5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH $LUOLQH3URIjOV$VVjQY$LUERUQH,QF 1R (/(&7521,& &,7$7,21 )(' $SS 3 WK &LU )LOH 1DPH D S %HIRUH &/$<DQG52*(56&LUFXLWsXGJHV &2))0$1 'LVWULFWsXGJH 81,7('67$7(6&28572)$33($/6 BBBBBBBBBBBBBBBBB )257+(6,;7+&,5&8,7 &2816(/ BBBBBBBBBBBBBBBBB $5*8(' 'LDQD 6 %URZQ /2*27+(7,6 3(1&( '2//'D\WRQ2KLRIRU$SSHOODQW$QGUHZ'0F&OLQWRFN $,5/,1( 352)(66,21$/6 ; )25' +$55,621 $WODQWD *HRUJLD IRU $SSHOOHH $662&,$7,21 2) 7+( 21%5,() 'LDQD6%URZQsRKQ5'ROO/2*27+(7,6 3(1&( '2// 'D\WRQ 2KLR IRU $SSHOODQW ( 6FRWW ,17(51$7,21$/ 6PLWK )25' +$55,621 $WODQWD *HRUJLD 6FRWW $ 1R %527+(5+22' 2) &DUUROO 925<6 6$7(5 6(<0285 3($6( 7($067(56 /2&$/ 81,21 ! &LQFLQQDWL2KLRIRU$SSHOOHH 12 $)/&,2 3ODLQWLII$SSHOODQW BBBBBBBBBBBBBBBBB 23,1,21 Y BBBBBBBBBBBBBBBBB &/$< &LUFXLW sXGJH 3ODLQWLII $LUOLQH 3URIHVVLRQDOV $,5%251( ,1& $VVRFLDWLRQ 7HDPVWHUjV /RFDO 8QLRQ 1R DSSHDOV DQ 'HIHQGDQW$SSHOOHH RUGHUGLVPLVVLQJLWVFRPSODLQWWRFRPSHODUELWUDWLRQSXUVXDQW WR 6HFWLRQ RI WKH /DERU0DQDJHPHQW 5HODWLRQV $FW $%; $,5 ,1& /05$ 86&RULJLQDOO\ILOHGDJDLQVW'HIHQGDQWV 'HIHQGDQW $LUERUQH,QFDQGLWVZKROO\RZQHGVXEVLGLDU\$%;$LU,QF :H$)),50WKHGLVWULFWFRXUWjVFRQFOXVLRQEXWRQGLIIHUHQW 1 JURXQGV $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&LQFLQQDWL )$&76 1Rn6DQGUD6%HFNZLWK'LVWULFWsXGJH 'HIHQGDQW $LUERUQH LV D KROGLQJ FRPSDQ\ $%; DQG $LUERUQH([SUHVV IND$)& DUHZKROO\RZQHGVXEVLGLDULHV $UJXHG 0DUFK RI$LUERUQH$%;LVDQDLUOLQHVXEMHFWWRWKH5DLOZD\/DERU $FW86&3ODLQWLIILVWKHFROOHFWLYHEDUJDLQLQJ 'HFLGHGDQG)LOHG sXQH
7KH +RQRUDEOH sHQQLIHU % &RIIPDQ 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH (DVWHUQ DQG :HVWHUQ 'LVWULFWV RI .HQWXFN\ VLWWLQJ E\ GHVLJQDWLRQ
1R $LUOLQH3URIjOV$VVjQY$LUERUQH,QF $LUOLQH3URIjOV$VVjQY$LUERUQH,QF 1R
UHSUHVHQWDWLYH RI WKH SLORWV DQG IOLJKW HQJLQHHUV WKDW $%; 'HIHQGDQWmUHVLJQl6LGH/HWWHU'HIHQGDQWGLGQRWUHSO\ HPSOR\V 2Q0DUFK3ODLQWLIIVHQWDQRWKHUOHWWHUmGHPDQGLQJ WKDW$LUERUQHSURFHHGWRDUELWUDWLRQlWRGHWHUPLQHZKHWKHU $%;DQG3ODLQWLIIVLJQHGDFROOHFWLYHEDUJDLQLQJDJUHHPHQW $LUERUQHDV$%;jVQHZSDUHQWKDGWRDELGHE\RUmUHVLJQl m&%$l 6HSDUDWH IURP WKH &%$ UHSUHVHQWDWLYHV RI 6LGH/HWWHU 7HDPVWHUV /RFDO 3ODLQWLIIjV SUHGHFHVVRU DQG $)& VLJQHGm6LGH/HWWHUl ,QsXQHRI ZKHQWKHVHSDUWLHV 2Q $SULO 'HIHQGDQW UHIXVHG 3ODLQWLIIjV UHTXHVW H[HFXWHG 6LGH /HWWHU $)& ZDV WKH SDUHQW RI $%; ,Q TXHVWLRQHGZKHWKHUDQ\DUELWUDEOHLVVXHH[LVWHGDQGUHTXHVWHG UHOHYDQWSDUW6LGH/HWWHUSURYLGHV WKDW 3ODLQWLII VHQG DOO IXWXUH FRUUHVSRQGHQFH WR RXWVLGH FRXQVHO7RP.DVVLQ3ODLQWLIIUHSHDWHGLWVUHTXHVWWR.DVVLQ ,WLVQRWWKHLQWHQWRI$LUERUQH)UHLJKW&RUSRUDWLRQDQG RQ0D\.DVVLQUHSOLHGLQDsXQH OHWWHULQ QHLWKHU >$)&@ QRU DQ\ VXEVLGLDU\ VKDOO HVWDEOLVK RU ZKLFKKHDVVHUWHGWKDW$%;jVQHZSDUHQW$LUERUQHLVQRW FRQGXFWRQLWVRUWKHLURZQEHKDOIDQ\DLUOLQHRSHUDWLRQV ERXQG E\ 6LGH /HWWHU .DVVLQ WKXV UHIXVHG 3ODLQWLIIjV LQFOXGLQJLQWHUQDWLRQDORSHUDWLRQVRIWKHW\SHFRYHUHGE\ GHPDQGIRUDUELWUDWLRQ $UWLFOH 6HFWLRQ ( 3DUDJUDSKV DQG ZLWK WKH H[FHSWLRQV VHW IRUWK LQ 3DUDJUDSK RI WKH $JUHHPHQW 352&('85$/+,6725< EHWZHHQ $%; $LU ,QF DQG ,%7 >,QWHUQDWLRQDO %URWKHUKRRGRI7HDPVWHUV@XQOHVVVXFKRSHUDWLRQVDUH 2Q sXQH 3ODLQWLII ILOHG LWV FRPSODLQW DJDLQVW SHUIRUPHGE\SLORWVRQWKH$%;6HQLRULW\/LVW 'HIHQGDQWDQG$%;VHHNLQJDQRUGHUmUHTXLULQJ>'HIHQGDQW@ WRFRPSO\ZLWKWKHGLVSXWHUHVROXWLRQSURFHGXUHVHWIRUWKLQ ,Q WKH HYHQW RI DQ\ GLVSXWH RYHU WKH LQWHUSUHWDWLRQ RU VLGHOHWWHULQFOXGLQJEXWQRWOLPLWHGWRSDUWLFLSDWLRQLQ DSSOLFDWLRQ RI WKLV OHWWHU WKH GLVSXWH ZLOO EH SURPSWO\ DUELWUDWLRQl s$DW 7KHFRPSODLQWGRHVQRWFODLPWKDW VXEPLWWHG IRU ILQDO DQG ELQGLQJ DUELWUDWLRQ 'HIHQGDQW KDV FRQGXFWHG RU LV DERXW WR FRQGXFW mDLUOLQH $LUERUQH)UHLJKW&RUSRUDWLRQIXUWKHUDJUHHVWKDWLWVKDOO RSHUDWLRQVlWKDWZRXOGFRQWUDYHQH6LGH/HWWHU VXEPLWWRWKHMXULVGLFWLRQRIWKH$UELWUDWRUDQG VKDOOFRPSO\ZLWKWKH$UELWUDWRUjVDZDUG 2Q sXO\ 'HIHQGDQW DQG $%; ILOHG VHSDUDWH PRWLRQV WR GLVPLVV 'HIHQGDQWjV PRWLRQ DVVHUWHG ODFN RI ,Q'HFHPEHURIDFRUSRUDWHUHVWUXFWXULQJWRRNSODFHLQ VXEMHFW PDWWHU MXULVGLFWLRQ ODFN RI SHUVRQDO MXULVGLFWLRQ ZKLFK $)& ZDV UHQDPHG $LUERUQH ([SUHVV ,QF IDLOXUHWRVWDWHDFODLPXSRQZKLFKUHOLHIFRXOGEHJUDQWHG 'HIHQGDQW$LUERUQH,QFZDVIRUPHG DQG $LUERUQH DQGLPSURSHUYHQXH,QWKUHHSDUDJUDSKVWKHGLVWULFWFRXUW ([SUHVV,QF IND$)& DQG$%;EHFDPHZKROO\RZQHG GLVPLVVHGWKHFDVHDJDLQVW'HIHQGDQWSXUVXDQWWR)HG5&LY VXEVLGLDULHVRI'HIHQGDQW$LUERUQH,QF 3 E IRUIDLOXUHWRVWDWHDFODLPXSRQZKLFKUHOLHIFRXOG EHJUDQWHG6SHFLILFDOO\WKHFRXUWFRQFOXGHGWKDWm>W@KHIDFWV 2Q'HFHPEHUDIWHUOHDUQLQJDERXWWKHFRUSRUDWH 3ODLQWLIIDOOHJHVSDUWLFXODUO\'HIHQGDQWjVIDLOXUHWRVXEPLWWR UHRUJDQL]DWLRQ 3ODLQWLII VHQW D OHWWHU WR sRKQ 6WDUNRYLFK DUELWUDWLRQWKHLVVXHRILWVVWDWXVYLVDYLV6LGH/HWWHUGRQRW $%;jV6HQLRU'LUHFWRURI/DERU5HODWLRQVUHTXHVWLQJWKDW JLYHULVHWRDFODLPXQGHU 86&XSRQZKLFK
