00a0348p.06

99-5281Court of Appeals for the Sixth CircuitOct 3, 2000

Full text


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
'277,( 5(1(( 0&$/3,1
3ODLQWLII$SSHOODQW
Y
/(;,1*721 $872 758&.
6723 ,1&D.HQWXFN\
FRUSRUDWLRQ0$5,( 0,//6DV
$GPLQLVWUDWUL[RIWKH(VWDWHRI
9DQFH0LOOV%(&.+$0
*$5/$1' $33$/$&+,$1 2,/
&25325$7,21D.HQWXFN\
FRUSRUDWLRQ* 0 2,/
&203$1< ,1&D.HQWXFN\
FRUSRUDWLRQ% 9 5($/7<
&25325$7,21
'HIHQGDQWV$SSHOOHHV
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH(DVWHUQ'LVWULFWRI.HQWXFN\DW3LNHYLOOH
1R²-RVHSK0+RRG'LVWULFW-XGJH
$UJXHG$XJXVW
'HFLGHGDQG)LOHG2FWREHU

-- 1 of 14 --

0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO
1R
%HIRUH.583$16.<:(//)25'DQG%2**6
&LUFXLW-XGJHV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(':LOOLDP&5DPELFXUH5$0%,&85(0,//(5
3,6$&$12/H[LQJWRQ.HQWXFN\IRU$SSHOODQW*DU\
:1DSLHU1$3,(5 $662&,$7(6/RQGRQ.HQWXFN\
IRU$SSHOOHHV21%5,():LOOLDP&5DPELFXUH-HIIUH\
-RKQ .XHEOHU 5$0%,&85( 0,//(5 3,6$&$12
/H[LQJWRQ .HQWXFN\ IRU $SSHOODQW *DU\ : 1DSLHU
1$3,(5 $662&,$7(6 /RQGRQ .HQWXFN\ IRU
$SSHOOHHV
%2**6-GHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK
.583$16.<-MRLQHG:(//)25'- S GHOLYHUHG
DVHSDUDWHFRQFXUULQJRSLQLRQ
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
%2**6&LUFXLW-XGJH3ODLQWLII$SSHOODQW'RWWLH5HQHH
0F$OSLQ FKDOOHQJHV RQ MXULVGLFWLRQDO JURXQGV WZR GLVWULFW
FRXUW RUGHUV KROGLQJ KHU LQ FRQWHPSW RI WKH FRXUW¶V SULRU
RUGHUV DQG RI WKH VHWWOHPHQW DJUHHPHQW WKDW WKH SDUWLHV
H[HFXWHGLQDQHIIRUWWRWHUPLQDWHWKHOLWLJDWLRQXQGHUO\LQJWKLV
DSSHDO2QO\RQHVPDOOSDUWRIWKHVHWWOHPHQWDJUHHPHQWZDV
LQFRUSRUDWHGLQWRWKHFRXUW¶VRUGHUGLVPLVVLQJWKHVXLW7KXV
WKHFRXUWKDGQRMXULVGLFWLRQZLWKUHJDUGWRPRVWRIWKHRUGHU
DSSHDOHG IURP :H WKHUHIRUH UHYHUVH DQG UHPDQG IRU
FRQVLGHUDWLRQRIDQRUGHUZLWKLQWKHFRXUW¶VMXULVGLFWLRQ
1R 0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO

BBBBBBBBBBBBBBBBBBBBBB
&21&855(1&(
BBBBBBBBBBBBBBBBBBBBBB
+$55< : :(//)25' &LUFXLW -XGJH FRQFXUULQJ ,
FRQFXU LQ WKH RSLQLRQ RI -XGJH %RJJV EXW DGG D IHZ
FRPPHQWVWKDWVHHPDSSURSULDWH
7KH GLVWULFW FRXUW¶V LQLWLDO RUGHU QDPLQJ *DKDIHU DV
$SSDODFKLDQ 2LO &RPSDQ\¶V ³$2&´ UHFHLYHU ZDV
XQIRUWXQDWHDQGLOODGYLVHGHVSHFLDOO\ZLWKRXWWKHSRVWLQJRI
DSURSHUUHFHLYHU¶VERQGDGHTXDWHO\WRSURWHFW$2&LQWKH
HYHQRIWKHUHFHLYHU¶VLPSURSHURUXQDXWKRUL]HGDFWLRQV7KLV
UHJUHWWDEOHDFWLRQKDVHQJHQGHUHGPXOWLSOHFRXUWILOLQJVJUHDW
H[SHQVHWRWKHSDUWLHVDQGUHFULPLQDWLRQV,DPQRWVXUHWKDW
*DKDIHUKLPVHOIGLGQRWHQJHQGHUVRPHRIWKHVHSUREOHPV
DQGDQH[DPLQDWLRQRIKLVDFWLRQVPLJKWVKRZKLVDZDUHQHVV
WKDWDSURSHUDQGVXEVWDQWLDOERQGZDVQHYHUSRVWHGWRSURWHFW
$2&,WZDVIXUWKHUUHJUHWWDEOHWKDWWKLVUHFHLYHUVKLSDFWLRQ
ZDVWDNHQZLWKRXWDFRQWHPSRUDQHRXVKHDULQJ
,WZRXOGDSSHDUIXUWKHUPRUHWKDW*DKDIHU¶VDFWLRQVYLVD
YLV0F$OSLQVHHNLQJODUJHIHHVZHUHWDNHQZLWKNQRZOHGJH
WKDWSODLQWLIIVKDGIHZLIDQ\DVVHWVWRVDWLVI\KLVFODLPDQG
WKDWVXFKDFWLRQPLJKWIRUFHDVHWWOHPHQWZLWK$2&E\KLV
IRUPHU³FOLHQWV´
,I0F$OSLQLVFRUUHFWWKDWWKHRULJLQDOFRQWHPSWRUGHUZDV
HQWHUHGDJDLQVWKHUZLWKRXWDKHDULQJ,ZRXOGTXHVWLRQWKH
SURSULHW\RIWKHGLVWULFWFRXUW¶VDFWLRQLQWKDWUHJDUG,QDQ\
HYHQWSXUVXDQWWRWKHRSLQLRQDQGKROGLQJXQGHU.RNNRQHQY
*XDUGLDQ/LIH,QV&R86 DOORIWKHDFWLRQV
RIWKHGLVWULFWFRXUWVHHNLQJWRHQIRUFHRWKHUSURYLVLRQVRIWKH
VHWWOHPHQWDJUHHPHQWZRXOGEHRIQRHIIHFWDVEHLQJZLWKRXW
MXULVGLFWLRQ

-- 2 of 14 --

0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO
1R
GHIHQGDQWV¶ SURSHU UHPHG\ IRU WKHVH YLRODWLRQV OLHV LQ D
VHSDUDWHDFWLRQIRUEUHDFKRIWKH6HWWOHPHQW$JUHHPHQWLQ
ZKLFKVXLWWKHGHIHQGDQWVFRXOGDOVRUHTXHVWDSUHOLPLQDU\
LQMXQFWLRQ HQMRLQLQJ 0F$OSLQ IURP SURFHHGLQJ ZLWK KHU
PDOSUDFWLFH DFWLRQ WR WKH H[WHQW WKDW KHU FDVH GHSHQGV RQ
FODLPVVKHSURPLVHGWRDEDQGRQXQGHUWKH$JUHHPHQW6HH
'RZQH\)GDW VWDWLQJWKDWEHFDXVHWKHGLVWULFWFRXUW
³IDLOHGWRUHWDLQMXULVGLFWLRQRYHUHQIRUFHPHQWRIWKH>SDUWLHV¶
VHWWOHPHQW@ DJUHHPHQW ZKHQ HQWHULQJ MXGJPHQW >WKH
GHIHQGDQW¶V@EUHDFKRIFRQWUDFWFODLPZDVSURSHUO\DGGUHVVHG
LQDVHSDUDWHSURFHHGLQJ´ 7KHGLVWULFWFRXUWPD\KRZHYHU
HQIRUFH LWV RUGHUV FRQFHUQLQJ WKH UHWXUQ RI FRQILGHQWLDO
FRUSRUDWHGRFXPHQWVDJDLQVW0F$OSLQLIWKHFRXUWGHWHUPLQHV
RQUHPDQGWKDWWKRVHRUGHUVELQG0F$OSLQDVZHOODV*DKDIHU
$ SURSHU UHDGLQJ RI WKH 6XSUHPH &RXUW¶V RSLQLRQ LQ
.RNNRQHQ FRPSHOV WKH FRQFOXVLRQ WKDW WKH GLVWULFW FRXUW
ODFNHG MXULVGLFWLRQ WR HQIRUFH WHUPV RI WKH 6HWWOHPHQW
$JUHHPHQW WKDW ZHUH QRW H[SUHVVO\ LQFRUSRUDWHG LQ LWV
GLVPLVVDORURWKHURUGHUV7KHSRUWLRQVRIWKHGLVWULFWFRXUW¶V
-DQXDU\DQG0D\UXOLQJVGLUHFWLQJ0F$OSLQWRFRPSO\
ZLWK SDUDJUDSKV DQG RI WKH 6HWWOHPHQW $JUHHPHQW DUH
WKHUHIRUH LQYDOLG :KHWKHU WKH SRUWLRQV RI WKH RUGHUV
SHUWDLQLQJWRWKHUHWXUQRI$2&GRFXPHQWVPD\EHHQIRUFHG
DJDLQVW 0F$OSLQ GHSHQGV RQ ZKHWKHU WKH GLVWULFW FRXUW¶V
0DUFK DQG 6HSWHPEHU RUGHUV FRQFHUQLQJ WKH
UHWXUQRIFRQILGHQWLDOGRFXPHQWVFDQEHFRQVWUXHGWRELQGKHU
HYHQWKRXJKWKH\H[SUHVVO\UHIHURQO\WR*DKDIHU%HFDXVH
WKHGLVWULFWFRXUWLVLQWKHEHVWSRVLWLRQWRGHWHUPLQHWKHVFRSH
DQGPHDQLQJRIWKHVHRUGHUVZH5(9(56(WKHMXGJPHQW
KROGLQJ0F$OSLQLQFRQWHPSWRIFRXUWDQG5(0$1'WKH
FDVHIRUIXUWKHUSURFHHGLQJVFRQVLVWHQWZLWKWKLVRSLQLRQ
1R 0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO

$OWKRXJK $2& ZDV DGPLQLVWUDWLYHO\ GLVVROYHG RQ 1RYHPEHU
IRU IDLOLQJ WR ILOH DQ DQQXDO UHSRUW LW UHPDLQV D SDUW\ WR WKLV
OLWLJDWLRQ DQG LV UHIHUUHG WR DV WKH SULQFLSDO RU SULPDU\ GHIHQGDQW EHFDXVH
LW LV WKH FRUSRUDWLRQ LQ ZKLFK 5REHUW 7 0RFN 0F$OSLQ¶V SUHGHFHVVRU LQ
LQWHUHVW DOOHJHGO\ RZQHG VWRFN
7KH DFWLRQ ILOHG ZDV GLVPLVVHG E\ WKH 3XODVNL &LUFXLW &RXUW IRU
LPSURSHU YHQXH 7KH DFWLRQ ZDV GLVPLVVHG E\ WKH .QR[ &LUFXLW
&RXUW IRU ODFN RI SURVHFXWLRQ DQG WKH .HQWXFN\ &RXUW RI $SSHDOV IRXQG
WKDW GLVPLVVDO WR EH ZLWKRXW SUHMXGLFH 0F$OSLQ EURXJKW WKH VXLW LQ
3XODVNL &LUFXLW &RXUW EXW YROXQWDULO\ GLVPLVVHG WKH FDVH XSRQ OHDUQLQJ
WKDW KHU IDWKHU¶V VXLW LQ WKDW FRXUW ZDV GLVPLVVHG IRU LPSURSHU YHQXH
,
+LVWRU\RIWKH/LWLJDWLRQ
3ODLQWLII$SSHOODQW'RWWLH5HQHH0F$OSLQEURXJKWWKHVXLW
WKDW JDYH ULVH WR WKH VHWWOHPHQW DJUHHPHQW DW LVVXH LQ WKLV
DSSHDOLQKHUFDSDFLW\DVDGPLQLVWUDWUL[RIWKHHVWDWHRIKHU
ODWHIDWKHU5REHUW70RFNDQGDVDQDOOHJHGVKDUHKROGHURI
WKHSULPDU\GHIHQGDQWLQWKLVFDVH$SSDODFKLDQ2LO&RPSDQ\
$2& ,QKHUVXLWEHIRUHWKHGLVWULFWFRXUW0F$OSLQDOOHJHG
WKDW$2&LQDVHULHVRILOOHJDOWUDQVDFWLRQVGHIUDXGHG0RFN
DQGWKHUHE\KLVHVWDWHRIWKHYDOXHRIWKHVWRFNKHDOOHJHGO\
KHOGLQWKHFRPSDQ\,QKHUFRPSODLQW0F$OSLQDVVHUWHGWKDW
WKHGLVWULFWFRXUWKDGIHGHUDOTXHVWLRQMXULVGLFWLRQRYHUKHU
VXLWEHFDXVH$2&¶VXQODZIXODFWLRQVFRQVWLWXWHGDSDWWHUQRI
UDFNHWHHULQJXQGHUWKHFLYLO5,&2VWDWXWH86&††
7KHVWDWHODZFODLPVRYHUZKLFK0F$OSLQFODLPHGWKH
GLVWULFWFRXUWKDGVXSSOHPHQWDOMXULVGLFWLRQZHUHSUHYLRXVO\
SOHGLQDQGE\0F$OSLQ¶VSUHGHFHVVRUVLQLQWHUHVW
5REHUW0RFNDQGKLVZLIH'RWWLH70RFNDQGZHUHDOVR
SOHGE\0F$OSLQKHUVHOILQDVWDWHFRXUWDFWLRQLQ7KH
FODLPV UDLVHG LQ WKH VWDWH FRXUW SURFHHGLQJV ZHUH QRW
DGMXGLFDWHG RQ WKH PHULWV KRZHYHU VR 0F$OSLQ ZDV QRW
EDUUHGIURPUHSOHDGLQJWKHPDQFLOODU\WRKHUIHGHUDO5,&2
FODLP

-- 3 of 14 --

0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO
1R
0F$OSLQ¶VIDWKHU5REHUW0RFNZDVDQ$2&HPSOR\HH
ZKR ZDV GLVFKDUJHG E\ WKH FRPSDQ\ LQ WKH HDUO\ ¶V
$FFRUGLQJWR0F$OSLQ0RFNRZQHGRI$2&¶VVWRFN
ZKHQ KH ZDV GLVFKDUJHG DQG KDG DQ RSWLRQ WR DFTXLUH DQ
DGGLWLRQDORIWKHFRPSDQ\¶VRXWVWDQGLQJVKDUHVZKLFK
RSWLRQ KH DOOHJHGO\ DWWHPSWHG WR H[HUFLVH DIWHU KH OHIW WKH
FRUSRUDWLRQ:KHQ0RFN¶VHIIRUWVWRH[HUFLVHWKHRSWLRQZHUH
UHMHFWHGE\WKHFRPSDQ\RQ0D\0RFNILOHGVXLWLQ
WKH3XODVNL&LUFXLW&RXUWWRHQIRUFHKLVULJKWVDJDLQVW$2&
DQGLWVGLUHFWRUV$OWKRXJK0RFNSUHYDLOHGRQKLVFODLPVIRU
SDVW ZDJHV KLV EUHDFK RI FRQWUDFW DQG RWKHU FODLPV ZHUH
GLVPLVVHGZLWKRXWSUHMXGLFHIRUODFNRIYHQXH0RFNGLHGLQ
0DUFK DQG 'RWWLH 0RFN KLV ZLGRZ DQG WKH
DGPLQLVWUDWUL[ RI KLV HVWDWH UHILOHG KLV EUHDFK RI FRQWUDFW
FODLPVDJDLQVW$2&LQ.QR[&RXQW\&LUFXLW&RXUWEXWWKH
FDVH ZDV GLVPLVVHG LQ $SULO IRU ODFN RI SURVHFXWLRQ
:KHQ'RWWLH0RFNGLHGRQ6HSWHPEHU0F$OSLQZDV
DSSRLQWHG DGPLQLVWUDWUL[ RI KHU IDWKHU¶V HVWDWH DQG KHU
KXVEDQG7LP0F$OSLQZDVODWHUDSSRLQWHGFRDGPLQLVWUDWRU
:LWK 7LP¶V DVVLVWDQFH 0F$OSLQ UHWDLQHG 'RXJODV &
%UDQGRQRQHRIWKHGHIHQGDQWVLQ0F$OSLQ¶VFXUUHQWOHJDO
PDOSUDFWLFH VXLW LQ )D\HWWH &RXQW\ WR UHSUHVHQW WKH 0RFN
(VWDWHLQLWVFLYLO5,&2VXLWDJDLQVW$2&LQWKHGLVWULFWFRXUW
7KH0RFN(VWDWHZDVDQGUHPDLQVLQVROYHQW$V0F$OSLQ
QRWHVLQKHUEULHIEHIRUHWKLVFRXUWWKH(VWDWH¶VRQO\DVVHWLV
5REHUW0RFN¶VDOOHJHGVWRFNRZQHUVKLSLQ$2&DQGKLV
DOOHJHGRSWLRQWRDFTXLUHDQDGGLWLRQDORIWKHFRPSDQ\¶V
RXWVWDQGLQJVKDUHV
3URFHGXUDO+LVWRU\LQWKH'LVWULFW&RXUW
0F$OSLQ ILOHG VXLW DJDLQVW $2& LQ WKH GLVWULFW FRXUW RQ
)HEUXDU\$FFRUGLQJWR0F$OSLQ%UDQGRQZKR
RIIHUHGWRWDNHWKHFDVHRQDFRQWLQJHQF\EDVLVDQGWRDGYDQFH
WKH(VWDWH¶VOLWLJDWLRQFRVWVDGYLVHGKHU WKDWWKH(VWDWH
KDG WKH EHVW FKDQFH RI UHFRYHULQJ DJDLQVW $2& LQ D
VKDUHKROGHUGHULYDWLYHVXLWRQEHKDOIRIDQGIRUWKHEHQHILWRI
$2& WKDWKHZRXOGDVNIRUDWHPSRUDU\UHVWUDLQLQJRUGHU
DQGIRUWKHDSSRLQWPHQWRIDUHFHLYHUXSRQWKHILOLQJRIWKH
1R 0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO

DUWIXOO\FRQVWUXHGWRLPSO\WKDW>VKH@ZDVUHTXLUHGWRSHUIRUP
DVSHFLILFDFW´WKHGHIHQGDQWVIDLOHGWRHVWDEOLVK³E\FOHDUDQG
FRQYLQFLQJHYLGHQFHWKDW>VKH@YLRODWHGDQ\RIWKH>@RUGHUV´
$SSHOODQWV%UDWVHHDOVR((2&Y/RFDO/RFDO
RI6KHHW0HWDO:RUNHUV¶,QW¶O$VV¶Q)G G
&LU DII¶G86 KROGLQJWKDWDSDUW\
PD\RQO\EHKHOGLQFRQWHPSWRIDFRXUWRUGHULI WKHRUGHU
FOHDUO\ DQG XQDPELJXRXVO\ LPSRVHG DQ REOLJDWLRQ RQ WKH
SDUW\ SURRIRIWKHSDUW\¶VQRQFRPSOLDQFHZLWKWKHRUGHU
ZDVFOHDUDQGFRQYLQFLQJDQG WKHSDUW\GLGQRWGLOLJHQWO\
DWWHPSW WR FRPSO\ ZLWK WKH RUGHU $OWKRXJK WKH GLVWULFW
FRXUW¶VRUGHUVGRQRWVSHFLILFDOO\UHIHUWR0F$OSLQLWLV
SRVVLEOHWRFRQVWUXHWKHPDQGLQSDUWLFXODUWKHSRUWLRQRIWKH
0DUFKRUGHUSURYLGLQJWKDW³DQ\FRSLHVPDGH>RI
FRQILGHQWLDO$2&GRFXPHQWV@VKDOODOVREHUHWXUQHGWRWKH
GHIHQGDQWV´DVELQGLQJDOOSDUWLHVWRWKHOLWLJDWLRQQRWMXVW
*DKDIHU6HH/XFLOOHY&LW\RI&KLFDJR)G
WK&LU VWDWLQJWKDWDIHGHUDOFRXUWZLOOHQIRUFHRU
UHWDLQ MXULVGLFWLRQ RYHU D VHWWOHPHQW DJUHHPHQW RQO\ WR WKH
H[WHQW WKDW WKH FRXUW¶V MXGJPHQW H[SUHVVO\ RU LPSOLFLWO\
LQFRUSRUDWHVWKHWHUPVRIWKHDJUHHPHQW +RZHYHUEHFDXVH
³WKHUHDUHIHZSHUVRQVLQDEHWWHUSRVLWLRQWRXQGHUVWDQGWKH
PHDQLQJRIDQRUGHUWKDQWKHGLVWULFWMXGJHZKRRUGHUHG
LW´ZHZLOOQRWGHFLGHZKHWKHUWKH0DUFKPDQGDWHELQGV
0F$OSLQ EXW ZLOO LQVWHDG UHPDQG WKH LVVXH WR WKH GLVWULFW
FRXUWIRUDGHWHUPLQDWLRQFRQFHUQLQJWKHVFRSHRIWKHRUGHU
6FHOVDY&LW\8QLYRI1HZ<RUN)G G &LU
FI1HXEHUJ)GDW QRWLQJWKDW³DVWKHMXGJH
ZKRKDGSUHVLGHGRYHUWKHZDQLQJ\HDUVRI>WKHXQGHUO\LQJ@
ODZVXLW´ WKH GLVWULFW MXGJH ZDV LQ WKH ³EHVW SRVLWLRQ WR
HYDOXDWH WKH VHWWOHPHQW DJUHHPHQW DQG ZKHWKHU WKH
1HXEHUJVZHUHHQWLWOHGWR>UHOLHIWKHUHXQGHU@´
,,,
7KH6XSUHPH&RXUW¶VRSLQLRQLQ.RNNRQHQSUHFOXGHVWKH
GLVWULFW FRXUW IURP HQIRUFLQJ SRUWLRQV RI WKH 6HWWOHPHQW
$JUHHPHQWWKDWZHUHQRWH[SUHVVO\LQFRUSRUDWHGLQHLWKHULWV
GLVPLVVDORUGHURULQLWVSULRURUGHUVDJDLQVWWKHSDUWLHV7KH

-- 4 of 14 --

0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO
1R
,QWKLVFDVHWKHGLVWULFWFRXUW¶VIDLOXUHH[SUHVVO\WRUHWDLQ
MXULVGLFWLRQRYHUWKH6HWWOHPHQW$JUHHPHQWRUWRLQFRUSRUDWH
PRUHWKDQRQHRIWKHVHWWOHPHQWWHUPVLQLWVGLVPLVVDORUGHU
SUHFOXGHVLWIURPHQIRUFLQJXQLQFRUSRUDWHGWHUPVDJDLQVWWKH
SDUWLHV7KHSRUWLRQVRIWKHGLVWULFWFRXUW¶V-DQXDU\DQG
0D\ RUGHUV GLUHFWLQJ 0F$OSLQ WR FRPSO\ ZLWK
SDUDJUDSKVDQGRIWKH6HWWOHPHQW$JUHHPHQWDUHWKHUHIRUH
LQYDOLG+RZHYHUWKHGLVWULFWFRXUWPD\RQUHPDQGXSKROG
WKH SRUWLRQV RI WKH RUGHUV GLUHFWLQJ 0F$OSLQ WR UHWXUQ
FRQILGHQWLDO GRFXPHQWV WR WKH GHIHQGDQWV LI WKH FRXUW
GHWHUPLQHVWKDWLWVUXOLQJVGLUHFWLQJ*DKDIHUWRUHWXUQDOO
GRFXPHQWV VHL]HG GXULQJ KLV UHFHLYHUVKLS DOVR ERXQG
0F$OSLQHLWKHUGLUHFWO\RUEHFDXVHVKHZDVFRPSOLFLWLQWKH
UHWHQWLRQRIWKHGRFXPHQWVDWLVVXH
-XULVGLFWLRQWR(QIRUFH3ULRU2UGHUV
$OWKRXJK$UWLFOH,,,OLPLWVDGLVWULFWFRXUW¶VMXULVGLFWLRQWR
HQIRUFHWKHWHUPVRIDVHWWOHPHQWDJUHHPHQWWKHGLVWULFWFRXUW
DOZD\V KDV MXULVGLFWLRQ WR HQIRUFH LWV RZQ RUGHUV 6HH
.RNNRQHQ 86 DW VWDWLQJ WKDW D FRXUW KDV
DQFLOODU\MXULVGLFWLRQWR³PDQDJHLWVSURFHHGLQJVYLQGLFDWHLWV
DXWKRULW\DQGHIIHFWXDWHLWVGHFUHHV´DQGWKXVKDVDQFLOODU\
MXULVGLFWLRQWRHQIRUFHDVHWWOHPHQWDJUHHPHQWLQFRUSRUDWHGLQ
DFRXUWRUGHUEHFDXVH³EUHDFKRIWKHDJUHHPHQWZRXOGEHD
EUHDFK RI WKH RUGHU´ $PHULFDQ 7RZQ &HQWHU Y +DOO
$VVRFV)G WK&LU UHDIILUPLQJWKH
ZHOOHVWDEOLVKHGUXOHWKDWLIDFRXUWKDVMXULVGLFWLRQRYHUWKH
VXEVWDQFH RI D OLWLJDWLRQ LW KDV MXULVGLFWLRQ WR HQIRUFH WKH
MXGJPHQW LW UHQGHUV 7KXV WKH GLUHFWLYHV LQ WKH GLVWULFW
FRXUW¶V-DQXDU\DQG0D\RUGHUVPD\EHXSKHOGWRWKH
H[WHQWWKDWWKH\DUH FRQVLVWHQWZLWKWKHWHUPVRIDQ\RUGHU
LVVXHGE\WKHGLVWULFWFRXUWSULRUWRGLVPLVVDORI0F$OSLQ¶V
FDVH
0F$OSLQDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQKROGLQJKHU
LQ FRQWHPSW RI LWV RUGHUV GLUHFWLQJ WKH UHWXUQ RI
FRQILGHQWLDOGRFXPHQWVWR$2&EHFDXVHWKRVHRUGHUVZHUH
GLUHFWHGRQO\WR*DKDIHUDQGWKDW³HYHQLIWKHRUGHUVFRXOGEH
1R 0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO

,Q KHU DIILGDYLW LQ VXSSRUW RI KHU PRWLRQ IRU UHFHLYHUVKLS 0F$OSLQ
UHTXHVWHG WKDW WKH FRXUW ³DSSRLQW D UHFHLYHU WR RYHUVHH WKH GD\ WR GD\
RSHUDWLRQV RI $2& DQG LQVXUH WKDW QR GRFXPHQWV RU UHFRUGV DUH GHVWUR\HG
DOWHUHG RU FRQFHDOHG RU FRUSRUDWH DVVHWV GLVVLSDWHG´
IHGHUDOFRXUWFRPSODLQWDQG WKDW$2&ZRXOGXOWLPDWHO\
EHUHVSRQVLEOHIRUWKHSD\PHQWRIDOOIHHVFRVWVDQGH[SHQVHV
$VHYLGHQFHGE\WKHVWDWHPHQWVLQKHUEULHI0F$OSLQZDV
ZHOODZDUHWKDW%UDQGRQ¶V³OLWLJDWLRQVWUDWHJ\´FRQWHPSODWHG
WKH³DSSRLQWPHQWRIDUHFHLYHUWRWDNHRYHUWKHDVVHWVUHFRUGV
DQG RSHUDWLRQV RI $2&´ DQG WR ³XQFRYHU PRUH UHFHQW
DFWLRQDEOHRIIHQVHVZLWKWKHOLPLWDWLRQVSHULRG´$SSHOODQW¶V
%UDW,QVKRUW0F$OSLQZDVZHOODZDUHWKDWGHVSLWHKHU
VWDWHPHQWV WR WKH GLVWULFW FRXUW WKDW D UHFHLYHU VKRXOG EH
DSSRLQWHGVLPSO\WRSUHYHQW$2&IURPGHVWUR\LQJHYLGHQFH
RUPLVPDQDJLQJDVVHWVWKH(VWDWHSODQQHGWRXVHWKHUHFHLYHU
WRVHL]HDQGVHDUFK$2&¶VUHFRUGVLQDQDWWHPSWWRXQFRYHU
HYLGHQFH RI DFWLRQDEOH RIIHQVHV WKDW ZHUH QRW EDUUHG E\
5,&2¶VIRXU\HDUVWDWXWHRIOLPLWDWLRQV7RWKLVHQG%UDQGRQ
ILOHGDQH[SDUWHPRWLRQDVNLQJWKHGLVWULFWFRXUWWRLVVXHD
WHPSRUDU\UHVWUDLQLQJRUGHUDQGWRDSSRLQW0RUULV*DKDIHUD
IRUHQVLF DFFRXQWDQW DV $2&¶V UHFHLYHU 7KH PRWLRQ ZDV
VXSSRUWHG E\ DIILGDYLWV IURP 0F$OSLQ DQG IURP *DKDIHU
ZKRP%UDQGRQKDGVROLFLWHGDVDSRWHQWLDOUHFHLYHUSULRUWR
ILOLQJ0F$OSLQ¶VFRPSODLQW
%DVHGRQWKHVXSSRUWLQJDIILGDYLWVWKHGLVWULFWFRXUWLVVXHG
DWHPSRUDU\UHVWUDLQLQJRUGHURQ)HEUXDU\HQMRLQLQJ
$2&IURPGHVWUR\LQJDOWHULQJDQGRUFRQFHDOLQJGRFXPHQWV
DQG IURP GLVSRVLQJ RI FRUSRUDWH DVVHWV 7KH FRXUW DOVR
JUDQWHG0F$OSLQ¶VUHTXHVWWRDSSRLQW*DKDIHUDVUHFHLYHU$W
WKHWLPHLWLVVXHGWKHRUGHUDSSRLQWLQJ*DKDIHUWKHGLVWULFW
FRXUW EHOLHYHG EDVHG RQ 0F$OSLQ¶V UHSUHVHQWDWLRQV WKDW
*DKDIHU¶VUHFHLYHU¶VERQG VHFXUHGE\2KLR&DVXDOW\LQWKH
DPRXQW RI ZRXOG VHUYH DV VHFXULW\ SXUVXDQW WR
)HGHUDO 5XOH RI &LYLO 3URFHGXUH F IRU DQ\ FRVWV RU
GDPDJHVLQFXUUHGE\$2&ZHUHLWVXEVHTXHQWO\GHWHUPLQHG
WKDWWKHFRPSDQ\KDGEHHQZURQJIXOO\HQMRLQHGRUSODFHGLQ

