01a0064p.06

&DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO
1R
>7@KH VFKRRO ERDUG¶V XQLIRUP SROLF\ ZLOO SDVV
FRQVWLWXWLRQDO VFUXWLQ\ LI LW IXUWKHUV DQ LPSRUWDQW RU
VXEVWDQWLDO JRYHUQPHQW LQWHUHVW LI WKH LQWHUHVW LV
XQUHODWHGWRWKHVXSSUHVVLRQRIVWXGHQWH[SUHVVLRQDQGLI
WKHLQFLGHQWDOUHVWULFWLRQVRQ)LUVW$PHQGPHQWDFWLYLWLHV
DUHQRPRUHWKDQLVQHFHVVDU\WRIDFLOLWDWHWKDWLQWHUHVW
,G FLWLQJ 8QLWHG 6WDWHV Y 2¶%ULHQ 86
$SSO\LQJ WKDW WHVW WR WKH SUHVHQW FDVH , ZRXOG
FRQFOXGH WKDW D VWDEOH GLVUXSWLRQIUHH HGXFDWLRQDO
HQYLURQPHQW LV D VXEVWDQWLDO JRYHUQPHQW LQWHUHVW WKDW WKH
LQWHUHVWLVXQUHODWHGWRWKHVXSSUHVVLRQRIVWXGHQWH[SUHVVLRQ
DQGWKDWE\OLPLWLQJWKHSURKLELWLRQWRFORWKLQJZKLFKZLOOEH
GLVUXSWLYH WKH VFKRRO PLQLPL]HV )LUVW $PHQGPHQW
UHVWULFWLRQVWRQRPRUHWKDQZKDWLVQHFHVVDU\WRIDFLOLWDWHWKDW
LQWHUHVW
, FRQFXU LQ UHPDQGLQJ WKLV FDVH WR WKH GLVWULFW FRXUW IRU
QHFHVVDU\ILQGLQJVRIIDFW,ZRXOGFRQFOXGHKRZHYHUWKDW
LI WKH GLVWULFW FRXUW ILQGV HYLGHQFH WR VXSSRUW GHIHQGDQWV¶
FRQWHQWLRQWKDWSULQFLSDO)XOW]UHDVRQDEO\EHOLHYHGWKDWDSULRU
ILJKWRFFXUUHGDVDUHVXOWRIWKHSUHVHQFHRIDFRQIHGHUDWHIODJ
DQGWKDWSULRUILJKWJDYH)XOW]UHDVRQWRDQWLFLSDWHDGGLWLRQDO
GLVUXSWLRQWKHQGHIHQGDQWV¶UHJXODWLRQRISODLQWLIIV¶FRQGXFW
ZDV QR PRUH WKDQ WKDW QHFHVVDU\ WR DFKLHYH D FRPSHOOLQJ
JRYHUQPHQWLQWHUHVWDQGGLGQRWYLRODWHWKH)LUVW$PHQGPHQW

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
7,027+< &$6725,1$E\DQG
WKURXJKKLVSDUHQWDQG
JXDUGLDQ3DWV\5HZW
3ODLQWLII$SSHOODQW
7,))$1< '$5*$9(//E\DQG
WKURXJKKHUSDUHQWVDQG
JXDUGLDQV*UHJDQG6DQGUD
'DUJDYHOO
3ODLQWLII
Y
0$',621 &2817< 6&+22/
%2$5' 6+$1121 -2+1621
:,//,$0 )8/7= 6+$1121
-2+1621DV6XSHULQWHQGHQW
RIWKH0DGLVRQ&RXQW\
6FKRRO'LVWULFW:,//,$0
)8/7=DV3ULQFLSDORI
0DGLVRQ&HQWUDO+LJK6FKRRO
'HIHQGDQWV$SSHOOHHV
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH(DVWHUQ'LVWULFWRI.HQWXFN\DW/H[LQJWRQ
1R²+HQU\5:LOKRLW-U'LVWULFW-XGJH

-- 1 of 10 --

&DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO
1R
$UJXHG'HFHPEHU
'HFLGHGDQG)LOHG0DUFK
%HIRUH0(55,77.(11('<DQG*,/0$1&LUFXLW
-XGJHV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' &KDGZLFN .\OH 6D\UH 3RUWVPRXWK 2KLR IRU
$SSHOODQW :LOOLDP + )RJOH 0W 6WHUOLQJ .HQWXFN\ IRU
$SSHOOHHV 21 %5,() .LUN ' /\RQV 6287+(51
/(*$/ 5(6285&( &(17(5 ,1& %ODFN 0RXQWDLQ
1RUWK &DUROLQD IRU $SSHOODQW :LOOLDP + )RJOH 0W
6WHUOLQJ.HQWXFN\IRU$SSHOOHHV
0(55,77-GHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK
*,/0$1-MRLQHG.(11('<- SS GHOLYHUHG
DVHSDUDWHFRQFXUULQJRSLQLRQ
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
0(55,77 &LUFXLW -XGJH 3ULQFLSDO :LOOLDP )XOW] RI
0DGLVRQ &RXQW\ +LJK 6FKRRO WZLFH VXVSHQGHG VWXGHQWV
7LPRWK\&DVWRULQDDQG7LIIDQ\'DUJDYHOOIRUZHDULQJ7VKLUWV
GLVSOD\LQJ WKH &RQIHGHUDWH IODJ WKH UDWLRQDOH IRU WKH
VXVSHQVLRQVZDVWKDWWKH7VKLUWVYLRODWHGWKHVFKRROGUHVV
FRGHZKLFKEDQVFORWKLQJFRQWDLQLQJDQ\³LOOHJDOLPPRUDORU
UDFLVW LPSOLFDWLRQV´ )ROORZLQJ WKHLU VXVSHQVLRQV WKH
VWXGHQWVEURXJKWVXLWFKDOOHQJLQJWKHFRQVWLWXWLRQDOLW\RIWKH
GLVFLSOLQDU\DFWLRQVDQGWKHGLVWULFWFRXUWJUDQWHGVXPPDU\
MXGJPHQWIRUWKHVFKRROERDUG$IWHUUHYLHZLQJWKDWGHFLVLRQ
ZHILQGWKDWZHDUHXQDEOHWRUHVROYHWKHFRQVWLWXWLRQDOLW\RI
WKHVFKRROERDUG¶VDFWLRQV ZLWKRXWNQRZLQJWKHPDQQHULQ
ZKLFKWKHVFKRROERDUGHQIRUFHGLWVGUHVVFRGHDQGZKHWKHU
1R &DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO

, FHUWDLQO\ DJUHH ZLWK WKH SULQFLSOH SXW IRUWK E\ WKH PDMRULW\ WKDW
UHJXODWLRQ RI )LUVW $PHQGPHQW VSHHFK PXVW EH FRQWHQW QHXWUDO %HFDXVH
WKH LPSOLFDWHG SRUWLRQ RI WKH VFKRRO¶V GUHVV FRGH SROLF\ SURKLELWLQJ DQ\
GUHVV ZKLFK ZRXOG FDXVH GLVUXSWLRQ LV FRQWHQW QHXWUDO KRZHYHU , VLPSO\
GR QRW ILQG D GLVFXVVLRQ RI FRQWHQW QHXWUDOLW\ GLVSRVLWLYH LQ WKLV FDVH
VFKRRODFWLYLWLHV6HH7LQNHU86DW*UD\QHG
86DW
7KH)LIWK&LUFXLW¶VUHFHQWHYDOXDWLRQRI)LUVW$PHQGPHQW
SURWHFWLRQLQDVFKRROVHWWLQJLVDSSOLFDEOHKHUH6HH&DQDG\
Y%RVVLHU3DULVK6FKRRO%RDUG:/ WK&LU
-DQ ,Q&DQDG\WKH)LIWK&LUFXLWXSKHOGDVFKRRO¶V
ULJKW WR HQIRUFH D PDQGDWRU\ VFKRRO XQLIRUP $IWHU
DFNQRZOHGJLQJWKDWWKHTXHVWLRQRIVFKRROXQLIRUPVGLGQRW
ILWH[DFWO\ZLWKLQWKHWKUHHFDWHJRULHVHVWDEOLVKHGE\7LQNHUY
'HV0RLQHV,QGHSHQGHQW6FKRRO'LVWULFW86
DGGUHVVLQJ VFKRRO UHJXODWLRQ GLUHFWHG DW VSHFLILF VWXGHQW
YLHZSRLQWV %HWKHO6FKRRO'LVWULFWY)UDVHU86
DGGUHVVLQJVWXGHQWH[SUHVVLRQLQYROYLQJOHZGYXOJDU
RU REVFHQH VSHHFK DQG +D]HOZRRG 6FKRRO 'LVWULFW Y
.XKOPHLHU 86 DGGUHVVLQJ VFKRRO
VSRQVRUHGVWXGHQWVSHHFK WKHFRXUWKHOGWKDW
%HFDXVH FKRLFHRIFORWKLQJLVSHUVRQDOH[SUHVVLRQWKDW
KDSSHQV WR RFFXU RQ WKH VFKRRO SUHPLVHV DQG WKH
6FKRRO %RDUG¶V XQLIRUP SROLF\ LV XQUHODWHG WR DQ\
YLHZSRLQWDOHYHORIVFUXWLQ\VKRXOGDSSO\LQWKLVFDVH
WKDWLVKLJKHUWKDQWKHVWDQGDUGLQ.XKOPHLHUEXWOHVV
VWULQJHQWWKDQWKHVFKRRORIILFLDO¶VEXUGHQLQ7LQNHU
&DQDG\:/ 7KDWVDPHVWDQGDUGVKRXOG
DSSO\ WR WKH SUHVHQW FDVH ZKHUH SODLQWLIIV¶ FKRLFH RI
FRQIHGHUDWH IODJ VKLUWV ZDV SHUVRQDO H[SUHVVLRQ DQG ZDV
FOHDUO\QRWVFKRROVSRQVRUHGDQG WKHUHOHYDQWSRUWLRQRI
WKH GUHVV FRGH SROLF\ EDQQLQJ GLVUXSWLYH FORWKLQJ LV
YLHZSRLQW QHXWUDO ,Q IRUPXODWLQJ WKDW VWDQGDUG WKH )LIWK
&LUFXLWWKHQFRQFOXGHGWKDW