7KH SDUHQW FRUSRUDWLRQ RQO\ VLJQHG WKH 6LGH /HWWHU QRW WKH &%$ EHFDXVH LW GLG QRW ZDQW WR FUHDWH WKH LPSUHVVLRQ WKDW LW HPSOR\HG ZRUNHUV FRYHUHG E\ WKH 5DLOZD\ /DERU $FW 1R $LUOLQH3URIjOV$VVjQY$LUERUQH,QF $LUOLQH3URIjOV$VVjQY$LUERUQH,QF 1R
UHOLHIFDQEHJUDQWHGl$VDFRQVHTXHQFHIRXURIWKHILYH $UWLFOH,,,RIWKH8QLWHG6WDWHV&RQVWLWXWLRQUHTXLUHVWKDW LVVXHV UDLVHG LQ WKLV DSSHDO DUH DUJXPHQWV KHDUG EXW QRW SDUWLHV DWWHPSWLQJ WR LQYRNH IHGHUDO MXULVGLFWLRQ DOOHJH DQ DGGUHVVHGE\WKHGLVWULFWFRXUWWKDW'HIHQGDQWQRZRIIHUVDV DFWXDOFDVHRUFRQWURYHUV\2j6KHDY/LWWOHWRQ86 DOWHUQDWLYHEDVHVIRUWKHGLVWULFWFRXUWjVMXGJPHQW )ODVWY&RKHQ 86 $VZHKDYHH[SODLQHG 2QsDQXDU\WKLV&RXUWJUDQWHG$%;j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nWKHLQMXU\PXVWEHIDLUO\ FODLPVWKDW3ODLQWLIIQHJOHFWHGWRDOOHJHWKHUHTXLUHGmLQMXU\ WUDFHDEOHWRWKHGHIHQGDQW VDFWLRQ DQG >
Free access — add to your briefcase to read the full text and ask questions with AI
5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH $LUOLQH3URIjOV$VVjQY$LUERUQH,QF 1R (/(&7521,& &,7$7,21 )(' $SS 3 WK &LU )LOH 1DPH D S %HIRUH &/$<DQG52*(56&LUFXLWsXGJHV &2))0$1 'LVWULFWsXGJH 81,7('67$7(6&28572)$33($/6 BBBBBBBBBBBBBBBBB )257+(6,;7+&,5&8,7 &2816(/ BBBBBBBBBBBBBBBBB $5*8(' 'LDQD 6 %URZQ /2*27+(7,6 3(1&( '2//'D\WRQ2KLRIRU$SSHOODQW$QGUHZ'0F&OLQWRFN $,5/,1( 352)(66,21$/6 ; )25' +$55,621 $WODQWD *HRUJLD IRU $SSHOOHH $662&,$7,21 2) 7+( 21%5,() 'LDQD6%URZQsRKQ5'ROO/2*27+(7,6 3(1&( '2// 'D\WRQ 2KLR IRU $SSHOODQW ( 6FRWW ,17(51$7,21$/ 6PLWK )25' +$55,621 $WODQWD *HRUJLD 6FRWW $ 1R %527+(5+22' 2) &DUUROO 925<6 6$7(5 6(<0285 3($6( 7($067(56 /2&$/ 81,21 ! &LQFLQQDWL2KLRIRU$SSHOOHH 12 $)/&,2 3ODLQWLII$SSHOODQW BBBBBBBBBBBBBBBBB 23,1,21 Y BBBBBBBBBBBBBBBBB &/$< &LUFXLW sXGJH 3ODLQWLII $LUOLQH 3URIHVVLRQDOV $,5%251( ,1& $VVRFLDWLRQ 7HDPVWHUjV /RFDO 8QLRQ 1R DSSHDOV DQ 'HIHQGDQW$SSHOOHH RUGHUGLVPLVVLQJLWVFRPSODLQWWRFRPSHODUELWUDWLRQSXUVXDQW WR 6HFWLRQ RI WKH /DERU0DQDJHPHQW 5HODWLRQV $FW $%; $,5 ,1& /05$ 86&RULJLQDOO\ILOHGDJDLQVW'HIHQGDQWV 'HIHQGDQW $LUERUQH,QFDQGLWVZKROO\RZQHGVXEVLGLDU\$%;$LU,QF :H$)),50WKHGLVWULFWFRXUWjVFRQFOXVLRQEXWRQGLIIHUHQW 1 JURXQGV $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&LQFLQQDWL )$&76 1Rn6DQGUD6%HFNZLWK'LVWULFWsXGJH 'HIHQGDQW $LUERUQH LV D KROGLQJ FRPSDQ\ $%; DQG $LUERUQH([SUHVV IND$)& DUHZKROO\RZQHGVXEVLGLDULHV $UJXHG 0DUFK RI$LUERUQH$%;LVDQDLUOLQHVXEMHFWWRWKH5DLOZD\/DERU $FW86&3ODLQWLIILVWKHFROOHFWLYHEDUJDLQLQJ 'HFLGHGDQG)LOHG sXQH
