Ullmo v. Gilmour Academy

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

7+20$6 8//02 s$&48(/,1( ; 8//02DQGs$621 8//02  E\DQGWKURXJKKLVSDUHQWV   1R DQGOHJDOJXDUGLDQV7KRPDV  DQGsDFTXHOLQH8OOPR !  3ODLQWLIIV$SSHOODQWV   Y   *,/0285 $&$'(0<   'HIHQGDQW$SSHOOHH  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG 1Rn3DWULFLD$*DXJKDQ'LVWULFWsXGJH $UJXHG2FWREHU 'HFLGHGDQG)LOHG'HFHPEHU %HIRUH%2**6DQG*,/0$1&LUFXLWsXGJHV48,67 'LVWULFWsXGJH

7KH +RQRUDEOH *RUGRQ s 4XLVW 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH :HVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ

  8OOPRHWDOY*LOPRXU$FDGHP\ 1R 1R 8OOPRHWDOY*LOPRXU$FDGHP\ 

BBBBBBBBBBBBBBBBB mDQLPXVlWRZDUGKLP6XFKDFRQFOXVRU\VWDWHPHQWGRHVQRW HVWDEOLVKELDVIRUWKHSXUSRVHVRIDPRWLRQWRUHFXVH*HQHUDO &2816(/ $YLDWLRQ ,QF  )G DW  m&RQFOXVLRQV UXPRUV EHOLHIV DQG RSLQLRQV DUH QRW VXIILFLHQW WR IRUP D EDVLV IRU $5*8('  6WHSKHQ 2 :DONHU %HDFKZRRG 2KLR IRU GLVTXDOLILFDWLRQl LQWHUQDO TXRWDWLRQ PDUNV RPLWWHG $SSHOODQWV*UHJRU\90HUVRO%$.(5 +267(7/(5 )LQDOO\DQDIILGDYLWILOHGXQGHU†PXVWEHmDFFRPSDQLHG &OHYHODQG 2KLR IRU $SSHOOHH  21 %5,()  6WHSKHQ 2 E\DFHUWLILFDWHRIFRXQVHORIUHFRUGVWDWLQJWKDWLWLVPDGHLQ :DONHU %HDFKZRRG 2KLR IRU $SSHOODQWV  *UHJRU\ 9 JRRG IDLWKl   86& †   1R VXFK FHUWLILFDWH 0HUVRO 7KRPDV s 3LDWDN %$.(5  +267(7/(5 DFFRPSDQLHGWKHDIILGDYLWILOHGE\WKH8OOPRV%DVHGXSRQ &OHYHODQG2KLRIRU$SSHOOHH WKHVHIDFWRUVZHFRQFOXGHWKDWWKHFXPXODWLYHHIIHFWRIWKH GLVWULFWFRXUWjVGHQLDORIWKH8OOPRVjPRWLRQWRUHFXVHDQGLWV BBBBBBBBBBBBBBBBB RWKHU SUHWULDO UXOLQJV GLG QRW GHSULYH WKH 8OOPRV RI GXH SURFHVV 23,1,21 BBBBBBBBBBBBBBBBB ,,,&21&/86,21 521$/' /(( *,/0$1 &LUFXLW sXGJH  7KRPDV DQG )RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH $)),50 WKH sDFTXHOLQH8OOPREURXJKWVXLWLQVWDWHFRXUWDJDLQVW*LOPRXU MXGJPHQWRIWKHGLVWULFWFRXUW $FDGHP\DOOHJLQJEUHDFKRIFRQWUDFWIUDXGDQGDYLRODWLRQ RIWKH,QGLYLGXDOVZLWK'LVDELOLWLHV(GXFDWLRQ$FW,'($ 86& ††   7KH\ EDVHG WKHLU FODLPV XSRQ *LOPRXUjVDOOHJHGIDLOXUHWRSURYLGHWKHLUVRQsDVRQZLWKDQ HGXFDWLRQ GHVLJQHG WR KHOS KLP RYHUFRPH KLV OHDUQLQJ GLVDELOLW\$IWHUUHPRYLQJWKHFDVHWRIHGHUDOGLVWULFWFRXUW *LOPRXUILOHGWZRVXFFHVVLYHPRWLRQVIRUVXPPDU\MXGJPHQW EDVHG XSRQ GLIIHUHQW DVSHFWV RI WKH 8OOPRVj FODLPV  7KH GLVWULFWFRXUWJUDQWHGERWKPRWLRQVUHVXOWLQJLQWKHGLVPLVVDO RIWKH8OOPRVjFRPSODLQW)RUWKHUHDVRQVVHWIRUWKEHORZZH $)),50WKHMXGJPHQWRIWKHGLVWULFWFRXUW ,%$&.*5281' $ )DFWXDOEDFNJURXQG *LOPRXU LV D SULYDWH &DWKROLF HOHPHQWDU\ DQG VHFRQGDU\ VFKRRO ORFDWHG LQ *DWHV 0LOOV 2KLR  sDVRQ DWWHQGHG ILUVW JUDGHDW*LOPRXUGXULQJZKLFKWLPHKHZDVGLDJQRVHGZLWK GHDIQHVV LQ KLV OHIW HDU  +LV KHDULQJ LPSDLUPHQW PDGH LW GLIILFXOWIRUKLPWRFRPPXQLFDWHZLWKKLVILUVWJUDGHWHDFKHU &RQYLQFHGWKDWWKHVLWXDWLRQDW*LOPRXUZRXOGQRWLPSURYH  8OOPRHWDOY*LOPRXU$FDGHP\ 1R 1R 8OOPRHWDOY*LOPRXU$FDGHP\ 