-- 2 of 10 --

&DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO
1R
FRXOG FHUWDLQO\ EH UHVWULFWHG EXW RQO\ LI WKH IRUELGGHQ
FRQGXFW ³PDWHULDOO\ GLVUXSWV FODVVZRUN RU LQYROYHV
VXEVWDQWLDOGLVRUGHURULQYDVLRQRIWKHULJKWVRIRWKHUV´
*UD\QHG86DW FLWLQJ7LQNHU86DW
)XUWKHUPRUH LQ XSKROGLQJ WKH FLW\ RUGLQDQFH SURKLELWLQJ
QRLV\DQGGLVUXSWLYHSLFNHWLQJRXWVLGHDVFKRROWKH*UD\QHG
&RXUW H[SODLQHG WKDW WKH RUGLQDQFH ZDV FRQVWLWXWLRQDO
EHFDXVH
>7KH RUGLQDQFH@ JRHV QR IXUWKHU WKDQ 7LQNHU VD\V D
PXQLFLSDOLW\ PD\ JR WR SUHYHQW LQWHUIHUHQFH ZLWK LWV
VFKRROV,WLVQDUURZO\WDLORUHGWRIXUWKHU>WKHWRZQ¶V@
FRPSHOOLQJ LQWHUHVW LQ KDYLQJ DQ XQGLVUXSWHG VFKRRO
VHVVLRQFRQGXFLYHWRWKHVWXGHQWV¶OHDUQLQJDQGGRHVQRW
XQQHFHVVDULO\LQWHUIHUHZLWK)LUVW$PHQGPHQWULJKWV)DU
IURP KDYLQJ DQ LPSHUPLVVLEO\ EURDG SURSK\ODFWLF
RUGLQDQFH >WKH WRZQ@ SXQLVKHV RQO\ FRQGXFW ZKLFK
GLVUXSWVRULVDERXWWRGLVUXSWQRUPDOVFKRRODFWLYLWLHV
7KDW GHFLVLRQ LV PDGH DV LW VKRXOG EH RQ DQ
LQGLYLGXDOL]HG EDVLV JLYHQ WKH SDUWLFXODU IDFWV RI WKH
VLWXDWLRQ
,GDW7KXVWKHRQO\FRQGXFWWKDWFDQEHUHJXODWHGLQ
RUGHU WR DFKLHYH WKH FRPSHOOLQJ LQWHUHVW RI D VWDEOH
HGXFDWLRQDOHQYLURQPHQWLVDFWLYLW\ZKLFKZLOOGLVUXSWWKDW
HQYLURQPHQW1RRWKHUUHJXODWLRQRISURWHFWHGVSHHFKFDQEH
FRQVLGHUHGQDUURZO\WDLORUHGWRPHHWWKLVFRPSHOOLQJLQWHUHVW
,QVKRUWHYLGHQFHRIOLNHO\GLVUXSWLRQLVERWKVXIILFLHQWDQG
QHFHVVDU\WRMXVWLI\UHJXODWLRQRISURWHFWHGVSHHFKLQDVFKRRO
VHWWLQJ7KHUHIRUH,ZRXOGQRWRQO\FRQFOXGHWKDWWKHVFKRRO
ZRXOG QRW QHFHVVDULO\ EH UHTXLUHG WR SURKLELW 0DOFROP ;
VKLUWV LI LW SURKLELWV FRQIHGHUDWH IODJ VKLUWV EXW LQ IDFW ,
TXHVWLRQZKHWKHUWKHVFKRROFRXOGEHSHUPLWWHGWRSURKLELW
GLVSOD\LQJDV\PERORIHLWKHU0DOFROP;RUWKHFRQIHGHUDWH
IODJXQOHVVLWFRXOGVKRZHYLGHQFHWKDWVXFKDGLVSOD\ZRXOG
UHVXOWLQGLVUXSWLRQ)LUVW$PHQGPHQWSURWHFWHGFRQGXFWPD\
RQO\EHUHJXODWHGLILWGLVUXSWVRULVDERXWWRGLVUXSWQRUPDO
1R &DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO

0DGLVRQ&RXQW\+LJK6FKRROKDGDFWXDOO\H[SHULHQFHGDQ\
UDFLDOO\EDVHGYLROHQFHSULRUWRWKHVXVSHQVLRQV$VDUHVXOW
PDWHULDO TXHVWLRQV RI IDFW UHPDLQ ZKLFK UHQGHU WKLV FDVH
LQDSSURSULDWHIRUVXPPDU\MXGJPHQWDQGZHWKHUHIRUHUHPDQG
WKLVFDVHWRWKHGLVWULFWFRXUWIRUWULDO2QFHWKHGLVWULFWFRXUW
KDVPDGHWKHQHFHVVDU\ILQGLQJVRIIDFWLWVKRXOGDSSO\WKH
OHJDOIUDPHZRUNVHWIRUWKLQWKLVRSLQLRQ
,)DFWV
,QWKHIDOORIZKHQDOORIWKHHYHQWVLQTXHVWLRQWRRN
SODFH7LPRWK\&DVWRULQDDQG7LIIDQ\'DUJDYHOOZHUHVWXGHQWV
DW0DGLVRQ&HQWUDO+LJK6FKRROORFDWHGLQ0DGLVRQ&RXQW\
.HQWXFN\&DVWRULQDZDVDMXQLRUDQG'DUJDYHOODIUHVKPDQ
$WWKHWLPH&DVWRULQDDQG'DUJDYHOOZHUHGDWLQJ1HLWKHU
KDG SUHYLRXVO\ H[SHULHQFHG DQ\ VLJQLILFDQW GLVFLSOLQDU\
SUREOHPV
2QWKHPRUQLQJRI6HSWHPEHUERWKSODLQWLIIVDUULYHGDW
VFKRROZHDULQJPDWFKLQJ+DQN:LOOLDPV-UFRQFHUW7VKLUWV
JLYHQWRWKHPE\'DUJDYHOO¶VIDWKHU&RXQWU\PXVLFVWDU+DQN
:LOOLDPV-UZDVSLFWXUHGRQWKHIURQWRIWKH7VKLUWVDQGWZR
&RQIHGHUDWHIODJVZHUHGLVSOD\HGRQWKHEDFNDORQJZLWKWKH
SKUDVH³6RXWKHUQ7KXQGHU´7KHSODLQWLIIVVDLGWKDWWKH\ZHUH
ZHDULQJWKH7VKLUWVLQFRPPHPRUDWLRQRI+DQN:LOOLDPV
6U¶VELUWKGD\DQGWRH[SUHVVWKHLUVRXWKHUQKHULWDJH:KHQ
WKH WZR VWXGHQWV ZHQW WR WKH SULQFLSDO¶V RIILFH WR FKDQJH
'DUJDYHOO¶V FODVV VFKHGXOH WKH SULQFLSDO :LOOLDP )XOW]
LQIRUPHGWKHPWKDWWKH&RQIHGHUDWHIODJHPEOHPYLRODWHGWKH
VFKRRO¶VGUHVVFRGH+HJDYHWKHVWXGHQWVWKHFKRLFHRIHLWKHU
WXUQLQJWKHVKLUWVLQVLGHRXWIRUWKHUHVWRIWKHGD\RUUHWXUQLQJ
KRPH WR FKDQJH )XOW] EDVHG WKLV LQVWUXFWLRQ RQ KLV
LQWHUSUHWDWLRQ RI WKH VFKRRO¶V GUHVV FRGH ZKLFK SURKLELWV
VWXGHQWV IURP ZHDULQJ DQ\ FORWKLQJ RU HPEOHP ³WKDW LV
REVFHQHVH[XDOO\VXJJHVWLYHGLVUHVSHFWIXORUZKLFKFRQWDLQV
VORJDQVZRUGVRULQDQ\ZD\GHSLFWVDOFRKROGUXJVWREDFFR
RUDQ\LOOHJDOLPPRUDORUUDFLVWLPSOLFDWLRQ´7KHGUHVVFRGH
VSHFLILHGWKDWLIWKHYLRODWLRQFRXOGQRWEHFRUUHFWHGDWVFKRRO
WKHQWKHSULQFLSDOKDGWKHDXWKRULW\WRVHQGWKHRIIHQGHUKRPH