7KH +RQRUDEOH sHQQLIHU % &RIIPDQ 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH (DVWHUQ DQG :HVWHUQ 'LVWULFWV RI .HQWXFN\ VLWWLQJ E\ GHVLJQDWLRQ
1R $LUOLQH3URIjOV$VVjQY$LUERUQH,QF $LUOLQH3URIjOV$VVjQY$LUERUQH,QF 1R
UHSUHVHQWDWLYH RI WKH SLORWV DQG IOLJKW HQJLQHHUV WKDW $%; 'HIHQGDQWmUHVLJQl6LGH/HWWHU'HIHQGDQWGLGQRWUHSO\ HPSOR\V 2Q0DUFK3ODLQWLIIVHQWDQRWKHUOHWWHUmGHPDQGLQJ WKDW$LUERUQHSURFHHGWRDUELWUDWLRQlWRGHWHUPLQHZKHWKHU $%;DQG3ODLQWLIIVLJQHGDFROOHFWLYHEDUJDLQLQJDJUHHPHQW $LUERUQHDV$%;jVQHZSDUHQWKDGWRDELGHE\RUmUHVLJQl m&%$l 6HSDUDWH IURP WKH &%$ UHSUHVHQWDWLYHV RI 6LGH/HWWHU 7HDPVWHUV /RFDO 3ODLQWLIIjV SUHGHFHVVRU DQG $)& VLJQHGm6LGH/HWWHUl ,QsXQHRI ZKHQWKHVHSDUWLHV 2Q $SULO 'HIHQGDQW UHIXVHG 3ODLQWLIIjV UHTXHVW H[HFXWHG 6LGH /HWWHU $)& ZDV WKH SDUHQW RI $%; ,Q TXHVWLRQHGZKHWKHUDQ\DUELWUDEOHLVVXHH[LVWHGDQGUHTXHVWHG UHOHYDQWSDUW6LGH/HWWHUSURYLGHV WKDW 3ODLQWLII VHQG DOO IXWXUH FRUUHVSRQGHQFH WR RXWVLGH FRXQVHO7RP.DVVLQ3ODLQWLIIUHSHDWHGLWVUHTXHVWWR.DVVLQ ,WLVQRWWKHLQWHQWRI$LUERUQH)UHLJKW&RUSRUDWLRQDQG RQ0D\.DVVLQUHSOLHGLQDsXQH OHWWHULQ QHLWKHU >$)&@ QRU DQ\ VXEVLGLDU\ VKDOO HVWDEOLVK RU ZKLFKKHDVVHUWHGWKDW$%;jVQHZSDUHQW$LUERUQHLVQRW FRQGXFWRQLWVRUWKHLURZQEHKDOIDQ\DLUOLQHRSHUDWLRQV ERXQG E\ 6LGH /HWWHU .DVVLQ WKXV UHIXVHG 3ODLQWLIIjV LQFOXGLQJLQWHUQDWLRQDORSHUDWLRQVRIWKHW\SHFRYHUHGE\ GHPDQGIRUDUELWUDWLRQ $UWLFOH 6HFWLRQ ( 3DUDJUDSKV DQG ZLWK WKH H[FHSWLRQV VHW IRUWK LQ 3DUDJUDSK RI WKH $JUHHPHQW 352&('85$/+,6725< EHWZHHQ $%; $LU ,QF DQG ,%7 >,QWHUQDWLRQDO %URWKHUKRRGRI7HDPVWHUV@XQOHVVVXFKRSHUDWLRQVDUH 2Q sXQH 3ODLQWLII ILOHG LWV FRPSODLQW DJDLQVW SHUIRUPHGE\SLORWVRQWKH$%;6HQLRULW\/LVW 'HIHQGDQWDQG$%;VHHNLQJDQRUGHUmUHTXLULQJ>'HIHQGDQW@ WRFRPSO\ZLWKWKHGLVSXWHUHVROXWLRQSURFHGXUHVHWIRUWKLQ ,Q WKH HYHQW RI DQ\ GLVSXWH RYHU WKH LQWHUSUHWDWLRQ RU VLGHOHWWHULQFOXGLQJEXWQRWOLPLWHGWRSDUWLFLSDWLRQLQ DSSOLFDWLRQ RI WKLV OHWWHU WKH GLVSXWH ZLOO EH SURPSWO\ DUELWUDWLRQl s$DW 7KHFRPSODLQWGRHVQRWFODLPWKDW VXEPLWWHG IRU ILQDO DQG ELQGLQJ DUELWUDWLRQ 'HIHQGDQW KDV FRQGXFWHG RU LV DERXW WR FRQGXFW mDLUOLQH $LUERUQH)UHLJKW&RUSRUDWLRQIXUWKHUDJUHHVWKDWLWVKDOO