Brandenburg v. Hous Auth Irvine

Opinion

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

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jVRZQHUVKLSRIDOOHJHGO\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