United States v. Jolivette

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

81,7(' 67$7(6 2) $0(5,&$ ; 3ODLQWLII$SSHOOHH    1R Y  !  )$%,(1 0,*8(/ s2/,9(77(  'HIHQGDQW$SSHOODQW  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH:HVWHUQ'LVWULFWRI7HQQHVVHHDWsDFNVRQ 1RnsDPHV'7RGG&KLHI'LVWULFWsXGJH $UJXHG1RYHPEHU 'HFLGHGDQG)LOHGsXO\ %HIRUH.583$16.<%$7&+(/'(5DQG*,/0$1 &LUFXLWsXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8('0LFKDHO0/RVDYLR/RXLVYLOOH.HQWXFN\IRU $SSHOODQW7RQ\5$UYLQ$66,67$1781,7('67$7(6 $77251(< 0HPSKLV 7HQQHVVHH IRU $SSHOOHH 21%5,()0LFKDHO0/RVDYLR/RXLVYLOOH.HQWXFN\IRU $SSHOODQW  7RQ\ 5 $UYLQ 6WXDUW s &DQDOH $66,67$17 81,7('67$7(6$77251(<60HPSKLV7HQQHVVHHIRU $SSHOOHH

  8QLWHG6WDWHVYsROLYHWWH 1R 1R 8QLWHG6WDWHVYsROLYHWWH 

BBBBBBBBBBBBBBBBB )LQDOO\ ZH DGRSW DV ZHOO WKH UHDVRQLQJ RI WKH )RXUWK &LUFXLWLQ6WXGLILQDQGKROGWKDWWKHLPSRVLWLRQRIERWKWKH 23,1,21 JXLGHOLQHVHQWHQFHIRUYLRODWLRQRI86&†DDQG BBBBBBBBBBBBBBBBB G DQG WKH PDQGDWRU\ FRQVHFXWLYH VHQWHQFH RI  86& †FGRHVQRWYLRODWHWKH'RXEOHsHRSDUG\&ODXVH $/,&(0%$7&+(/'(5&LUFXLWsXGJH7KH$SSHOODQW )DELHQ0LJXHOsROLYHWWHDSSHDOVWKHVHQWHQFHLPSRVHGDIWHUKH ,9 SOHGJXLOW\WRFKDUJHVRIFRQVSLUDF\WRFRPPLWEDQNUREEHU\ LQ YLRODWLRQ RI  86& †  DUPHG EDQN UREEHU\ LQ )RUWKHIRUHJRLQJUHDVRQVWKHMXGJPHQWRIWKHGLVWULFWFRXUW YLRODWLRQRI86&†DDQGGDQGFDUU\LQJDQGXVH LV $)),50(' DV WR sROLYHWWHjV FRQYLFWLRQ DQG WHUP RI RI D ILUHDUP GXULQJ D FULPH RI YLROHQFH LQ YLRODWLRQ RI  LPSULVRQPHQW EXW 9$&$7(' DV WR WKH SRUWLRQ RI WKH 86& † F  sROLYHWWH FODLPV WKDW WKH LPSRVLWLRQ RI sXGJPHQWUHTXLULQJUHVWLWXWLRQ FRQVHFXWLYHVHQWHQFHVIRUWKHDUPHGEDQNUREEHU\FRQYLFWLRQ DQGIRUWKHILUHDUPFRQYLFWLRQYLRODWHVWKH)LIWK$PHQGPHQWjV SURWHFWLRQDJDLQVW'RXEOHsHRSDUG\%HFDXVHZHFRQFOXGH WKDWWKHLPSRVLWLRQRIFRQVHFXWLYHVHQWHQFHVIRUWKHVHRIIHQVHV GRHV QRW YLRODWH WKH )LIWK $PHQGPHQW ZH ZLOO DIILUP WKH MXGJPHQWRIWKHGLVWULFWFRXUW , 2QWKHPRUQLQJRIsXQHsROLYHWWHDUPHGZLWKD QLQHPLOOLPHWHU SLVWRO KLG ZLWK WZR VLPLODUO\ DUPHG FR GHIHQGDQWVLQWKHZRRGVQHDUDEDQNDQGZDLWHGIRUWKHEDQN HPSOR\HHVWRDUULYH:KHQWKHEDQNRSHQHGWKHWULRHQWHUHG WLHGXSWKHHPSOR\HHVDQGVWROHPRQH\IURPWKHVDIH7KH