-- 3 of 10 --

&DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO
1R
WR FKDQJH DQG WR DVVLJQ DSSURSULDWH SXQLVKPHQW :KHQ
&DVWRULQD DQG 'DUJDYHOO UHIXVHG WR FRPSO\ ZLWK KLV
GLUHFWLYHV )XOW] FDOOHG WKHLU SDUHQWV +H H[SODLQHG WR WKH
SDUHQWVWKDWWKHFORWKLQJZDVDYLRODWLRQRIWKHGUHVVFRGHEXW
WKDW LI WKH SDUHQWV FRQYLQFHG WKH VWXGHQWV WR JR KRPH DQG
FKDQJHWKHUHZRXOGEHQRGLVFLSOLQDU\DFWLRQ,IWKHVWXGHQWV
UHIXVHGWRFKDQJHWKH\ZRXOGEHVXVSHQGHGIRUWKUHHGD\V
7KHSDUHQWVVWURQJO\VXSSRUWHGWKHLUFKLOGUHQ¶VGHFLVLRQDQG
)XOW]VXVSHQGHGHDFKVWXGHQW$WWKHHQGRIWKHWKUHHGD\V
&DVWRULQDDQG'DUJDYHOOUHWXUQHGWRVFKRROZHDULQJWKHVDPH
VKLUWV)XOW]DJDLQH[SODLQHGWKDWWKHIODJZDVRIIHQVLYHWR
RWKHUVWXGHQWVDQGDYLRODWLRQRIWKHGUHVVFRGH:KHQWKH
SDUHQWVUHLWHUDWHGWKHLUVXSSRUWIRUWKHVWXGHQWV¶GHVLUHWRZHDU
WKH 7VKLUWV )XOW] VXVSHQGHG WKHP IRU D VHFRQG WKUHHGD\
SHULRG&DVWRULQDDQG'DUJDYHOOQHYHUUHWXUQHGWR0DGLVRQ
&HQWUDODQGZHUHVXEVHTXHQWO\JLYHQKRPHVFKRROLQJE\WKHLU
SDUHQWV
,QUXOLQJRQWKHVWXGHQWV¶VXLWFKDOOHQJLQJWKHLUVXVSHQVLRQV
WKH GLVWULFW FRXUW IRXQG WKDW ZHDULQJ WKH 7VKLUWV GLG QRW
TXDOLI\ DV ³VSHHFK´DQG WKDW HYHQ LI LW ZHUH ³VSHHFK´ WKH
SODLQWLIIV IDLOHG WR VKRZ D )LUVW $PHQGPHQW YLRODWLRQ ,Q
DGGLWLRQWKHFRXUWUHMHFWHGWKHSODLQWLIIV¶FRQWHQWLRQWKDWWKH
VFKRROGUHVVFRGHZDVYDJXHDQGRYHUEURDG7KH&RXUWWKHQ
GLVPLVVHGDOOVXSSOHPHQWDOVWDWHFODLPVZLWKRXWSUHMXGLFH
,,$QDO\VLV
7KLVFDVHUDLVHVWZRPDLQTXHVWLRQV GRHVZHDULQJWKH
&RQIHGHUDWH IODJ 7VKLUWV TXDOLI\ DV WKH W\SH RI VSHHFK
FRYHUHGE\WKH)LUVW$PHQGPHQWDQG LIVRLVWKDWVSHHFK
SURWHFWHGJLYHQWKHVSHFLDOUXOHVJRYHUQLQJVFKRROV¶DXWKRULW\
WRUHJXODWHVWXGHQWVSHHFK"7KHGLVWULFWFRXUW¶VDQVZHUWRWKH
ILUVWTXHVWLRQWKDWZHDULQJWKH+DQN:LOOLDPV-U7VKLUWV
GLGQRWTXDOLI\DV³VSHHFK´ZDVLQFRUUHFW7KHSODLQWLIIV
ZRUH WKH VKLUWV WR H[SUHVV D FHUWDLQ YLHZSRLQW DQG WKDW
YLHZSRLQWZDVHDVLO\DVFHUWDLQDEOHE\DQREVHUYHU2QWKH
VHFRQG TXHVWLRQ YLHZLQJ DOO RI WKH IDFWV LQ WKH OLJKW PRVW
IDYRUDEOHWRWKHSODLQWLIIVLWDSSHDUVWKDWWKHVFKRROERDUG
1R &DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO

)XOW]¶V GHSRVLWLRQ WHVWLPRQ\ ZDV DV IROORZV
4 +RZ PDQ\ WLPHV KDYH \RX DVNHG VRPHERG\ WR WDNH D
0DOFROP ; VKLUW RII LQ \RXU VFKRRO"
$ ,¶YH DVNHG WKHP RQ, FDQ¶W FRXQW EXW ,¶YH DVNHG WKHP RQ
VHYHUDO RFFDVLRQV
4 :KHQ ZDV WKH ODVW WLPH \RX DVNHG WKHP"
$ , GRQ¶W UHFDOO , KDYHQ¶W VHHQ RQH WKLV \HDU
-$
WKDW³FDXVH>V@GLVUXSWLRQRIWKHHGXFDWLRQDOSURFHVV´ -$

7KH PDMRULW\ VXEVHTXHQWO\ FRQFOXGHV KRZHYHU WKDW
SURKLELWLQJWKHFRQIHGHUDWHIODJVKLUWVZKLOHRWKHUVWXGHQWV
ZHUHDOORZHGWRZHDU0DOFROP;VKLUWVZDVQRWSHUPLVVLEOH
DVLWDPRXQWHGWRYLHZSRLQWGLVFULPLQDWLRQ,ZRXOGQRWHWKDW
ZKLOHWKHUHLVDIDFWXDOGLVSXWHSULQFLSDO)XOW]WHVWLILHGWKDW
KH KDG RQ VHYHUDO RFFDVLRQV DVNHG VWXGHQWV WR WDNH RII D
0DOFROP ; VKLUW EXW WKDW KH KDG QRW VHHQ RQH UHFHQWO\
8QGHUUHOHYDQW6XSUHPH&RXUWFDVHODZLQFOXGLQJ7LQNHU,
EHOLHYHWKDWWKHSUHVHQFHRI0DOFROP;VKLUWVLVLUUHOHYDQWWR
WKHDQDO\VLVLQWKLVFDVH$OWKRXJKWKH7LQNHU&RXUWGLGVD\
WKDW³>L@WLVDOVRUHOHYDQWWKDWWKHVFKRRODXWKRULWLHVGLGQRW
SXUSRUWWRSURKLELWWKHZHDULQJRIDOOV\PEROVRISROLWLFDORU
FRQWURYHUVLDO VLJQLILFDQFH´ WKH &RXUW WKHQ LPPHGLDWHO\
DFNQRZOHGJHG WKDW WKH FDVH ZRXOG EH GLIIHUHQW ZHUH WKHUH
HYLGHQFHRIGLVUXSWLRQ,GDW7KH&RXUWVWDWHGWKDW
³FRQGXFW E\ WKH VWXGHQW ZKLFK IRU DQ\ UHDVRQ
PDWHULDOO\GLVUXSWVFODVVZRUNRULQYROYHVVXEVWDQWLDOGLVRUGHU
LV RI FRXUVH QRW LPPXQL]HG E\ WKH FRQVWLWXWLRQDO
JXDUDQWHHRIIUHHGRPRIVSHHFK´,GDW7KH6XSUHPH
&RXUW KDV LWVHOI UHYLHZHG 7LQNHU LQ *UD\QHG Y &LW\ RI
5RFNIRUG86 7KHUHWKH&RXUWH[SODLQHG
WKHKROGLQJLQ7LQNHU
>:@H QRZKHUH VXJJHVWHG WKDW VWXGHQWV WHDFKHUV RU
DQ\RQHHOVHKDVDQDEVROXWHFRQVWLWXWLRQDOULJKWWRXVHDOO
SDUWVRIDVFKRROEXLOGLQJRULWVLPPHGLDWHHQYLURQVIRU
KLVXQOLPLWHGH[SUHVVLYHSXUSRVHV([SUHVVLYHDFWLYLW\

-- 4 of 10 --

&DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO
1R
,QDGGLWLRQ,FDQQRWDJUHHZLWKWKHPDMRULW\¶VVWDWHPHQW
WKDWWKHVFKRRO¶V³UDWLRQDOHIRUWKHVXVSHQVLRQVZDVWKDWWKH7
VKLUWV YLRODWHG WKH VFKRRO GUHVV FRGH ZKLFK EDQV FORWKLQJ
FRQWDLQLQJ DQ\ μLOOHJDO LPPRUDO RU UDFLVW LPSOLFDWLRQV¶´
:KLOH,DJUHHWKDWSULQFLSDO)XOW]EDQQHGWKHVKLUWVEHFDXVH
WKH\YLRODWHGWKHVFKRRO¶VGUHVVFRGHKHGLGQRWUHO\RQWKH
³UDFLVWLPSOLFDWLRQV´SRUWLRQRIWKHSROLF\&RQWUDU\WRWKH
PDMRULW\¶V GHVFULSWLRQ RI WKH IDFWV )XOW]¶V GHSRVLWLRQ
WHVWLPRQ\FOHDUO\LQGLFDWHVWKDWKHH[SOLFLWO\UHIXVHGWRVD\
WKDWKHWKRXJKWWKHIODJZDVUDFLVW
41RZLVQ¶WLWWUXHWKDW\RXWROGP\FOLHQWVDQGWKH
SDUHQWV RI P\ FOLHQWV WKDW WKH &RQIHGHUDWH )ODJ ZDV D
UDFLVWV\PERORQWKDWGD\"
$,GRQ¶WNQRZLI,VDLGLWLQWKDWWHUPV,VDLGWKDWWKH
&RQIHGHUDWH)ODJLVRIIHQVLYHWRFHUWDLQVWXGHQWV

