDVDVVLJQHGWRWKHVWDQGDUGWUDFN1HLWKHU 'HIHQGDQWVj VXPPDU\ MXGJPHQW PRWLRQV WKDW 5LGGOH DQG VLGH DWWHPSWHG WR IROORZ WKH /RFDO 5XOHV UHJDUGLQJ ,UYLQH GLG QRW XOWLPDWHO\ SUHYDLO 7KLV W\SH RI KLQGVLJKW QXPEHURIGHSRVLWLRQVLHFRXQVHOIRUGHIHQGDQWVGLGQRW DQDO\VLVGLVFRXUDJHVLQGLYLGXDOFLWL]HQVIURPEULQJLQJVXLWVWR DWWHPSWWRSUHYHQWFRXQVHOIRUSODLQWLIIVIURPWDNLQJ HQIRUFHWKHLUFLYLOULJKWV&KULVWLDQVEXUJ86DW GHSRVLWLRQV 1HLWKHU SDUW\ UDLVHG ZLWK WKLV FRXUW DQ\ 'HIHQGDQWV DUH IUXVWUDWHG IRU KDYLQJ WR GHIHQG D VXLW E\ D LVVXHUHJDUGLQJDEXVHRIGLVFRYHU\'HIHQGDQWVPDGHQR SULYDWHFLWL]HQZKRLVDQRXWVSRNHQFULWLFRI&LW\RIILFLDOV DWWHPSWWRVHHNWKLVFRXUWjVDVVLVWDQFHLQQDUURZLQJWKH 7KH &RQVWLWXWLRQ KRZHYHU SURYLGHV FLWL]HQV WKH ULJKW WR GLVFRYHU\WRUHOHYDQWIDFWVDQGLVVXHV'HIHQGDQWVGLG H[HUFLVHWKHLUYRLFHHVSHFLDOO\UHJDUGLQJSXEOLFRIILFLDOV$ QRWUDLVHZLWKWKHFRXUWDQ\GLVFRYHU\SUREOHPVZKLFK FRXUW PXVW EH VHQVLWLYH WKDW m>D@Q DZDUG RI DWWRUQH\jV IHHV DURVH GXULQJ GHSRVLWLRQV VXFK DV WKH REVWUXFWLYH DJDLQVWDORVLQJSODLQWLIILQDFLYLOULJKWVDFWLRQLVDQH[WUHPH EHKDYLRUE\0U5LGGOHGXULQJKLVGHSRVLWLRQDQGGLGQRW VDQFWLRQ DQG PXVW EH OLPLWHG WR WUXO\ HJUHJLRXV FDVHV RI VHHNFRXUWVXSHUYLVLRQRISODLQWLIIjVGHSRVLWLRQ PLVFRQGXFWl5LGGHUY&LW\RI6SULQJILHOG)G WK&LUTXRWLQJsRQHV)GDW7KHUHLVQR ILQGLQJE\WKHORZHUFRXUWWKDWWKHILOLQJRIWKH&RPSODLQWZDV DQHJUHJLRXVFDVHRIPLVFRQGXFWE\3ODLQWLIIV7KH'LVWULFW 7KLVFRXUWFRQFOXGHVWKDWGHIHQGDQWVDUHQRWHQWLWOHG &RXUWjV ILQGLQJ WKDW 5LGGOH DQG ,UYLQHj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sXGJH1XJHQW XQUHDVRQDEO\ DQG YH[DWLRXVO\ PD\ EH UHTXLUHG E\ WKH ZRXOGKDYHmUHLQHGLQlSODLQWLIIVKDGKHEHHQQRWLILHGRI FRXUWWRVDWLVI\SHUVRQDOO\WKHH[FHVVFRVWVH[SHQVHVDQG WKHSUREOHPV,QRWKHUZRUGVGHIHQGDQWVPDGHDWDFWLFDO DWWRUQH\Vj IHHV UHDVRQDEO\ LQFXUUHG EHFDXVH RI VXFK GHFLVLRQWRSDUWLFLSDWHLQDVFRUFKHGHDUWKDSSURDFKUDWKHU FRQGXFW WKDQ WR PLWLJDWH WKHLU GDPDJHV ,W LV QRZ WRR ODWH WR FKDQJHFRXUVH 