MXGJPHQWl/RJDQY'D\WRQ+XGVRQ&RUS)G WKH8OOPRVHQUROOHGsDVRQDW5DWQHU0RQWHVVRUL6FKRRODIWHU WK&LU KHFRPSOHWHGWKHILUVWJUDGH  7KH8OOPRVIDLOHGWRSURSHUO\VXSSRUWWKHLUPRWLRQWR  sDVRQZDVVXEVHTXHQWO\GLDJQRVHGZLWKDOHDUQLQJGLVDELOLW\ UHFXVHDQGRIIHUQRHYLGHQFHWKDWELDVLQIOXHQFHGDQ\ LQYROYLQJ ZULWWHQ H[SUHVVLRQ  %HFDXVH RI WKLV OHDUQLQJ RIWKHGLVWULFWMXGJHjVSUHWULDOUXOLQJV GLVDELOLW\ 5DWQHU SURYLGHG sDVRQ ZLWK DQ LQGLYLGXDOL]HG OHDUQLQJ GLVDELOLW\ HGXFDWLRQ  +H UHVSRQGHG ZHOO WR WKH $FFRUGLQJ WR WKH 8OOPRV WKH GLVWULFW MXGJH ZDV ELDVHG LQGLYLGXDOL]HG SURJUDP SURJUHVVLQJ IURP VHFRQG WKURXJK DJDLQVWWKHLUFRXQVHO7KH\LQVLVWWKDWWKLVELDVLQIOXHQFHGWKH VL[WKJUDGHDW5DWQHUsDVRQKRZHYHUGHVLUHGWRUHWXUQWR GLVWULFWMXGJHjVSUHWULDOUXOLQJV7KHVHUXOLQJVLQFOXGLQJWKH *LOPRXU IRU WKH VHYHQWK JUDGH WHOOLQJ KLV SDUHQWV WKDW KH GLVWULFW MXGJHjV UHIXVDO WR UHFXVH KHUVHOI IURP WKLV FDVH mZDQWHGWREHSDUWRIWKH*LOPRXUIDPLO\l DOOHJHGO\GHQLHGWKH8OOPRVWKHGXHSURFHVVRIODZ 6HYHUDO PRQWKV EHIRUH sDVRQjV VHYHQWKJUDGH \HDU 7KH8OOPRVKRZHYHUIDLOWRVKRZWKDWWKHGLVWULFWFRXUW sDFTXHOLQH8OOPRPHWZLWK5REHUW,VDEHOODWKH'LUHFWRURI DEXVHGLWVGLVFUHWLRQLQGHQ\LQJWKHLUPRWLRQIRUUHFXVDO$ $GPLVVLRQVDW*LOPRXUWRGLVFXVVsDVRQjVSRVVLEOHUHWXUQ PRWLRQIRUUHFXVDOEDVHGXSRQSHUVRQDOELDVLVJRYHUQHGE\ 6KHFODLPVWKDW,VDEHOODDVVXUHGKHUmWKDWLWGLGQjWPDNHDQ\ 86&†ZKLFKPDNHVUHFXVDOPDQGDWRU\ZKHUHDSDUW\ GLIIHUHQFHWKDWsDVRQKDGOHDUQLQJGLVDELOLWLHVl,VDEHOOD ILOHVDmVXIILFLHQWlDIILGDYLWGHVFULELQJWKHMXGJHjVmSHUVRQDO DOVR DOOHJHGO\ WROG KHU WKDW *LOPRXU PDLQWDLQHG D mYHU\ ELDV RU SUHMXGLFHl  7KH DIILGDYLW RIIHUHG LQ VXSSRUW RI WKH QXUWXULQJHQYLURQPHQWlDQGWKDWLWmZRXOGZRUNZLWKsDVRQl 8OOPRVjPRWLRQIRUUHFXVDOZDVQRWVXIILFLHQWIRUWKHSXUSRVHV RI† sDVRQ VXEVHTXHQWO\ UHWXUQHG WR *LOPRXU IRU WKH VHYHQWK JUDGHDQGFRQWLQXHGKLVVFKRROLQJWKHUHWKURXJKWKHWZHOIWK 7RZDUUDQWUHFXVDOXQGHU†DQDIILGDYLWPXVWmDOOHJH>@ JUDGH(DFK\HDUWKDWsDVRQDWWHQGHG*LOPRXUWKH8OOPRV IDFWVZKLFKDUHDVRQDEOHSHUVRQZRXOGEHOLHYHZRXOGLQGLFDWH VLJQHGDQ(QUROOPHQW$JUHHPHQWWKDWREOLJDWHGVWXGHQWVDQG D MXGJH KDV D SHUVRQDO ELDV DJDLQVW WKH PRYLQJ SDUW\l WKHLU SDUHQWV WR DELGH E\ WKH UXOHV VHW IRUWK LQ *LOPRXUjV *HQHUDO$YLDWLRQ,QFY&HVVQD$LUFUDIW&R)G 6WXGHQW DQG 3DUHQW +DQGERRN  7KH +DQGERRN FRQWDLQV  WK &LU   7KH DOOHJHG IDFWV PRUHRYHU PXVW SROLFLHVUHJDUGLQJDFDGHPLFVGLVFLSOLQHDQGUHODWHGPDWWHUV UHODWH WR mH[WUDMXGLFLDO FRQGXFW UDWKHU WKDQ    MXGLFLDO ,WDOVRLQFOXGHVDVHFWLRQWLWOHGm3KLORVRSK\lZKLFKVWDWHV FRQGXFWl8QLWHG6WDWHVY6WRU\)GWK &LULQWHUQDOTXRWDWLRQPDUNVRPLWWHG,QRWKHUZRUGV $V D SUHPLHU LQGHSHQGHQW &DWKROLF SUHSDUDWRU\ VFKRRO WKHDIILGDYLWPXVWDOOHJH IDFWVVKRZLQJmDSHUVRQDOELDVDV SUHVFKRRO WKURXJK KLJK VFKRRO *LOPRXU $FDGHP\ GLVWLQJXLVKHGIURPDMXGLFLDORQHDULVLQJRXWRIWKHMXGJHjV PRGHOVLWVHOIRQWKHIDPLO\DQGWDNHVDVLWVPLVVLRQWKH EDFNJURXQGDQGDVVRFLDWLRQDQGQRWIURPWKHMXGJHjVYLHZRI VHDUFKIRUH[FHOOHQFHLQHDFKSHUVRQ WKHODZl,GDWLQWHUQDOTXRWDWLRQPDUNVRPLWWHG *LOPRXUWHDFKHUVPLUURUWKH+RO\&URVVWUDGLWLRQDVWKH\ 7KHDIILGDYLWRIIHUHGLQVXSSRUWRIWKH8OOPRVjPRWLRQWR ZRUNIRUWKHIXOOGHYHORSPHQWRIWKHLUVWXGHQWVLQDQG UHFXVHKRZHYHUVHHNVWRHVWDEOLVKELDVEDVHGVROHO\XSRQWKH RXWRIWKHFODVVURRPUHVSHFWLQJSXSLOVjGLIIHULQJDELOLWLHV GLVWULFWMXGJHjVSUHWULDOUXOLQJV1RHYLGHQFHZDVSUHVHQWHGRI DQGVW\OHVRIOHDUQLQJ DQ\ H[WUDMXGLFLDO ELDV  )XUWKHUPRUH WKH RQO\ PHQWLRQ RI SHUVRQDOELDVLQWKHDIILGDYLWLVWKHVWDWHPHQWE\WKH8OOPRVj $IWHUUHWXUQLQJWR*LOPRXUsDVRQVWUXJJOHGDFDGHPLFDOO\ FRXQVHO WKDW KH mSHUFHLYHGl WKDW WKH GLVWULFW MXGJH KDG DQ +H URXWLQHO\ IDLOHG WR FRPSOHWH DVVLJQPHQWV DQG HDUQHG  8OOPRHWDOY*LOPRXU$FDGHP\ 1R 1R 8OOPRHWDOY*LOPRXU$FDGHP\ 