-- 5 of 14 --

0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO
1R
7KH FRXUW VXEVHTXHQWO\ GLVFRYHUHG WKDW *DKDIHU¶V ERQG ZDV SRVWHG
RQO\ DV VHFXULW\ IRU DQ\ GDPDJHV WKDW $2& PLJKW VXVWDLQ DV D UHVXOW RI
*DKDIHU¶V IDLOXUH SURSHUO\ WR DFFRXQW IRU IXQGV WKDW FDPH LQWR KLV
SRVVHVVLRQ DV WKH FRPSDQ\¶V UHFHLYHU
7KH UHSRUW VWDWHG DPRQJ RWKHU WKLQJV WKDW $2&¶V UHFRUGV
HYLGHQFHG 5REHUW 0RFN¶V RZQHUVKLS RI VKDUHV RI $2& VWRFN DQG WKDW
$2& DSSHDUHG WR KDYH HQJDJHG LQ VRPH LQWHUHVWHG WUDQVDFWLRQV EXW WKDW
*DKDIHU QHHGHG WR UHYLHZ DGGLWLRQDO ZLWQHVVHV DQG LQWHUYLHZ FHUWDLQ $2&
PDQDJHPHQW HPSOR\HHV WR GHWHUPLQH WKH H[WHQW RI DQ\ ZURQJGRLQJ
UHFHLYHUVKLS,QLWVRUGHUWKHGLVWULFWFRXUWGLUHFWHG8QLWHG
6WDWHV 0DUVKDOV WR DFFRPSDQ\ *DKDIHU WR $2&¶V
KHDGTXDUWHUVWRVHUYHWKH752ZKLFKZDVWRUHPDLQLQHIIHFW
SHQGLQJ DQ LQMXQFWLRQ KHDULQJ RQ 0DUFK 2Q
)HEUXDU\*DKDIHUDFFRPSDQLHGE\IHGHUDOPDUVKDOV
DQG DUPHG SULYDWH VHFXULW\ JXDUGV VHUYHG WKH FRXUW¶V
UHVWUDLQLQJRUGHURQ$2&VHDUFKHGWKHRIILFHVRI$2&DQG
LWV FRGHIHQGDQW * 0 DQG VHL]HG UHFRUGV IURP ERWK
FRPSDQLHV¶ RIILFHV $FFRUGLQJ WR $2& DIWHU WKUHDWHQLQJ
$2& HPSOR\HHV ZKHQ WKH HPSOR\HHV REMHFWHG WR WKH
XQDQQRXQFHGVHDUFK*DKDIHUDQGWKHPDUVKDOVOHIW$2&¶V
SUHPLVHVLQDYDQFRQWDLQLQJVRPHER[HVRIFRQILGHQWLDO
FRUSRUDWHGRFXPHQWV$WWKHLQMXQFWLRQKHDULQJRQ0DUFK
$2&REMHFWHGWRWKHDGHTXDF\RI*DKDIHU¶VERQGDQG
WR *DKDIHU¶V UROH LQ WKH OLWLJDWLRQ H[SUHVVLQJ VLJQLILFDQW
FRQFHUQVUHJDUGLQJ0F$OSLQ¶VIDLOXUHWRSRVWDQLQMXQFWLRQ
ERQG WKH VFRSH RI *DKDIHU¶V SRZHU DV UHFHLYHU DQG WKH
PDQQHULQZKLFK*DKDIHUDQGWKH0DUVKDOVVHUYHGWKH752
DQGVHL]HG$2&¶VDQG* 0¶VFRUSRUDWHUHFRUGV*DKDIHU
UHVSRQGHGWR$2&¶VREMHFWLRQVE\VXEPLWWLQJWRWKHFRXUWKLV
³)LUVW ,QWHULP 5HFHLYHUVKLS 5HSRUW´ DQG E\ UHTXHVWLQJ DQ
RUGHUDSSURYLQJKLVIHHVDQGH[SHQVHV
8SRQ UHDOL]LQJ WKDW GHVSLWH 0F$OSLQ¶V UHSUHVHQWDWLRQV
*DKDIHU¶VERQGZDVQRWDWUXHLQMXQFWLRQERQGEXWVHUYHGRQO\
WR LQGHPQLI\ $2& IRU GDPDJHV UHVXOWLQJ IURP *DKDIHU¶V
IDLOXUH SURSHUO\ WR DFFRXQW IRU IXQGV WKDW FDPH LQWR KLV
SRVVHVVLRQDV$2&¶VUHFHLYHUWKHGLVWULFWFRXUWRQ0DUFK
1R 0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO

VHWWOHPHQWDJUHHPHQWSXUVXDQWWR5XOH E EHFDXVHOLNHWKH
GHIHQGDQWVLQWKLVFDVHWKHPRYLQJSDUWLHV³ZHUHQRWUHDOO\
WU\LQJWRUHRSHQWKHGLVPLVVHGVXLWZKLFKZRXOGEHWKHHIIHFW
RID5XOH E PRWLRQVHWWLQJDVLGHWKHILQDOMXGJPHQW´
EXW ZHUH LQVWHDG WU\LQJ WR JHW WKH MXGJH WR ³LQWHUSUHW WKH
DJUHHPHQWJLYLQJWKHPWKHEHQHILW>RIWKHLUEDUJDLQ@´,GDW
VHHDOVR1DWLRQDO3UHVWR,QGXV,QFY'D]H\&RUS
)G )HG&LU QRWLQJWKDWDGLVWULFWFRXUW
UHWDLQV QR LQKHUHQW DXWKRULW\ WR HQIRUFH RU LQWHUSUHW D
VHWWOHPHQWFRQWUDFWWHUPLQDWLQJWKHOLWLJDWLRQ $VWKLVFRXUW
KHOGLQ+LQVGDOHY)DUPHUV1DW¶O%DQN 7UXVW&R)G
WK &LU VHYHQ \HDUV EHIRUH .RNNRQHQ ZDV
GHFLGHG D GLVWULFW FRXUW WKDW XQFRQGLWLRQDOO\ GLVPLVVHV DQ
DFWLRQ ZLWK SUHMXGLFH DQG GRHV QRW DWWHPSW WR UHWDLQ
MXULVGLFWLRQ WR HQIRUFH WKH SDUWLHV¶ VHWWOHPHQW DJUHHPHQW
FDQQRW HQIRUFH WKH DJUHHPHQW EHFDXVH WKH ³XQFRQGLWLRQDO
GLVPLVVDO ZLWK SUHMXGLFH WHUPLQDWH>V@ WKH GLVWULFW FRXUW¶V
MXULVGLFWLRQH[FHSWIRUWKHOLPLWHGSXUSRVHRIUHRSHQLQJDQG
VHWWLQJ DVLGH WKH MXGJPHQW RI GLVPLVVDO ZLWKLQ WKH VFRSH
DOORZHGE\5XOH E ´,GDW HPSKDVLVDGGHG
,QDGGLWLRQWRWKHVXEVWDQWLYHSUREOHPVDVVRFLDWHGZLWKWKH
GLVWULFWFRXUW¶VUHOLDQFHRQ5XOH E DVWKHEDVLVIRUDQFLOODU\
MXULVGLFWLRQRYHUWKH6HWWOHPHQW$JUHHPHQWWKHGHIHQGDQWV¶
IDLOXUH WR PRYH WKH GLVWULFW FRXUW IRU UHOLHI SXUVXDQW WR WKH
5XOH WKHGHIHQGDQWVEURXJKWWKHLUPRWLRQIRUFRQWHPSWDQG
IRUHQIRUFHPHQWRIWKH$JUHHPHQWSXUVXDQWWR)HGHUDO5XOHRI
&LYLO 3URFHGXUH XQGHUPLQHV WKH GLVWULFW FRXUW¶V
LQWHUSUHWDWLRQRI5XOH E LQLWV-DQXDU\RUGHU6HH)HG
5 &LY 3 E VWDWLQJ WKDW UHOLHI PXVW EH VRXJKW ³RQ
PRWLRQ´ E\ WKH DJJULHYHG SDUW\ .DOW Y +XQWHU )G
WK&LU UHIXVLQJWRJUDQWUHOLHISXUVXDQW
WR5XOH E EHFDXVHWKHSDUW\VHHNLQJHQIRUFHPHQWRIWKH
VHWWOHPHQWDJUHHPHQW³GLGQRWVHHN5XOH E UHOLHI´EXW
LQVWHDGSOHGDQ³LQGHSHQGHQWDFWLRQVHHNLQJHTXLWDEOHUHOLHI´
ZLWKRXW³VDWLVI>\LQJ@KLVEXUGHQRIHVWDEOLVKLQJIHGHUDOFRXUW
MXULVGLFWLRQ´ FLWLQJ.RNNRQHQ86DW

