01a0085p.06

7KH +RQRUDEOH 'HQLVH 3DJH +RRG 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU
WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ

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$SSHOOHH
Y
0,&+$(/ 60,7+
'HIHQGDQW$SSHOODQW
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&LQFLQQDWL
1R²6DQGUD6%HFNZLWK'LVWULFW-XGJH
$UJXHG$XJXVW
'HFLGHGDQG)LOHG0DUFK
%HIRUH0225(DQG&/$<&LUFXLW-XGJHV+22'
'LVWULFW-XGJH
BBBBBBBBBBBBBBBBB
&2816(/
$5*8('&5DQVRP+XGVRQ$66,67$17)('(5$/
38%/,&'()(1'(5&LQFLQQDWL2KLRIRU$SSHOODQW7HUU\
/HKPDQQ $66,67$17 81,7(' 67$7(6 $77251(<

-- 1 of 10 --

8QLWHG6WDWHVY6PLWK 1R
&LQFLQQDWL 2KLR IRU $SSHOOHH 21 %5,() & 5DQVRP
+XGVRQ $66,67$17 )('(5$/ 38%/,& '()(1'(5
&LQFLQQDWL 2KLR IRU $SSHOODQW 7LPRWK\ ' 2DNOH\
$66,67$1781,7('67$7(6$77251(<&LQFLQQDWL
2KLRIRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
'(1,6(3$*(+22''LVWULFW-XGJH2Q-DQXDU\
DIHGHUDOJUDQGMXU\VLWWLQJLQWKH6RXWKHUQ'LVWULFWRI
2KLR FKDUJHG 'HIHQGDQW 0LFKDHO 6PLWK DQG ILYH FR
GHIHQGDQWV ZLWK GUXJUHODWHG RIIHQVHV LQ D WHQFRXQW
LQGLFWPHQW'HIHQGDQW6PLWKZDVQDPHGLQ&RXQWV,,,DQG
;RIWKHLQGLFWPHQW'HIHQGDQW6PLWKDQGKLVFRGHIHQGDQWV
SOHDGHG JXLOW\ WR &RXQW , RI WKH LQGLFWPHQW ZKLFK LV
FRQVSLUDF\ WR SRVVHVV ZLWK WKH LQWHQW WR GLVWULEXWH FRFDLQH
EDVH DQG FRFDLQH IURP 2FWREHU XQWLO -DQXDU\
LQ YLRODWLRQ RI 86& † &RXQW ,, RI WKH
LQGLFWPHQWFKDUJHGWKDW'HIHQGDQW6PLWKDQG-DPHV2JOHVE\
XQODZIXOO\GLVWULEXWHGFRFDLQHEDVHLQYLRODWLRQRI86&
† D E % LLL DQG86&†RQ2FWREHU
&RXQW;FKDUJHG'HIHQGDQW6PLWKDQG*HRUJH&DUWHU
ZLWK XQODZIXOO\ GLVWULEXWLQJ FRFDLQH EDVH LQ DQ DPRXQW LQ
H[FHVVRIILYHJUDPVRQ1RYHPEHULQYLRODWLRQRI
86&† D E % LLL DQG86&†
2Q-DQXDU\'HIHQGDQW6PLWKZDVDUUHVWHGDQG
KHOG ZLWKRXW ERQG XQWLO D KHDULQJ RQ -DQXDU\
'HIHQGDQW6PLWKZDVDUUDLJQHGDQGHQWHUHGDQRWJXLOW\SOHD
RQ-DQXDU\7ULDOZDVVFKHGXOHGRQ0DUFK
EXW ZDV SRVWSRQHG XQWLO $SULO DW D SUHWULDO
FRQIHUHQFHZLWK'HIHQGDQW6PLWK¶VDWWRUQH\2QWKHGD\RI
WULDO'HIHQGDQW6PLWKFKDQJHGKLVSOHDDQGSOHDGHGJXLOW\WR
&RXQW , RI WKH LQGLFWPHQW FRQVSLUDF\ WR SRVVHVV ZLWK WKH
LQWHQW WR GLVWULEXWH FRFDLQH EDVH DQG FRFDLQH 7KH
JRYHUQPHQWZDVLQIRUPHGRI'HIHQGDQW6PLWK¶VGHFLVLRQWR
SOHDGJXLOW\ODWHLQWKHGD\RQWKHHYHRIWULDO$W'HIHQGDQW
6PLWK¶VVHQWHQFLQJKHDULQJRQ-XQHKHREMHFWHGWR

-- 2 of 10 --

1R 8QLWHG6WDWHVY6PLWK
WKHLQFOXVLRQRIJUDPVRIFRFDLQHEDVHLQWKHFDOFXODWLRQ
RIKLVEDVHRIIHQVHOHYHO'HIHQGDQW6PLWK¶VREMHFWLRQZDVDV
IROORZV
2EMHFWLRQ 1R 7KH GHIHQVH FRXQVHO REMHFWV WR
SDUDJUDSKVDQGRIWKHSUHVHQWHQFHUHSRUW
6SHFLILFDOO\ WKH GHIHQVH REMHFWV WR 0U 6PLWK >VLF@
LQYROYHPHQWLQWKHVDOHRIJUDPVRIFUDFNFRFDLQH
$FFRUGLQJWR0U 6PLWKWKHUHZDVDQRWKHULQGLYLGXDO
LQYROYHGLQWKHVDOHRIWKHJUDPVRIFRFDLQHNQRZQDV
³WKH)DWPDQ´WKHUHIRUHKHIHHOVKHLVQRWUHVSRQVLEOHIRU
WKLVWUDQVDFWLRQ
,WZDV'HIHQGDQW6PLWK¶VFRQWHQWLRQWKDWLIWKHJUDPV
RIFUDFNFRFDLQHKDGEHHQH[FOXGHGIURPWKHFDOFXODWLRQRI
KLV EDVH RIIHQVH OHYHO WKH OHYHO ZRXOG KDYH EHHQ WKLUWHHQ
LQVWHDG RI WZHQW\WKUHH $ EDVH RIIHQVH OHYHO RI WKLUWHHQ
FRXSOHGZLWK'HIHQGDQW6PLWK¶VFULPLQDOKLVWRU\FDWHJRU\RI
9 ZRXOG KDYH JLYHQ 'HIHQGDQW 6PLWK WR PRQWKV¶
LPSULVRQPHQWOHVVHQLQJWKHPRQWKVRILPSULVRQPHQW
LPSRVHG
'HIHQGDQW 6PLWK¶V REMHFWLRQ ZDV RYHUUXOHG DW WKH
VHQWHQFLQJ 7KH GLVWULFW FRXUW GHWHUPLQHG WKDW 'HIHQGDQW
6PLWKZDVUHVSRQVLEOHIRUWKHDGGLWLRQDOJUDPVRIFUDFN
FRFDLQH 7KH GLVWULFW FRXUW DOVR GHWHUPLQHG EDVHG XSRQ
'HIHQGDQW6PLWK¶VXQWLPHO\DFFHSWDQFHRIUHVSRQVLELOLW\KH
TXDOLILHGIRURQO\DWZRSRLQWUHGXFWLRQDQGQRWDWKUHHSRLQW
UHGXFWLRQ7KHUHIRUH'HIHQGDQW6PLWK¶VJXLGHOLQHUDQJHZDV
PRQWKVKHZDVVHQWHQFHGWRDWHUPRIPRQWKVRI
LPSULVRQPHQW 'HIHQGDQW 6PLWK ILOHG D WLPHO\ QRWLFH RI
DSSHDO
,%$&.*5281'
7KH'UXJ(QIRUFHPHQW$JHQF\ ³'($´ DQGWKH/RFNODQG
2KLR DQG /LQFROQ +HLJKWV 2KLR 3ROLFH 'HSDUWPHQWV
FRQGXFWHG D MRLQW LQYHVWLJDWLRQ GXULQJ WKH ODWH VXPPHU RI
7KHVWDWHSROLFHGHSDUWPHQWVUHTXHVWHGDVVLVWDQFHIURP
WKH'($LQKDQGOLQJWKHJURZLQJGUXJWUDIILFNLQJSUREOHPLQ
WKHLUWRZQV$VSHFLDOL]HGLQYHVWLJDWLYHXQLWNQRZQDVWKH