RSHUDWLRQVlWKDWZRXOGFRQWUDYHQH6LGH/HWWHU VXEPLWWRWKHMXULVGLFWLRQRIWKH$UELWUDWRUDQG VKDOOFRPSO\ZLWKWKH$UELWUDWRUjVDZDUG 2Q sXO\ 'HIHQGDQW DQG $%; ILOHG VHSDUDWH PRWLRQV WR GLVPLVV 'HIHQGDQWjV PRWLRQ DVVHUWHG ODFN RI ,Q'HFHPEHURIDFRUSRUDWHUHVWUXFWXULQJWRRNSODFHLQ VXEMHFW PDWWHU MXULVGLFWLRQ ODFN RI SHUVRQDO MXULVGLFWLRQ ZKLFK $)& ZDV UHQDPHG $LUERUQH ([SUHVV ,QF IDLOXUHWRVWDWHDFODLPXSRQZKLFKUHOLHIFRXOGEHJUDQWHG 'HIHQGDQW$LUERUQH,QFZDVIRUPHG DQG $LUERUQH DQGLPSURSHUYHQXH,QWKUHHSDUDJUDSKVWKHGLVWULFWFRXUW ([SUHVV,QF IND$)& DQG$%;EHFDPHZKROO\RZQHG GLVPLVVHGWKHFDVHDJDLQVW'HIHQGDQWSXUVXDQWWR)HG5&LY VXEVLGLDULHVRI'HIHQGDQW$LUERUQH,QF 3 E IRUIDLOXUHWRVWDWHDFODLPXSRQZKLFKUHOLHIFRXOG EHJUDQWHG6SHFLILFDOO\WKHFRXUWFRQFOXGHGWKDWm>W@KHIDFWV 2Q'HFHPEHUDIWHUOHDUQLQJDERXWWKHFRUSRUDWH 3ODLQWLIIDOOHJHVSDUWLFXODUO\'HIHQGDQWjVIDLOXUHWRVXEPLWWR UHRUJDQL]DWLRQ 3ODLQWLII VHQW D OHWWHU WR sRKQ 6WDUNRYLFK DUELWUDWLRQWKHLVVXHRILWVVWDWXVYLVDYLV6LGH/HWWHUGRQRW $%;jV6HQLRU'LUHFWRURI/DERU5HODWLRQVUHTXHVWLQJWKDW JLYHULVHWRDFODLPXQGHU 86&XSRQZKLFK
7KH SDUHQW FRUSRUDWLRQ RQO\ VLJQHG WKH 6LGH /HWWHU QRW WKH &%$ EHFDXVH LW GLG QRW ZDQW WR FUHDWH WKH LPSUHVVLRQ WKDW LW HPSOR\HG ZRUNHUV FRYHUHG E\ WKH 5DLOZD\ /DERU $FW 1R $LUOLQH3URIjOV$VVjQY$LUERUQH,QF $LUOLQH3URIjOV$VVjQY$LUERUQH,QF 1R
UHOLHIFDQEHJUDQWHGl$VDFRQVHTXHQFHIRXURIWKHILYH $UWLFOH,,,RIWKH8QLWHG6WDWHV&RQVWLWXWLRQUHTXLUHVWKDW LVVXHV UDLVHG LQ WKLV DSSHDO DUH DUJXPHQWV KHDUG EXW QRW SDUWLHV DWWHPSWLQJ WR LQYRNH IHGHUDO MXULVGLFWLRQ DOOHJH DQ DGGUHVVHGE\WKHGLVWULFWFRXUWWKDW'HIHQGDQWQRZRIIHUVDV DFWXDOFDVHRUFRQWURYHUV\2j6KHDY/LWWOHWRQ86 DOWHUQDWLYHEDVHVIRUWKHGLVWULFWFRXUWjVMXGJPHQW )ODVWY&RKHQ 86 $VZHKDYHH[SODLQHG 2QsDQXDU\WKLV&RXUWJUDQWHG$%;j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nWKHLQMXU\PXVWEHIDLUO\ FODLPVWKDW3ODLQWLIIQHJOHFWHGWRDOOHJHWKHUHTXLUHGmLQMXU\ WUDFHDEOHWRWKHGHIHQGDQW VDFWLRQ DQG >D@OLNHOLKRRG LQIDFWl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m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mDVVHUW LQ D DO )('(5$/ 35$&7,&( $1' 352&('85( Q UHYLHZLQJ FRXUW DQ\ JURXQG LQ VXSSRUW RI KLV MXGJPHQW ZKHWKHU RU QRW 6XSS ,QMXU\LQIDFW PHDQV WKDW WKH SODLQWLII KDV WKDW JURXQG ZDV UHOLHG XSRQ RU HYHQ FRQVLGHUHG E\ WKH WULDO FRXUWl 'DQGULGJH Y :LOOLDPV 86 Q m$Q DSSHOODWH mVXVWDLQHGRULVLQLPPHGLDWHGDQJHURIVXVWDLQLQJVRPHGLUHFW