86& /LWLJDWLRQ FRQGXFW LV UHYLHZHG mIRU µXQUHDVRQDEOH DQG YH[DWLRXVj PXOWLSOLFDWLRQ RI OLWLJDWLRQ GHVSLWHWKHDEVHQFHRIDQ\FRQVFLRXVLPSURSULHW\lsRQHV 5LGGOHHWDOY 1RV 1RV 5LGGOHHWDOY (JHQVSHUJHUHWDO (JHQVSHUJHUHWDO )GDW$EVHQWDVKRZLQJRIEDGIDLWKVDQFWLRQV WKDQ WR PLWLJDWH WKHLU GDPDJHVl s$ SS 7KH PD\ EH LPSRVHG mDW OHDVW ZKHQ DQ DWWRUQH\ NQRZV RU 0DJLVWUDWHsXGJHVSHFLILFDOO\VWDWHG UHDVRQDEO\VKRXOGNQRZWKDWDFODLPSXUVXHGLVIULYRORXVRU WKDWKLVRUKHUOLWLJDWLRQWDFWLFVZLOOQHHGOHVVO\REVWUXFWWKH &RXQVHOIRUGHIHQGDQWRWKHUWKDQ=DYDUHOODDUJXHGWKDW OLWLJDWLRQRIQRQIULYRORXVFODLPVl5LGGHU)GDW ZLWQHVVHVKDGEHHQGHSRVHGDIWHUSODLQWLIIVLGHQWLILHG TXRWLQJsRQHV)GDWm>7@KHPHUHILQGLQJWKDWDQ SHRSOH DV KDYLQJ NQRZOHGJH RI WKH IDFWV RI WKHLU DWWRUQH\IDLOHGWRXQGHUWDNHDUHDVRQDEOHLQTXLU\LQWRWKHEDVLV FDVH+HVWDWHGWKDWWKHGHIHQGDQWVWRRNDQµDJJUHVVLYHj IRUDFODLPGRHVQRWDXWRPDWLFDOO\LPSO\WKDWWKHSURFHHGLQJV DSSURDFK WR GHIHQVH EHFDXVH RI 0U 5LGGOHjV ZHUHLQWHQWLRQDOO\RUXQUHDVRQDEO\PXOWLSOLHGl5LGGHU OLWLJLRXVQHVV0RUHRYHUFRXQVHOVWDWHGWKDWKHFKRVHWR )GDWm$QDWWRUQH\LVOLDEOHXQGHUVROHO\IRU YLGHRWDSH 0U 5LGGOHjV GHSRVLWLRQ EHFDXVH RI 0U H[FHVVLYHFRVWVUHVXOWLQJIURPWKHYLRODWLYHFRQGXFWl,GDW 5LGGOHjVUHIXVDOWRDQVZHUTXHVWLRQVLQDVWUDLJKWIRUZDUG 6LPSOHLQDGYHUWHQFHRUQHJOLJHQFHWKDWIUXVWUDWHVWKH PDQQHU $OO RI WKHVH GHIHQVH GHFLVLRQV DFFRUGLQJ WR WULDOMXGJHZLOOQRWVXSSRUWDVDQFWLRQXQGHU,QUH GHIHQVH FRXQVHO ZHUH SURPSWHG E\ WKH QDWXUH RI WKH 5XEHQ)GDWm7KHUHPXVWEHVRPHFRQGXFWRQWKH ODZVXLW DQG E\ 0U 5LGGOHjV KLVWRU\ RI OLWLJDWLRQ SDUW RI WKH VXEMHFW DWWRUQH\ WKDW WULDO MXGJHV DSSO\LQJ WKH &RXQVHODUJXHGWKDWKHDWWHPSWHGWRSHUVXDGHSODLQWLIIV FROOHFWLYH ZLVGRP RI WKHLU H[SHULHQFH RQ WKH EHQFK FRXOG WRGLVPLVVWKHODZVXLW7KHOHJDOIHHVDQGFRVWVWRWKH DJUHHIDOOVVKRUWRIWKHREOLJDWLRQVRZHGE\DPHPEHURIWKH GHIHQGDQWV H[FHSW =DYDUHOOD WRWDOHG LQ H[FHVV RI EDU WR WKH FRXUW DQG ZKLFK DV D UHVXOW FDXVHV DGGLWLRQDO