-- 3 of 10 --

8QLWHG6WDWHVY6PLWK 1R
0RELOH(QIRUFHPHQW7HDP ³0(7´ IURP'HWURLW0LFKLJDQ
ZDVVHQWWRDVVLVWLQWKHLQYHVWLJDWLRQLQ6HSWHPEHURI
7KH ORFDO SROLFH RIILFHUV KDG GLVFRYHUHG GXULQJ WKHLU
SUHOLPLQDU\ LQYHVWLJDWLRQV WKDW WKH ELJJHVW VRXUFH RI GUXJ
WUDIILFNLQJ ZDV FHQWHUHG DURXQG :DOQXW 6WUHHW LQ
/RFNODQG2KLR7KH:DOQXWDGGUHVVZDVDWZRIDPLO\WZR
VWRU\UHVLGHQFH-RVHSK2JOHVE\DQGKLVIDPLO\OLYHGRQWKH
ILUVWIORRURIWKHGZHOOLQJDQG'HIHQGDQW6PLWKOLYHGRQWKH
VHFRQGIORRURIWKHGZHOOLQJ7KHORFDOSROLFHKDGUHFHLYHG
QXPHURXV SULYDWH FRPSODLQWV RI GUXJ VDOHV E\ 'HIHQGDQW
6PLWK2JOHVE\DQG2JOHVE\¶VVRQ-RVHSK&DLQRXWRI
:DOQXW3HUVRQVLQYROYHGLQWKHGUXJDFWLYLW\RIWHQORLWHUHG
DURXQG WKH GZHOOLQJ DQG SXUFKDVHG GUXJV SULPDULO\ IURP
'HIHQGDQW6PLWK
,Q2FWREHURIWKH0(7EHJDQWDUJHWLQJLQGLYLGXDOV
LQYROYHG LQ GUXJ WUDIILFNLQJ DW :DOQXW &RQILGHQWLDO
LQIRUPDQWVZHUHVHQWWRPDNH³FRQWUROOHGSXUFKDVHV´RIFUDFN
FRFDLQH 2Q 2FWREHU WKH FRQILGHQWLDO LQIRUPDQW
SXUFKDVHGZRUWKRIFUDFNFRFDLQHIURP&DLQDWWKH
:DOQXW DGGUHVV XQGHU WKH VXUYHLOODQFH RI WKH 0(7 7KH
0(7DJHQWVREVHUYHGWKHFRQILGHQWLDOLQIRUPDQWGULYHWR
:DOQXWJHWRXWRIWKHYHKLFOHDQGVSHDNEULHIO\ZLWK2JOHVE\
2JOHVE\LQIRUPHGWKHLQIRUPDQWWKDW&DLQZDVQRWKRPHEXW
WKDW 2JOHVE\ FRXOG VHOO WKH LQIRUPDQW VRPH FUDFN FRFDLQH
7KHLQIRUPDQWDUUDQJHGDWLPHDQGSODFHWRPHHW2JOHVE\LQ
RUGHUWRFRQGXFWWKHWUDQVDFWLRQ3ULRUWRWKHWLPHWKDWWKH
LQIRUPDQW KDG DJUHHG WR PHHW DJHQWV REVHUYHG 2JOHVE\
WDONLQJ WR 'HIHQGDQW 6PLWK LQ IURQW RI :DOQXW
'HIHQGDQW 6PLWK KDQGHG 2JOHVE\ D VPDOO LWHP ZKLFK ZDV
EHOLHYHGWREHFUDFNFRFDLQH$WWKHGHVLJQDWHGWLPH2JOHVE\
OHIWDQGPHWWKHLQIRUPDQWDQGJDYHWKHLQIRUPDQWWKHSDFNDJH
LQH[FKDQJHIRU7KHSDFNDJHFRQWDLQHGJUDPVRI
FUDFNFRFDLQH
2Q1RYHPEHUGXULQJRQHRIWKHPDQ\FRQWUROOHG
EX\V ZKLFK RFFXUUHG RYHU WKH QH[W FRXSOH RI PRQWKV WKH
LQIRUPDQWSXUFKDVHGRQHKDOIRXQFHRIFUDFNFRFDLQHIURP
'HIHQGDQW 6PLWK DQG KLV FRGHIHQGDQW *HRUJH &DUWHU
'HIHQGDQW6PLWKWROGWKHLQIRUPDQWWRFRPHWR:DOQXW
1R 8QLWHG6WDWHVY6PLWK
,9&21&/86,21
)RUWKHUHDVRQV VHWIRUWKDERYHZH$)),50'HIHQGDQW
6PLWK¶VMXGJPHQWRIFRQYLFWLRQDQGVHQWHQFH