UREEHU\ZDVIRLOHGE\DEDQNFXVWRPHUZKRZDONHGLQVDZ ZKDWZDVJRLQJRQDQGOHIWWRFDOOWKHSROLFH5HDOL]LQJWKDW WKHSROLFHZHUHHQURXWHWKHGHIHQGDQWVIOHGLQWRWKHZRRGV ZLWKDQXQGHWHUPLQHGDPRXQWRIPRQH\/DWHUWKDWGD\WKH SROLFH VHDUFKHG WKH ZRRGV DQG IRXQG sROLYHWWH DQG KLV FR GHIHQGDQWV7KHH[DFWDPRXQWRIPRQH\WDNHQLQWKHKHLVW ZDVQHYHUDVFHUWDLQHG sROLYHWWHSOHGJXLOW\WRDWKUHHFRXQWLQGLFWPHQWFKDUJLQJ KLPZLWKFRQVSLUDF\WRFRPPLWDUPHGEDQNUREEHU\DUPHG EDQNUREEHU\DQGXVLQJDQGFDUU\LQJDILUHDUPGXULQJDFULPH RIYLROHQFH7KHFRXUWVHQWHQFHGKLPWRWZRFRQFXUUHQWWHUPV IRU WKH EDQN UREEHU\ DQG FRQVSLUDF\ FKDUJHV DQG D FRQVHFXWLYHPRQWKWHUPIRUWKH86&†FILUHDUP YLRODWLRQ  7KH FRXUW DOVR VHQWHQFHG sROLYHWWH WR PDNH  8QLWHG6WDWHVYsROLYHWWH 1R 1R 8QLWHG6WDWHVYsROLYHWWH 

GHVFULEHG LQ † F  )RU WKHVH UHDVRQV ZH UHMHFW UHVWLWXWLRQLQDQDPRXQWWREHVHWXSRQUHFHLSWRIDUHSRUWIURP 6WXGLILQjVLQWHUSUHWDWLRQRI†FDQGFRQFOXGHWKDW WKH SUREDWLRQ RIILFHU UHJDUGLQJ WKH DSSURSULDWH DPRXQW RI 6WXGLILQjVVHQWHQFHGRHVQRWFRQVWLWXWHGRXEOHMHRSDUG\ UHVWLWXWLRQ 6WXGLILQ)GDW ,, 7KH6WXGLILQFRXUWUHOLHGH[WHQVLYHO\RQDQHDUOLHURSLQLRQ sROLYHWWHFODLPVWKDWWKHGLVWULFWFRXUWHUUHGE\UHTXLULQJKLP IURPWKH(LJKWK&LUFXLW8QLWHG6WDWHVY$ODQL])G WR SD\ DQ DV\HW XQGLVFORVHG DPRXQW RI UHVWLWXWLRQ  7KH WK&LUZKLFKKDGUHMHFWHGDVLPLODUO\EURDGUHDGLQJ JRYHUQPHQW FRQFHGHG WKDW WKH UHVWLWXWLRQ ZDV RSHQHQGHG RI†F,QSDUWLFXODUZLWKUHJDUGWRWKHVDPHJHQHUDO DQG WKDW WKH VHQWHQFH VKRXOG EH DPHQGHG WR UHPRYH WKH DUJXPHQWWKDWsROLYHWWHPDNHVEHIRUHXVKHUHQDPHO\WKDWWKH UHVWLWXWLRQ SURYLVLRQ  1HLWKHU SDUW\ UDLVHG WKH TXHVWLRQ RI mJUHDWHU PLQLPXP VHQWHQFHl ODQJXDJH RI  86& ZKHWKHUWKHIDLOXUHRIWKHGLVWULFWFRXUWWRVHWDILQDODPRXQW † F  $ DSSOLHV WR WKH SUHGLFDWH RIIHQVH WKH $ODQL] IRUWKHVHQWHQFHRIUHVWLWXWLRQUREVWKHMXGJPHQWRIILQDOLW\ FRXUWVDLG DQGGHSULYHVWKLVFRXUWRIMXULVGLFWLRQWRKHDUWKHDSSHDO,WLV ZHOO VHWWOHG KRZHYHU WKDW DQ DSSHOODWH FRXUW PXVW VDWLVI\ :HKDYHVFRXUHGWKHVWDWXWRU\ODQJXDJH\HWZHILQGQR LWVHOIRILWVDSSHOODWHMXULVGLFWLRQHYHQLIWKHTXHVWLRQLVQRW VXSSRUW IRU WKH SURSRVLWLRQ DGYDQFHG E\ WKH GLVWULFW UDLVHGE\WKHSDUWLHV:DJQHUY%XUOLQJWRQ,QGXVWULHV,QF FRXUW WKDW VXEGLYLVLRQ F  $ V JUHDWHU PLQLPXP  )G   WK &LU   %HFDXVH WKH