46RWRWKHEHVWRI\RXUUHFROOHFWLRQ\RXQHYHUUHODWHG
WR WKHP WKDW LW ZDV \RXU RSLQLRQ WKDW WKH &RQIHGHUDWH
%DWWOH)ODJLVDUDFLVWV\PEROLVWKDW\RXUWHVWLPRQ\"
$ 7KDW LV P\ RSLQLRQ , WKLQN LQ P\ RSLQLRQ WKH
&RQIHGHUDWH)ODJLVRIIHQVLYHWREODFNVWXGHQWV
-$ /DWHULQWKHGHSRVLWLRQSODLQWLIIV¶DWWRUQH\DQG
)XOW]KDGWKHIROORZLQJH[FKDQJH
4:HOOOHWPHMXVWFXWULJKWWRWKHFKDVHWKHQ'R\RX
WKLQNWKH&RQIHGHUDWH)ODJLVDUDFLVWV\PERO"
$ 7KDW¶V \RX NQRZ DV IDU DV ,¶P FRQFHUQHG WKH
&RQIHGHUDWH)ODJRUDQ\RIWKHRWKHUNLQGVRIVKLUWVLVQRW
DOOWKDWRIIHQVLYHWRPHSHUVRQDOO\EXW,GRNQRZWKDWLW
FDXVHVFRQIOLFWEHWZHHQWKHVWXGHQWVDQGWKDWP\MRELVWR
WU\WRKHOSPDLQWDLQDVDIHDQGRUGHUO\HQYLURQPHQWIRU
VWXGHQWVWROHDUQDQGWHDFKHUVWRWHDFK
)XOW]'HS 7KXVZKHQKHEDQQHGSODLQWLIIV¶VKLUWVWKH
UHFRUGSHUPLWVWKHILQGLQJWKDW)XOW]DFWHGXQGHUWKHSRUWLRQ
RIWKHVFKRRO¶VGUHVVFRGHSROLF\ZKLFKSURKLELWVDQ\DWWLUH
1R &DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO

HQIRUFHGWKHGUHVVFRGHLQDQXQHYHQDQGYLHZSRLQWVSHFLILF
PDQQHU WKHUHE\ YLRODWLQJ FRUH YDOXHV RI WKH )LUVW
$PHQGPHQW,QDGGLWLRQWKHVFKRROKDVQRWVKRZQWKDWWKH
SODLQWLIIV¶FRQGXFWFUHDWHVDOLNHOLKRRGRIYLROHQFHRURWKHU
GLVUXSWLRQWKDWZDUUDQWVWKLVNLQGRIUHJXODWLRQ
7KH3ODLQWLIIV¶&RQGXFWZDV6SHHFK*RYHUQHGE\WKH
)LUVW $PHQGPHQW ± ,Q 7H[DV Y -RKQVRQ 86
WKHIODJEXUQLQJFDVH WKH6XSUHPH&RXUWODLGRXWWKH
VWDQGDUGIRUZKDWFRQGXFWFRQVWLWXWHVH[SUHVVLRQSURWHFWHGE\
WKH)LUVW$PHQGPHQW7KLVLQTXLU\IRFXVHGRQ³ZKHWKHU>D@Q
LQWHQW WR FRQYH\ D SDUWLFXODUL]HG PHVVDJH ZDV SUHVHQW DQG
>ZKHWKHU@WKHOLNHOLKRRGZDVJUHDWWKDWWKHPHVVDJHZRXOGEH
XQGHUVWRRGE\WKRVHZKRYLHZHGLW´,GDW,QWKHLQVWDQW
FDVHWKHGLVWULFWFRXUWFRQFOXGHGWKDWWKHSODLQWLIIVLQWHQGHG
WRFRPPHPRUDWH+DQN:LOOLDPV6U¶VELUWKGD\7KHFRXUW
IRXQG WKDW WKLV ZDV D SDUWLFXODUL]HG PHVVDJH EXW WKDW WKLV
PHVVDJHZDVXQDVFHUWDLQDEOHEDVHGRQWKHSODLQWLIIV¶GHFLVLRQ
WRZHDUD+DQN:LOOLDPV-U7VKLUW7KHFRXUWFKDUDFWHUL]HG
WKH ZHDULQJ RI WKHVH 7VKLUWV DV D ³PHUH GLVSOD\´ RI D
FRQIHGHUDWHIODJDQGUXOHGWKDWWKLVGLGQRWUHVXOWLQDILQGLQJ
RISURWHFWHGVSHHFK%RWKSODLQWLIIVKRZHYHUWHVWLILHGWKDW
WKH\LQWHQGHGWRFRQYH\SULGHLQWKHLUVRXWKHUQKHULWDJHLQ
DGGLWLRQWRDQ\PHVVDJHDVVRFLDWHGZLWK+DQN:LOOLDPV6U
7KHVFKRROERDUGGRHVQRWGLVSXWHWKHSODLQWLIIV¶FODLPWKDW
WKH\DOVRLQWHQGHGWRDIILUPWKHLUVRXWKHUQEDFNJURXQGV7KH
7VKLUWVSURPLQHQWO\GLVSOD\HGWZR&RQIHGHUDWHIODJVDQGWKH
SKUDVH³6RXWKHUQ7KXQGHU´,QDGGLWLRQERWK+DQN:LOOLDPV
6U DQG +DQN :LOOLDPV -U DUH VLQJHUV ZKRVH VRQJV KDYH
VWURQJDSSHDOLQWKH6RXWK:HWKHUHIRUHFRQFOXGHWKDWWKH
SODLQWLIIVLQWHQGHGWRH[SUHVVPRUHWKDQDPHUHDSSUHFLDWLRQ
IRU WKH OLIH DQG PXVLF RI HLWKHU SHUIRUPHU )XUWKHU WKHLU
GHFLVLRQWRUHWXUQWRVFKRRODWWKHHQGRIWKHILUVWVXVSHQVLRQ
VWLOOZHDULQJWKH7VKLUWVGHPRQVWUDWHVWKDWWKHVWXGHQWVIXOO\
DSSUHFLDWHG WKH PHVVDJH WKDW VFKRRO DGPLQLVWUDWRUV
XQGHUVWRRG WKH 7VKLUWV WR FRQYH\ %HFDXVH WKH SODLQWLIIV¶
LQWHQGHG H[SUHVVLRQ ZDV ERWK D FRPPHPRUDWLRQ RI +DQN
:LOOLDPV6U¶VELUWKGD\DVZHOODVDVWDWHPHQWDIILUPLQJWKH
SODLQWLIIV¶VKDUHGVRXWKHUQKHULWDJHWKHLUGHFLVLRQWRZHDUWKH

-- 5 of 10 --

&DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO
1R
+DQN:LOOLDPV7VKLUWVFRQVWLWXWHVVSHHFKIDOOLQJZLWKLQWKH
)LUVW$PHQGPHQW
7KH 6FKRRO %RDUG¶V $XWKRULW\ 7R 5HJXODWH WKH
3ODLQWLIIV¶6SHHFK±7KLVFDVHLVJRYHUQHGE\WKH6XSUHPH
&RXUW¶VODQGPDUNGHFLVLRQFRQFHUQLQJVWXGHQWVSHHFK7LQNHU
Y 'HV 0RLQHV ,QGHSHQGHQW 6FKRRO 'LVWULFW 86
:KLOH7LQNHUKDVEHHQQDUURZHGE\WZRPRUHUHFHQW
FDVHV%HWKHO6FKRRO'LVWULFW1RY)UDVHU86
DQG +D]HOZRRG 6FKRRO 'LVWULFW Y .XKOPHLHU
86 QHLWKHURIWKHVHGHFLVLRQVDOWHUHG7LQNHU¶V
FRUH SULQFLSOHV FRQFHUQLQJ WKH FLUFXPVWDQFHV XQGHU ZKLFK
SXEOLFVFKRROVPD\UHJXODWHVWXGHQWVSHHFK,Q7LQNHUWKH
6XSUHPH&RXUWVWUXFNGRZQWKHVFKRROGLVWULFW¶VEDQRQWKH
ZHDULQJ RI EODFN DUPEDQGV WR SURWHVW WKH 9LHWQDP :DU
&HQWUDOWRWKHGHFLVLRQZDVWKHIDFWWKDWWKHVFKRROGLVWULFWGLG
QRW EDQ RWKHU FORWKLQJ WKDW H[SUHVVHG FRQWURYHUVLDO YLHZV
LQFOXGLQJ ,URQ &URVVHV ZKLFK ZHUH RIWHQ XQGHUVWRRG DV
V\PEROVRI+LWOHUDQGWKH1D]LV7LQNHU86DW
7KLVDVSHFWRIWKHGHFLVLRQLVFRQVLVWHQWZLWKDQXPEHURI
ODWHU 6XSUHPH &RXUW GHFLVLRQV VLJQDOLQJ WKDW YLHZSRLQW
VSHFLILFVSHHFKUHVWULFWLRQVDUHDQHJUHJLRXVYLRODWLRQRIWKH
)LUVW $PHQGPHQW 6HH HJ 5RVHQEHUJHU Y 5HFWRU DQG
9LVLWRUVRIWKH8QLYHUVLW\RI9LUJLQLD86
³'LVFULPLQDWLRQ DJDLQVW VSHHFK EHFDXVH RI LWV
PHVVDJHLVSUHVXPHGWREHXQFRQVWLWXWLRQDO´ 5$9Y6W
3DXO 86 VWULNLQJ GRZQ D
0LQQHVRWDKDWHVSHHFKVWDWXWHRQWKHEDVLVRILPSHUPLVVLEOH
YLHZSRLQWGLVFULPLQDWLRQ
,Q FRQWUDVW )UDVHU FRQFHUQHG D VFKRRO¶V GHFLVLRQ WR
GLVFLSOLQH D VWXGHQW DIWHU KH XVHG ³RIIHQVLYHO\ OHZG DQG
LQGHFHQWVSHHFK´GXULQJDVSHHFKQRPLQDWLQJDFODVVPDWHIRU
DSRVLWLRQLQWKHVWXGHQWDVVHPEO\7KH&RXUWIRXQGWKDWWKLV
ZDVQRWSURWHFWHGVSHHFKDQGWKDWWKHVFKRROKDGDQLQWHUHVW
LQ WHDFKLQJ VWXGHQWV WKH ERXQGDULHV RI VRFLDOO\ DSSURSULDWH
EHKDYLRUWKDWSURYLGHGVRPHURRPIRUDVFKRROWRUHJXODWH
VSHHFKZKLFKZRXOGRWKHUZLVHEHSURWHFWHG)UDVHU86
DW ,Q +D]HOZRRG WKH &RXUW XSKHOG WKH VFKRRO¶V
1R &DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO

QRHYLGHQFHRIGLVUXSWLRQWRMXVWLI\WKHUHJXODWLRQ%XW7LQNHU
DFNQRZOHGJHGWKDWDFWXDOGLVUXSWLRQPD\MXVWLI\UHJXODWLRQRI
VSHHFKH[SODLQLQJWKDW³WKHSURKLELWLRQRIH[SUHVVLRQRIRQH
SDUWLFXODU RSLQLRQ DW OHDVW ZLWKRXW HYLGHQFH WKDW LW LV
QHFHVVDU\WRDYRLGPDWHULDODQGVXEVWDQWLDOLQWHUIHUHQFHZLWK
VFKRROZRUNRUGLVFLSOLQHLVQRWFRQVWLWXWLRQDOO\SHUPLVVLEOH´
,GDW HPSKDVLVDGGHG
7KH6L[WK&LUFXLWKDVSUHYLRXVO\UHFRJQL]HGWKDWDVKRZLQJ
RI OLNHO\ GLVUXSWLRQ LV WKH FHQWUDO WHQHW WR SHUPLVVLEOH
UHJXODWLRQRI)LUVW$PHQGPHQWVSHHFKLQDVFKRROVHWWLQJ,Q
0HOWRQY<RXQJ)G WK&LU WKLVFRXUW
XSKHOG D VFKRRO UHJXODWLRQ EDQQLQJ WKH GLVSOD\ RI WKH
FRQIHGHUDWHIODJ7KH0HOWRQFRXUWKHOGWKDW³>X@QOLNHWKH
7LQNHU FDVH ZKHUH WKH &RXUW IRXQG QR HYLGHQFH RI HLWKHU
DFWXDO RU SRWHQWLDO GLVUXSWLYH FRQGXFW EXW RQO\ DQ
μXQGLIIHUHQWLDWHG IHDU RU DSSUHKHQVLRQ RI GLVWXUEDQFH¶ WKH
UHFRUGLQWKHSUHVHQWFDVHUHIOHFWVTXLWHFOHDUO\WKDWVFKRRO
RIILFLDOV KDG HYHU\ ULJKW WR DQWLFLSDWH WKDW D WHQVH UDFLDO
VLWXDWLRQFRQWLQXHGWRH[LVWDVRIWKHRSHQLQJRIVFKRRO´,G
DW7KXVWKHVFKRROZDVDOORZHGWRUHJXODWHEHFDXVHRI
IDFWXDOHYLGHQFHVKRZLQJWKDWWKHIODJZRXOGFDXVHGLVUXSWLRQ
,QWKHSUHVHQWFDVHDSK\VLFDOILJKWEHWZHHQVWXGHQWVRQH
GD\HDUOLHUFDXVHGE\DQLPDJHRIWKHFRQIHGHUDWHIODJZRXOG
JLYH WKH SULQFLSDO D FRQFUHWH EDVLV WR WKLQN DGGLWLRQDO
GLVUXSWLRQZRXOGHQVXHLISODLQWLIIVZHUHSHUPLWWHGWRZHDU
WKHIODJVKLUWV7KHSULRUILJKWGLVWLQJXLVKHVWKLVFDVHIURP
7LQNHUDQGSODFHVLWLQWKHFDWHJRU\RIFDVHVLQZKLFKIDFWXDO
HYLGHQFHGHPRQVWUDWHVWKDWGLVUXSWLRQZLOOOLNHO\UHVXOW7KH
PDMRULW\ FODLPV WKDW WKH HYLGHQFH RI WKH ILJKW LV QRW
GLVSRVLWLYHEHFDXVHRWKHUVWXGHQWVWHVWLILHGWKDWWKHILJKWZDV
QRWDERXWWKHFRQIHGHUDWHIODJ7KHFULWLFDOLVVXHKRZHYHULV
ZKHWKHUWKHSULQFLSDODFWHGRQZKDWKHUHDVRQDEO\EHOLHYHGWR
EHDFWXDOHYLGHQFHWKDWWKHVKLUWVZRXOGEHGLVUXSWLYH6R
ORQJDVKHZDVWROGE\DVWXGHQWWKDWDFRQIHGHUDWHIODJZDV
WKHVXEMHFWRIWKHSULRUILJKWDQGKHZDVQRWXQUHDVRQDEOHIRU
EHOLHYLQJWKDWVWXGHQWKHKDGDUHDVRQDEOHEDVLVWRLQIHUWKDW
SODLQWLIIV¶VKLUWVZRXOGVSDUNPRUHGLVUXSWLRQ

-- 6 of 10 --

&DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO
1R
BBBBBBBBBBBBBBBBBBBB
&21&855(1&(
BBBBBBBBBBBBBBBBBBBB
.(11('<&LUFXLW-XGJHFRQFXUULQJ,FRQFXUZLWKWKH
PDMRULW\LQUHPDQGLQJWKLVFDVHWRWKHGLVWULFWFRXUWWRUHVROYH
WKHIDFWXDOLVVXHVDQG,FRQFXUZLWK3DUW,,RIWKHPDMRULW\
RSLQLRQKROGLQJWKDWWKHFRQGXFWLQTXHVWLRQFRQVWLWXWHV)LUVW
$PHQGPHQWSURWHFWHGVSHHFK,ZULWHVHSDUDWHO\KRZHYHU
EHFDXVH,GLVDJUHHZLWKWKHDQDO\VLVLQ3DUW,,RIWKHPDMRULW\
RSLQLRQ &RQWUDU\ WR WKH PDMRULW\¶V DUJXPHQW , ILQG WKDW
LQGLYLGXDO VSHHFK QRW VSRQVRUHG E\ WKH VFKRRO PD\ EH
UHJXODWHGLQDVFKRROVHWWLQJLIDQGRQO\LIWKHUHLVVSHFLILF
HYLGHQFHWRVXSSRUWDEHOLHIWKDWWKHFRQGXFWZLOOUHVXOWLQ
GLVUXSWLRQWRWKHVFKRRO¶VHGXFDWLRQDOHQYLURQPHQW
7KHPDMRULW\DFFHSWVWKHDUJXPHQWWKDWWKLVFDVHLVIDFWXDOO\
VLPLODUWR7LQNHUDQGLVWKHUHIRUHJRYHUQHGE\WKH6XSUHPH
&RXUW¶VKROGLQJWKHUHLQYDOLGDWLQJDVFKRRO¶VEDQRQEODFN
DUPEDQGV ZRUQ WR SURWHVW WKH 9LHWQDP ZDU 7KH PDMRULW\
DSSDUHQWO\ IDLOV WR UHFRJQL]H KRZHYHU WKDW LQ 7LQNHU WKH
&RXUWH[SOLFLWO\UHOLHGRQWKHIDFWWKDW³WKHUHZHUHQRWKUHDWV
RUDFWVRIYLROHQFHRQVFKRROSUHPLVHV´LGDWZKLOHLQ
WKHSUHVHQWFDVHWKHUHLVHYLGHQFHWRVXSSRUWDOLNHOLKRRGRI
GLVUXSWLRQ'HVSLWHWKHPDMRULW\¶VVXPPDU\VWDWHPHQWWKDWWKH
VFKRRO EDQQHG WKH FRQIHGHUDWH IODJ VKLUWV ³ZLWKRXW DQ\
VKRZLQJRIGLVUXSWLRQ´WKHUHFRUGVKRZVWKDWDILJKWEURNH
RXWLQYROYLQJVWXGHQWVZHDULQJFRQIHGHUDWHIODJ7VKLUWVWKH
GD\ EHIRUH )XOW] SURKLELWHG SODLQWLIIV IURP ZHDULQJ WKHLU
VKLUWV DQG )XOW] VWDWHG WKDW VWXGHQWV WROG KLP WKDW WKH
FRQIHGHUDWHIODJZDVWKHFDXVHRIWKDWSULRUILJKW -$
$OWKRXJK LW LV FOHDU WKDW HYHQ LQ D VFKRRO VHWWLQJ
³XQGLIIHUHQWLDWHGIHDURUDSSUHKHQVLRQRIGLVWXUEDQFHLVQRW
HQRXJKWRRYHUFRPHWKHULJKWWRIUHHGRPRIH[SUHVVLRQ´LG
DW WKH 6XSUHPH &RXUW KDV UHFRJQL]HG D FRPSHOOLQJ
JRYHUQPHQW LQWHUHVW LQ SURWHFWLQJ D VFKRRO¶V HGXFDWLRQDO
HQYLURQPHQW7LQNHUUHMHFWHGDVFKRRO¶VDELOLW\WRUHJXODWH
EDVHGRQWKHFRQWHQWRIWKHYLHZVH[SUHVVHGZKHUHWKHUHZDV
1R &DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO

GHFLVLRQWRFHQVRUFHUWDLQDUWLFOHVLQWKHVFKRROQHZVSDSHU
7KH&RXUWIRXQGWKDWWKHVFKRROQHZVSDSHUZDVQRWDSXEOLF
IRUXPDQGWKDWVFKRRORIILFLDOVDUHHQWLWOHGWRH[HUFLVHJUHDWHU
FRQWURO RYHU ³VFKRROVSRQVRUHG´ VSHHFK VXFK DV D VFKRRO
QHZVSDSHU+D]HOZRRG86DW%H\RQGWKH
WKUHH ³VFKRROVSHHFK´ 6XSUHPH &RXUW FDVHV DQG WKH ZHOO
GHYHORSHG OLQH RI 6XSUHPH &RXUW GHFLVLRQV SURKLELWLQJ
YLHZSRLQWGLVFULPLQDWLRQWZR&RXUWRI$SSHDOVGHFLVLRQV
0HOWRQY<RXQJ)G WK&LU DQG:HVWY
'HUE\8QLILHG6FKRRO'LVWULFW1R)G WK
&LU DUHUHOHYDQWLQWKDWWKH\XSKROGDSXEOLFVFKRRO¶V
DXWKRULW\ WR EDQ &RQIHGHUDWH IODJV LQ VRPHZKDW GLIIHUHQW
IDFWXDOFLUFXPVWDQFHV
7KHIDFWVZKHQYLHZHGLQWKHOLJKWPRVWIDYRUDEOHWRWKH
SODLQWLIIV GLVWLQJXLVK WKH 0DGLVRQ &RXQW\ EDQ RQ
&RQIHGHUDWHIODJVIURPWKHEDQVXSKHOGLQDOOIRXURIWKHVH
FDVHV)LUVWWKHSODLQWLIIVWHVWLILHGWKDWRWKHUPHPEHUVRIWKH
VWXGHQWERG\ZRUHFORWKLQJYHQHUDWLQJ0DOFROP;DQGZHUH
QRW GLVFLSOLQHG 6HFRQG WKH SODLQWLIIV ZHUH ZHDULQJ WKH
GLVSXWHG FORWKLQJ LQ D PDQQHU WKDW GLG QRW GLVUXSW VFKRRO
DFWLYLW\ RU FDXVH XQUHVW GXULQJ WKH VFKRRO GD\ 7KLUG
&DVWRULQD DQG 'DUJDYHOO ZHUH FOHDUO\ PDNLQJ D SHUVRQDO
VWDWHPHQWLQGHFLGLQJWRZHDUWKH+DQN:LOOLDPV-U7VKLUWV
LQ RWKHU ZRUGV WKHUH LV QR ZD\ WKDW WKHLU VSHHFK FRXOG EH
FRQVLGHUHGWREH³VFKRROVSRQVRUHG´QRUGLGWKHVWXGHQWVXVH
DQ\VFKRROUHVRXUFHVWRH[SUHVVWKHLUYLHZV
7DNLQJWKHVHIDFWVLQWRFRQVLGHUDWLRQWKH0DGLVRQ&RXQW\
FDVH LV PRUH DQDORJRXV WR 7LQNHU WKDQ WR HLWKHU )UDVHU RU
+D]HOZRRG ,Q 7LQNHU WKH 'HV 0RLQHV VFKRRO ERDUG KDG
DGRSWHGDSROLF\VSHFLILFDOO\EDQQLQJWKHZHDULQJRIEODFN
DUPEDQGV 7KH SROLF\ VWDWHG WKDW DQ\ VWXGHQWV IRXQG LQ
YLRODWLRQZRXOGEHDVNHGWRUHPRYHWKHRIIHQGLQJDUWLFOHLI
WKHVWXGHQWUHIXVHGVXVSHQVLRQZRXOGIROORZXQWLOWKHVWXGHQW
UHWXUQHGZLWKRXWWKHDUPEDQG7KHSODLQWLIIVLQWHQWLRQDOO\
YLRODWHGWKHSROLF\DQGZHUHVHQWKRPH)ROORZLQJWKHLUOHJDO
FKDOOHQJHWRWKHVXVSHQVLRQWKH6XSUHPH&RXUWVWUXFNGRZQ
WKH VFKRRO SROLF\ DV XQFRQVWLWXWLRQDO $V D SUHOLPLQDU\

-- 7 of 10 --

&DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO
1R
PDWWHUWKH&RXUWIRUPDOO\UHFRJQL]HGWKHIDFWWKDWVWXGHQWVGR
QRW³VKHGWKHLUFRQVWLWXWLRQDOULJKWVWRIUHHGRPRIVSHHFKRU
H[SUHVVLRQDWWKHVFKRROKRXVHJDWH´7LQNHU86DW
7KRXJK VFKRROV KDYH WKH DXWKRULW\ WR VHW UHJXODWLRQV
SHUWDLQLQJWRWKHOHQJWKRIVNLUWVRUKDLUWKH&RXUWKHOGWKDW
WKHUHZDVQREDVLVIRUDSROLF\WKDWSXQLVKHG³VLOHQWSDVVLYH
H[SUHVVLRQ RI RSLQLRQ XQDFFRPSDQLHG E\ DQ\ GLVRUGHU RU
GLVWXUEDQFHRQWKHSDUWRISHWLWLRQHUV´,GDW7KH&RXUW
GUHZVSHFLDODWWHQWLRQWRWKHIDFWWKDWWKHSODLQWLIIV¶DFWLRQV
GLG QRW FDXVH DQ\ LQWHUIHUHQFH ³ZLWK VFKRROV¶ ZRUN RU >@
FROOLVLRQZLWKWKHULJKWVRIRWKHUVWXGHQWVWREHVHFXUHDQGWR
EHOHWDORQH´,G,QWKHORZHUFRXUWSURFHHGLQJVWKHGLVWULFW
FRXUW KDG EDVHG LWV GHFLVLRQ XSKROGLQJ WKH VFKRRO ERDUG¶V
DFWLRQV RQ WKH IHDU RI GLVWXUEDQFH EXW WKH 6XSUHPH &RXUW
UHMHFWHG WKLV DUJXPHQW EHFDXVH ³XQGLIIHUHQWLDWHG IHDU RU
DSSUHKHQVLRQRIGLVWXUEDQFHLVQRWHQRXJKWRRYHUFRPHWKH
ULJKWWRIUHHGRPRIH[SUHVVLRQ´,G,QDGGLWLRQWKH6XSUHPH
&RXUWZDVFOHDUO\LQIOXHQFHGE\WKHIDFWWKDWWKHVFKRROERDUG
DGRSWHGDSROLF\WKDWRQO\EDQQHGEODFNDUPEDQGVDQGQRW
RWKHUSRWHQWLDOO\GLVUXSWLYHV\PEROV,GDW)RUH[DPSOH
WKH &RXUW VSHFLILFDOO\ QRWHG WKDW WKH VFKRRO ERDUG EDQQHG
EODFN DUPEDQGV ZKLOH DOORZLQJ VWXGHQWV WR ZHDU WKH ,URQ
&URVV D V\PERO WKDW REYLRXVO\ LQYRNHG LPDJHV RI 1D]L
*HUPDQ\,G,QWKHLQVWDQWFDVH'DUJDYHOODQG&DVWRULQD
FODLPWKDWVWXGHQWVLQ0DGLVRQ&RXQW\ZRUHFORWKLQJEHDULQJ
WKH³;´V\PERODVVRFLDWHGZLWK0DOFROP;DQGWKH%ODFN
0XVOLPPRYHPHQW7KHVFKRRO¶VUHIXVDOWREDUWKHZHDULQJ
RI WKLV DSSDUHO DORQJ ZLWK WKH &RQIHGHUDWH IODJ JLYHV WKH
DSSHDUDQFH RI D WDUJHWHG EDQ VRPHWKLQJ WKDW WKH 6XSUHPH
&RXUWKDVURXWLQHO\VWUXFNGRZQDVDYLRODWLRQRIWKH)LUVW
$PHQGPHQW 6HH HJ 3ROLFH 'HSDUWPHQW RI &KLFDJR Y
0RVOH\86 VWULNLQJGRZQDQRSLFNHWLQJODZ
WKDWFRQWDLQHGDQH[FHSWLRQIRURQO\ODERUUHODWHGSLFNHWLQJ
&LW\ RI 0DGLVRQ -RLQW 6FKRRO 'LVWULFW 1R Y :LVFRQVLQ
(PSOR\PHQW 5HODWLRQV &RPPLVVLRQ 86
KROGLQJ WKDW D VFKRRO ERDUG FDQQRW EDU RQO\ QRQXQLRQ
WHDFKHUVIURPVSHDNLQJDWDSXEOLFPHHWLQJFRQFHUQLQJWKH
ERDUG¶VODERUUHODWLRQV 7KH&RXUWKDVKHOGWKDWWKLVW\SHRI
EDQ LV D ³PRUH EODWDQW´ YLRODWLRQ RI WKH )LUVW $PHQGPHQW
1R &DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO

WKHVFKRRODQGWKDWWKHFRPPLWWHH¶VVSHFLILFILQGLQJVVKRZHG
WKDW WKHUH ZDV PRUH WKDQ ³DQ XQGLIIHUHQWLDWHG IHDU RU
DSSUHKHQVLRQRIGLVWXUEDQFH´0HOWRQ)GDW
$VDUHVXOWWKHFRXUWUHFRJQL]HGWKDWWKRXJKWKHFDVHZDVD
FORVHRQHWKHVXVSHQVLRQZDVDYDOLGH[HUFLVHRIWKHVFKRRO
ERDUG¶VFRQVWLWXWLRQDODXWKRULW\XQGHU7LQNHU,G
7KHIRUHJRLQJGLVFXVVLRQRIWKHWKUHH6XSUHPH&RXUWDQG
WZR&RXUWRI$SSHDOVFDVHVGHPRQVWUDWHVWKHLPSRUWDQFHRI
WKHIDFWXDOFLUFXPVWDQFHVLQVFKRROVSHHFKFDVHVDQGZK\D
UHPDQGLVQHFHVVDU\LQWKLVFDVHVRWKDWWKHGLVWULFWFRXUWFDQ
UHVROYH WKH SODLQWLIIV¶ IDFWXDO DVVHUWLRQV ,I WKH VWXGHQWV¶
FODLPVUHJDUGLQJWKH0DOFROP;LQVSLUHGFORWKLQJ LHWKDW
RWKHU VWXGHQWV ZRUH WKLV W\SH RI FORWKLQJ DQG ZHUH QRW
GLVFLSOLQHG DQG WKHLU FODLPV WKDW WKHUH ZHUH QR SULRU
GLVUXSWLYH DOWHUFDWLRQV DV D UHVXOW RI &RQIHGHUDWH IODJV DUH
IRXQGFUHGLEOHWKHFRXUWEHORZZRXOGEHUHTXLUHGWRVWULNH
GRZQWKHVWXGHQWV¶VXVSHQVLRQDVDYLRODWLRQRIWKHLUULJKWVRI
IUHHVSHHFKDVVHWIRUWKLQ7LQNHU,QDGGLWLRQHYHQLIWKHUH
KDVEHHQUDFLDOYLROHQFHWKDWQHFHVVLWDWHVDEDQRQUDFLDOO\
GLYLVLYHV\PEROVWKHVFKRROGRHVQRWKDYHWKHDXWKRULW\WR
HQIRUFHDYLHZSRLQWVSHFLILFEDQRQUDFLDOO\VHQVLWLYHV\PEROV
DQGQRWRWKHUV&RQYHUVHO\LIWKHVWXGHQWVFDQQRWHVWDEOLVK
WKHLUIDFWXDOFODLPVWKHQWKHSULQFLSDODQGVFKRROERDUGPD\
KDYH DFWHG ZLWKLQ WKHLU FRQVWLWXWLRQDO DXWKRULW\ WR FRQWURO
VWXGHQW DFWLYLW\ DQG EHKDYLRU ,Q HLWKHU FLUFXPVWDQFH WKH
IDFWVDUHHVVHQWLDOWRWKHDSSOLFDWLRQRIWKHOHJDOIUDPHZRUN
GLVFXVVHG KHUHLQ $FFRUGLQJO\ WKH VXPPDU\ MXGJPHQW LV
UHYHUVHGDQGWKHFDVHUHPDQGHGWRWKHGLVWULFWFRXUWIRUWULDO