-- 4 of 10 --

8QLWHG6WDWHVY6PLWK 1R
052$./(<1RWKLQJIURPWKH8QLWHG6WDWHV<RXU
+RQRU
7+(&28570U+XGVRQ"
05+8'621'LG\RXVD\,DPVRUU\<RXU+RQRU
GLG\RXVD\EHIRUHZHPRYHEH\RQGWKDWSRLQW"
7+(&28575LJKW,W¶VP\RSLQLRQDQG,KDYHQ¶W
KHDUG DQ\WKLQJ WR WKH FRQWUDU\ XQOHVV \RX KDYH
VRPHWKLQJ QHZ RQ WKH SRLQW WKDW LW¶V JRLQJ WR EH P\
UXOLQJ WKDW 0U 6PLWK LV QRW HQWLWOHG WR WKH WKLUG
DFFHSWDQFHRUUHVSRQVLELOLW\SRLQWUHGXFWLRQEHFDXVHKH
GLGQRWDFFHSWUHVSRQVLELOLW\DQGQRWLI\WKHJRYHUQPHQW
LQ D WLPHO\ IDVKLRQ QRU GLG KH SURYLGH FRPSOHWH
LQIRUPDWLRQWRWKHJRYHUQPHQWDQGWKHUHIRUHKHGRHVQRW
TXDOLI\
05 +8'621 , KDYH QR PRUH REMHFWLRQV QRU DQ\
PRUHLQIRUPDWLRQRQWKDW<RXU+RQRU
-$DW
7KH GLVWULFW FRXUW GLG QRW HUU LQ UHGXFLQJ 'HIHQGDQW
6PLWK¶VRIIHQVHOHYHOE\RQO\WZRSRLQWVLQVWHDGRIWKUHHIRU
DFFHSWDQFH RI UHVSRQVLELOLW\ 3XUVXDQW WR WKH VHQWHQFLQJ
JXLGHOLQHVDGHIHQGDQWPD\GHFUHDVHKLVRIIHQVHOHYHOE\WZR
OHYHOVLIKH³FOHDUO\GHPRQVWUDWHVDFFHSWDQFHRIUHVSRQVLELOLW\
IRUKLVRIIHQVH´6HH866*†( D ,Q8QLWHG6WDWHVY
%DVKDUD )G WK &LU WKLV &RXUW
IRXQG WKDW WKH GLVWULFW FRXUW GLG QRW HUU LQ OLPLWLQJ D
GHIHQGDQW¶V UHGXFWLRQ WR WZR OHYHOV EHFDXVH WKH GHIHQGDQW
ZDLWHGXQWLOILYHGD\VEHIRUHWULDOWRHQWHUKLVJXLOW\SOHD
'XH WR WKH GHOD\ E\ WKH GHIHQGDQW WKH JRYHUQPHQW ZDV
FRPSHOOHG WR SUHSDUH LWV HQWLUH FDVH IRU WULDO 6LPLODUO\
'HIHQGDQW6PLWKZDLWHGXQWLOSPRQWKHHYHRIWULDOWR
QRWLI\WKHJRYHUQPHQWRIKLVGHFLVLRQWRSOHDGJXLOW\UHTXLULQJ
WKHJRYHUQPHQWWRSUHSDUHLWVHQWLUHFDVHDVLQ%DVKDUD,Q
OLJKWRIWKHDERYHRXWOLQHGIDFWVWKHGLVWULFWFRXUWGLGQRWHUU
LQOLPLWLQJ6PLWK¶VUHGXFWLRQWRWZROHYHOVIRUDFFHSWDQFHRI
UHVSRQVLELOLW\
1R 8QLWHG6WDWHVY6PLWK
WR PDNH WKH EX\ 7KH VXUYHLOODQFH RIILFHUV REVHUYHG WKH
LQIRUPDQWVSHDNLQJZLWK'HIHQGDQW6PLWKDVKHOHDQHGRXWRI
DVHFRQGIORRUZLQGRZ'HIHQGDQW6PLWKZDVODWHULGHQWLILHG
E\ 2IILFHU :DWWV DV WKH SHUVRQ OHDQLQJ RXW RI WKH ZLQGRZ
EHFDXVH'HIHQGDQW6PLWK¶VLGHQWLW\FRXOGQRWVSHFLILFDOO\EH
GHWHUPLQHGIURPWKHYLGHR2IILFHU:DWWVXVHGELQRFXODUVWR
DVFHUWDLQWKHLGHQWLW\RIWKHSHUVRQZLWKZKRPWKHLQIRUPDQW
ZDVFRQYHUVLQJ7KHDJHQWVKHDUG'HIHQGDQW6PLWKLQVWUXFW
WKHLQIRUPDQWWRFRPHWRWKHUHDURIWKHKRXVHYLDDQDXGLR
ZLUHZRUQE\WKHLQIRUPDQW7KHLQIRUPDQWPHW'HIHQGDQW
6PLWKLQWKHUHDURIWKHKRXVHZKHUHWKHLQIRUPDQWLQTXLUHG
DERXWWKHSXUFKDVHSULFHRIWKHKDOIRXQFHRIFUDFNFRFDLQH
'HIHQGDQW 6PLWK UHVSRQGHG WKDW WKH FRVW ZDV 7KH
DJHQWV KHDUG WKH LQIRUPDQW¶V FRQYHUVDWLRQ ZLWK 'HIHQGDQW
6PLWKYLDWKHDXGLRZLUHDQGKHDUGWKHQDPH³0LNH´DVZHOO
DV WKH QLFNQDPH ³)DW´ UHIHUULQJ WR WKH ³)DWPDQ´ WKH
QLFNQDPHRIFRGHIHQGDQW&RUQHOLXV2JOHWUHH'HIHQGDQW
6PLWK LQVWUXFWHG WKH LQIRUPDQW WR UHWXUQ LQ DSSUR[LPDWHO\
KDOIDQKRXU
7KHLQIRUPDQWUHWXUQHGWR:DOQXWWKLUW\PLQXWHVODWHU
DQGIRXQG'HIHQGDQW6PLWKVWDQGLQJRXWVLGHRIWKHKRXVH
ZLWKWZRRWKHULQGLYLGXDOVRQHRIZKLFKZDVFRGHIHQGDQW
&DUWHU7KHDJHQWVZHUHRQO\DEOHWRDXGLRWDSHWKHPHHWLQJ
EHWZHHQ WKH LQIRUPDQW DQG WKH GHIHQGDQWV EHFDXVH DQ\
DWWHPSWWRYLGHRWDSHWKHPHHWLQJZRXOGKDYHFRPSURPLVHG
WKH LQYHVWLJDWLRQ 7KH YRLFHV RQ WKH DXGLR WDSH ZHUH
LGHQWLILHG DV WKRVH RI WKH LQIRUPDQW 'HIHQGDQW 6PLWK DQG
&DUWHU 7KH RWKHU LQGLYLGXDO ZDV QRW LGHQWLILHG $W WKH
PHHWLQJ'HIHQGDQW6PLWKLQVWUXFWHGWKHLQIRUPDQWWRGULYHWR
WKH ³0DQ¶V /RXQJH´ ORFDWHG LQ /LQFROQ +HLJKWV 7KH
LQIRUPDQW UHIXVHG VWDWLQJ WKDW KH GLG QRW ZDQW WR GULYH WR
DQRWKHUORFDWLRQ'HIHQGDQW6PLWKWXUQHGWR&DUWHUDQGVSRNH
LQ ORZ WRQHV 'HIHQGDQW 6PLWK WKHQ WROG WKH LQIRUPDQW WR
IROORZKLPDQG&DUWHUWRWKHUHDURIWKHKRXVH:KHQWKH
JURXS UHDFKHG WKH UHDU RI WKH KRXVH &DUWHU DVNHG WKH
LQIRUPDQWLIKHKDGDVFDOH7KHLQIRUPDQWSURYLGHG&DUWHU
ZLWKDVFDOH&DUWHULPPHGLDWHO\UHDFKHGLQWRKLVSRFNHWDQG
UHPRYHGDFOHDUSODVWLFEDJFRQWDLQLQJWKHFUDFNFRFDLQHDQG
KDQGHG WKH EDJ WR 'HIHQGDQW 6PLWK 'HIHQGDQW 6PLWK