VHQWHQFHFODXVHDSSOLHVWRWKHSUHGLFDWHGUXJWUDIILFNLQJ MXULVGLFWLRQDOLVVXHLVLQH[WULFDEO\ERXQGWRWKHPHULWVRIWKH FULPH RU FULPH RI YLROHQFH RI ZKLFK D SDUWLFXODU UHVWLWXWLRQRUGHUZHZLOOUHYLHZWKHWZRLVVXHVWRJHWKHU GHIHQGDQWKDVEHHQFRQYLFWHG6XEGLYLVLRQF  $ V JUHDWHU PLQLPXP VHQWHQFH FODXVH UHIHUV RQO\ WR WKH $IHGHUDOFRXUWjVSRZHUWRRUGHUUHVWLWXWLRQLVFLUFXPVFULEHG ILUHDUPUHODWHGFRQGXFWSURVFULEHGHLWKHUE\†F  E\VWDWXWH7LWOH86&†G  SURYLGHVWKDWLID RU E\ DQ\ RWKHU SURYLVLRQ RI ODZ  7KH WHQ\HDU YLFWLPjV ORVVHV DUH QRW DVFHUWDLQDEOH  GD\V SULRU WR PDQGDWRU\ PLQLPXP GUXJ VHQWHQFH DW  86& VHQWHQFLQJWKHFRXUWVKDOOVHWDGDWHZLWKLQGD\VDIWHUWKH †E  $GRHVQRWJRYHUQILUHDUPUHODWHGFRQGXFW VHQWHQFLQJIRUWKHILQDOGHWHUPLQDWLRQRIWKHORVVHV,QWKLV DQGWKHUHIRUHGRHVQRWIDOOZLWKLQVXEGLYLVLRQF  $ V FDVHWKHJRYHUQPHQWFRQFHGHVWKDWPRUHWKDQGD\VKDV UHIHUHQFHWRDQ\RWKHUSURYLVLRQRIODZ SDVVHGDQGWKDWQRILQDOGHWHUPLQDWLRQRIORVVKDVEHHQPDGH E\WKHGLVWULFWFRXUW7KHILUVWTXHVWLRQEHIRUHWKLVFRXUWWKHQ ,GDW LVZKHWKHULQWKHDEVHQFHRIVXFKDGHWHUPLQDWLRQsROLYHWWHjV FRQYLFWLRQ DQG VHQWHQFH DUH ILQDO IRU SXUSRVHV RI DSSHDO :HWKLQNWKDWWKHUHDVRQLQJRI$ODQL]LVHQWLUHO\FRUUHFW ([DPLQLQJWKHGHFLVLRQVRIWKH6XSUHPH&RXUWDQGRXUVLVWHU 1HLWKHUVXEVHFWLRQDQRUVXEVHFWLRQGRI†FRQWDLQV FLUFXLWV ZH FRQFOXGH WKDW WKH UHVWLWXWLRQ SURYLVLRQ RI WKH DPLQLPXPVHQWHQFHWKHVHQWHQFHSUHVFULEHGE\VXEVHFWLRQ VHQWHQFHLVYRLGDQGWKHUHPDLQGHURIWKHVHQWHQFHLPSRVHG DGRHVQRWJRYHUQILUHDUPUHODWHGFRQGXFWDQGDOWKRXJKWKH E\WKHGLVWULFWFRXUWLVDILQDODSSHDODEOHRUGHU VHQWHQFHSUHVFULEHGE\VXEVHFWLRQGJRYHUQVWKHXVHRImD GDQJHURXVZHDSRQRUGHYLFHlLWLVQRWVSHFLILFWRILUHDUPV ,WLVD[LRPDWLFWKDWm>I@LQDOLW\DVDFRQGLWLRQRIUHYLHZLVDQ :HKROGWKDWWKHVHQWHQFHVLQWKRVHVXEVHFWLRQVGRQRWIDOO KLVWRULF FKDUDFWHULVWLF RI IHGHUDO DSSHOODWH SURFHGXUHl ZLWKLQ†F  $jVUHIHUHQFHWRmDQ\RWKHUSURYLVLRQRI )ODQDJDQY8QLWHG6WDWHV86TXRWLQJ ODZl &REEOHGLFNY8QLWHG6WDWHV86 7KH 6XSUHPH&RXUWKDVKHOGWKDWm>I@LQDOMXGJPHQWLQDFULPLQDO  8QLWHG6WDWHVYsROLYHWWH 1R 1R 8QLWHG6WDWHVYsROLYHWWH 