EHORZDYHUDJH JUDGHV  7KH 8OOPRV DWWULEXWHG sDVRQjV IRUVXPPDU\MXGJPHQWRQWKHLU,'($FODLP7KH\PDLQWDLQ GLIILFXOWLHVWR*LOPRXUjVIDLOXUHWRDGHTXDWHO\DFFRPPRGDWH WKDW*LOPRXUSXUSRVHO\GHOD\HGILOLQJLWVPRWLRQIRUVXPPDU\ KLV OHDUQLQJ GLVDELOLW\  7KH\ ZHUH SDUWLFXODUO\ GLVVDWLVILHG MXGJPHQWRQWKHLU,'($FODLPVRWKDWLWFRXOGILUVWREWDLQD ZLWK*LOPRXUjVUHIXVDOWRDGRSWWKHUHFRPPHQGDWLRQVPDGH IHGHUDOMXGJPHQWRQWKHLUVWDWHODZFODLPV$FFRUGLQJWRWKH E\sDVRQjVSV\FKRORJLVWZKRVXJJHVWHGDPRQJRWKHUWKLQJV 8OOPRV 5XOH  RI WKH )HGHUDO 5XOHV RI &LYLO 3URFHGXUH WKDWsDVRQEHDOORZHGWRWDNHWHVWVRUDOO\DQGEHJLYHQPRUH SURKLELWV*LOPRXUIURPmPDQLSXODWLQJWKHMXGLFLDOSURFHVVWR WLPH WR FRPSOHWH KLV DVVLJQPHQWV  %XW WKH 8OOPRV LPSRVHIHGHUDOVWDQGDUGVRIUHYLHZRQHQWLUHO\6WDWH&RXUW QHYHUWKHOHVVKDGsDVRQUHWXUQWR*LOPRXUHDFK\HDU'HVSLWH FODLPVl KLVFRQVLVWHQWO\SRRUDFDGHPLFSHUIRUPDQFHsDVRQJUDGXDWHG IURP*LOPRXULQ 7KH8OOPRVKRZHYHURIIHUQRDXWKRULW\IRUWKHSURSRVLWLRQ WKDW 5XOH  REOLJDWHG *LOPRXU WR ILUVW VHHN VXPPDU\ % 3URFHGXUDOEDFNJURXQG MXGJPHQW RQ WKHLU ,'($ FODLP  0RUHRYHU DV WKH GLVWULFW FRXUW UHFRJQL]HG mWKHUH LV QR LQGLFDWLRQ WKDW *LOPRXUjV 7KH8OOPRVEURXJKWVXLWLQVWDWHFRXUWDJDLQVW*LOPRXULQ IDLOXUHWRLQLWLDOO\PRYHIRUVXPPDU\MXGJPHQW>RQWKH,'($ 6HSWHPEHURI6XLQJRQEHKDOIRIWKHPVHOYHVDQGsDVRQ FODLP@ ZDV WKH UHVXOW RI IRXO SOD\l  7KH VHTXHQFH RI WKH\ VRXJKW GDPDJHV IRU EUHDFK RI FRQWUDFW IUDXG DQG D *LOPRXUjVPRWLRQVIRUVXPPDU\MXGJPHQWWKHUHIRUHGRHVQRW YLRODWLRQ RI WKH ,'($  7KH\ PDLQWDLQHG WKDW *LOPRXU HQWLWOHWKH8OOPRVWRSXUVXHWKHLUEUHDFKRIFRQWUDFWDQGIUDXG EUHDFKHG LWV SURPLVH WR mZRUN IRU WKH GHYHORSPHQWl RI LWV FODLPVLQVWDWHFRXUW6HH(QORZY7LVKRPLQJR&W\0LVV VWXGHQWVDQGWRUHVSHFWVWXGHQWVjmGLIIHULQJDELOLWLHVDQGVW\OHV )GWK&LUm6XFKDGHWHUPLQDWLRQ>WR RIOHDUQLQJlDVVHWIRUWKLQWKH+DQGERRN7KH8OOPRVDOVR DOORZ D VXFFHVVLYH PRWLRQ IRU VXPPDU\ MXGJPHQW@ FRQWHQGHG WKDW WKLV SURPLVH ZDV IUDXGXOHQW  )LQDOO\ WKH SDUWLFXODUO\UHJDUGLQJTXHVWLRQVRIWKHWLPLQJDQGVHTXHQFHRI 8OOPRVDOOHJHGWKDW*LOPRXUYLRODWHGWKH,'($E\IDLOLQJWR PRWLRQVLQWKHGLVWULFWFRXUWEHVWOLHVDWWKHGLVWULFWFRXUWjV KHOSsDVRQRYHUFRPHKLVOHDUQLQJGLVDELOLW\ GLVFUHWLRQl *LOPRXU UHPRYHG WKH 8OOPRVj VXLW WR WKH 8QLWHG 6WDWHV $FFRUGLQJO\ZHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLGQRWHUU 'LVWULFW&RXUWIRU WKH1RUWKHUQ'LVWULFWRI2KLR$WLPHO\ LQGHQ\LQJWKH8OOPRVjPRWLRQWRYDFDWHDQGUHPDQG PRWLRQIRUVXPPDU\MXGJPHQWZDVILOHGE\*LOPRXURQWKH 8OOPRVj EUHDFK RI FRQWUDFW DQG IUDXG FODLPV ZKLFK WKH & 7KHFXPXODWLYHHIIHFWRIWKHGLVWULFWMXGJHjVSUHWULDO GLVWULFWFRXUWJUDQWHG$IWHUWKHGHDGOLQHIRUILOLQJGLVSRVLWLYH UXOLQJV DQG KHU UHIXVDO WR UHFXVH KHUVHOI IURP WKLV PRWLRQV KDG SDVVHG WKH