H[SHQVHWRWKHRSSRVLQJSDUW\l,Gm$VDQFWLRQLVJHQHUDOO\ LPSURSHUZKHUHDVXFFHVVIXOPRWLRQFRXOGKDYHDYRLGHGDQ\ &RXQVHO IRU GHIHQGDQW =DYDUHOOD DUJXHG WKDW KH DGGLWLRQDOOHJDOH[SHQVHVE\GHIHQGDQWVl,GDW IROORZHGWKHOHDGRIRWKHUGHIHQVHFRXQVHOZLWKUHVSHFW WRGHSRVLWLRQVDQGRWKHUGLVFRYHU\GHFLVLRQV+HDUJXHG 7KH'LVWULFW&RXUWDZDUGHGDWWRUQH\IHHVXQGHUIRU WKDW KH KDG SHUPLWWHG =DYDUHOOD WR EH LQWHUYLHZHG E\ KRXUV UHODWHG WR WKH SUHSDUDWLRQ RI WKH VXPPDU\ MXGJPHQW FRXQVHOIRUSODLQWLIIVDWOHQJWKDIWHUWKHVXLWZDVILOHGLQ PRWLRQVDQGWKHGLVFRYHU\FRQGXFWHGE\WKHSDUWLHV1HLWKHU DQ DWWHPSW WR SHUVXDGH SODLQWLIIV WR GLVPLVV =DYDUHOOD WKH0DJLVWUDWHsXGJHQRUWKH'LVWULFW&RXUWPDGHDILQGLQJRI IURP WKH VXLW =DYDUHOOD VHHNV IHHV DQG FRVWV LQ WKH EDGIDLWKRQWKHSDUWRIWKHDWWRUQH\VUHSUHVHQWLQJ3ODLQWLIIV DPRXQWRI %DVHG RQ WKH ILQGLQJ DERYH 3ODLQWLIIVj FODLPV ZHUH QRW IULYRORXV8QGHUDFRXUWPXVWUHYLHZZKHWKHUWKH 3ODLQWLIIV RSSRVH WKH PRWLRQV 3ODLQWLIIVj FRXQVHO DWWRUQH\VHQJDJHGLQFRQGXFWZKLFKPXOWLSOLHGWKHOLWLJDWLRQ DUJXHGWKDWWKHGLVFRYHU\UHTXHVWVVHUYHGE\GHIHQGDQWV XQUHDVRQDEO\RUYH[DWLRXVO\7KH0DJLVWUDWHsXGJHGLGQRW ZHUHYHU\EURDGDQGKHQFHEURDGDQVZHUVZHUHPHULWHG UHFRPPHQGDWWRUQH\IHHVIRUWKHGLVFRYHU\WDNHQLQWKLVFDVH +HIXUWKHUVWDWHGWKDWDIWHUWKHVHFRQGVWDWXVFRQIHUHQFH 7KH0DJLVWUDWHsXGJHQRWHGWKDWQHLWKHUSDUW\DWWHPSWHGWR KHGLVFORVHGWRFRFRXQVHOIRUGHIHQGDQWVLQZULWLQJWKH IROORZWKH/RFDO5XOHVUHJDUGLQJWKHQXPEHURIGHSRVLWLRQV LGHQWLWLHVRIWKHZLWQHVVHVKHZRXOGFDOODWWULDODQGWKDW EXWWKDWQHLWKHUSDUW\UDLVHGZLWKWKHFRXUWDQ\LVVXHUHJDUGLQJ HDFK WLPH 0U 5LGGOH QDPHG DQ LQGLYLGXDO GXULQJ GLVFRYHU\DEXVH7KH0DJLVWUDWHsXGJHIXUWKHUQRWHGWKDWWKH GHSRVLWLRQWKHGHIHQGDQWVGHSRVHGWKDWLQGLYLGXDO7KDW GHIHQVH PDGH WKH WDFWLFDO GHFLVLRQ WR IROORZ DQ DJJUHVVLYH LQFOXGHGWKHGHSRVLWLRQRIDSK\VLFLDQVHHQE\0U5LGGOH GHIHQVHDQGmWRSDUWLFLSDWHLQDVFRUFKHGHDUWKDSSURDFKUDWKHU VL[ \HDUV HDUOLHU WDNHQ DV D GHIHQVH WR DQ HPRWLRQDO GLVWUHVVFODLP3ODLQWLIIVjFRXQVHOVWDWHGWKDWKLVFOLHQW