FDVH    PHDQV VHQWHQFH  7KH VHQWHQFH LV WKH MXGJPHQWl RIIHQVHFKDUDFWHULVWLFVIRUWKHRIIHQVHRIUREEHU\LWLVFOHDU &RUH\Y8QLWHG6WDWHV86LQWHULRU WKDW&RQJUHVVGLGQRWLQWHQGWKDW†FVKRXOGEHDYDLODEOH TXRWHV RPLWWHG  6HH DOVR 8QLWHG 6WDWHV Y %UDWFKHU  WRHQKDQFHWKHSHQDOW\IRUUREEHU\ZKHUHDILUHDUPZDVXVHG )GWK&LU )XUWKHU sROLYHWWH DUJXHV RQFH WKH VSHFLILF RIIHQVH FKDUDFWHULVWLFV DUH WDNHQ LQWR DFFRXQW LQ FDOFXODWLQJ WKH &RUH\SUHGDWHGWKH6HQWHQFLQJ*XLGHOLQHVDQGLQYROYHG JXLGHOLQHUDQJHIRUUREEHU\WKHPLQLPXPSHQDOW\IRUUREEHU\ DVWDWXWHWKDWSHUPLWWHGWKHVHQWHQFLQJFRXUWWRFRPPLWWKH ZKHUH D ILUHDUP ZDV XVHG LV JUHDWHU WKDQ WKH ILYH \HDU GHIHQGDQW WR WKH FXVWRG\ RI WKH $WWRUQH\ *HQHUDO IRU WKH HQKDQFHPHQWFRQWDLQHGLQ†F PD[LPXPSHULRGSHUPLWWHGE\ODZSHQGLQJWKHFRPSOHWLRQ RIDSUHVHQWHQFLQJLQYHVWLJDWLRQDQGDIWHUUHFHLSWDQGVWXG\ 7KLV FODLP LV OLNHZLVH ZLWKRXW PHULW  (YHQ LI RIWKHLQYHVWLJDWLYHUHSRUWWRDIILUPWKHLQLWLDOVHQWHQFHRUWR † F  $ LV DSSOLFDEOH WR sROLYHWWHnWKDW VHFWLRQ ZDV LPSRVH D QHZ DQG OHVVHU VHQWHQFH  5HO\LQJ XSRQ LWV SULRU DGGHGE\DPHQGPHQWWR†LQVHYHUDOPRQWKVDIWHU SURQRXQFHPHQWWKDWmZKHQGLVFLSOLQHKDVEHHQLPSRVHGWKH sROLYHWWH FRPPLWWHG WKH FULPHV WR ZKLFK KH SOHG JXLOW\ GHIHQGDQWLVHQWLWOHGWRUHYLHZl.RUHPDWVXY8QLWHG6WDWHV KHUHnQRFRXUWKDVUHDGWKDWODQJXDJHDVsROLYHWWHDVNVXVWR 86WKH&RXUWKHOGWKDWWKHLPSRVLWLRQ UHDGLW7KH)RXUWK&LUFXLWIRUH[DPSOHLQ8QLWHG6WDWHVY RI WKH LQLWLDO VHQWHQFH ZDV mIUHLJKWHG ZLWK VXIILFLHQWO\ 6WXGLILQ)GWK&LUKHOGWKDWLPSRVLWLRQRI VXEVWDQWLDOLQGLFLDRIILQDOLW\WRVXSSRUWDQDSSHDOl&RUH\ †F  $jVPDQGDWRU\PLQLPXPFRQVHFXWLYHVHQWHQFH 86DW LQDGGLWLRQWRWKHPDQGDWRU\PLQLPXPVHQWHQFHUHTXLUHGE\  86& † H GLG QRW YLRODWH WKH 'RXEOH sHRSDUG\ 7KH(LJKWK&LUFXLWKDVKHOGWKDWDmVHQWHQFHRISUREDWLRQLV &ODXVH7KHGHIHQGDQWFODLPHGWKDWKLVVHQWHQFHYLRODWHGWKH DµILQDOGHFLVLRQjIRUSXUSRVHVRIDSSHOODWHUHYLHZlHYHQZKHQ 'RXEOHsHRSDUG\&ODXVHEHFDXVHERWKSHQDOWLHVSXQLVKHGWKH RQHRIWKHWHUPVRISUREDWLRQLVSD\PHQWRIUHVWLWXWLRQLQDQ VDPHFRQGXFWWKDWLPSRVLWLRQRIERWKSHQDOWLHVFRQVWLWXWHG XQGHWHUPLQHGDPRXQW8QLWHG6WDWHVY0F.QLJKW)G LPSURSHUGRXEOHFRXQWLQJXQGHUWKH6HQWHQFLQJ*XLGHOLQHV   WK &LU   7KH 6HYHQWK &LUFXLW UHDFKHG D DQGWKDWWKHODQJXDJHRI†F  $VXIILFHGWRGHIHDWWKH VLPLODU FRQFOXVLRQ UHJDUGLQJ D VHQWHQFH SURYLVLRQ WKDW SUHVXPSWLRQ WKDW &RQJUHVV LQWHQGHG WR DXWKRUL]H PXOWLSOH UHTXLUHGWKHGHIHQGDQWWRUHLPEXUVHWKHJRYHUQPHQWIRUKLV