GLVWULFW FRXUW JUDQWHG OHDYH IRU FDVHGLGQRWGHSULYHWKH8OOPRVRIGXHSURFHVV *LOPRXUWRDOVRPRYHIRUVXPPDU\MXGJPHQWRQWKH8OOPRVj UHPDLQLQJFODLPXQGHUWKH,'($  6WDQGDUGRIUHYLHZ 7KH 8OOPRV UHVSRQGHG WR *LOPRXUjV VHFRQG PRWLRQ IRU 7KH8OOPRVEDVHWKHLUGXHSURFHVVFKDOOHQJHSULPDULO\XSRQ VXPPDU\MXGJPHQWE\ILOLQJDPRWLRQIRUWKHGLVWULFWMXGJHWR WKH GLVWULFW MXGJHjV GHQLDO RI WKHLU PRWLRQ WR UHFXVH  7KLV UHFXVHKHUVHOI7KH\DOOHJHGWKDWWKHGLVWULFWMXGJHjVGHFLVLRQ FRXUWmUHYLHZVGHFLVLRQVGHQ\LQJPRWLRQVWRUHFXVHXQGHU WR JUDQW *LOPRXU OHDYH WR ILOH LWV ODWH PRWLRQ IRU VXPPDU\ WKHDEXVHRIGLVFUHWLRQVWDQGDUGl8QLWHG6WDWHVY+DUWVHO MXGJPHQW DV ZHOO DV WKH MXGJHjV RWKHU SUHWULDO UXOLQJV )GWK&LU$QDEXVHRIGLVFUHWLRQLV HYLGHQFHGKHUELDVDJDLQVWWKHLUFRXQVHO,QDGGLWLRQWRWKHLU IRXQG ZKHUH WKLV FRXUW LV OHIW ZLWK WKH mGHILQLWH DQG ILUP PRWLRQWRUHFXVHWKH8OOPRVILOHGDPRWLRQUHTXHVWLQJWKDW FRQYLFWLRQ WKDW WKH WULDO FRXUW FRPPLWWHG D FOHDU HUURU RI WKH GLVWULFW FRXUW YDFDWH LWV HDUOLHU RUGHU JUDQWLQJ VXPPDU\  8OOPRHWDOY*LOPRXU$FDGHP\ 1R 1R 8OOPRHWDOY*LOPRXU$FDGHP\ 

7KH8OOPRVDOVREDVHGWKHLUPRWLRQWRYDFDWHDQGUHPDQGRQ MXGJPHQW RQ WKHLUEUHDFKRIFRQWUDFWDQGIUDXGFODLPVDQG *LOPRXUjVDOOHJHGYLRODWLRQRI5XOHRIWKH)HGHUDO5XOHV UHPDQGWKRVHFODLPVWRVWDWHFRXUW$IWHUGHQ\LQJWKH8OOPRVj RI&LYLO3URFHGXUH7KLVFRXUWDSSOLHVmDQDEXVHRIGLVFUHWLRQ PRWLRQV WKH GLVWULFW FRXUW JUDQWHG VXPPDU\ MXGJPHQW WR VWDQGDUGLQUHYLHZLQJDOODVSHFWVRIDGLVWULFWFRXUWjV5XOH *LOPRXURQWKH8OOPRVj,'($FODLP GHWHUPLQDWLRQl&RRWHU *HOOY+DUWPDU[&RUS86  7KH8OOPRVWKHQILOHGWKLVWLPHO\DSSHDO7KH\FRQWHQG WKDWWKHGLVWULFWFRXUWHUUHGLQJUDQWLQJVXPPDU\MXGJPHQWWR  *LOPRXUZDVIXOO\ZLWKLQLWVULJKWVWRUHPRYHWKLVFDVH *LOPRXURQWKHLUEUHDFKRIFRQWUDFWIUDXGDQG,'($FODLPV WRIHGHUDOFRXUWDQGWRVHHNVXPPDU\MXGJPHQWRQWKH )XUWKHUPRUHWKH\DUJXHWKDWWKHGLVWULFWFRXUWHUUHGLQGHQ\LQJ 8OOPRVjVWDWHODZFODLPVEHIRUHWKHLU,'($FODLP WKHLUPRWLRQWRYDFDWHWKHJUDQWRIVXPPDU\MXGJPHQWRQWKHLU VWDWHODZFODLPVDQGWRUHPDQGWKRVHFODLPVWRVWDWHFRXUW 7KH8OOPRVILUVWFRQWHQGWKDWWKHGLVWULFWFRXUWVKRXOGKDYH )LQDOO\WKH8OOPRVFODLPWKDWWKHFXPXODWLYHHIIHFWRIWKH JUDQWHGWKHLUPRWLRQWRYDFDWHDQGUHPDQGEHFDXVH*LOPRXU GLVWULFWFRXUWjVGHQLDORIWKHLUPRWLRQWRUHFXVHDQGLWVYDULRXV LPSURSHUO\UHPRYHGWKLVFDVHWRIHGHUDOFRXUW7KH\SRLQWRXW RWKHUSUHWULDOUXOLQJVGHSULYHGWKHPRIWKHGXHSURFHVVRIODZ WKDWWKH,'($DXWKRUL]HVVXLWVLQERWKVWDWHDQGIHGHUDOFRXUW %HFDXVHWKH\ILOHGVXLWLQVWDWHFRXUWWKH8OOPRVLQVLVWWKDW ,,$1$/<6,6 WKHGLVWULFWFRXUWODFNHGMXULVGLFWLRQRYHUWKHLU,'($FODLP $ *LOPRXUZDVHQWLWOHGWRVXPPDU\MXGJPHQWRQWKH 7KLVDUJXPHQWLVZLWKRXWPHULW5HPRYDOLVSURSHUZKHUH 8OOPRVjEUHDFKRIFRQWUDFWIUDXGDQG,'($FODLPV DFRPSODLQWUDLVHVDFODLPWKDWLVZLWKLQWKHMXULVGLFWLRQRIWKH IHGHUDOFRXUWV86&†D7KH,'($LVDIHGHUDO  6WDQGDUGRIUHYLHZ VWDWXWH   $Q\ FODLP DULVLQJ XQGHU WKH ,'($ LV WKHUHIRUH VXEMHFW WR WKH MXULVGLFWLRQ RI WKH GLVWULFW FRXUW   86& 7KLV FRXUW UHYLHZV GH QRYR WKH GLVWULFW FRXUWjV JUDQW RI †m7KHGLVWULFWFRXUWVVKDOOKDYHRULJLQDOMXULVGLFWLRQRI VXPPDU\MXGJPHQW+ROORZD\Y%UXVK)G DOO FLYLO DFWLRQV DULVLQJ XQGHU WKH &RQVWLWXWLRQ ODZV RU