-- 6 of 14 --

0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO
1R
)HG5&LY3 E
$VWKH6XSUHPH&RXUWDFNQRZOHGJHGLQ.RNNRQHQVRPH
FLUFXLWVKDYHKHOGWKDWDGLVPLVVHGVXLWFDQEHUHRSHQHGXQGHU
)HGHUDO5XOHRI&LYLO3URFHGXUH E E\UHDVRQRIEUHDFK
RIWKHDJUHHPHQWWHUPLQDWLQJWKHOLWLJDWLRQ6HH.RNNRQHQ
86DW+RZHYHUWKH&RXUWZHQWRQWRREVHUYHWKDW
³>H@QIRUFHPHQW RI >D@ VHWWOHPHQW DJUHHPHQW ZKHWKHU
WKURXJKDZDUGRIGDPDJHVRUGHFUHHRIVSHFLILFSHUIRUPDQFH
LVPRUHWKDQMXVWDFRQWLQXDWLRQRUUHQHZDORIWKHGLVPLVVHG
VXLWDQGKHQFHUHTXLUHVLWVRZQEDVLVIRUMXULVGLFWLRQ´,ELG
HPSKDVLVDGGHG ,QWKLVFDVHWKHGLVWULFWFRXUWVRXJKWWR
HQIRUFHVSHFLILFSURYLVLRQVRIWKH6HWWOHPHQW$JUHHPHQWE\
KROGLQJ0F$OSLQLQFRQWHPSWRIFRXUWDQGE\RUGHULQJKHUWR
SHUIRUPVSHFLILFDFWV7KHGLVWULFWFRXUW¶VFRQWHPSWRUGHUZDV
FOHDUO\ ³PRUH WKDQ MXVW D FRQWLQXDWLRQ RU UHQHZDO RI WKH
GLVPLVVHGVXLW´DQGDIILUPLQJWKHGLVWULFWFRXUW¶VUHOLDQFHRQ
5XOH E ZRXOG FUHDWH DQ H[FHSWLRQ WR WKH KROGLQJ LQ
.RNNRQHQ WKDW ZRXOG VZDOORZ WKH UXOH JLYLQJ WKH GLVWULFW
FRXUW WKH W\SH RI EURDG HQIRUFHPHQW MXULVGLFWLRQ WKDW WKH
.RNNRQHQ &RXUW UHVHUYHG WR FRXUWV WKDW HLWKHU VSHFLILFDOO\
UHWDLQMXULVGLFWLRQWRHQIRUFHDVHWWOHPHQWDJUHHPHQWRUWKDW
H[SUHVVO\LQFRUSRUDWHWKHWHUPVRIWKHDJUHHPHQWLQDYDOLG
DQGHQIRUFHDEOHRUGHU,ELG
&RQWUDU\WRWKHGHIHQGDQWV¶DVVHUWLRQWKHGHWHUPLQDWLRQE\
VRPHFRXUWVWKDW ³UHSXGLDWLRQRIDVHWWOHPHQWDJUHHPHQW
WKDWWHUPLQDWH>V@OLWLJDWLRQSHQGLQJEHIRUHDFRXUWFRQVWLWXWHV
DQH[WUDRUGLQDU\FLUFXPVWDQFH´MXVWLI\LQJUHOLHIXQGHU5XOH
E DQG WKDW.RNNRQHQSHUPLWVSDUWLHVWR³UHYLYHD
VXLW XQGHU 5XOH E ZKHQ D VHWWOHPHQW DJUHHPHQW KDV
EHHQEUHDFKHG´/HDOY7RZQRI&LFHUR:/
1',OO DW FLWLQJ.HHOLQJY6KHHW0HWDO:RUNHUV,QW¶O
$VVRF )G WK &LU LV VLPSO\ QRW
VXSSRUWHG E\ .RNNRQHQ¶V WH[W RU WKH PDQQHU LQ ZKLFK WKH
IHGHUDO FRXUWV RI DSSHDOV KDYH DSSOLHG WKH FDVH 6HH
.RNNRQHQ86DW1HXEHUJ)GDW,Q
1HXEHUJ IRU H[DPSOH WKH 6HYHQWK &LUFXLW DIILUPHG WKH
GLVWULFW FRXUW¶V UHIXVDO WR LQWHUSUHW RU HQIRUFH WKH SDUWLHV¶
1R 0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO

0F$OSLQ H[SODLQV LQ KHU EULHI RQ DSSHDO WKDW VKH ZDV XQDEOH WR
REWDLQ WKH ERQG EHFDXVH WKH 0RFN (VWDWH¶V RQO\ DVVHW ± LWV DOOHJHG VWRFN
RZQHUVKLS LQ $2& ± ZDV DW WKH PRVW ZRUWK DQ DPRXQW
LQVXIILFLHQW WR FRYHU WKH REOLJDWLRQ RQ D ERQG 0F$OSLQ EODPHV
KHU DWWRUQH\ IRU KHU IDLOXUH WR REWDLQ WKH ERQG DOOHJLQJ WKDW KDG ³%UDQGRQ
QRW FKRVHQ WR UHO\ RQ WKH TXHVWLRQDEOH $2& ILQDQFLDO VWDWHPHQWV DQG
LQVWHDG XQGHUWDNHQ DQ\ GXH GLOLJHQFH WR LQYHVWLJDWH DQGRU REWDLQ DQ\
LQGHSHQGHQW YDOXDWLRQV RI MXVW WKH UHDO HVWDWH RZQHG E\ $2&´ D ERQG
ZRXOG KDYH EHHQ LVVXHG EHFDXVH WKH LQVXUHUV 0F$OSLQ FRQWDFWHG UHIXVHG
WR LVVXH D ERQG EDVHG RQ WKH DOOHJHG YDOXH RI WKH 0RFN (VWDWH¶V VWRFN LQ
$2& DV UHIOHFWHG LQ $2&¶V 0DUFK ILQDQFLDO VWDWHPHQW
LVVXHGDQRUGHUGLUHFWLQJ0F$OSLQWRSRVWDVXUHW\ERQG
LQWKHDPRXQWRIQRODWHUWKDQSPWKDWGD\
7KHFRXUWDOVRGLUHFWHG*DKDIHUWRVXEPLWDSURSRVHGRUGHU
FODULI\LQJ KLV GXWLHV LQ WKH OLWLJDWLRQ 7KH GLVWULFW FRXUW
H[WHQGHGWKH752XQWLO0DUFKDQGRUGHUHG*DKDIHU
WR VXEPLW D EDODQFH VKHHW GHWDLOLQJ $2&¶V DVVHWV DQG
OLDELOLWLHV$WDKHDULQJRQ0DUFKWKHGLVWULFWFRXUW
ZDVLQIRUPHGWKDW0F$OSLQKDGQRWSRVWHGWKHUHTXLUHGVXUHW\
ERQG DV GLUHFWHG E\ WKH FRXUW¶V 0DUFK RUGHU DQG WKDW
*DKDIHU KDG QRW SUHSDUHG D EDODQFH VKHHW ,Q UHVSRQVH WR
0F$OSLQ¶VIDLOXUHWRSRVWERQGDQGWRTXHVWLRQVFRQFHUQLQJ
*DKDIHU¶VGXWLHVDQGTXDOLILFDWLRQVDVUHFHLYHU-XGJH+RRG
LVVXHG DQ RUGHU GDWHG 0DUFK LQ ZKLFK KH
GLVVROYHGWKH7HPSRUDU\5HVWUDLQLQJ2UGHU GHQLHG
0F$OSLQ¶VPRWLRQIRUDSUHOLPLQDU\LQMXQFWLRQ JUDQWHG
*DKDIHU¶V PRWLRQ IRU DSSURYDO DQG SD\PHQW RI FRVWV
GLUHFWHG0F$OSLQWRSD\*DKDIHU¶VIHHVDQGFRVWVWRWDOLQJ
DVRI0DUFKDORQJZLWKDQ\DGGLWLRQDO
IHHV RU FKDUJHV WKHUHDIWHU LQFXUUHG GLVVROYHG WKH
UHFHLYHUVKLS DQG UHOLHYHG *DKDIHU RI DQ\ IXUWKHU
UHVSRQVLELOLWLHVDVUHFHLYHU GLUHFWHG*DKDIHU¶VFRXQVHOWR
UHWDLQ DOO FRSLHV RI *DKDIHU¶V )LUVW ,QWHULP 5HSRUW DQG
RUGHUHG*DKDIHUQRWWRGLVFORVHWRDQ\RQHRWKHUWKDQKLV
DWWRUQH\DQ\LQIRUPDWLRQKHREWDLQHGLQKLVFDSDFLW\DV$2&¶V
UHFHLYHU
2Q0D\*DKDIHUPRYHGWKHGLVWULFWFRXUWWRDOWHU
RUDPHQGWKH0DUFKRUGHUWRSURYLGHWKDW0F$OSLQZRXOG