SXQLVKPHQWV$IWHUH[DPLQLQJDQGUHMHFWLQJHDFKRIWKHVH FRXUWDSSRLQWHGDWWRUQH\jVIHHV8QLWHG6WDWHVY*XUWXQFD DUJXPHQWVWKHFRXUWVXPPHGXSE\VD\LQJ )GWK&LU7KHFRXUWUHDVRQHGWKDW DOWKRXJKWKHH[DFWDPRXQWRIUHSD\PHQWZDVVWLOOLQTXHVWLRQ ([DPLQLQJWKHVWDWXWHDVDZKROHSDUWLFXODUO\LQOLJKWRI WKH VHQWHQFH mVXIILFLHQWO\ VDWLVILH>G@ FRQYHQWLRQDO WKHODQJXDJHRI†FDQGWKHSXUSRVHEHKLQGWKH UHTXLUHPHQWVRIILQDOLW\l,GTXRWLQJ&RUH\DW DPHQGPHQWVZHGRQRWEHOLHYHWKDW&RQJUHVVLQWHQGHG WRQDUURZ†FE\HOLPLQDWLQJPDQGDWRU\FRQVHFXWLYH 7KHLQWHUHVWVRIMXVWLFHUHTXLUHWKDWWKHDSSHOODWHSURFHVV VHQWHQFHV ZKHUH DQRWKHU SURYLVLRQ LPSRVHV D KLJKHU PRYH DV H[SHGLWLRXVO\ DV SUDFWLFDEOH  ,I D GHIHQGDQW ZDV PDQGDWRU\PLQLPXPVHQWHQFHIRUFRQGXFWRWKHUWKDQWKDW SURSHUO\FRQYLFWHGDQGVHQWHQFHGWKHQSXEOLFSROLF\GHPDQGV WKDWKLVSXQLVKPHQWEHVZLIWDQGFHUWDLQ,IDGHIHQGDQWZDV ZURQJIXOO\ FRQYLFWHG MXVWLFH UHTXLUHV WLPHO\ UHYLHZ DQG  FRUUHFWLYHDFWLRQ6HH&RUH\86DWm7KHGRPLQDQW :H QRWH WKDW WKH *XLGHOLQH VHQWHQFH LPSRVHG E\ WKH GLVWULFW FRXUW LQ WKLV FDVH GLG QRW FRQWDLQ DQ\ XSZDUG DGMXVWPHQW RI WKH EDVH RIIHQVH OHYHO SKLORVRSK\HPERGLHGLQWKHVHUXOHVUHIOHFWVWKHWZLQFRQFHUQV IRU UREEHU\ IRU WKH VSHFLILF RIIHQVH FKDUDFWHULVWLF RI XVH RI D ILUHDUP WKDWFULPLQDODSSHDOVEHGLVSRVHGRIDVH[SHGLWLRXVO\DVWKH sROLYHWWH DSSHDUV WR DUJXH RQO\ WKDW WKH DYDLODELOLW\ RI WKH VSHFLILF RIIHQVH FKDUDFWHULVWLF UHTXLUHV D ILQGLQJ WKDW † F PD\ QRW EH DSSOLHG KHUH  8QLWHG6WDWHVYsROLYHWWH 1R 1R 8QLWHG6WDWHVYsROLYHWWH 

SHQDOW\ VKDOO EH LQFUHDVHG  ,I QR YLRODWLRQ RI WKH 'RXEOH IDLUDQGRUGHUO\DGPLQLVWUDWLRQRIMXVWLFHPD\SHUPLWDQGWKDW sHRSDUG\ &ODXVH RFFXUUHG ZKHQ WKH VHQWHQFH UHTXLUHG E\ WKH LPSRVLWLRQ RI DFWXDO SXQLVKPHQW EH DYRLGHG SHQGLQJ † F ZDV LPSRVHG FRQVHFXWLYHO\ WR WKH VHQWHQFH IRU D GLVSRVLWLRQRIWKHDSSHDOlsROLYHWWHZDVSURSHUO\FRQYLFWHG YLRODWLRQRIWKHFDUMDFNLQJVWDWXWHWKDWFRQWDLQHGDVDQHOHPHQW DQG KDV QRW FRQWHVWHG DQ\ DVSHFW RI WKH WULDO RU SUHWULDO WKH SUHVHQFH RI D ILUHDUP FOHDUO\ QR VXFK YLRODWLRQ RFFXUV SURFHHGLQJV+HZDVDOVRVHQWHQFHGWRDGHILQLWHSHULRGRI ZKHQWKH†FVHQWHQFHLVLPSRVHGFRQVHFXWLYHO\WRWKH LQFDUFHUDWLRQDQGUHVWLWXWLRQ7KHRQO\LVVXHUHPDLQLQJIRU VHQWHQFHIRUYLRODWLRQRI†DDQGGWKDWGRQRWKDYH