-- 8 of 10 --

&DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO
1R
SLFWXUH RI D &RQIHGHUDWH IODJ GXULQJ KLV PDWK FODVV WKXV
YLRODWLQJWKHVFKRRO¶V³5DFLDO+DUDVVPHQWDQG,QWLPLGDWLRQ´
SROLF\ +H ZDV VXEVHTXHQWO\ VXVSHQGHG DQG EURXJKW VXLW
FKDOOHQJLQJWKHFRQVWLWXWLRQDOLW\RIKLVSXQLVKPHQW7KH7HQWK
&LUFXLWXSKHOGWKHVXVSHQVLRQDVDOHJLWLPDWHH[HUFLVHRIWKH
VFKRRO¶VDXWKRULW\7KRXJKWKLVPD\DSSHDUIDFLDOO\VLPLODU
WRWKH0DGLVRQ&RXQW\FRQWURYHUV\LQ:HVWWKHUHKDGEHHQ
DFWXDOILJKWVLQYROYLQJUDFLDOV\PEROV WKH&RQIHGHUDWHIODJLQ
SDUWLFXODU LQWKHVFKRROGLVWULFWDQGWKHUHZDVQRHYLGHQFH
WKDWWKHVFKRROGLVWULFWHQIRUFHGWKH5DFLDO+DUDVVPHQWDQG
,QWLPLGDWLRQ SROLF\ LQ D PDQQHU WKDW IDYRUHG RQH W\SH RI
SRWHQWLDOO\ UDFLDOO\ GLYLVLYH V\PEROV RYHU DQRWKHU $V D
UHVXOW WKH 7HQWK &LUFXLW¶V GHFLVLRQ LQ :HVW PHUHO\
GHPRQVWUDWHVWKDWDVFKRROERDUGPD\EDQUDFLDOO\GLYLVLYH
V\PEROV ZKHQ WKHUH KDV EHHQ DFWXDO UDFLDOO\ PRWLYDWHG
YLROHQFHDQGZKHQWKHSROLF\LVHQIRUFHGZLWKRXWYLHZSRLQW
GLVFULPLQDWLRQ6LQFHWKH0DGLVRQ&RXQW\DFWLRQGRHVQRW
DSSHDUWRVDWLVI\HLWKHURQHRIWKHVHFULWHULDWKH7HQWK&LUFXLW
GHFLVLRQLVRIOLPLWHGXWLOLW\LQWKHDGMXGLFDWLRQRIWKHFDVH
EHIRUHWKLVFRXUW
6LPLODUO\ WKLV FRXUW¶V GHFLVLRQ LQ 0HOWRQ FRQFHUQHG D
&KDWWDQRRJDSXEOLFVFKRRO¶VVXVSHQVLRQRIDVWXGHQWIRU
ZHDULQJDMDFNHWZLWKD&RQIHGHUDWHIODJSDWFK7KHVFKRROLQ
TXHVWLRQZKLFKKDGSUHYLRXVO\EHHQDQDOOZKLWHVFKRROZDV
LQWHJUDWHGLQRQO\IRXU\HDUVEHIRUHWKHVXVSHQVLRQ,Q
WKDWIRXU\HDUSHULRGWKHKLJKVFKRROLQTXHVWLRQH[SHULHQFHG
VLJQLILFDQW UDFLDO WHQVLRQ PXFK RI ZKLFK VSUXQJ IURP WKH
VFKRRO¶VV\PERO WKH&RQIHGHUDWHIODJ WKHVFKRRO¶VDWKOHWLF
QLFNQDPH WKH ³5HEHOV´ DQG WKH VFKRRO¶V ILJKW VRQJ
³'L[LH´ )ROORZLQJWKHVHSUREOHPVDVSHFLDOFRPPLWWHH
FRQYHQHGWRDGGUHVVWKHVHUDFLDOSUREOHPVPDGHDVSHFLILF
ILQGLQJ WKDW WKH &RQIHGHUDWH IODJ ZDV D FDXVH RI XQUHVW
5HO\LQJRQWKDWILQGLQJWKHVFKRROERDUGEDQQHGWKHGLVSOD\
RIWKH&RQIHGHUDWHIODJ+DYLQJEHHQLQIRUPHGRIWKHEDQ
SODLQWLII0HOWRQWKHQZRUHDMDFNHWZLWKD&RQIHGHUDWHIODJ
SDWFK WR VFKRRO DQG ZDV VXVSHQGHG ,Q UHYLHZLQJ KLV
VXVSHQVLRQWKLVFRXUWDSSOLHG7LQNHUWRWKHUHJXODWLRQILQGLQJ
WKDWWKHKLVWRU\RIXQUHVWDPRXQWHGWRDPDWHULDOGLVUXSWLRQDW
1R &DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO

EHFDXVH ³JRYHUQPHQW UHJXODWLRQ PD\ QRW UHJXODWH VSHHFK
EDVHGRQLWVVXEVWDQWLYHFRQWHQWRUWKHPHVVDJHLWFRQYH\V´
5RVHQEHUJHU86DW
9LHZLQJ WKH IDFWV LQ WKH OLJKW PRVW IDYRUDEOH WR WKH
VWXGHQWVWKHVFKRROKDVEDQQHGRQO\FHUWDLQUDFLDOYLHZSRLQWV
ZLWKRXWDQ\VKRZLQJRIGLVUXSWLRQ$VDUHVXOWZLWKRXWDQ\
IRUPDO IDFWXDO ILQGLQJV WR JXLGH XV ZH VHH QR REYLRXV
GLIIHUHQFHV EHWZHHQ WKH 7LQNHU DQG 0DGLVRQ &RXQW\
VLWXDWLRQV RWKHU WKDQ WKH IDFW WKDW WKH 'HV 0RLQHV 6FKRRO
%RDUG DGRSWHG D IRUPDO SROLF\ EDQQLQJ EODFN DUPEDQGV
EHIRUH WKH VWXGHQWV HYHU ZRUH WKHP ZKHUHDV WKH 0DGLVRQ
&RXQW\6FKRRO%RDUGEDQQHG&RQIHGHUDWHIODJVLQDPRUH³DG
KRF´PDQQHU7KLVPHDQVWKDWLQ7LQNHUWKHUHZDVDIRUPDOO\
WDUJHWHGEDQIURPWKHYHU\EHJLQQLQJZKHUHDVWKH0DGLVRQ
&RXQW\GUHVVFRGHLVDIDFLDOO\QHXWUDOSROLF\WKDWLVHQIRUFHG
DFFRUGLQJWRWKHVWXGHQWVLQDFRQWHQWVSHFLILFPDQQHU,IWKH
VWXGHQWV¶FODLPLVWUXHRQO\FHUWDLQLGHRORJLFDOSRVLWLRQVDUH
EDUUHG IURP H[SUHVVLRQ RQ VFKRRO SURSHUW\ %DVHG RQ WKH
6XSUHPH&RXUWUXOLQJVLQ7LQNHU0RVOH\DQG5RVHQEHUJHU
WKH VFKRRO ERDUG FDQQRW VLQJOH RXW &RQIHGHUDWH IODJV IRU
VSHFLDOWUHDWPHQWZKLOHDOORZLQJRWKHUFRQWURYHUVLDOUDFLDODQG
SROLWLFDOV\PEROVWREHGLVSOD\HG
7KH PRUH UHFHQW 6XSUHPH &RXUW GHFLVLRQV GLVFXVVLQJ
VFKRROV¶ DXWKRULW\ WR UHJXODWH VWXGHQW VSHHFK DUH QRW
DSSOLFDEOHWRWKLVVLWXDWLRQ%RWK)UDVHUDQG+D]HOZRRG
WKHWZRFDVHVRIWHQFLWHGIRUSXEOLFVFKRROV¶SRZHUWRUHJXODWH
WKHLUVWXGHQWV¶VSHHFKFRQWDLQLPSRUWDQWIDFWXDOGLIIHUHQFHV
WKDWGLVWLQJXLVKWKHPIURPWKHLQVWDQWFRQWURYHUV\)UDVHU
XSKHOGWKHGLVFLSOLQLQJRIWKHVWXGHQW¶VSURIDQHQRPLQDWLQJ
VSHHFKEDVHGRQWKHVFKRRO¶VQHHGWRWHDFKVWXGHQWVDERXW
DSSURSULDWHVRFLHWDOEHKDYLRUIXUWKHUPRUHWKH&RXUWIRXQG
WKDWWKHVFKRROKDGZLGHODWLWXGHLQGHWHUPLQLQJWKH³PDQQHU
RIVSHHFK´WKDWZDVSHUPLVVLEOHRQVFKRROJURXQGV)UDVHU
86DW,QWKHLQVWDQWFDVHKRZHYHUWKHVFKRROLV
QRW DWWHPSWLQJ WR UHJXODWH WKH ³PDQQHU RI VSHHFK´ )RU
H[DPSOHDVWXGHQWZRXOGEHSHUPLWWHGWRDWWHQGFODVVZHDULQJ
D7VKLUWZLWKDIODJRQLWLIWKHIODJZDVLQVXSSRUWRIWKH