-- 5 of 10 --

8QLWHG6WDWHVY6PLWK 1R
ZHLJKHGWKHEDJ7KHEDJZDVKDQGHGWRWKHLQIRUPDQWDQG
WKHLQIRUPDQWKDQGHG&DUWHULQH[FKDQJH&DUWHUJDYH
WKHWR6PLWK7KHEDJFRQWDLQHGJUDPVRIFUDFN
FRFDLQH
2Q-DQXDU\6PLWKZDVDUUHVWHGDVDSDUWRIWKH
0(7LQYHVWLJDWLRQ
,,-85,6',&7,21
-XULVGLFWLRQLVSURSHUXQGHU86&†ZKLFKJUDQWV
VXEMHFWPDWWHUMXULVGLFWLRQWR8QLWHG6WDWHV'LVWULFWFRXUWVLQ
FDVHVLQYROYLQJRIIHQVHVDJDLQVWWKHODZVRIWKH8QLWHG6WDWHV
$SSHOODWH MXULVGLFWLRQ LV LQYRNHG SXUVXDQW WR 86&
†
,,,$1$/<6,6
$ )LIWK$PHQGPHQW
'HIHQGDQW 6PLWK FODLPV WKDW WKH GLVWULFW FRXUW HUUHG LQ
DOORZLQJ FRGHIHQGDQW *HRUJH &DUWHU WR DVVHUW KLV )LIWK
$PHQGPHQW ULJKW QRW WR WHVWLI\ DW 'HIHQGDQW 6PLWK¶V
VHQWHQFLQJKHDULQJ³$GHIHQGDQW¶VFKDOOHQJHWRKLVVHQWHQFH
RQ FRQVWLWXWLRQDO JURXQGV SUHVHQWV D TXHVWLRQ RI ODZ RYHU
ZKLFKWKLV&RXUWVKRXOGH[HUFLVHGHQRYRUHYLHZ´8QLWHG
6WDWHVY/OR\G)G WK&LU
&RGHIHQGDQW &DUWHU ZDV FDOOHG WR WKH VWDQG GXULQJ
'HIHQGDQW6PLWK¶VVHQWHQFLQJKHDULQJ&RGHIHQGDQW&DUWHU
ZDV VZRUQ LQ LPPHGLDWHO\ WKHUHDIWHU DQG DFWLQJ WKURXJK
FRXQVHODVVHUWHGKLV)LIWK$PHQGPHQWULJKWVWDWLQJWKDWKH
GLGQRWZLVKWRWHVWLI\7KHSURVHFXWLRQIDLOHGWRREMHFWWRWKH
DVVHUWLRQRIWKHSULYLOHJHVWDWLQJWKDW&DUWHUPD\EHH[SRVLQJ
KLPVHOI WR FULPLQDO SURVHFXWLRQ LI KH ZHUH WR WHVWLI\
'HIHQGDQW 6PLWK DUJXHG WKDW &DUWHU KDG DOUHDG\ SOHDGHG
JXLOW\WR&RXQW;RIWKHLQGLFWPHQWDQGPDGHVWDWHPHQWVWR
WKHJRYHUQPHQWUHJDUGLQJWKHGUXJWUDQVDFWLRQVDQGWKHUHIRUH
VKRXOG QRW EH DOORZHG WR DVVHUW KLV )LIWK $PHQGPHQW
SULYLOHJH,QFRQWUDVW&DUWHU¶VDWWRUQH\DUJXHGWKDW&DUWHU
QHYHUPDGHVWDWHPHQWVUHJDUGLQJWKHLVVXHZKLFK'HIHQGDQW
1R 8QLWHG6WDWHVY6PLWK
JXLOW\'HIHQGDQW6PLWKGLGQRWQRWLI\WKHJRYHUQPHQWXQWLO
WKHHYHQLQJEHIRUHWULDO7KHUHFRUGUHIOHFWVWKHIROORZLQJ
7+( &2857 7KH H[WUD SRLQW IRU DFFHSWDQFH RI
UHVSRQVLELOLW\XQGHU6HFWLRQ( E PD\EHDZDUGHG
IRUHLWKHURIWZRUHDVRQVILUVWWLPHO\SURYLGLQJFRPSOHWH
LQIRUPDWLRQ WR WKH JRYHUQPHQW FRQFHUQLQJ KLV RZQ
LQYROYHPHQWLQWKHRIIHQVHRUVHFRQGWLPHO\QRWLI\LQJ
DXWKRULWLHV
$Q\WKLQJ \RX ZRXOG OLNH WR VD\ RQ WKH LVVXH RI
SURYLGLQJFRPSOHWHLQIRUPDWLRQWRWKHJRYHUQPHQW"
05 2$./(< >3526(&8725@ <RXU +RQRU ZH
KDYHQHYHUVSRNHQWR0U6PLWK:H GRQ¶W KDYHDQ\
LQIRUPDWLRQDVWRZKDWKHZRXOGVD\WRXV
7+(&2857<RXDJUHHZLWKWKDW0U+XGVRQ"
05+8'621>'()(16(&2816(/@7KDWZRXOG
EHDFFXUDWH<RXU+RQRU
7+(&2857$OOULJKW6RFOHDUO\0U6PLWKGRHV
QRW TXDOLI\ XQGHU 6XEVHFWLRQ E 7KH RQO\ ZD\ KH
FRXOGTXDOLI\IRUWKHH[WUDSRLQWLVLIXQGHU E KH
WLPHO\QRWLILHGDXWKRULWLHVRIKLVLQWHQWLRQWRHQWHUDSOHD
RI JXLOW\ SHUPLWWLQJ WKH &RXUW DQG WKH JRYHUQPHQW WR
DOORFDWHLWVUHVRXUFHVHIILFLHQWO\
, WKLQN FOHDUO\ RQ WKLV UHFRUG WKDW 0U 6PLWK LV QRW
HQWLWOHGWRWKDWDGGLWLRQDOUHGXFWLRQXQGHU6HFWLRQ E
WLPHO\QRWLILFDWLRQ7KDWZRXOGLQFUHDVHKLVRIIHQVHOHYHO
WR $QG WKDW ZRXOG PRYH KLP IURP D VHQWHQFLQJ
UDQJHRIWRPRQWKVWRDVHQWHQFLQJUDQJHRIWR
PRQWKV
%HIRUH ZH PRYH EH\RQG WKDW SRLQW , ZLOO JLYH ERWK
FRXQVHODQ\WKHRSSRUWXQLW\WRPDNHDQ\FRPPHQWVWKDW
WKH\ZRXOGOLNH