WK&LU6XPPDU\MXGJPHQWLVSURSHUZKHUHWKHUHDUH WUHDWLHV RI WKH 8QLWHG 6WDWHVl  $OWKRXJK WKH ,'($ DOVR QRJHQXLQHLVVXHVRIPDWHULDOIDFWLQGLVSXWHDQGWKHPRYLQJ SHUPLWVVXLWVWREHEURXJKWLQVWDWHFRXUWmWKHIDFWWKDWWKH SDUW\LVHQWLWOHGWRMXGJPHQWDVDPDWWHURIODZ)HG5&LY ,'($SURYLGHVWKHSODLQWLIIZLWKWKHFKRLFHRIVWDWHRUIHGHUDO 3F,QGHFLGLQJDPRWLRQIRUVXPPDU\MXGJPHQWWKH FRXUWGRHVQRWSUHFOXGHWKHUHPRYDORIWKHUHVXOWLQJDFWLRQWR FRXUW PXVW YLHZ WKH HYLGHQFH DQG GUDZ DOO UHDVRQDEOH IHGHUDOFRXUWl)D\HWWHYLOOH3HUU\/RFDO6FK'LVWY5HFNHUV LQIHUHQFHVLQIDYRURIWKHQRQPRYLQJSDUW\0DWVXVKLWD(OHF )6XSS6'2KLRVHHDOVR'RUVH\Y ,QGXV&RY=HQLWK5DGLR&RUS86 &LW\ RI 'HWURLW  )G   WK &LU  m7KH 7KHFRXUWLVQRWWRmZHLJKWKHHYLGHQFHDQGGHWHUPLQHWKH ZHLJKW RI MXGLFLDO DXWKRULW\ VXSSRUWV WKH FRQFOXVLRQ WKDW D WUXWKRIWKHPDWWHUEXWWRGHWHUPLQHZKHWKHUWKHUHLVDJHQXLQH &RQJUHVVLRQDO JUDQW RI FRQFXUUHQW MXULVGLFWLRQ LQ D VWDWXWH LVVXHIRUWULDOl$QGHUVRQY/LEHUW\/REE\,QF86 GRHV QRW LPSO\ WKDW UHPRYDO LV SURKLELWHGl LQWHUQDO $JHQXLQHLVVXHIRUWULDOH[LVWVRQO\ZKHUH TXRWDWLRQPDUNVRPLWWHG WKHUH LV VXIILFLHQW mHYLGHQFH RQ ZKLFK WKH MXU\ FRXOG UHDVRQDEO\ILQGIRUWKHSODLQWLIIl,GDW 7KH8OOPRVQH[WDUJXHWKDWWKHGLVWULFWFRXUWVKRXOGKDYH JUDQWHGWKHLUPRWLRQWRYDFDWHDQGUHPDQGEHFDXVH*LOPRXU DOOHJHGO\HQJDJHGLQIRUXPVKRSSLQJE\ILOLQJLWVPRWLRQIRU VXPPDU\MXGJPHQWRQWKHLUVWDWHODZFODLPVEHIRUHPRYLQJ  8OOPRHWDOY*LOPRXU$FDGHP\ 1R 1R 8OOPRHWDOY*LOPRXU$FDGHP\ 

 7KHm3KLORVRSK\lVHFWLRQRI*LOPRXUjV+DQGERRNLV  )G   WK &LU  TXRWLQJ *DGVE\ Y WRR JHQHUDO DQG DVSLUDWLRQDO WR FRQVWLWXWH DQ *UDVPLFN)GWK&LU  HQIRUFHDEOHSURPLVH ,QWKHSUHVHQWDFWLRQWKH8OOPRVVXHG*LOPRXUXQGHUWKH ,QVXLQJIRUEUHDFKRIFRQWUDFWWKH8OOPRVGLGQRWDOOHJH ,'($7KH\DUJXHWKDW*LOPRXUVHUYHGDVD/($EHFDXVHLW WKDW*LOPRXUWRWDOO\IDLOHGWRSURYLGHHGXFDWLRQDOVHUYLFHVDV UHFHLYHG ERWK IHGHUDO DQG VWDWH HGXFDWLRQ IXQGV  %XW WKH SURPLVHGWRWKHPLQWKH(QUROOPHQW$JUHHPHQW7KH\LQVWHDG 8OOPRVDFNQRZOHGJHWKDW*LOPRXUUHFHLYHGSXEOLFIXQGVRQO\ VRXJKWWRHQIRUFHWKHODQJXDJHFRQWDLQHGLQWKH3KLORVRSK\ IRUJHQHUDOHGXFDWLRQSXUSRVHVDVRSSRVHGWRIXQGVSURYLGHG VHFWLRQRIWKH+DQGERRNZKLFKVWDWHVWKDWm*LOPRXUWHDFKHUV XQGHUWKH,'($IRUGLVDELOLW\HGXFDWLRQ)XUWKHUPRUHWKH PLUURU WKH +RO\ &URVV WUDGLWLRQ DV WKH\ ZRUN IRU WKH IXOO ,'($GHILQHVD/($DVDSXEOLFDGPLQLVWUDWLYHERG\FKDUJHG GHYHORSPHQWRIWKHLUVWXGHQWVLQDQGRXWRIWKHFODVVURRP ZLWK RYHUVHHLQJ SXEOLF VFKRROV   86& † D  UHVSHFWLQJSXSLOVjGLIIHULQJDELOLWLHVDQGVW\OHVRIOHDUQLQJl GHILQLQJ D /($ DV mD SXEOLF ERDUG RI HGXFDWLRQ RU RWKHU 7KH+DQGERRNIXUWKHUSURYLGHVWKDW*LOPRXUmPRGHOVLWVHOI SXEOLF DXWKRULW\ OHJDOO\ FRQVWLWXWHG    IRU HLWKHU RQ WKH IDPLO\ DQG WDNHV DV LWV PLVVLRQ WKH VHDUFK IRU DGPLQLVWUDWLYHFRQWURORUGLUHFWLRQRIRUWRSURYLGHDVHUYLFH H[FHOOHQFHLQHDFKSHUVRQl IXQFWLRQIRUSXEOLFHOHPHQWDU\RUVHFRQGDU\VFKRROVl 1RZKHUH LQ WKH 3KLORVRSK\ VHFWLRQ KRZHYHU LV WKHUH D 7KH8OOPRVFRQFHGHWKDW*LOPRXULVDSULYDWHLQVWLWXWLRQ GHVFULSWLRQRIWKHIDFXOW\jVWHDFKLQJPHWKRGVRUDQ\SURPLVH *LOPRXUPRUHRYHULVDVFKRROUDWKHUWKDQDQDGPLQLVWUDWLYH DVWRWKHPDQQHULQZKLFKWKHIDFXOW\ ZLOODFFRPPRGDWHD