GHWHUPLQDWLRQLVWKHSUHFLVHDPRXQWRIWKDWUHVWLWXWLRQ6LQFH DVDQHOHPHQWWKHSUHVHQFHRIDILUHDUP QR TXHVWLRQ H[LVWV UHJDUGLQJ WKH SURSULHW\ RI GHIHQGDQWjV FRQYLFWLRQ ZH WKLQN WKDW WKH UHTXLUHPHQWV RI &RUH\ DQG 7KHRWKHUPDWHULDOGLIIHUHQFHEHWZHHQ86&† .RUHPDWVXKDYHEHHQPHW DQG86&†LVWKDWRQHGHDOVZLWKUREELQJEDQNV ZKLOHWKHRWKHUGHDOVZLWKVWHDOLQJFDUV$OWKRXJKWKHVWDWXWHV 7KHODQJXDJHRIWKHVWDWXWHSXUVXDQWWRZKLFKsROLYHWWHjV PD\VHHPZRUOGVDSDUWWR0UsROLYHWWHZHILQGQRUHOHYDQW VHQWHQFH RI UHVWLWXWLRQ ZDV LPSRVHG DOVR SRLQWV WR D GLVWLQFWLRQZLWKUHJDUGWRWKHFRQJUHVVLRQDOLQWHQWWRPDNHWKH FRQFOXVLRQWKDWWKHMXGJPHQWLQWKLVFDVHLVILQDOIRUSXUSRVHV SHQDOW\IRUD†FYLRODWLRQFXPXODWLYHWRWKHSHQDOW\IRU RIDSSHDO7KHVWDWXWHVWDWHVWKDWm>D@VHQWHQFHWKDWLPSRVHV WKHPRUHVSHFLILFRIIHQVH DQRUGHURIUHVWLWXWLRQLVDILQDOMXGJPHQWQRWZLWKVWDQGLQJWKH IDFW WKDW WKH VHQWHQFHl FDQ EH VXEVHTXHQWO\ FRUUHFWHG sROLYHWWH DOVR FODLPV WKDW WKH ODQJXDJH RI † F LWVHOI DSSHDOHG PRGLILHG RU DGMXVWHG  86& † R SURKLELWV WKH LPSRVLWLRQ RI WKH HQKDQFHPHQW LQ WKLV FDVH $FFRUGLQJWRWKHVWDWXWHDFRUUHFWLRQPHDQVWKHUHSDLURIDQ sROLYHWWH SRLQWV WR WKH † F  $ ZKLFK SURYLGHV LQ HDUOLHUHUURU6HH86&†R  $0RGLILFDWLRQ SHUWLQHQWSDUW DOVRSUHVXPHVDFKDQJHPDGHWRDSUHGHWHUPLQHGDPRXQW 6HH  86& † R  %  7KH DPHQGPHQW DQG ([FHSWWRWKHH[WHQWWKDWDJUHDWHUPLQLPXPVHQWHQFHLV DGMXVWPHQWSURYLVLRQVDOVRFLWHWRVSHFLILFFRGHVHFWLRQVWKDW RWKHUZLVH SURYLGHG E\ WKLV VXEVHFWLRQ RU E\ DQ\ RWKHU DOORZ FKDQJHV WR WKH HDUOLHU UHVWLWXWLRQ DPRXQW ZKHQ WKH SURYLVLRQRIODZDQ\SHUVRQZKRGXULQJDQGLQUHODWLRQ GHIHQGDQWjV ILQDQFLDO FRQGLWLRQV FKDQJH  6HH  86& WR DQ\ FULPH RI YLROHQFH RU GUXJ WUDIILFNLQJ FULPH †R  &'7KHVHSURYLVLRQVDOORZLQJFRUUHFWLRQV LQFOXGLQJDFULPHRIYLROHQFHRUGUXJWUDIILFNLQJFULPH DQGDPHQGPHQWVDIWHUDVLJQLILFDQWSHULRGRIWLPHKDVSDVVHG WKDWSURYLGHVIRUDQHQKDQFHGSXQLVKPHQWLIFRPPLWWHG EXWDIILUPLQJWKHILQDOLW\RIWKHVHQWHQFHPLOLWDWHVWURQJO\LQ E\WKHXVHRIDGHDGO\RUGDQJHURXVZHDSRQRUGHYLFH IDYRURIRXUILQGLQJILQDOLW\LQWKHGLVWULFWFRXUWjVRUGHU IRUZKLFKWKHSHUVRQPD\EHSURVHFXWHGLQDFRXUWRIWKH 8QLWHG 6WDWHV XVHV RU FDUULHV D ILUHDUP RU ZKR LQ 0RVWLPSRUWDQWO\WKHVWDWXWRU\GHDGOLQHIRUFDOFXODWLQJWKH