-- 6 of 10 --

8QLWHG6WDWHVY6PLWK 1R
JRYHUQPHQW¶V VLQJOH ZLWQHVV WKDW WKLV &RXUW IRXQG FOHDUO\
HUURQHRXV
,Q WKH FDVH DW EDU WKH GLVWULFW FRXUW GLG QRW HQJDJH LQ
VSHFXODWLRQZKHQFDOFXODWLQJWKHDPRXQWRIGUXJVDWWULEXWDEOH
WR 'HIHQGDQW 6PLWK 7KH FRXUW PDGH WKH LQGLYLGXDOL]HG
LQTXLU\LQWR6PLWK¶VLQYROYHPHQWLQWKH1RYHPEHU
GUXJ WUDQVDFWLRQ WKDW ZH IRXQG ODFNLQJ LQ 0HDFKDP 7KH
GLVWULFWFRXUWYLHZHGDOOWKHDYDLODEOHHYLGHQFH7KHFRXUW
YLHZHG WKH YLGHRWDSH OLVWHQHG WR WKH DXGLRWDSH DQG KHDUG
WHVWLPRQ\ IURP 2IILFHU :DWWV ZKR ZDV IDPLOLDU ZLWK
'HIHQGDQW6PLWK WKDWKHKHDUG'HIHQGDQW6PLWK¶VYRLFHRQ
WKH DXGLRWDSH 7KH GLVWULFW FRXUW¶V ILQGLQJV DUH
GLVWLQJXLVKDEOH IURP WKH DVVXPSWLRQV PDGH E\ WKH GLVWULFW
FRXUWLQ0HDFKDP*LYHQWKHHQWLUHUHFRUGWKHGLVWULFWFRXUW
FOHDUO\ GLG QRW HUU LQ DWWULEXWLQJ WKH JUDPV RI FUDFN
FRFDLQHWR'HIHQGDQW6PLWKIRUVHQWHQFLQJSXUSRVHV7KH
ILQGLQJV RI WKH GLVWULFW FRXUW DV WR WKH DPRXQW RI GUXJV
DWWULEXWDEOHWR'HIHQGDQW6PLWKIRUVHQWHQFLQJSXUSRVHVZHUH
QRWFOHDUO\HUURQHRXV
& 5HGXFWLRQRI6PLWK¶V2IIHQVH/HYHO
7KH VHQWHQFLQJ FRXUW¶V DFFHSWDQFH RI UHVSRQVLELOLW\
GHWHUPLQDWLRQ LV ³HQWLWOHG WR JUHDW GHIHUHQFH RQ UHYLHZ´
866*†(FRPPHQW Q 7KLV&RXUWUHYLHZV³IRUFOHDU
HUURUDGLVWULFWFRXUW¶VILQGLQJWKDWDGHIHQGDQWLVQRWHQWLWOHG
WRDVHQWHQFHUHGXFWLRQIRUDFFHSWDQFHRIUHVSRQVLELOLW\´6HH
8QLWHG6WDWHVY7LOIRUG)G WK&LU
³+RZHYHUWKHVWDQGDUGRIUHYLHZLVGHQRYRZKHUHWKH
RQO\LVVXHGSUHVHQWHGLVWKHSURSULHW\RIWKHDSSOLFDWLRQRIWKH
UHGXFWLRQ WR XQFRQWHVWHG IDFWV´ ,G 7KH UHGXFWLRQ RI
'HIHQGDQW 6PLWK¶V RIIHQVH E\ WZR OHYHOV LQVWHDG RI WKUHH
OHYHOVIRUDFFHSWDQFHRIUHVSRQVLELOLW\LVQRWHUURU
$WVHQWHQFLQJ-XGJH%HFNZLWKLQYLWHGGHIHQVHFRXQVHOWR
DGGUHVVWKHLVVXHRIZKHWKHU'HIHQGDQW6PLWKZDVHQWLWOHGWR
DWKUHHOHYHOUHGXFWLRQLQKLVRIIHQVHOHYHOIRUDFFHSWDQFHRI
UHVSRQVLELOLW\-XGJH%HFNZLWKQRWHGWKDWWKHDGGLWLRQDORQH
OHYHO UHGXFWLRQ LV W\SLFDOO\ DZDUGHG ZKHQ D GHIHQGDQW
SURPSWO\ QRWLILHV WKH JRYHUQPHQW RI KLV LQWHQWLRQ WR SOHDG
1R 8QLWHG6WDWHVY6PLWK
6PLWK ZLVKHG WR TXHVWLRQ KLP &DUWHU¶V DWWRUQH\ IXUWKHU
DUJXHGWKDWLI&DUWHUZDVFRPSHOOHGWRWHVWLI\KHZRXOGEH
H[SRVLQJKLPVHOIWRSHUMXU\DQGSRVVLEOHREVWUXFWLRQFKDUJHV
'HIHQGDQW 6PLWK ZDV SHUPLWWHG WR TXHVWLRQ &DUWHU ZKLOH
&DUWHU¶VDWWRUQH\VWRRGQH[WWRKLPWRDGYLVH&DUWHURIWKH
DSSURSULDWH LQVWDQFHV WR DVVHUW KLV )LIWK $PHQGPHQW
SULYLOHJH &DUWHU DQVZHUHG TXHVWLRQV UHJDUGLQJ D SOHD
DJUHHPHQWZLWKWKHJRYHUQPHQWEXWREMHFWHGDQGDVVHUWHGKLV
)LIWK$PHQGPHQWULJKWVZKHQTXHVWLRQHGDERXWWKRVHSHUVRQV
ZKR ZHUH SUHVHQW GXULQJ WKH 1RYHPEHU GUXJ
WUDQVDFWLRQLQYROYLQJWKHJUDPVRIFUDFNFRFDLQH7KH
FRXUW VXVWDLQHG WKH REMHFWLRQ 'HIHQGDQW 6PLWK DJDLQ
DWWHPSWHGWRTXHVWLRQ&DUWHUDERXWWKHSHUVRQVLQYROYHGLQWKH
LQFLGHQWEXW&DUWHU¶VDWWRUQH\REMHFWHGEDVHGXSRQWKHVDPH
JURXQGV7KHREMHFWLRQVZHUHDJDLQVXVWDLQHGE\WKHFRXUW
2QDSSHDO'HIHQGDQW6PLWKDUJXHVWKDWWKHGLVWULFWFRXUW
HUUHG LQ DOORZLQJ &DUWHU WR DVVHUW KLV )LIWK $PHQGPHQW
SULYLOHJHUHJDUGLQJWKH1RYHPEHUHYHQWV'HIHQGDQW
6PLWK DUJXHV WKDW ZKHQ &DUWHU HQWHUHG KLV JXLOW\ SOHD
DJUHHPHQW UHJDUGLQJ &RXQW ; DQ\ SULYLOHJH DJDLQVW VHOI
LQFULPLQDWLRQFHDVHGWRH[LVW'HIHQGDQW6PLWKUHOLHVXSRQ
WKH 6XSUHPH &RXUW¶V UHFHQW GHFLVLRQ LQ 0LWFKHOO Y 8QLWHG
6WDWHV86 LQVXSSRUWRIKLVFRQWHQWLRQWKDW
FRGHIHQGDQW &DUWHU ZDV QRW HQWLWOHG WR DVVHUW WKH )LIWK
$PHQGPHQWSULYLOHJH
,WLVWUXHDVDJHQHUDOUXOHWKDWZKHUHWKHUHFDQEHQR
IXUWKHULQFULPLQDWLRQWKHUHLVQREDVLVIRUWKHDVVHUWLRQRI
WKHSULYLOHJH:HFRQFOXGHWKDWSULQFLSOHDSSOLHVWRFDVHV
LQZKLFKWKHVHQWHQFHKDVEHHQIL[HGDQGWKHMXGJPHQWRI
FRQYLFWLRQKDVEHFRPHILQDO,IQRDGYHUVHFRQVHTXHQFHV
FDQEHYLVLWHGXSRQWKHFRQYLFWHGSHUVRQE\UHDVRQRI
IXUWKHUWHVWLPRQ\WKHQWKHUHLVQRIXUWKHULQFULPLQDWLRQ
WREHIHDUHG
,GDW FLWDWLRQRPLWWHG
'HIHQGDQW6PLWKDOVRRIIHUV8QLWHG6WDWHVY3DUGR
)G '&&LU LQVXSSRUWRIKLVFRQWHQWLRQ
'HIHQGDQW6PLWKFODLPVWKDWWKH'LVWULFWRI&ROXPELD&LUFXLW