ERG\$FFRUGLQJO\WKH,'($jVGHILQLWLRQRID/($OHDYHV VWXGHQWjVOHDUQLQJGLVDELOLWLHV1RVWDQGDUGVDUHVHWIRUWKWR mQRURRPlIRU*LOPRXUWRILWZLWKLQWKHVWDWXWRU\WHUP6W GHWHUPLQH ZKHWKHU *LOPRXU KDV ZRUNHG IRU WKH IXOO sRKQVEXU\$FDGHP\Y'+)GG&LU GHYHORSPHQWRILWVVWXGHQWVRUUHVSHFWHGLWVVWXGHQWVjGLIIHULQJ KROGLQJWKDWDSULYDWHVFKRROLVQRWD/($EHFDXVHWKH,'($ DELOLWLHV,QVWHDGWKHVHFWLRQVLPSO\DVVXUHVVWXGHQWVDQG GHILQHVD/($DVDSXEOLFDGPLQLVWUDWLYHERG\*LOPRXULV SDUHQWVWKDW*LOPRXUjVPLVVLRQLVWRVHDUFKIRUH[FHOOHQFHLQ WKHUHIRUHQRWVXEMHFWWROLDELOLW\XQGHUWKH,'($ HDFK SHUVRQ  7KH ODQJXDJH LQ WKH 3KLORVRSK\ VHFWLRQ WKHUHIRUH VHWV IRUWK RQO\ D JHQHUDO VWDWHPHQW RI *LOPRXUjV )RU DOO RI WKH UHDVRQV VHW IRUWK DERYH ZH KROG WKDW WKH LGHDOV GLVWULFW FRXUW GLG QRW HUU LQ JUDQWLQJ VXPPDU\ MXGJPHQW WR *LOPRXURQWKH8OOPRVj,'($FODLP ,QGHILQLWHDQGDVSLUDWLRQDOODQJXDJHGRHVQRWFRQVWLWXWHDQ HQIRUFHDEOH SURPLVH XQGHU 2KLR ODZ  7KH 2KLR 6XSUHPH % 7KHGLVWULFWFRXUWGLGQRWHUULQGHQ\LQJWKH8OOPRVj &RXUWKDVPDGHFOHDUWKDWYDJXHODQJXDJHZLOOQRWZDUUDQW PRWLRQWRYDFDWHWKHJUDQWRIVXPPDU\MXGJPHQWRQ MXGLFLDOHQIRUFHPHQWVWDWLQJWKDWm>D@FRXUWFDQQRWHQIRUFHD WKHLU EUHDFK RI FRQWUDFW DQG IUDXG FODLPV DQG WR FRQWUDFWXQOHVVLWFDQGHWHUPLQHZKDWLWLVl5XOOLY)DQ&R UHPDQGWKRVHFODLPVWRVWDWHFRXUW 1(G2KLRKROGLQJWKDWWKHWULDOFRXUW HUUHG LQ HQIRUFLQJ DQ DPELJXRXV VHWWOHPHQW DJUHHPHQW  6WDQGDUGRIUHYLHZ LQWHUQDOTXRWDWLRQPDUNVRPLWWHG,QDGGLWLRQDEUHDFKRI FRQWUDFW FODLP ZLOO QRW DULVH IURP WKH IDLOXUH WR IXOILOO D 7KH8OOPRVjPRWLRQWRYDFDWHDQGUHPDQGZDVDFKDOOHQJH VWDWHPHQWRIJRDOVRULGHDOV$OOHQY(WKLFRQ,QF) LQSDUWWRWKHGLVWULFWFRXUWjVVXEMHFWPDWWHUMXULVGLFWLRQRYHU 6XSS6'2KLR,Q$OOHQWZRGLVFKDUJHG WKLV FDVH  7KLV FRXUW UHYLHZV mGH QRYR WKH H[LVWHQFH RI HPSOR\HHVVXHGWKHLUIRUPHUHPSOR\HUIRUEUHDFKRIFRQWUDFW VXEMHFWPDWWHUMXULVGLFWLRQDVDTXHVWLRQRIODZl:ULJKW Y*HQHUDO0RWRUV&RUS)GWK&LU  8OOPRHWDOY*LOPRXU$FDGHP\ 1R 1R 8OOPRHWDOY*LOPRXU$FDGHP\ 

RIHGXFDWLRQVHUYLFHVl:LVHY2KLR'HSjWRI(GXF)G DOOHJLQJ WKDW VWDWHPHQWV FRQWDLQHG LQ WKH HPSOR\HUjV FUHGR WK&LU0RVWQRWDEO\WKH,'($UHTXLUHV FRQVWLWXWHG D SURPLVH RI HPSOR\PHQW  7KH FUHGR VWDWHG VWDWHVWRSURYLGHm>D@IUHHDSSURSULDWHSXEOLFHGXFDWLRQWR DPRQJRWKHUWKLQJVWKDWWKHHPSOR\HUZDVmUHVSRQVLEOHlWRLWV DOOFKLOGUHQZLWKGLVDELOLWLHVUHVLGLQJLQWKH6WDWHl HPSOR\HHVDQGWKDWHPSOR\HHVmPXVWKDYHDVHQVHRIVHFXULW\ 86&†D  LQWKHLUMREVl,GDW%XWWKHGLVWULFWFRXUWFRQFOXGHG WKDWUDWKHUWKDQDSURPLVHRIHPSOR\PHQWWKLVODQJXDJHZDV 8QGHU WKH ,'($ WKH UHVSRQVLELOLW\ IRU HQVXULQJ WKDW mDQ DUWLFXODWLRQ RI >WKH HPSOR\HUjV@ DVSLUDWLRQDO JRDOV DQG GLVDEOHGVWXGHQWVUHFHLYHDIUHHDSSURSULDWHSXEOLFHGXFDWLRQ LGHDOVl,GDW OLHV ZLWK WKH VWDWH HGXFDWLRQDO DJHQF\ 6($   86& †D UHFRJQL]LQJWKH6($DVWKHSULPDU\DXWKRULW\ 7KH8OOPRVLQVLVWWKDWWKH$OOHQGHFLVLRQLVGLVWLQJXLVKDEOH IRUHVWDEOLVKLQJDVWDWHjVFRPSOLDQFHZLWKWKH,'($7KH IURPWKHSUHVHQWFDVHDUJXLQJWKDWm2KLRLVDQHPSOR\PHQW 6($ GLVWULEXWHV D VXEVWDQWLDO SRUWLRQ RI WKH VWDWHjV ,'($ DWZLOOVWDWHDQGDVORQJDVWKHILULQJZDVQRWGLVFULPLQDWRU\ IXQGVWRORFDOHGXFDWLRQDODJHQFLHV/($VZKLFKGLUHFWO\ WKHODQJXDJHLQDFUHGRZDVLQUHDOLW\LUUHOHYDQWl SURYLGH GLVDEOHG VWXGHQWV ZLWK D IUHH DSSURSULDWH SXEOLF 7KLV DUJXPHQW ODFNV PHULW KRZHYHU EHFDXVH WKH FRXUW LQ HGXFDWLRQ86&†J HVWDEOLVKLQJWKH/($Vj $OOHQKDGWRGHFLGHZKHWKHUWKHODQJXDJHLQWKHFUHGRFUHDWHG ULJKWWRDWOHDVWRIWKH,'($IXQGVSDLGWRWKHVWDWH DQHQIRUFHDEOHSURPLVHRIHPSOR\PHQWVRDVWRHVWDEOLVKDQ H[FHSWLRQWR2KLRjVGHIDXOWUXOHRIHPSOR\PHQWDWZLOO7KXV 3DUHQWVRIDGLVDEOHGVWXGHQWPD\FKDOOHQJHZKHWKHUWKHLU WKHODQJXDJHLQWKHFUHGRZDVDWLVVXHLQ$OOHQ FKLOG LV UHFHLYLQJ WKH IUHH DSSURSULDWH SXEOLF HGXFDWLRQ UHTXLUHGXQGHUWKH,'($86&†E UHTXLULQJ 7KH8OOPRVIXUWKHUFRQWHQGWKDWHYHQLI$OOHQLVSHUVXDVLYH WKH 6($ DQG WKH /($ WR SURYLGH DQ RSSRUWXQLW\ IRU WKH DXWKRULW\ WKH ODQJXDJH LQ WKH 3KLORVRSK\ VHFWLRQ LV QRW SDUHQWVRIDGLVDEOHGFKLOGWRSUHVHQWFRPSODLQWVUHJDUGLQJ DVSLUDWLRQDO7KH\UHO\XSRQWKHWHVWLPRQ\RI5REHUW/DYDOOH mWKHSURYLVLRQRIDIUHHDSSURSULDWHSXEOLFHGXFDWLRQWRVXFK WKH +HDGPDVWHU DW *LOPRXU WR VXSSRUW WKHLU DUJXPHQW FKLOGl  7R GR VR WKH SDUHQWV PXVW ILOH D FRPSODLQW ZLWK /DYDOOHWHVWLILHGGXULQJKLVGHSRVLWLRQWKDW*LOPRXUmZDQWHGl HLWKHUWKH6($RUWKH/($ZKLFKLVWKHQREOLJDWHGWRFRQGXFW DQGmH[SHFWHGlSDUHQWVWRUHO\XSRQWKHUHSUHVHQWDWLRQVLQWKH D KHDULQJ UHJDUGLQJ WKH SDUHQWVj FRPSODLQW   86& +DQGERRN+HDOVRVWDWHGWKDW*LOPRXUjVIDLOXUHWRSURYLGH † I SURYLGLQJ WKDW SDUHQWV ZKR ILOH D FRPSODLQW WKH VHUYLFHV SURPLVHG LQ WKH +DQGERRN ZRXOG FRQVWLWXWH D UHJDUGLQJWKHLUGLVDEOHGFKLOGjVHGXFDWLRQDUHHQWLWOHGWRDQ EUHDFK RI FRQWUDFW  /DYDOOH KRZHYHU GHQLHG WKDW WKH LPSDUWLDOGXHSURFHVVKHDULQJ 3KLORVRSK\ VHFWLRQ FRQWDLQHG DQ\ VSHFLILF SURPLVHV RI HGXFDWLRQDO VHUYLFHV  +H VSHFLILFDOO\ VWDWHG WKDW WKH 7KH,'($SURYLGHVWKDWDQ\SHUVRQmDJJULHYHGlE\WKHILQDO 3KLORVRSK\VHFWLRQmSXWVIRUWKWKHLGHDOVZKLFKWKH>*LOPRXU@ GHFLVLRQ UHDFKHG DW WKH FRQFOXVLRQ RI WKLV DGPLQLVWUDWLYH $FDGHP\VHWVIRUWKDVWRWKDWZKLFKLWDVSLUHVl SURFHVVPD\EULQJDFLYLODFWLRQLQVWDWHRUIHGHUDOFRXUW 86& † L  D  $OWKRXJK WKH ,'($ GRHV QRW %DVHGRQWKHDERYHZHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLG VSHFLILFDOO\QDPHWKHSDUW\DJDLQVWZKRPVXFKDQDFWLRQPD\ QRW HUU LQ JUDQWLQJ VXPPDU\ MXGJPHQW WR *LOPRXU RQ WKH EH EURXJKW WKH mµODQJXDJH DQG VWUXFWXUH RI >WKH@ ,'($ 8OOPRVjEUHDFKRIFRQWUDFWFODLP VXJJHVWWKDWHLWKHURUERWKHQWLWLHV>WKH6($RU/($@PD\EH KHOGOLDEOHIRUWKHIDLOXUHWRSURYLGHDIUHHDSSURSULDWHSXEOLF HGXFDWLRQ jl6W7DPPDQ\3DULVK6FK%GY/RXLVLDQD  8OOPRHWDOY*LOPRXU$FDGHP\ 1R 1R 8OOPRHWDOY*LOPRXU$FDGHP\ 

 7KH8OOPRVIDLOHGWRDOOHJHDPDWHULDOUHSUHVHQWDWLRQ WRUHO\XSRQ$GPLVVLRQ'LUHFWRU,VDEHOODjVDOOHJHGDVVXUDQFHV RIIDFWVXIILFLHQWWRVXVWDLQDFODLPIRUIUDXG WRsDFTXHOLQH8OOPRWKDWmLWGLGQjWPDNHDQ\GLIIHUHQFHWKDW sDVRQ KDG OHDUQLQJ GLVDELOLWLHVl DQG WKDW *LOPRXU mZRXOG 7KHODQJXDJHFRQWDLQHGLQWKH3KLORVRSK\VHFWLRQRIWKH ZRUNZLWKsDVRQlLQDmYHU\QXUWXULQJHQYLURQPHQWl +DQGERRNLVDOVRWKHEDVLVIRUWKH8OOPRVjIUDXGFODLP7KH\ DOOHJHGWKDWWKH\UHDVRQDEO\UHOLHGXSRQWKHSURPLVHVPDGHLQ 7KH8OOPRVjFRPSODLQWKRZHYHUPDNHVQRPHQWLRQRIDQ\ WKH3KLORVRSK\VHFWLRQQDPHO\WKDW*LOPRXUZRXOGZRUNWR RUDO UHSUHVHQWDWLRQV FRQFHUQLQJ WKH