FRXUW FDQ ILQG DQ DOWHUQDWLYH EDVLV IRU FRQFOXGLQJ WKDW D SDUW\ LV HQWLWOHG LQMXU\l0DVVDFKXVHWWVY0HOORQ86 WR VXPPDU\ MXGJPHQW DQG LJQRUH DQ\ HUURQHRXV EDVHV UHOLHG XSRQ E\ WKH m7KH LQMXU\ PXVW EH ERWK µUHDO DQG LPPHGLDWHj QRW GLVWULFW FRXUW SURYLGHG LW SURFHHGV FDUHIXOO\ VR WKH RSSRVLQJ SDUW\ LV QRW µFRQMHFWXUDOjRUµK\SRWKHWLFDOjl2j6KHD86DW GHQLHG DQ RSSRUWXQLW\ WR UHVSRQG WR WKH QHZ WKHRU\l +HUP Y 6WDIIRUG )LQDOO\ m>Z@LWKRXW HYLGHQFH WKDW WKH >SODLQWLIIjV@ SUHGLFWHG )G WK &LU $Q DSSHOODQW KDV mDQ RSSRUWXQLW\ WR UHVSRQGl ZKHQ JLYHQ D FKDQFH WR mDUJXH >KHU SRVLWLRQ@ EHIRUH WKLV &RXUW UHVXOW LV µDFWXDO RU LPPLQHQWj VXFK DQ LQMXU\ FDQ RQO\ EH 6KDK Y *HQ (OHFWULF &R )G WK &LU 1RQH RI µFRQMHFWXUDORUK\SRWKHWLFDOjl0LFK*DV&RY)(5& 'HIHQGDQWjV DUJXPHQWV VKRXOG VXUSULVH 3ODLQWLII EHFDXVH 'HIHQGDQW PDGH )G WK&LU WKHVH VDPH SRLQWV EHORZ 1R $LUOLQH3URIjOV$VVjQY$LUERUQH,QF $LUOLQH3URIjOV$VVjQY$LUERUQH,QF 1R
,WLVXQFOHDUSUHFLVHO\ZKDWLQMXU\3ODLQWLIIDOOHJHV,QLWV LQTXLU\1DWLRQZLGH0XW,QV&RY&LVQHURV)G 5HSO\ %ULHI DWWHPSWLQJ WR DGGUHVV WKH VWDQGLQJ SUREOHP WK&LU 3ODLQWLII DUJXHV WKDW m>W@KH LVVXHV UDLVHG E\ WKH 8QLRQjV &RPSODLQWDUHFOHDUDQGUHDOQRWK\SRWKHWLFDODQGDEVWUDFW 7KHUHLVXQTXHVWLRQDEO\VRPHRYHUODSEHWZHHQULSHQHVVDQG ,WLV>'HIHQGDQWjV@UHSXGLDWLRQRIDQ\REOLJDWLRQXQGHU6LGH VWDQGLQJ :DUWK Y 6HOGLQ 86 Q /HWWHU ZKLFK FRQVWLWXWHV D SUHVHQW FRQWURYHUV\ ULSH IRU 7KHVWDQGLQJTXHVWLRQWKXVEHDUVFORVHDIILQLW\WRTXHVWLRQV UHVROXWLRQnQRWWKHHIIHFWRIDK\SRWKHWLFDOEUHDFKDWVRPH RI ULSHQHVVnZKHWKHU WKH KDUP DVVHUWHG KDV PDWXUHG SRLQWLQWKHIXWXUHl 3OjV5HSO\%UDW HPSKDVLVDGGHG VXIILFLHQWO\ WR ZDUUDQW MXGLFLDO LQWHUYHQWLRQ :KHQ WKH 3ODLQWLIIDOVRDUJXHV LQMXU\DOOHJHGLVQRWDFWXDOEXWPHUHO\WKUHDWHQHGVWDQGLQJ DQG ULSHQHVV EHFRPH PRUH GLIILFXOW WR GLVWLQJXLVK $ 7KLV FDVH LV FOHDUO\ ILW IRU MXGLFLDO UHVROXWLRQ DW WKH WKUHDWHQHGRULPPLQHQWLQMXU\PD\VDWLVI\VWDQGLQJjVLQMXU\ SUHVHQW VWDJH 7KHUH H[LVWV QR VHW RI IDFWV UHDO RU LQIDFWUHTXLUHPHQW\HWWKHFODLPPD\VWLOOEHXQULSHLIWKH K\SRWKHWLFDOZKLFKZRXOGVXJJHVWWKDWMXVWLFHZRXOGEH LVVXHVDUHQRWILWIRUMXGLFLDOUHYLHZSHUKDSVEHFDXVHIXWXUH EHWWHUVHUYHGLIMXGLFLDOUHVROXWLRQZRXOGEHSRVWSRQHGWR HYHQWVPD\JUHDWO\DIIHFWWKHRXWFRPHRIWKHOLWLJDWLRQDQGWKH VRPHGDWHLQWKHIXWXUH FRVWRIZDLWLQJLVQRWSDUWLFXODUO\VHYHUH7KHFRQYHUVHLVDOVR WUXH$VGLVFXVVHGIXUWKHUEHORZ3ODLQWLIILQWKLVFDVHODFNV 