-- 7 of 10 --

8QLWHG6WDWHVY6PLWK 1R
IRXQG WKDW D FRGHIHQGDQW VKRXOG KDYH EHHQ FRPSHOOHG WR
WHVWLI\ZKHQFDOOHGE\WKHGHIHQGDQWZKHUHWKHFRGHIHQGDQW
IHDUHGQRRWKHUUHSULVDOIURPWKHHYHQWVLQTXHVWLRQ
7KH JRYHUQPHQW DUJXHV WKDW WKH GLVWULFW FRXUW SURSHUO\
DOORZHG&DUWHUWRDVVHUWKLV)LIWK$PHQGPHQWSULYLOHJH,WLV
WKHJRYHUQPHQW¶VSRVLWLRQWKDW&DUWHU¶VWHVWLPRQ\PD\KDYH
VXEMHFWHGKLPWRDGGLWLRQDOFKDUJHVRISHUMXU\REVWUXFWLRQRI
MXVWLFHDQGSRVVLEO\IDOVHVWDWHPHQWVWRWKHSROLFH7KHUHIRUH
DFFRUGLQJ WR WKH JRYHUQPHQW 0LWFKHOO DQG 3DUGR DUH QRW
DSSOLFDEOHWRWKLVFDVH
,Q0LWFKHOOWKH6XSUHPH&RXUWUHVROYHGWKHFRQIOLFWDPRQJ
WKHFLUFXLWVFUHDWHGE\WKH7KLUG&LUFXLWUHJDUGLQJZKHWKHUD
FRQYLFWHG GHIHQGDQW FRXOG LQYRNH WKH )LIWK $PHQGPHQW
SURWHFWLRQDJDLQVWVHOILQFULPLQDWLRQZKHQKLVWHVWLPRQ\DW
VHQWHQFLQJ ZRXOG KDYH WKH SRWHQWLDO RI HQKDQFLQJ KLV
VHQWHQFH 7KH 7KLUG &LUFXLW KDG VSOLW IURP WKRVH FLUFXLWV
ZKLFK KDG KHOG WKDW D GHIHQGDQW FRQYLFWHG EXW QRW \HW
VHQWHQFHG FRXOG LQYRNH WKH )LIWK $PHQGPHQW SULYLOHJH
DJDLQVWVHOILQFULPLQDWLRQLIWKHWHVWLPRQ\VRXJKWFRXOGEH
XVHGWRHQKDQFHWKHVHQWHQFH0LWFKHOO86
FLWLQJ8QLWHG6WDWHVY.XNX)G WK&LU
8QLWHG 6WDWHV Y *DUFLD )G WK &LU
8QLWHG6WDWHVY'H/D&UX])G VW&LU
8QLWHG6WDWHVY+HUQDQGH])G WK&LU
8QLWHG 6WDWHV Y %DKDGDU )G QG &LU
%DQN2QHRI&OHYHODQG1$Y$EEH)G
WK&LU 8QLWHG6WDWHVY/XJJ)G '&
&LU 8QLWHG 6WDWHV Y 3DULV )G WK &LU
7KH6XSUHPH&RXUWUHYHUVLQJWKH7KLUG&LUFXLWKHOG
WKDWWKHSHWLWLRQHULQ0LWFKHOO³UHWDLQHGWKHSULYLOHJHDWKHU
VHQWHQFLQJ KHDULQJ´ ,G 7KH &RXUW ZURWH WKDW ³>W@KH
FHQWHUSLHFHRIWKH7KLUG&LUFXLW¶VRSLQLRQ>ZDV@WKHLGHDWKDW
WKHHQWU\RIWKHJXLOW\SOHDFRPSOHWHGWKHLQFULPLQDWLRQRIWKH
GHIHQGDQWWKXVH[WLQJXLVKLQJWKHSULYLOHJH´,GDW7KH
&RXUW VWDWHG ³>Z@KHUH D VHQWHQFH KDV \HW WR EH LPSRVHG
KRZHYHUWKLV&RXUWKDVDOUHDG\UHMHFWHGWKHSURSRVLWLRQWKDW
μLQFULPLQDWLRQLVFRPSOHWHRQFHJXLOWKDVEHHQDGMXGLFDWHG¶´
,G TXRWLQJ(VWHOOHY6PLWK86
1R 8QLWHG6WDWHVY6PLWK
WKHWDSHLQGLFDWHVWKDWWKHSHUVRQSUHVHQWDWWKHWUDQVDFWLRQ
ZDV ³WKH )DWPDQ´ &RUQHOLXV 2JOHWUHH 'HIHQGDQW 6PLWK
FRQWHQGVWKDWLIWKHDXGLRWDSHLVQRWFRQVLGHUHGWKHGLVWULFW
FRXUW LV OHIW ZLWK QRWKLQJ EXW 2IILFHU :DWWV¶ WHVWLPRQ\ WR
VXSSRUWLWVFRQFOXVLRQWKDW'HIHQGDQW6PLWKZDVSUHVHQWDW
WKHWLPHRIWKH1RYHPEHUGUXJWUDQVDFWLRQ'HIHQGDQW
6PLWKFRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHGLQVROHO\UHO\LQJ
XSRQWKHWHVWLPRQ\RIRQHRIILFHULQILQGLQJWKDW'HIHQGDQW
6PLWK ZDV SUHVHQW DW WKH WLPH RI WKH GUXJ WUDQVDFWLRQ
'HIHQGDQW6PLWKUHOLHVXSRQ0HDFKDP
0HDFKDPKHOGWKDWWKHGLVWULFWFRXUWKDGFOHDUO\HUUHGLQ
UHO\LQJ XSRQ WKH WHVWLPRQ\ IURP D VLQJOH RIILFHU LQ
GHWHUPLQLQJ WKH DPRXQW RI GUXJV DWWULEXWDEOH WR WKH
GHIHQGDQWVIRUVHQWHQFLQJSXUSRVHV+RZHYHU0HDFKDPGLG
QRWEDVHLWVKROGLQJVROHO\RQWKLVSUHPLVH7KH0HDFKDP
FRXUWZDVPRVWWURXEOHGE\WKHGLVWULFWFRXUW¶VIDLOXUHWRPDNH
DQLQGLYLGXDOL]HGLQTXLU\LQWRWKHQDWXUHRIWKHGHIHQGDQWV¶
LQYROYHPHQWLQWKHFRQVSLUDF\ZKHQWKHFRXUWGHWHUPLQHGWKH
DPRXQWRIGUXJVDWWULEXWDEOHWRGHIHQGDQWV6HH)GDW
7KHFRXUWVWDWHGVSHFLILFDOO\WKDW
:KLOHWURXEOHGE\WKHVRPHZKDWVSHFXODWLYHQDWXUHRI
WKHFRXUW¶VTXDQWLW\FDOFXODWLRQZHDUHPRVWGLVWXUEHGE\
WKH IDFW WKDW WKH GLVWULFW FRXUW IDLOHG WR PDNH
LQGLYLGXDOL]HG ILQGLQJV UHJDUGLQJ WKH VFRSH RI WKH
FRQVSLUDF\ DQG WKH GXUDWLRQ DQG QDWXUH RI HDFK
GHIHQGDQW¶VSDUWLFLSDWLRQLQWKHVFKHPH7KHFRXUWKHOG
D VLQJOH KHDULQJ DW ZKLFK D ORQH JRYHUQPHQW ZLWQHVV
WHVWLILHG WKHQ LQGLVFULPLQDWHO\ LPSRUWHG LWV IDFWXDO
ILQGLQJVFRQFHUQLQJWKHDPRXQWRIQDUFRWLFVIRUZKLFK
-RQHV ZDV UHVSRQVLEOH LQWR WKH 0HDFKDP DQG %RWHOOR
VHQWHQFLQJFDOFXOXV$SSDUHQWO\WKHGLVWULFWFRXUWVLPSO\
DVVXPHG WKDW 0HDFKDP DQG %RWHOOR ZHUH WR EH KHOG
DFFRXQWDEOH IRU DOO QDUFRWLFV FKDQQHOHG WKURXJK WKH
FRQVSLUDF\,QGRLQJVRWKHFRXUWHUUHG
,G,WZDVWKHIDLOXUHRIWKHGLVWULFWFRXUWWRGLIIHUHQWLDWH
EHWZHHQ FRFRQVSLUDWRUV QRW WKH UHOLDQFH XSRQ WKH