IXUWKHUDQFHRIDQ\VXFKFULPHSRVVHVVHVDILUHDUPVKDOO DPRXQWRIUHVWLWXWLRQGXHKDVSDVVHG7KHVWDWXWHUHTXLUHV LQDGGLWLRQWRWKHSXQLVKPHQWSURYLGHGIRUVXFKFULPHRI WKDWLIWKHSUREDWLRQGHSDUWPHQWLVXQDEOHWRGHWHUPLQHWKH YLROHQFHRUGUXJWUDIILFNLQJFULPHn YLFWLPjVORVVHVSULRUWRWKHVHQWHQFLQJKHDULQJWKHFRXUWVKDOO VHWDILQDOGDWHIRUVXFKGHWHUPLQDWLRQQRWODWHUWKDQGD\V >UHPDLQGHURI†F  $RPLWWHG@ IURPWKHKHDULQJGDWH86&†G ,IZLWKLQ GD\V RI VXFK GHWHUPLQDWLRQ WKH YLFWLP GLVFRYHUV IXUWKHU +H DUJXHV WKDW EHFDXVH WKH 6HQWHQFLQJ *XLGHOLQHV SURYLGH ORVVHVWKHYLFWLPPD\XSRQDVKRZLQJRIJRRGFDXVHUHRSHQ JUHDWHUSHQDOWLHVIRUUREEHU\FRPPLWWHGZLWKDILUHDUPWKDQ WKHPDWWHU,G7KRVHWLPHSHULRGVKDYLQJSDVVHGWKHGLVWULFW IRU UREEHU\ FRPPLWWHG ZLWKRXW D ILUHDUP DQG EHFDXVH WKH FRXUWFRXOGQRWQRZFRQVLVWHQWZLWKWKHWHUPVRIWKHVWDWXWH *XLGHOLQHV LQFOXGH XVH RI D ILUHDUP DPRQJ WKH VSHFLILF  8QLWHG6WDWHVYsROLYHWWH 1R 1R 8QLWHG6WDWHVYsROLYHWWH 

VHW DQ DPRXQW RI UHVWLWXWLRQ  ,Q WKH DEVHQFH RI VXFK DQ DQG FXPXODWLYH VHQWHQFLQJ LQ WKH FRQWH[W RI WKH FULPH RI DPRXQWWKHFRXUWFDQQRWVSHFLI\mWKHPDQQHULQZKLFKDQG FDUMDFNLQJLQ8QLWHG6WDWHVYsRKQVRQ)GWK&LU WKHVFKHGXOHDFFRUGLQJWRZKLFKWKHUHVWLWXWLRQLVWREHSDLG  DQG UHFRJQL]HG WKDW &RQJUHVV LQWHQGHG WKDW WKH l6HH86&†I  %  SHQDOWLHVEHFXPXODWLYH :HEHOLHYHWKDWWKHVWDWXWHPDNHVFOHDUWKHFRQJUHVVLRQDO m&RQJUHVVZDQWHGWRPDNHVXUHLQ†FWKDWDOO LQWHQW WR SURKLELW FRXUWV IURP PDNLQJ UHVWLWXWLRQ IHGHUDOFULPHVFRPPLWWHGZLWKDKDQGJXQDUHHQKDQFHG GHWHUPLQDWLRQVDIWHUWKHVWDWXWRU\SHULRGKDVUXQ%XWHYHQLI HYHQWKRXJKWKHRWKHUPRUHVSHFLILFFULPHRIYLROHQFH ZHIRXQG&RQJUHVVjVVLOHQFHRQWKHLVVXHRIZKDWRFFXUVLIDV DOVR UHTXLUHV WKH SUHVHQFH RI D ILUHDUP  &RQJUHVV LQWKLVFDVHWKHFRXUWGRHVQRWPDNHVXFKDGHWHUPLQDWLRQZH LQWHQGHGWRLPSRVHDGGLWLRQDOSXQLVKPHQWIRUWKHVDPH ZRXOGDSSO\WKHZHOOVHWWOHGUXOHUHTXLULQJWKDWDQ\DPELJXLW\ FRQGXFW DQG WKH GRXEOH MHRSDUG\ FODXVH GRHV QRW LQFULPLQDOVWDWXWHVEHUHVROYHGDJDLQVWWKHJRYHUQPHQWDQGLQ SURVFULEH PXOWLSO\LQJ WKH SXQLVKPHQW WKLV ZD\    IDYRURIWKHFULPLQDOGHIHQGDQW6WDSOHVY8QLWHG6WDWHV &RQJUHVV LQ HIIHFW VDLG WR MXGJHV WKDW ZKDWHYHU WKH 86   Q   UXOH RI OHQLW\ UHTXLUHV WKDW SXQLVKPHQW LV IRU WKH PRUH VSHFLILF YLROHQW FULPH \RX DPELJXRXVFULPLQDOVWDWXWH>V@EHFRQVWUXHGLQIDYRURI