3Oj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m>W@KHUH H[LVWV QR VHW RI IDFWV UHDO RU SODLQWLIIV EULQJ RQO\ ULSH FODLPV KHOSV FRXUWV mDYRLG>@ K\SRWKHWLFDOZKLFKZRXOGVXJJHVWWKDWMXVWLFHZRXOGEHEHWWHU SUHPDWXUHDGMXGLFDWLRQ$EERWW/DEVY*DUGQHU86 VHUYHGLIMXGLFLDOUHVROXWLRQZRXOGEHSRVWSRQHGWRVRPHGDWH VHH DOVR /DNH &DUULHUV $VV Q Y LQWKHIXWXUHl 3OjV5HSO\%UDW 3HUKDSVEXWHYHQVR 0DF0XOODQ 86 H[SODLQLQJ WKDW WKLV DUJXPHQW RQO\ VSHDNV WR ZKHWKHU WKH OHJDO LVVXH LV ULSHQHVV DVNV ZKHWKHU WKHUH LV D VXEVWDQWLDO FRQWURYHUV\ FXUUHQWO\mILW>@IRUMXGLFLDOGHFLVLRQl$EERWW/DEV EHWZHHQSDUWLHVKDYLQJDGYHUVHOHJDOLQWHUHVWVRIVXIILFLHQW 86DW 7KHSUHVHQWILWQHVVRIDFODLPIRUMXGLFLDOUHYLHZ LPPHGLDF\DQGUHDOLW\WRZDUUDQWWKHLVVXDQFHRIDGHFODUDWRU\ GRHVQRWHVWDEOLVKLQMXU\LQIDFW MXGJPHQW 7KHULSHQHVVGRFWULQHDFNQRZOHGJHVWKHSUREOHP LQKHUHQWLQDGMXGLFDWLQJDGLVSXWHmDQFKRUHGLQIXWXUHHYHQWV WKDWPD\QRWRFFXUDVDQWLFLSDWHGRUDWDOO1DW O5LIOH$VV Q RI $P Y 0DJDZ )G WK &LU 7KLV DQDO\VLV FRXOG FRQFHLYDEO\ OHDYH RQH ZLWK WKH HUURQHRXV LPSUHVVLRQ WKDW WKH mKDUGVKLSl SURQJ RI $EERWW /DERUDWRULHV ULSHQHVV 'HWHUPLQLQJZKHWKHUDFODLPLVULSHLQYROYHVHYDOXDWLQJmERWK LQTXLU\ VHH $EERWW /DEV 86 DW RYHUODSV HQWLUHO\ ZLWK WKH
WKHILWQHVVRIWKHLVVXHVIRUMXGLFLDOGHFLVLRQDQGWKHKDUGVKLS LQMXU\LQIDFW FRPSRQHQW RI WKH WULSDUWLWH WHVW IRU VWDQGLQJ VHH )ULHQGV RI WR WKH SDUWLHV RI ZLWKKROGLQJ FRXUW FRQVLGHUDWLRQ $EERWW WKH (DUWK 86 $Q LQMXU\LQIDFW H[LVWV LI DQ LQMXU\ LV
/DEV86DW 7REHULSHIRUUHYLHZFODLPVPXVW DFWXDO RU LPPLQHQW 2j6KHD 86 DW 2QFH D FODLP
VDWLVI\ERWKWKHILWQHVVDQGWKHKDUGVKLSFRPSRQHQWVRIWKH RYHUFRPHV WKDW EDVLF KXUGOH WKH VL]H RI WKH KDUP QR ORQJHU PDWWHUV FRQWUDVW WKH VL]H RI WKH KDUP PDWWHUV WUHPHQGRXVO\ LQ GHWHUPLQLQJ ,Q
ZKHWKHU D FODLP LV ULSH EHFDXVH DOWKRXJK m>E@RWK SURQJV RI WKH >$EERWW /DERUDWRULHV@ WHVW PXVW EH VDWLVILHG DOWKRXJK D VWURQJ VKRZLQJ RQ RQH 1R $LUOLQH3URIjOV$VVjQY$LUERUQH,QF $LUOLQH3URIjOV$VVjQY$LUERUQH,QF 1R
7KH PHUH IDFW WKDW 3ODLQWLII LV SUHVHQWO\ XQFHUWDLQ DV WR :HGHFOLQHWRFRPPHQWRQZKHWKHUWKLVZRXOGFRQVWLWXWHD ZKHWKHU6LGH/HWWHUELQGV'HIHQGDQWLVQRWDQLQMXU\LQIDFW FRQVWLWXWLRQDOO\VXIILFLHQWLQMXU\LQIDFWm7KHSDUW\LQYRNLQJ EHFDXVH3ODLQWLIIGRHVQRWDOOHJHWKDW'HIHQGDQWLVFXUUHQWO\ IHGHUDOMXULVGLFWLRQlPXVWHVWDEOLVKVWDQGLQJ/XMDQ86 HQJDJLQJRUWKUHDWHQLQJWRHQJDJHLQDFWLYLW\WKDW6LGH/HWWHU