-- 9 of 10 --

&DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO
1R
FRXQWU\¶V 2O\PSLF WHDP $V D UHVXOW LW LV WKH FRQWHQW RI
VSHHFK QRW WKH PDQQHU WKDW WKH 0DGLVRQ &RXQW\ 6FKRRO
%RDUGZLVKHVWRUHJXODWH,QDGGLWLRQDFOHDUXQGHUSLQQLQJRI
WKH&RXUW¶VKROGLQJLQ)UDVHUZDVWKHGLVUXSWLYHQDWXUHRIWKH
SODLQWLII¶VQRPLQDWLQJVSHHFKDQGWKHIDFWWKDWWKHVDQFWLRQV
ZHUHQRWEDVHGRQRQHSDUWLFXODUSROLWLFDOYLHZSRLQW,GDW
$VVXPLQJWKDWWKHUHKDVQRWEHHQDQ\UDFLDOO\PRWLYDWHG
YLROHQFH RU WKUHDW LQ WKH 0DGLVRQ &RXQW\ VFKRROV WKH
SODLQWLIIV¶GLVSOD\RIWKH&RQIHGHUDWHIODJPD\QRWKDYHKDG
DQ\VLJQLILFDQWGLVUXSWLYHHIIHFW7KHGHIHQGDQWVGRFODLP
WKDWSULRUWRWKHSODLQWLIIV¶VXVSHQVLRQWKHUHZDVDUDFLDOO\
EDVHGDOWHUFDWLRQRQVFKRROJURXQGVEXWSODLQWLIIVFRQWHQG
WKDW UDFH ZDV QRW WKH FDXVH RI WKH GLVWXUEDQFH 7KLV
GLVDJUHHPHQW VLPSO\ KLJKOLJKWV WKH QHHG IRU D WULDO WR
GHWHUPLQHWKHSUHFLVHIDFWVRIWKLVVLWXDWLRQ
+D]HOZRRGFRQFHUQHGDSXEOLFVFKRRO¶VGHFLVLRQWRFHQVRU
WZRDUWLFOHVVODWHGIRUDSSHDUDQFHLQWKHVFKRROQHZVSDSHU
RQH FRQFHUQHG SUHJQDQW VWXGHQWV DW WKH VFKRRO WKH RWKHU
GLVFXVVHGWKHLPSDFWRIGLYRUFHRQVWXGHQWV7KHSUHJQDQF\
VWRU\ZDVUHMHFWHGEHFDXVHWKHSULQFLSDOIHDUHGWKDWLQVSLWHRI
WKHSVHXGRQ\PVXVHGLQWKHDUWLFOHWKHVXEMHFWVPLJKWVWLOOEH
LGHQWLILHGE\WKHVFKRROFRPPXQLW\7KHGLYRUFHVWRU\ZDV
UHMHFWHG EHFDXVH LW FRQWDLQHG QHJDWLYH LQIRUPDWLRQ DERXW
VFKRROSDUHQWVDQGWKHUHZDVLQVXIILFLHQWWLPHWRSHUPLWWKHP
WRUHVSRQGWRWKHIDFWVVHWRXWLQ WKH DUWLFOH7KH6XSUHPH
&RXUWUHMHFWHGWKHQHZVSDSHUVWDIIPHPEHUV¶VXLWRQDQXPEHU
RIEDVHVWKHVFKRROSDSHUZDVQRWDSXEOLFIRUXPSXEOLVKLQJ
WKHSDSHUZDVDVFKRROVSRQVRUHGDFWLYLW\WKDWZDVSDUWRIDQ
DGYDQFHG MRXUQDOLVP FODVV DQG UHDGHUV ZRXOG SHUFHLYH
DUWLFOHV DSSHDULQJ LQ WKH VFKRRO SDSHU DV EHLQJ ³VFKRRO
DSSURYHG´SXEOLFDWLRQV+D]HOZRRG86DW,Q
DGGLWLRQWKH&RXUWUHFRJQL]HGWKHFRPSHWLQJSULYDF\LQWHUHVWV
RI WKH SUHJQDQW VWXGHQWV DQG WKH IDPLOLHV JRLQJ WKURXJK D
GLYRUFH,G$OORIWKHVHIDFWRUVFRPELQHGWRFUHDWHDVHWRI
FLUFXPVWDQFHVZKHUHWKH&RXUWDOORZHGWKHVFKRRORIILFLDOVWR
UHJXODWH VWXGHQW VSHHFK )RU WKH SXUSRVHV RI RXU FXUUHQW
LQTXLU\WKHPRVWLPSRUWDQWSDUWRIWKH+D]HOZRRGKROGLQJLV
WKH&RXUW¶VGHVFULSWLRQRIZKHQDVFKRROKDVJUHDWHUDXWKRULW\
1R &DVWRULQDHWDOY0DGLVRQ
&RXQW\6FKRRO%GHWDO

WRUHJXODWHVWXGHQWVSHHFK DQGWKHZD\7LQNHUGLIIHUVIURP
+D]HOZRRG
>7@KH VWDQGDUG DUWLFXODWHG LQ 7LQNHU IRU GHWHUPLQLQJ
ZKHQDVFKRROPD\SXQLVKVWXGHQWH[SUHVVLRQQHHGQRW
DOVREHWKHVWDQGDUGIRUGHWHUPLQLQJZKHQDVFKRROPD\
UHIXVHWROHQGLWVQDPHDQGUHVRXUFHVWRWKHGLVVHPLQDWLRQ
RIVWXGHQWH[SUHVVLRQ,QVWHDGZHKROGWKDWHGXFDWRUVGR
QRWRIIHQGWKH)LUVW$PHQGPHQWE\H[HUFLVLQJHGLWRULDO
FRQWURORYHUWKHVW\OHDQGFRQWHQWRIVWXGHQWVSHHFKLQ
VFKRROVSRQVRUHGH[SUHVVLYHDFWLYLWLHVVRORQJDVWKHLU
DFWLRQVDUHUHDVRQDEO\UHODWHGWROHJLWLPDWHSHGDJRJLFDO
FRQFHUQV,GDW
7KH 0DGLVRQ &RXQW\ 6FKRRO %RDUG¶V DFWLRQV FDQQRW EH
MXGJHGXVLQJWKHPRUHOHQLHQW+D]HOZRRGVWDQGDUGEHFDXVH
WKHVSHFLDOFLUFXPVWDQFHVSUHVHQWLQ+D]HOZRRGDUHVRFOHDUO\
DEVHQWLQ0DGLVRQ&RXQW\&DVWRULQDDQG'DUJDYHOO¶VDFWLRQV
ZHUHQRWVFKRROVSRQVRUHGQRUGLGWKHVFKRROVXSSO\DQ\RI
WKHUHVRXUFHVLQYROYHGLQWKHLUZHDULQJWKH7VKLUWV0RVW
LPSRUWDQWO\QRUHDVRQDEOHREVHUYHUFRXOGFRQFOXGHWKDWWKH
VFKRROKDGVRPHKRZHQGRUVHGWKHVWXGHQWV¶GLVSOD\RIWKH
&RQIHGHUDWHIODJ$VDUHVXOW7LQNHULVWKHPRVWUHOHYDQWRI
WKHWKUHH6XSUHPH&RXUWFDVHVFRQFHUQLQJVFKRROVSHHFKDQG
VHWVIRUWKWKHOHJDOIUDPHZRUNWKDWWKHGLVWULFWFRXUWVKRXOG
DSSO\WRLWVIDFWXDOILQGLQJV8VLQJWKH7LQNHUVWDQGDUGWKDW
³VLOHQWSDVVLYHH[SUHVVLRQRIRSLQLRQXQDFFRPSDQLHGE\DQ\
GLVRUGHU RU GLVWXUEDQFH RQ WKH SDUW RI SHWLWLRQHUV´ LV QRW
VXEMHFWWRUHJXODWLRQ7LQNHU86DWLWLVFOHDUWKDW
DIRUPDOIDFWXDOILQGLQJZLWKUHVSHFWWRWKHGLVWXUEDQFHLI
DQ\FDXVHGE\WKHSODLQWLIIV¶DFWLRQVLVQHFHVVDU\EHIRUHD
ILQDOGHFLVLRQFDQEHHQWHUHGLQWKLVFDVH
,QDGGLWLRQWKHWZR&RXUWRI$SSHDOVGHFLVLRQVXSKROGLQJ
VXVSHQVLRQVIRU&RQIHGHUDWHIODJGLVSOD\V0HOWRQY<RXQJ
)G WK&LU DQG:HVWY'HUE\8QLILHG
6FKRRO 'LVWULFW 1R )G WK &LU
VDWLVI\7LQNHULQZD\VWKDWWKH0DGLVRQ&RXQW\VXVSHQVLRQ
GRHVQRW,Q:HVWMXQLRUKLJKVFKRROVWXGHQW7:GUHZD

-- 10 of 10 --