PXVWDGGILYHPRUH\HDUVWRLWZKHQWKHWHUPVRI†F WKHDFFXVHG DUHPHWl $FFRUGLQJO\ZHKROGWKDWZKHQWKHGD\FORFNUXQVRXW ,G DW  IRRWQRWH RPLWWHG  sROLYHWWH DWWHPSWV WR WKH MXGJPHQW RI FRQYLFWLRQ DQG VHQWHQFH LQFOXGLQJ WKH GLVWLQJXLVKRXUKROGLQJLQsRKQVRQFODLPLQJWKDW86& UHVWLWXWLRQ SURYLVLRQ EHFRPHV ILQDO E\ RSHUDWLRQ RI WKH †WKHIHGHUDOFDUMDFNLQJVWDWXWHDWLVVXHLQWKDWFDVHLV VWDWXWH  :H WKHUHIRUH KDYH MXULVGLFWLRQ WR UHYLHZ WKH mHQWLUHO\GLIIHUHQWlIURP86&†WKHEDQNUREEHU\ MXGJPHQWRIFRQYLFWLRQDQGVHQWHQFH,WIROORZVWKDWEHFDXVH VWDWXWH DW LVVXH KHUH  sROLYHWWH LV ULJKW WKDW WKHUH LV D WKHUHZDVQRWLPHO\MXGLFLDOGHWHUPLQDWLRQRIWKHUHVWLWXWLRQ VLJQLILFDQW GLIIHUHQFH EHWZHHQ WKH WZR VWDWXWHV EXW WKDW DPRXQW WKH MXGJPHQW FRQWDLQV QR HQIRUFHDEOH UHVWLWXWLRQ GLIIHUHQFHGRHVQRWLQXUHWRKLVEHQHILW$WWKHWLPHWKDWWKLV SURYLVLRQ6HH8QLWHG6WDWHVY:HLU)GWK FRXUWGHFLGHGsRKQVRQWKHRIIHQVHRIFDUMDFNLQJUHTXLUHGWKH &LU SUHVHQFHRIDILUHDUPVRPHWKLQJWKDWWKLVFRXUWUHFRJQL]HG E\ WKH ODQJXDJH TXRWHG DERYH  7KH EDQN UREEHU\ VWDWXWH ,,, XQGHUZKLFKsROLYHWWHZDVFRQYLFWHGPDNHVQRPHQWLRQRIWKH SUHVHQFHRUXVHRIDILUHDUP$YLRODWLRQRI†DRFFXUV +DYLQJGHWHUPLQHGWKDWZHKDYHMXULVGLFWLRQWRUHYLHZWKLV ZKHQWKHRIIHQGHUmE\IRUFHDQGYLROHQFHRUE\LQWLPLGDWLRQ FDVH ZH WXUQ WR sROLYHWWHjV FODLP WKDW WKH LPSRVLWLRQ RI WDNHVIURPWKHSHUVRQRUSUHVHQFHRIDQRWKHUl$QG FRQVHFXWLYHVHQWHQFHVIRUYLRODWLRQRI86&†D † G SURYLGHV WKDW LI WKH RIIHQGHU LQ WKH FRXUVH RI DQGGDUPHGEDQNUREEHU\DQG86&†FXVHRI FRPPLWWLQJWKHUREEHU\RIIHQVHXVHVDmGDQJHURXVZHDSRQRU D ILUHDUP LQ D IHORQ\ YLRODWHV WKH )LIWK $PHQGPHQWjV GHYLFHlWRDVVDXOWRUSXWLQMHRSDUG\WKHOLIHRIDQ\SHUVRQWKH SURWHFWLRQ DJDLQVW GRXEOH MHRSDUG\  7KLV FODLP LV ZLWKRXW PHULW  7KH6XSUHPH&RXUWKDVKHOGWKDWZKHQ&RQJUHVVDXWKRUL]HV 7KDW VWDWXWH KDV VLQFH EHHQ DPHQGHG WR HOLPLQDWH DQ\ UHIHUHQFH WR FXPXODWLYHSXQLVKPHQWVHYHQIRUWKHVDPHRIIHQVHWKHGRXEOH D ILUHDUP D YLRODWLRQ RI †  QRZ RFFXUV LI WKH RIIHQGHU mZLWK WKH LQWHQW WR FDXVH GHDWK RU VHULRXV ERGLO\ KDUP WDNHV D PRWRU YHKLFOH    MHRSDUG\FODXVHLVQRWRIIHQGHG0LVVRXULY+XQWHU86 IURP WKH SHUVRQ RU SUHVHQFH RI DQRWKHU E\ IRUFH DQG YLROHQFH RU E\ 7KLVFRXUWWDFNOHGWKHLVVXHRI†F LQWLPLGDWLRQ   l