QDWXUH RU TXDOLW\ RI IXOO\ GHYHORS LWV VWXGHQWV DQG ZRXOG UHVSHFW LWV VWXGHQWVj sDVRQjVHGXFDWLRQDW*LOPRXU%RWK5XOHERIWKH)HGHUDO GLIIHULQJDELOLWLHVDQGVW\OHV RI OHDUQLQJ$FFRUGLQJWRWKH 5XOHVRI&LYLO3URFHGXUHDQG5XOH%RIWKH2KLR5XOHVRI 8OOPRV*LOPRXUQHLWKHUIXOILOOHGWKHVHSURPLVHVQRUHYHUKDG &LYLO3URFHGXUHUHTXLUHIUDXGWREHSOHGZLWKSDUWLFXODULW\7R DQ\LQWHQWLRQRIGRLQJVR VDWLVI\WKLVUHTXLUHPHQWDmSODLQWLIIPXVWDOOHJHVSHFLILFDOO\ WLPHV SODFHV >DQG@ FRQWHQWV    RI WKH XQGHUO\LQJ IUDXGl %XW WKH 8OOPRV IDLOHG WR DOOHJH WKDW *LOPRXU PDGH D 9LOG Y 9LVFRQVL  )G   WK &LU  UHSUHVHQWDWLRQRIIDFWVXIILFLHQWWRJLYHULVHWRDIUDXGFODLP GLVFXVVLQJWKHVKRZLQJUHTXLUHGWRVDWLVI\)HGHUDO5XOHE  XQGHU2KLRODZ%XUUY6WDUN&RXQW\%GRI&RPPjUV $OXPLQXP/LQH3URGV&RY%UDG6PLWK5RRILQJ&R 1(G2KLR6\OODEXVˆKROGLQJWKDW 1(G   2KLR &W $SS  VWDWLQJ WKDW LQ mDUHSUHVHQWDWLRQRIIDFWlLVWKHILUVWHOHPHQWRIDIUDXG RUGHUWRVDWLVI\2KLR5XOH%WKHFRPSODLQWPXVWmLQFOXGH FODLP)RUWKHSXUSRVHVRIDIUDXGFODLPDUHSUHVHQWDWLRQRI WKH WLPH SODFH DQG FRQWHQW RI WKH IDOVH UHSUHVHQWDWLRQl IDFWPXVWEHGHILQLWH)ULHVQHUY0LG$PHULFDQ1DWjO%DQN %HFDXVH WKH 8OOPRV GLG QRW SOHDG DQ\ IUDXGXOHQW RUDO 7UXVW&R1R:':/DW 2KLR UHSUHVHQWDWLRQV LQ WKHLU FRPSODLQW D FODLP IRU IUDXG EDVHG &W$SS6HSWKROGLQJWKDWDEDQNjVSURPLVHQRW XSRQVXFKUHSUHVHQWDWLRQVLVQRWSURSHUO\EHIRUHXV WR IRUHFORVH RQ D GHOLQTXHQW ORDQ LI WKH SODLQWLII FRQWLQXHG IXQGLQJ D FRUSRUDWLRQ ZDV mWRR YDJXH DQG LQGHILQLWH DV D 7KH8OOPRVLQDQ\HYHQWFDQQRWUHFRYHUIRUIUDXGEDVHG PDWWHU RI ODZ VR DV WR DPRXQW WR D IUDXGXOHQW XSRQ ,VDEHOODjV DOOHJHG RUDO UHSUHVHQWDWLRQV  ,VDEHOODjV PLVUHSUHVHQWDWLRQl$PsXUG)UDXGDQG'HFHLW† DVVXUDQFHVWKDW*LOPRXUZRXOGZRUNZLWKsDVRQDQGSURYLGH m$VDSUHGLFDWHIRUDIUDXGDFWLRQDUHSUHVHQWDWLRQ D QXUWXULQJ HQYLURQPHQW DUH MXVW DV YDJXH DV WKH ODQJXDJH PXVWEHGHILQLWHPHUHYDJXHJHQHUDORULQGHILQLWHVWDWHPHQWV FRQWDLQHGLQWKH3KLORVRSK\VHFWLRQRIWKH+DQGERRN7KHVH DUHLQVXIILFLHQWl VWDWHPHQWV WKHUHIRUH DUH WRR LQGHILQLWH WR FRQVWLWXWH D UHSUHVHQWDWLRQRIIDFWIRUSXUSRVHVRIDIUDXGFODLP 7KHODQJXDJHLQWKH3KLORVRSK\VHFWLRQLVLQGHILQLWH$V H[SODLQHG LQ 3DUW ,,$ DERYH WKH 3KLORVRSK\ VHFWLRQ )RUWKHVHUHDVRQVZHFRQFOXGHWKDWWKHGLVWULFWFRXUWGLG SURPLVHVQRVSHFLILFHGXFDWLRQDOVHUYLFHV,WLQVWHDGVHWVIRUWK QRW HUU LQ JUDQWLQJ VXPPDU\ MXGJPHQW WR *LOPRXU RQ WKH DQDVSLUDWLRQDOVWDWHPHQWRI*LOPRXUjVJRDOV7KHODQJXDJH 8OOPRVjIUDXGFODLP LQ WKH 3KLORVRSK\ VHFWLRQ WKHUHIRUH FRQWDLQV QR UHSUHVHQWDWLRQRIIDFWVXIILFLHQWO\GHILQLWHIRUDIUDXGFODLP  *LOPRXULVQRWVXEMHFWWROLDELOLW\XQGHUWKH,'($ 3HUKDSVUHFRJQL]LQJWKLVWKH8OOPRVVHHNWREURDGHQWKH 7KH ,'($ SURYLGHV IHGHUDO IXQGV WR KHOS VWDWHV HGXFDWH VFRSHRIWKHLUIUDXGFODLPRQDSSHDO7KH\QRZFRQWHQGWKDW GLVDEOHGVWXGHQWV86&†DXWKRUL]LQJJUDQWVWR WKHLUIUDXGFODLPZDVEDVHGXSRQ ERWKWKHODQJXDJHLQWKH VWDWHVWRDVVLVWWKHPLQSURYLGLQJVSHFLDOHGXFDWLRQWRVWXGHQWV 3KLORVRSK\ VHFWLRQ DQG mVLPLODU RUDO UHSUHVHQWDWLRQVl  $V ZLWKGLVDELOLWLHV$VWDWHUHFHLYLQJIXQGVXQGHUWKH,'($ VXSSRUWIRUWKHLUH[SDQGHGFODLPWKH8OOPRVDSSDUHQWO\VHHN mPXVWDELGHE\DKRVWRIUHJXODWLRQVJRYHUQLQJWKHSURYLVLRQ