-- 8 of 10 --

8QLWHG6WDWHVY6PLWK 1R
FRQFHGHDORQJZLWK0U+XGVRQWKDWQHLWKHUWKHYLGHR
QRUWKHDXGLRWDSHVDUHDPRGHORIFODULW\+RZHYHU,
FHUWDLQO\FRXOGPDNHRXWWKHQDPH³0LFKDHO´IURP0U
2JOHVE\LQUHVSRQVHWRWKHTXHVWLRQ³ZKRLVXSWKHUH´
IURPWKHFRQILGHQWLDOLQIRUPDQW
7KHRIILFHUZKRWHVWLILHG$JHQW:DWWVLQGLFDWHGWKDW
KH NQHZ 0LFKDHO 6PLWK NQHZ KLV YRLFH VDZ KLP
WKURXJK D SDLU RI ELQRFXODUV ZKLFK JDYH KLP D EHWWHU
YLHZRIWKHSHUVRQLQWKHZLQGRZZLWKWKHGLVWLQFWLYH
\HOORZKDWDQGDOVRUHFRJQL]HGKLVYRLFH
7KHTXDOLW\RIWKHWDSHLVSRRUDQGWKHVSHHGYDULHVVR
WKDWDWWLPHVWKHYRLFHVRXQGVPRUHOLNH0LFNH\0RXVH
WKDQLWGRHVDQ\ERG\HOVHWKDQDQ\RIXVWKLQNNQRZLQ
UHDOOLIH%XW,VWLOOEHOLHYHWKDWWKHDJHQW¶VWHVWLPRQ\ZDV
FUHGLEOH LQ WKDW KH VDLG KH UHFRJQL]HG 0LFKDHO ERWK
YLVXDOO\DQGRQWKHWDSH+HDOVRLQGLFDWHGWKDWKHGRHV
NQRZWKHVRFDOOHG³IDWPDQ´&RUQHOLXV2JOHWUHHERWK
E\VLJKWDQGZRXOGUHFRJQL]HKLVYRLFHDQGWKDWKHGLG
QRWVHHKLPRUKHDUKLPLQWKHFRXUVHRIWKLVWUDQVDFWLRQ
$QG 0U 6PLWK KDV QRW DGGXFHG DQ\ WHVWLPRQ\ RU
HYLGHQFH WR FRQWUDGLFW $JHQW :DWWV $QG ZKLOH 0U
+XGVRQ>GHIHQVHDWWRUQH\@KDVPDGHDQKHURLFDWWHPSWWR
DWWDFN $JHQW :DWWV¶V FUHGLELOLW\ RU REVHUYDWLRQV
QHYHUWKHOHVV,WKLQNZLWKRXWVXFFHVV
, DP VDWLVILHG DW OHDVW E\ D SUHSRQGHUDQFH RI WKH
HYLGHQFHDQGDFWXDOO\SUREDEO\PRUHWKDQWKDWWKDW0U
6PLWKZDVLQYROYHGLQWKLVWUDQVDFWLRQ
-$DW
2QDSSHDO'HIHQGDQW6PLWKDUJXHVWKDWWKHGLVWULFWFRXUW
VKRXOGQRWKDYHUHOLHGXSRQWKHDXGLRWDSH'HIHQGDQW6PLWK
FRQWHQGVWKDWEHFDXVHWKHTXDOLW\RIWKHDXGLRWDSHLVSRRUWKH
QDPH³0LNH´RU³0LFKDHO´LVKDUGWRGLVFHUQIURPWKHWDSH
'HIHQGDQW6PLWKDVVHUWVWKDWWKHUHLVQRWKLQJWRVKRZWKDW
'HIHQGDQW6PLWKLVWKH³0LNH´LQTXHVWLRQ,WLV'HIHQGDQW
6PLWK¶VSRVLWLRQWKDWWKHZRUG³IDW´ZKLFKFDQEHKHDUGRQ
1R 8QLWHG6WDWHVY6PLWK
&DUWHU ULJKWIXOO\ LQYRNHG KLV )LIWK $PHQGPHQW ULJKW
DJDLQVW LQFULPLQDWLRQ HYHQ WKRXJK KH KDG DOUHDG\ EHHQ
VHQWHQFHG:HKHOGLQ,Q%DQN2QHRI&OHYHODQG1$Y
$EEH WKDW ³>D@OWKRXJK D GHIHQGDQW SOHDGLQJ JXLOW\ WR DQ
RIIHQVHZDLYHVWKHFRQVWLWXWLRQDOSULYLOHJHZLWKUHJDUGWRWKH
RIIHQVH DGPLWWHG KH GRHV QRW WKHUHE\ VXEPLW μD EODQNHW
ZDLYHUDVWRRWKHURIIHQVHVWKDWPLJKWIRUPWKHEDVLVRIODWHU
FKDUJHV¶´UHJDUGOHVVRIWKHGHIHQGDQW¶VVHQWHQFLQJVWDWXV
)G WK&LU FLWDWLRQRPLWWHGLQ$EEH
TXRWLQJ8QLWHG6WDWHVY6HDYHU)G WK&LU
7KLV&RXUW¶VUHDVRQLQJZDVEDVHGXSRQWKHSRWHQWLDO
IRUODWHUFKDUJHVQRWDQHQKDQFHGVHQWHQFH7KLV&RXUWGLG
JR RQ WR FRQVLGHU WKH HIIHFW RI WKH GHIHQGDQW¶V SRWHQWLDO
WHVWLPRQ\RQKLVVHQWHQFLQJDQGMRLQHGWKHRWKHUFLUFXLWVLQ
KROGLQJ WKDW )LIWK $PHQGPHQW VHOILQFULPLQDWLRQ ULJKWV
³FRQWLQXHLQIRUFHXQWLOVHQWHQFLQJ´,GDW
7KHGLVWULFWFRXUWGLGQRWHUULQDOORZLQJ&DUWHUWRDVVHUWKLV
)LIWK $PHQGPHQW SULYLOHJH DJDLQVW VHOILQFULPLQDWLRQ DW
'HIHQGDQW6PLWK¶VVHQWHQFLQJ7KH'&&LUFXLWKHOGLQ
3DUGRWKDWWKHSULYLOHJHDJDLQVWVHOILQFULPLQDWLRQLVORVWRQFH
DZLWQHVVKDVEHHQFRQYLFWHGRIWKHRIIHQVHZLWKUHVSHFWWR
ZKLFK KH IHDUV LQFULPLQDWLRQ DV ZHOO DV ZKHQ D ZLWQHVV
SOHDGV JXLOW\ WR WKH RIIHQVH LQ TXHVWLRQ UDWKHU WKDQ EHLQJ
FRQYLFWHGDWWULDO6HH3DUGR)GDW7KHSULYLOHJH
DJDLQVWVHOILQFULPLQDWLRQLVDOVRORVWZKHUHFKDUJHVRUFRXQWV
RIDQLQGLFWPHQWDUHGLVPLVVHGDVSDUWRIDSOHDDJUHHPHQW
,G 7KH FRXUW UHDVRQHG WKDW ³>V@LQFH SURPLVHV WR GLVPLVV
FKDUJHV DV SDUW RI D SOHD DJUHHPHQW DUH ELQGLQJ RQ WKH
*RYHUQPHQWDZLWQHVVPD\QRWEHH[SRVHGWRSURVHFXWLRQRQ
WKRVH FKDUJHV DQG WKH QHHG IRU WKH SULYLOHJH LV ORVW´ ,G
7KHUHIRUH D FRGHIHQGDQW FRXOG QRW LQYRNH KLV )LIWK
$PHQGPHQWULJKWUHJDUGLQJWKHHYHQWVZKLFKVXUURXQGHGD
GUXJWUDQVDFWLRQEHFDXVHWKHFRGHIHQGDQWKDGDOUHDG\HQWHUHG
LQWR D SOHD DJUHHPHQW ZLWK WKH JRYHUQPHQW UHJDUGLQJ WKH
WUDQVDFWLRQ,GDW³$WWKHVDPHWLPHLWLVHTXDOO\
WUXHWKDWDZLWQHVVGRHVQRWORVHKLV)LIWK$PHQGPHQWULJKWWR
UHIXVHWRWHVWLI\FRQFHUQLQJRWKHUPDWWHUVRUWUDQVDFWLRQVQRW
LQFOXGHG LQ KLV FRQYLFWLRQ RU SOHD DJUHHPHQW´ ,G DW
³3OHDGLQJJXLOW\WRDFULPHGRHVQRWZDLYHWKHSULYLOHJHQRW