DW$VWKH6XSUHPH&RXUWKDVVWUHVVHGWKHUHTXLVLWHVRI PLJKWLPSOLFDWH6HH$WODV$LU,QFY$LU/LQH3LORWV$VVjQ $UWLFOH,,,mDUHQRWPHUHSOHDGLQJUHTXLUHPHQWVEXWUDWKHUDQ )G '&&LU ILQGLQJQR$UWLFOH,,, LQGLVSHQVDEOHSDUWRIWKHSODLQWLII VFDVHl,G/XMDQPDGH EDVLV WR H[HUFLVH MXULVGLFWLRQ RYHU GLVSXWH DERXW mIXWXUH XQGLVSXWDEO\ FOHDU WKDW LQMXU\LQIDFW LVPRUH WKDQ D mPHUH XQLODWHUDO FKDQJHV >WKH FRPSDQ\@ PD\ ZLVK WR PDNH DQG SOHDGLQJUHTXLUHPHQW>@lZKLFKREYLRXVO\PHDQVWKDWDSDUW\ ZKHWKHUWKRVHFKDQJHVZRXOGEHODZIXOXQGHUWKH>5DLOZD\ IDLOLQJ WR SOHDG DQ LQMXU\LQIDFW FDQQRW LQYRNH IHGHUDO /DERU$FW@l LQWHUQDOTXRWDWLRQRPLWWHG ,WLVSRVVLEOHWKDW MXULVGLFWLRQ 'HIHQGDQWZLOOQHYHUEHKDYHLQDPDQQHUWKDWZRXOGYLRODWH 6LGH/HWWHUHYHQDVVXPLQJWKDWDJUHHPHQWELQGV'HIHQGDQW 7KH FODLP E\ 3ODLQWLIIjV FRXQVHO DW RUDO DUJXPHQW LV &RQVHTXHQWO\WKHRQO\LQMXU\3ODLQWLIIZLOOGHILQLWHO\VXIIHU LUUHOHYDQW8QGHUQRFLUFXPVWDQFHVPD\DSODLQWLIIDPHQGLWV LV DEVWUDFW XQFHUWDLQW\ DERXW ZKHWKHU WKH DUELWUDWLRQ FODXVH FRPSODLQWDWRUDODUJXPHQWRQDSSHDO ELQGV'HIHQGDQW3ODLQWLIIKDGWRDOOHJHPRUH :H FDQQRW UHDFK WKH PHULWV RI D FDVH WKDW ZH ODFN WKH 3HUKDSVUHDOL]LQJWKHSUREOHP3ODLQWLIIjVFRXQVHODWWHPSWHG FRQVWLWXWLRQDO DXWKRULW\ WR GHFLGH )RU WKDW UHDVRQ ZH WRDOOHJHPRUHDWRUDODUJXPHQW,QUHVSRQVHWRDTXHVWLRQ $)),50WKHGLVWULFWFRXUWjVGHFLVLRQWRGLVPLVVWKHFDVH IURPWKH&RXUW3ODLQWLIIFRPSODLQHGWKDWXQFHUWDLQW\DERXW WKH VWDWXV RI 6LGH /HWWHU ZDV KLQGHULQJ LWV DELOLW\ WR HIIHFWLYHO\QHJRWLDWHDQHZFROOHFWLYHEDUJDLQLQJDJUHHPHQW ZLWK$%;,I3ODLQWLIINQHZIRUFHUWDLQWKDW6LGH/HWWHUGLG QRWELQG'HIHQGDQWWKHQ3ODLQWLIIPLJKWSULRULWL]HWKDWLVVXH DQG SUHVV $%; WR LQYLWH LWV SDUHQW WR UHH[HFXWH D ZRUN SUHVHUYDWLRQ DJUHHPHQW DV D FRQGLWLRQ RI 3ODLQWLIIjV DFTXLHVFHQFHWRDQHZFROOHFWLYHEDUJDLQLQJDJUHHPHQW,I 3ODLQWLIINQHZIRUFHUWDLQWKDW6LGH/HWWHUFXUUHQWO\ELQGV 'HIHQGDQWWKHQ3ODLQWLIIFRXOGSUHVVXUH$%;IRUVRPHRWKHU EHQHILW,QHVVHQFHFROOHFWLYHEDUJDLQLQJQHJRWLDWLRQVDUHD JLYHDQGWDNHSURFHVVVR3ODLQWLIIFDQQRWQHJRWLDWHHIIHFWLYHO\ XQOHVVLWNQRZVZKDWEHQHILWVLWDOUHDG\KDV
PD\ FRPSHQVDWH IRU D ZHDN RQH RQ WKH RWKHUl 0F,QQLV0LVHQRU Y 0H 0HG &WU )G VW &LU 5LSHQHVV ZLOO QRW H[LVW DOWKRXJK LQMXU\LQIDFW ZLOO ZKHQ D SODLQWLII KDV VXIIHUHG RU ZLOO LPPLQHQWO\ VXIIHU D VPDOO EXW OHJDOO\ FRJQL]DEOH LQMXU\ \HW WKH EHQHILWV WR DGMXGLFDWLQJ WKH GLVSXWH DW VRPH ODWHU WLPH RXWZHLJK WKH KDUGVKLS WKH SODLQWLII ZLOO HQGXUH E\ ZDLWLQJ