-- 9 of 10 --

8QLWHG6WDWHVY6PLWK 1R
WRLQFULPLQDWHRQHVHOIDWRWKHUWLPHVLQRWKHUFULPHVDQ\PRUH
WKDQFRQYLFWLRQRIRQHFULPHHUDVHVWKHSULYLOHJHDVLWUHODWHV
WRRWKHUV´
&DUWHU¶V WHVWLPRQ\ UHJDUGLQJ WKH 1RYHPEHU
LQFLGHQWWRZKLFKKHSOHDGHGJXLOW\SRWHQWLDOO\VXEMHFWHGKLP
WRRWKHUFKDUJHVVXFKDVSHUMXU\RUREVWUXFWLRQRIMXVWLFHLIWKH
WHVWLPRQ\ZDVRIDVHOILQFULPLQDWLQJQDWXUHHVSHFLDOO\VLQFH
&DUWHUKDGSUHYLRXVO\UHSUHVHQWHGWKDW&RUQHOLXV2JOHWUHHQRW
'HIHQGDQW6PLWKZDVWKHRWKHUSHUVRQZKRSDUWLFLSDWHGLQ
WKH 1RYHPEHU WUDQVDFWLRQ (YHQ XQGHU 3DUGR
'HIHQGDQW6PLWK¶VDUJXPHQWRQWKLVLVVXHIDLOV
% 6PLWK¶V5HVSRQVLELOLW\IRU$GGLWLRQDO*UDPVRI
&UDFN&RFDLQH
³:KHQUHYLHZLQJDGLVWULFWFRXUW¶VVHQWHQFLQJGHFLVLRQWKLV
FRXUWZLOOGLVWXUEWKHXQGHUO\LQJIDFWXDOILQGLQJVRQO\LIWKH\
DUHFOHDUO\HUURQHRXV´8QLWHG6WDWHVY+LOO)G
WK &LU FLWLQJ 86& † H 8QLWHG
6WDWHVY+DPLOWRQ)G WK&LU VHH
8QLWHG6WDWHVY0HDFKDP)G WK&LU
UHYLHZLQJ D GLVWULFW FRXUW¶V IDFWXDO ILQGLQJV UHJDUGLQJ WKH
DPRXQW RI QDUFRWLFV DWWULEXWDEOH WR D GHIHQGDQW IRU FOHDU
HUURU $ ILQGLQJ RI IDFW LV FOHDUO\ HUURQHRXV ZKHQ
³μDOWKRXJKWKHUHLVHYLGHQFHWRVXSSRUWLWWKHUHYLHZLQJFRXUW
RQ WKH HQWLUH UHFRUG LV OHIW ZLWK WKH GHILQLWH DQG ILUP
FRQYLFWLRQ WKDW D PLVWDNH KDV EHHQ FRPPLWWHG¶´ 8QLWHG
6WDWHVY*RUW'L'RQDWR)G WK&LU
TXRWLQJ 8QLWHG 6WDWHV Y 3HUH] )G WK &LU

,Q RUGHU WR FDOFXODWH D EDVH RIIHQVH OHYHO XVLQJ WKH
VHQWHQFLQJ JXLGHOLQHV WKH VHQWHQFLQJ FRXUW PXVW FRQVLGHU
WKRVH TXDQWLWLHV RI GUXJV QRW VSHFLILHG LQ WKH FRXQWV RI
FRQYLFWLRQZKLFKZHUHSDUWRIWKHVDPHFRXUVHRIFRQGXFWRU
FRPPRQ SODQ RU VFKHPH 6HH 0HDFKDP )G DW
FLWLQJ866*†% D 8QLWHG6WDWHVY=LPPHU
)G WK &LU ³:KHUH WKH DPRXQW LV
XQFHUWDLQWKHFRXUWLVXUJHGWRHUURQWKHVLGHRIFDXWLRQDQG
RQO\KROGWKHGHIHQGDQWUHVSRQVLEOHIRUWKHTXDQWLW\RIGUXJV
1R 8QLWHG6WDWHVY6PLWK
IRU ZKLFK WKH GHIHQGDQW LV PRUH OLNHO\ WKDQ QRW DFWXDOO\
UHVSRQVLEOH´ ,G FLWDWLRQV DQG LQWHUQDO TXRWDWLRQV PDUNV
RPLWWHG ³7KH VHQWHQFLQJ FRXUW¶V UHOHYDQW FRQGXFW
DSSUR[LPDWLRQ PXVW EH EDVHG RQ UHOLDEOH LQIRUPDWLRQ DQG
VXSSRUWHGE\DSUHSRQGHUDQFHRIWKHHYLGHQFH´,G FLWLQJ
866*†$ D
7KH GLVWULFW FRXUW IRXQG E\ D SUHSRQGHUDQFH RI WKH
HYLGHQFHWKDWWKHJUDPVRIFRFDLQHUHFRYHUHGIURPWKH
1RYHPEHU GUXJ WUDQVDFWLRQ ZDV DWWULEXWDEOH WR
'HIHQGDQW6PLWK7KHFRXUW¶VGHWHUPLQDWLRQZDVEDVHGXSRQ
WKHWHVWLPRQ\RI2IILFHU:DWWVDQRIILFHUZKRZRUNHGZLWK
WKH0(72IILFHU:DWWVWHVWLILHGWKDWKHZDVSHUVRQDOO\
IDPLOLDU ZLWK 'HIHQGDQW 6PLWK DQG &RUQHOLXV 2JOHWUHH
2IILFHU:DWWVNQHZWKDW'HIHQGDQW6PLWKOLYHGDW:DOQXW
6WUHHW:DWWVKDGXVHGELQRFXODUVWRREVHUYHWKH1RYHPEHU
HQFRXQWHU ZLWK 'HIHQGDQW 6PLWK DW :DOQXW
2IILFHU:DWWVDOVRKHDUGWKHLQIRUPDQWDQG'HIHQGDQW6PLWK
DUUDQJHWKHSXUFKDVHRIRQHKDOIRXQFHRIFUDFNFRFDLQHIRU
WKURXJKDQDXGLRUHFRUGLQJGHYLFH7KHLQIRUPDQWZDV
WROGWRUHWXUQWR:DOQXWLQDSSURSULDWHO\WKLUW\PLQXWHV
KRZHYHU2IILFHU:DWWVZDVXQDEOHWRREVHUYHWKHLQWHUDFWLRQ
EHFDXVHKHZDVXQDEOHWRSRVLWLRQKLPVHOIDWWKHVXUYHLOODQFH
SRLQW$OWKRXJKKHZDVXQDEOHWRVHHWKHWUDQVDFWLRQ2IILFHU
:DWWV ZDV DEOH WR KHDU WKH FRQYHUVDWLRQ EHWZHHQ WKH
LQIRUPDQWDQG'HIHQGDQW6PLWKWKURXJKWKHDXGLRUHFRUGLQJ
GHYLFH2IILFHU:DWWVWHVWLILHGWKDWKHKHDUGWKHYRLFHVRIWKH
LQIRUPDQW'HIHQGDQW6PLWKDQG&DUWHUDVWKH\DWWHPSWHGWR
ZHLJK WKH FRFDLQH 2IILFHU :DWWV DOVR KHDUG DQRWKHU FR
GHIHQGDQW-RH2JOHVE\7KHWHVWLPRQ\RI2IILFHU:DWWVWKH
YLGHRWDSHDQGWKHDXGLRWDSHRIWKH1RYHPEHUZHUH
SOD\HGIRUWKHGLVWULFWFRXUWDWVHQWHQFLQJ
7KH GLVWULFW FRXUW IRXQG WKDW WKH UHFRUG VKRZHG E\ D
SUHSRQGHUDQFH RI WKH HYLGHQFH WKDW 'HIHQGDQW 6PLWK ZDV
LQYROYHGLQWKH1RYHPEHUWUDQVDFWLRQ7KHGLVWULFW
FRXUWVWDWHG
,DPVDWLVILHGE\DSUHSRQGHUDQFHRIWKHHYLGHQFHWKDW
0U6PLWKZDVLQYROYHGLQWKLVWUDQVDFWLRQ,KDYHWR

-- 10 of 10 --