-- 7 of 14 --

0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO
1R
EHKHOGLQFRQWHPSWLIVKHFRQWLQXHGWRZLWKKROGSD\PHQWRI
KLVIHHV0F$OSLQILOHGDUHVSRQVHVWDWLQJWKDWWKH(VWDWHZDV
LQVROYHQW DQG WKDW *DKDIHU¶V IHHV VKRXOG EH WD[HG DJDLQVW
$2&DQGLWVFRGHIHQGDQWV0F$OSLQWKHUHDIWHUVRXJKWLQ
VSLWH RI WKH GLVWULFW FRXUW¶V 0DUFK RUGHU WR REWDLQ
*DKDIHU¶V)LUVW,QWHULP5HSRUWDQGWRREWDLQGRFXPHQWVWKDW
*DKDIHUVHL]HGGXULQJKLVUHFHLYHUVKLSE\ILOLQJD1RWLFHRI
'HSRVLWLRQDQG6XESRHQD'XFHV7HFXPFRPSHOOLQJ*DKDIHU
WRWHVWLI\DWDGHSRVLWLRQRQ-XQH2Q-XQH
*DKDIHU VRXJKW D SURWHFWLYH RUGHU DJDLQVW 0F$OSLQ¶V
VXESRHQDDQGRQ-XO\WKHGLVWULFWFRXUWHQWHUHGD
FRPSUHKHQVLYH UXOLQJ GLVSRVLQJ RI WKH SDUWLHV¶ YDULRXV
PRWLRQV DQG FODULI\LQJ LWV 0DUFK RUGHU GLVVROYLQJ ERWK
*DKDIHU¶VUHFHLYHUVKLSDQGWKHWHPSRUDU\UHVWUDLQLQJRUGHU
DJDLQVW$2&
,QLWV-XO\RUGHUWKHGLVWULFWFRXUWDOVRGHFOLQHGWRWD[
*DKDIHU¶VIHHVDJDLQVW$2&QRWLQJWKDWLWKDGPDGHLW³YHU\
FOHDU´LQLWV0DUFKRUGHUWKDW0F$OSLQZDVUHVSRQVLEOHIRU
SD\LQJ*DKDIHU¶VIHHV7KHGLVWULFWFRXUWGHQLHG*DKDIHU¶V
PRWLRQIRUDVKRZFDXVHRUGHURQWKHEDVLVWKDWLWZRXOGEH
XQIDLUWRSXQLVK0F$OSLQIRUIDLOLQJWRSD\*DKDIHUEHIRUHWKH
FRXUW UXOHG RQ KHU PRWLRQ WR DPHQG LWV 0DUFK RUGHU
+RZHYHUKDYLQJGHQLHG0F$OSLQ¶VPRWLRQWRDPHQG-XGJH
+RRGRQ-XO\GLUHFWHGKHUQRWWRGHOD\DQ\IXUWKHUDQGWR
SD\*DKDIHU¶VIHHVZLWKLQWHQGD\V7KHFRXUWWKHQVXVWDLQHG
*DKDIHU¶VPRWLRQIRUDSURWHFWLYHRUGHUTXDVKHG0F$OSLQ¶V
VXESRHQDKHOGWKDW0F$OSLQFRXOGQRWGHSRVH*DKDIHUDQG
KHOG WKDW *DKDIHU ZRXOG QRW EH UHTXLUHG WR SURGXFH DQ\
GRFXPHQWRUWRUHVSRQGWRDQ\GLVFRYHU\LQFRQQHFWLRQZLWK
0F$OSLQ¶V VXLW DJDLQVW $2& ,Q DGGLWLRQ WR JUDQWLQJ
*DKDIHU¶V PRWLRQ IRU D SURWHFWLYH RUGHU WKH FRXUW JUDQWHG
$2&¶V PRWLRQ WR DPHQG WKH FRXUW¶V 0DUFK RUGHU
GLVVROYLQJ WKH UHFHLYHUVKLS WR UHIOHFW WKH FRXUW¶V 0DUFK
UXOLQJWKDW
7KH5HFHLYHUVKDOOUHWXUQDOOGRFXPHQWVWDNHQIURPWKH
GHIHQGDQWV¶SUHPLVHVWKH5HFHLYHUVKDOOQRWGLVFORVH
1R 0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO

FRQWHPSWVDQFWLRQVDJDLQVWWKHDSSHOOHHLPPHGLDWHO\³DVKH
ZRXOG KDYH EHHQ DEOH WR KDG WKH GLVWULFW FRXUW UHWDLQHG
MXULVGLFWLRQ RU LQFRUSRUDWHG WKH >SDUWLHV¶@ VHWWOHPHQW
DJUHHPHQWLQWRWKHRUGHURIGLVPLVVDO´
,WLVZHOOVHWWOHGWKDW³>W@KHPHUHUHIHUHQFHLQ>DGLVPLVVDO@
RUGHUWR>DVHWWOHPHQW@$JUHHPHQWGRHVQRWLQFRUSRUDWHWKH
$JUHHPHQWLQWRWKHRUGHU´6FHOVDY&LW\8QLYHUVLW\RI1HZ
<RUN)G G&LU UHMHFWLQJWKHGLVWULFWFRXUW¶V
DWWHPSWWRHQIRUFHDVHWWOHPHQWDJUHHPHQWUHIHUHQFHGLQWKH
FRXUW¶V GLVPLVVDO RUGHU RQ WKH EDVLV WKDW .RNNRQHQ RQO\
SHUPLWV MXULVGLFWLRQ ZKHUH WKH ³'LVPLVVDO 2UGHU H[SUHVVO\
UHVHUYH>V@ DXWKRULW\ WR HQIRUFH WKH $JUHHPHQW RU
LQFRUSRUDWH>V@WKH$JUHHPHQWLQWRWKHRUGHU´ %HFDXVHWKLV
FRXUWKDVMRLQHGRWKHUFLUFXLWVLQVWULFWO\DSSO\LQJ.RNNRQHQ¶V
UHODWLYHO\QDUURZLQWHUSUHWDWLRQRIDGLVWULFWFRXUW¶VDQFLOODU\
MXULVGLFWLRQ WR HQIRUFH VHWWOHPHQW DJUHHPHQWV WHUPLQDWLQJ
OLWLJDWLRQWKHGLVWULFWFRXUW¶VLQFRUSRUDWLRQLQLWVGLVPLVVDO
RUGHURIRQO\DVLQJOHWHUPRIWKHSDUWLHV¶SDJHVHWWOHPHQW
DJUHHPHQWLVLQVXIILFLHQWWRVXSSRUWWKHFRXUW¶VH[HUFLVHRI
DQFLOODU\MXULVGLFWLRQRYHUWKHHQWLUHDJUHHPHQW
1RUFDQ5XOH E EHXVHGWRVXSSRUWWKHGLVWULFWFRXUW¶V
DWWHPSWWRHQIRUFHSURYLVLRQVRIWKHVHWWOHPHQWDJUHHPHQWQRW
H[SUHVVO\LQFRUSRUDWHGLQWKHGLVPLVVDORUGHU5HOLHIIURPD
ILQDOMXGJPHQWXQGHU5XOH E LVDQ³H[WUDRUGLQDU\UHPHG\
WKDWLVJUDQWHGRQO\LQH[FHSWLRQDOFLUFXPVWDQFHV´'LFNHUVRQ
Y%RDUGRI(GXFRI)RUG+HLJKWV)G WK
&LU VHHDOVR1HXEHUJ)GDW QRWLQJWKDW
³>Q@RWKLQJ LQ .RNNRQHQ SXUSRUWV WR FKDQJH WKH VWULQJHQW
VWDQGDUGV WKDW JRYHUQ WKH DYDLODELOLW\ RI UHOLHI XQGHU 5XOH
E ´ 5XOHSURYLGHVLQSHUWLQHQWSDUW
E 0LVWDNHV,QDGYHUWHQFH([FXVDEOH1HJOHFW1HZO\
'LVFRYHUHG(YLGHQFH)UDXG(WF2QPRWLRQDQGXSRQ
VXFKWHUPVDVDUHMXVWWKHFRXUWPD\UHOLHYHDSDUW\RUD
SDUW\¶VOHJDOUHSUHVHQWDWLYHIURPDILQDOMXGJPHQWRUGHU
RUSURFHHGLQJIRU DQ\RWKHUUHDVRQMXVWLI\LQJ
UHOLHIIURPWKHRSHUDWLRQRIWKHMXGJPHQW

-- 8 of 14 --

0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO
1R
$OWKRXJK WKH VWDWHPHQW LQ WKH FRXUW¶V 0DUFK FRQFHUQLQJ
WKH UHWXUQ RI FRQILGHQWLDO GRFXPHQWV WR $2& LV GLUHFWHG SULPDULO\ DW
*DKDIHU WKH SRUWLRQ RI WKH RUGHU GLUHFWLQJ WKDW ³DQ\ FRSLHV PDGH VKDOO
DOVR EH UHWXUQHG WR WKH GHIHQGDQWV´ LV ZULWWHQ LQ WKH SDVVLYH YRLFH DQG
FRXOG SRVVLEO\ EH FRQVWUXHG WR ELQG 0F$OSLQ 6HH LQIUD S
GLUHFWLQJWKDWDOOGRFXPHQWVVHL]HGE\*DKDIHUEHUHWXUQHGWR
$2& +RZHYHU WKLV FRXUW KDV MRLQHG RWKHU FLUFXLWV LQ
VWULFWO\DSSO\LQJWKHKROGLQJLQ.RNNRQHQ7KXVWKHGLVWULFW
FRXUW¶VLQFRUSRUDWLRQLQLWVGLVPLVVDORUGHURIRQO\RQHWHUP
RI WKH 6HWWOHPHQW $JUHHPHQW ZKLFK WHUP GRHV QRW RQ LWV
IDFH DSSO\ GLUHFWO\ WR 0F$OSLQ LV LQVXIILFLHQW WR FRQIHU
MXULVGLFWLRQRYHUWKHHQWLUHDJUHHPHQW,Q&DXGLOOY1RUWK
$PHULFDQ0HGLD&RUS)G WK&LU WKLV
FRXUWMRLQHGWKH7KLUGDQG(LJKWK&LUFXLWVLQKROGLQJWKDWDQ
RUGHUGLVPLVVLQJDFDVH³SXUVXDQWWRWKHWHUPVRIWKHSDUWLHV¶
VHWWOHPHQWDJUHHPHQW´GRHVQRWSURYLGHDGLVWULFWFRXUWZLWK
DQFLOODU\ MXULVGLFWLRQ WR HQIRUFH WKH DJUHHPHQW XQGHU
.RNNRQHQ6HHLGDW VWDWLQJWKDW³>W@KHSKUDVHμSXUVXDQW
WRWKHWHUPVRIWKH6HWWOHPHQW¶IDLOVWRLQFRUSRUDWHWKHWHUPV
RIWKH6HWWOHPHQW$JUHHPHQWLQWRWKHRUGHU´ TXRWLQJ,QUH
3KDU0RU,QF6HFXULWLHV/LWLJDWLRQ)G G
&LU TXRWLQJ 0HLQHU Y 0LVVRXUL 'HS¶W RI 0HQWDO
+HDOWK)G WK&LU ,Q&DXGLOOWKLV
FRXUWIODWO\UHMHFWHGWKHGLVWULFWFRXUW¶VDWWHPSWWRGLVWLQJXLVK
.RNNRQHQDQGHQIRUFHWKHSDUWLHV¶VHWWOHPHQWDJUHHPHQWRQ
WKHEDVLVWKDWLWVILQDORUGHUGLVPLVVHGWKHFDVH³SXUVXDQWWR
WKHWHUPVRIWKHSDUWLHV¶DJUHHPHQW´ZKHUHDVWKHGLVPLVVDO
RUGHULQ.RNNRQHQ³GLGQRWVRPXFKDVUHIHUWRWKHVHWWOHPHQW
DJUHHPHQW´&DXGLOO)GDW$2&¶VILUVWDUJXPHQW
LQVXSSRUWRIWKHGLVWULFWFRXUW¶VMXULVGLFWLRQKDVWKXVDOUHDG\
EHHQUHMHFWHGLQWKLVFLUFXLW6HHLELGVHHDOVR'RZQH\Y
&ODXGHU)G WK&LU ILQGLQJEDVHGRQ
D VWULFW DSSOLFDWLRQ RI WKH KROGLQJ LQ .RNNRQHQ WKDW WKH
GLVWULFW FRXUW ODFNHG MXULVGLFWLRQ WR HQIRUFH WKH SDUWLHV¶
VHWWOHPHQWDJUHHPHQWEHFDXVHLWIDLOHGVSHFLILFDOO\WR³UHWDLQ
MXULVGLFWLRQRYHUHQIRUFHPHQWRIWKHDJUHHPHQWZKHQHQWHULQJ
MXGJPHQW´ )XWHUQLFNY6XPSWHU7RZQVKLS)G
WK &LU QRWLQJ WKDW WKH DSSHOODQW FRXOG QRW VHHN
1R 0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO

*DKDIHU¶V )LUVW ,QWHULP 5HSRUW UHIHUV WR FRUSRUDWH GRFXPHQWV
HYLGHQFLQJ 5REHUW 0RFN¶V RZQHUVKLS RI VKDUHV RI $2& VWRFN
DQ\GRFXPHQWRUSRUWLRQWKHUHRIWRDQ\RQHDQGDQ\
FRSLHVPDGHVKDOODOVREHUHWXUQHGWRWKHGHIHQGDQWV
0F$OSLQIDLOHGWRSD\*DKDIHU¶VIHHVZLWKLQGD\VRIWKH
GLVWULFWFRXUW¶V-XO\RUGHUDQGRQ-XO\*DKDIHU
PRYHGWRKROG0F$OSLQLQFRQWHPSW*DKDIHUDOVRUHTXHVWHG
WKDWWKHFRXUWGLYHVWWKH0RFN(VWDWHRIDQ\LQWHUHVWLQRU
FODLPRIRZQHUVKLSWRWKHFRUSRUDWHVWRFNRI$2&DQGYHVW
VXFKULJKWWLWOHLQWHUHVWRUFODLPLQKLP,QWKHDOWHUQDWLYH
*DKDIHUPRYHGWKHGLVWULFWFRXUWWRLVVXHDZULWRIDWWDFKPHQW
RUVHTXHVWUDWLRQDJDLQVWWKH0RFN(VWDWH¶V RQO\ DVVHW±LWV
DOOHJHG RZQHUVKLS LQWHUHVW LQ $2& ± LQ RUGHU WR HIIHFW
FRPSOLDQFHZLWKWKHFRXUW¶V-XO\RUGHU0F$OSLQILOHGD
UHVSRQVHRQ$XJXVWVWDWLQJWKDWWKH0RFN(VWDWH
ZDVLQVROYHQWDQGWKDWLWZRXOGEHLQDSSURSULDWHIRUWKHFRXUW
WRKROGLWLQFRQWHPSW0F$OSLQ¶VFRXQVHOWKHQSURSRVHGWKDW
WKH FRXUW UHTXLUH $2& WR UHLVVXH RI WKH VKDUHV RI
$2&VWRFNDOOHJHGO\RZQHGE\WKH0RFN(VWDWHWR*DKDIHUWR
VHFXUH KLV IHHV DQG WKDW $2& UHPLW WKH UHPDLQLQJ
VKDUHVWRWKH(VWDWH
2Q6HSWHPEHUWKHGLVWULFWFRXUWILOHGDQH[WHQVLYH
RUGHUGLVPLVVLQJ0F$OSLQ¶VVXLWRQWKHPHULWVDQGGLVSRVLQJ
RIWKHSDUWLHV¶SHQGLQJPRWLRQV,QWKH6HSWHPEHURUGHUWKH
GLVWULFW FRXUW GLVPLVVHG ZLWK SUHMXGLFH DV WLPHEDUUHG
0F$OSLQ¶V FLYLO 5,&2 FODLPV GHFOLQHG WR H[HUFLVH
VXSSOHPHQWDOMXULVGLFWLRQRYHU0F$OSLQ¶VUHPDLQLQJVWDWHODZ
FODLPV GHQLHGDVPRRW$2&¶VPRWLRQWRWUDQVIHUYHQXH
DQG0F$OSLQ¶VPRWLRQIRUOHDYHWRILOHKHUUHVSRQVHRXWRI
WLPHDQG VFKHGXOHGDKHDULQJIRU6HSWHPEHUWR
FRQVLGHU*DKDIHU¶VPRWLRQWRKROG0F$OSLQLQFRQWHPSWRI
WKHFRXUW¶VRUGHUGLUHFWLQJKHUWRSD\*DKDIHU¶VIHHV7KH
GLVWULFW FRXUW QHYHU UXOHG RQ *DKDIHU¶V FRQWHPSW PRWLRQ
KRZHYHU EHFDXVH WKH SDUWLHV ZKR KDG EHHQ HQJDJHG LQ
VHWWOHPHQWQHJRWLDWLRQVVLQFH0D\H[HFXWHGDILQDO

-- 9 of 14 --

0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO
1R
VHWWOHPHQW DJUHHPHQW GLVSRVLQJ RI WKH OLWLJDWLRQ RQ
6HSWHPEHU 0F$OSLQ EHJDQ WKH QHJRWLDWLRQV E\
GHPDQGLQJLQH[FKDQJHIRUWKHUHOHDVHRIDOOKHU
FODLPV DJDLQVW $2& $V 0F$OSLQ H[SODLQV LQ KHU EULHI
KRZHYHU ³IROORZLQJ WKH HQWU\ RI WKH 6HSWHPEHU
2UGHU%UDQGRQFRQYLQFHG>KHUDQGKHUKXVEDQG@WKDWWKH\
KDG QR DOWHUQDWLYH EXW WR VHWWOH WKHLU FODLPV IRU HVVHQWLDOO\
ZKDWHYHU DPRXQW WKH 'HIHQGDQWV ZHUH ZLOOLQJ WR SD\´
EHFDXVHLIWKH\GLGQRWVHWWOH*DKDIHUZRXOGSURFHHGZLWKKLV
PRWLRQIRUFRQWHPSWDQGWKHHVWDWHZRXOGORVHDOORILWVVWRFN
LQ$2&
3XUVXDQWWRWKH6HWWOHPHQW$JUHHPHQW0XWXDO5HOHDVHDQG
&RYHQDQW1RWWR6XHH[HFXWHGRQ6HSWHPEHU$2&
SDLG0F$OSLQDWRWDORIRIZKLFKZHQWWR
*DKDIHU RI ZKLFK ZHQW WR %UDQGRQ IRU IHHV DQG
RIZKLFKZHQWWRWKH0RFN(VWDWH%RWK0F$OSLQ
DQG KHU KXVEDQG SHUVRQDOO\ LQLWLDOHG HDFK SDJH RI WKH
6HWWOHPHQW$JUHHPHQWZKLFKSURYLGHGLQSHUWLQHQWSDUWWKDW
*DKDIHUDQGWKH3ODLQWLIIVZDUUDQWDQGUHSUHVHQWWRWKH
'HIHQGDQWV WKDW WKH\ KDYH UHWXUQHG DQ\ DQG DOO
GRFXPHQWV LQFOXGLQJ FRSLHV WKHUHRI ZKLFK ZHUH
REWDLQHGDVWKHUHVXOWRIWKHSHUIRUPDQFHRI*DKDIHU¶V
GXWLHVDVUHFHLYHU6LPXOWDQHRXVO\ZLWKWKHH[HFXWLRQ
RI WKLV $JUHHPHQW *DKDIHU DQG WKH 3ODLQWLIIV KDYH
H[HFXWHG DQ $JUHHG 2UGHU SURYLGLQJ WKDW DQ\ DQG DOO
FRSLHV RI WKH 5HFHLYHU¶V )LUVW ,QWHULP 5HSRUW ZLOO EH
GHOLYHUHG WR WKH 'HIHQGDQWV E\ *DKDIHU DQGRU KLV
DWWRUQH\V 7KH 3ODLQWLIIV DJUHH WR UHWXUQ WR WKH
'HIHQGDQWV DQ\ DQG DOO GRFXPHQWV ZKLFK WKH\ KDYH
FRQFHUQLQJ$2&DQGRULWVRSHUDWLRQV
7KH3ODLQWLIIVDQG*DKDIHUDJUHHWKDWIURPDQGDIWHUWKH
GDWH RI WKLV $JUHHPHQW WKH\ DQG DQ\RQH FODLPLQJ
WKURXJKWKHPZLOOIRUHYHUUHIUDLQIURPPDNLQJDQ\FODLP
RUGHPDQGRUILOLQJDQ\FODLPLQDQ\IRUPRUEHIRUHDQ\
FRXUWRU DGPLQLVWUDWLYHDJHQF\WKDWL 5REHUW0RFNRU
DQ\RQHFODLPLQJWKURXJKKLPLVRUZDVDVKDUHKROGHURI
1R 0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO

E\DVLQJOHFRXUWRIFODLPVWKDWDUHLQYDU\LQJUHVSHFWVDQG
GHJUHHVIDFWXDOO\LQWHUGHSHQGHQWDQG WRHQDEOHDFRXUWWR
IXQFWLRQ VXFFHVVIXOO\ WKDW LV WR PDQDJH LWV SURFHHGLQJV
YLQGLFDWHLWVDXWKRULW\DQGHIIHFWXDWHLWVGHFUHHV´ FLWDWLRQV
RPLWWHG $V WKH &RXUW REVHUYHG LQ UHMHFWLQJ WKH GLVWULFW
FRXUW¶VDWWHPSWWRHQIRUFHWKHVHWWOHPHQWDJUHHPHQWRQWKH
EDVLV WKDW LW KDG DQFLOODU\ MXULVGLFWLRQ WR ³SURWHFW LWV
SURFHHGLQJVDQGYLQGLFDWHLWVDXWKRULW\´
>7@KHRQO\>UHOHYDQW@RUGHU>LVVXHGE\WKHGLVWULFWFRXUW@
ZDVWKDWWKHVXLWEHGLVPLVVHGDGLVSRVLWLRQWKDWLVLQQR
ZD\ IORXWHG RU LPSHULOHG E\ WKH DOOHJHG EUHDFK RI WKH
VHWWOHPHQW DJUHHPHQW 7KH VLWXDWLRQ ZRXOG EH TXLWH
GLIIHUHQW LI WKH SDUWLHV¶ REOLJDWLRQ WR FRPSO\ ZLWK WKH
WHUPVRIWKHVHWWOHPHQWDJUHHPHQWKDGEHHQPDGHSDUWRI
WKH RUGHU RI GLVPLVVDO ± HLWKHU E\ VHSDUDWH SURYLVLRQ
VXFK DV D SURYLVLRQ ³UHWDLQLQJ MXULVGLFWLRQ´ RYHU WKH
VHWWOHPHQWDJUHHPHQW RUE\LQFRUSRUDWLQJWKHWHUPVRI
WKHVHWWOHPHQWDJUHHPHQWLQWKHRUGHU,QWKDWHYHQWD
EUHDFK RI WKH DJUHHPHQW ZRXOG EH D YLRODWLRQ RI WKH
RUGHUDQGDQFLOODU\MXULVGLFWLRQWRHQIRUFHWKHDJUHHPHQW
ZRXOGWKHUHIRUHH[LVW7KDWKRZHYHUZDVQRWWKHFDVH
KHUH7KHMXGJH¶VPHUHDZDUHQHVVDQGDSSURYDORIWKH
WHUPVRIWKHVHWWOHPHQWDJUHHPHQWGRQRWVXIILFHWRPDNH
WKHPSDUWRIKLVRUGHU
,GDW QRWLQJWKDWZKHQDFDVHLVGLVPLVVHGSXUVXDQW
WR )HGHUDO 5XOH RI &LYLO 3URFHGXUH D ³WKH SDUWLHV¶
FRPSOLDQFHZLWKWKHWHUPVRIWKHVHWWOHPHQWFRQWUDFW RUWKH
FRXUW¶VμUHWHQWLRQRIMXULVGLFWLRQ¶RYHUWKHVHWWOHPHQWFRQWUDFW
PD\LQWKHFRXUW¶VGLVFUHWLRQEHRQHRIWKHWHUPVVHWIRUWKLQ
WKHRUGHU´
2IFRXUVHWKHIDFWVLQWKLVFDVHVXSSRUWWKHGLVWULFWFRXUW¶V
H[HUFLVHRIMXULVGLFWLRQWRDJUHDWHUH[WHQWWKDQGLGWKHIDFWVDW
LVVXH LQ .RNNRQHQ ,Q WKLV FDVH XQOLNH LQ .RNNRQHQ WKH
GLVWULFWFRXUW¶VRUGHURIGLVPLVVDOGLGPHQWLRQWKHVHWWOHPHQW
DJUHHPHQW DQG QRQFRPSOLDQFH ZLWK WKH DJUHHPHQW ZRXOG
DUJXDEO\ ³IORXW>@ DQG LPSHULO>@´ WKH GLVWULFW FRXUW¶V RUGHUV

-- 10 of 14 --

0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO
1R
XVHG WR SURYLGH D SDUW\ ZLWK UHOLHI IURP D MXGJPHQW RI
GLVPLVVDO+RZHYHULQWKLVFDVHWKHGLVWULFWFRXUWHUUHGLQ
FRQVWUXLQJ5XOH E DVDEURDGH[FHSWLRQWRWKH6XSUHPH
&RXUW¶VGHFLVLRQLQ.RNNRQHQY*XDUGLDQ/LIH,QV&R
86 LQZKLFKWKH&RXUWKHOGWKDWDIHGHUDOGLVWULFW
FRXUW ODFNV MXULVGLFWLRQ WR HQIRUFH D VHWWOHPHQW DJUHHPHQW
WHUPLQDWLQJ OLWLJDWLRQ XQOHVV WKH FRXUW ³H[SUHVVO\ UHWDLQHG
MXULVGLFWLRQ WR HQIRUFH WKH VHWWOHPHQW DJUHHPHQW´ RU
³LQFRUSRUDWHGWKHWHUPVRIWKHVHWWOHPHQWLQWRWKHGLVPLVVDO
RUGHU´,GDW:KHQUHDGLQFRQMXQFWLRQZLWKWKH
GLVPLVVDORUGHULQWKLVFDVH.RNNRQHQSUHFOXGHVWKHGLVWULFW
FRXUW IURP HQIRUFLQJ DQ\ SURYLVLRQV RI WKH 6HWWOHPHQW
$JUHHPHQWWKDWZHUHQRWH[SUHVVO\LQFRUSRUDWHGLQWRDQRUGHU
HQWHUHGZKLOHWKHFDVHZDVVWLOOSHQGLQJRQWKHFRXUW¶VGRFNHW
,Q.RNNRQHQWKH6XSUHPH&RXUWKHOGWKDWWKHGLVWULFWFRXUW
LQ ZKLFK WKH FDVH ZDV VHWWOHG GLG QRW KDYH MXULVGLFWLRQ WR
HQIRUFHWKHSURYLVLRQRIWKHVHWWOHPHQWDJUHHPHQWUHTXLULQJ
WKHSHWLWLRQHUWRUHWXUQFHUWDLQILOHVWRWKHUHVSRQGHQWEHFDXVH
WKH GLVWULFW FRXUW GLG QRW H[SUHVVO\ UHWDLQ MXULVGLFWLRQ RYHU
HQIRUFHPHQWRIWKHDJUHHPHQWRULQFRUSRUDWHWKHDJUHHPHQW¶V
WHUPVLQLWVGLVPLVVDORUGHU6HH.RNNRQHQ86DW
QRWLQJWKDWWKHGLVWULFWFRXUW¶VGLVPLVVDORUGHU³GLGQRWVR
PXFKDVUHIHUWRWKHVHWWOHPHQWDJUHHPHQW´ :ULWLQJIRUWKH
&RXUW-XVWLFH6FDOLDH[SODLQHGWKDWWKHGLVWULFWFRXUWHUUHGLQ
HQIRUFLQJWKHDJUHHPHQWSXUVXDQWWRLWV³LQKHUHQWVXSHUYLVRU\
SRZHU´RYHUWKHFDVHEHFDXVHIHGHUDOFRXUWVDUH³FRXUWVRI
OLPLWHG MXULVGLFWLRQ´ DQG ³>Q@HLWKHU >)HG 5 &LY 3URF
D LL @ QRU DQ\ >RWKHU@ SURYLVLRQ RI ODZ SURYLGHV IRU
MXULVGLFWLRQ RI WKH FRXUW RYHU GLVSXWHV DULVLQJ RXW RI DQ
DJUHHPHQWWKDWSURGXFHVWKHVWLSXODWLRQ>WRGLVPLVVWKHFDVH@´
,GDW
7KH&RXUWSURFHHGHGWRH[SODLQWKDWDQFLOODU\MXULVGLFWLRQ
WRHQIRUFHDVHWWOHPHQWDJUHHPHQWFDQQRWEHSUHPLVHGRQD
³UHODWLRQVKLSVRWHQXRXVDVWKHEUHDFKRIDQDJUHHPHQWWKDW
SURGXFHGWKHGLVPLVVDORIDQHDUOLHUIHGHUDOVXLW´,GDW
VWDWLQJ WKDW DQFLOODU\ MXULVGLFWLRQ H[LVWV IRU ³WZR VHSDUDWH
WKRXJKVRPHWLPHVUHODWHGSXUSRVHV WRSHUPLWGLVSRVLWLRQ
1R 0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO

$2&LL WKDWDQ\RIWKH'HIHQGDQWVKDVFRPPLWWHGDQ\
RIWKHDFWVGHVFULEHGLQDQ\RIWKHOLWLJDWLRQGHVFULEHGLQ
WKHSUHDPEOHVWRWKLV$JUHHPHQWRULLL WKDWDQ\RIWKH
3ODLQWLIIVKDYHDQ\FODLPVDJDLQVWDQ\RIWKH'HIHQGDQWV
,QDGGLWLRQWRSURYLGLQJIRUWKHUHOHDVHRI0F$OSLQ¶VFODLPV
DJDLQVWWKH'HIHQGDQWVWKH6HWWOHPHQW$JUHHPHQWSURYLGHG
IRUWKHUHOHDVHRIDOOFODLPVWKDW0F$OSLQPLJKWDVVHUWDJDLQVW
KHU DWWRUQH\V 0HVVUV %UDQGRQ *LOIHGGHU DQG 1DVK
$OWKRXJK0F$OSLQDOOHJHVLQKHUEULHIRQDSSHDOWKDWVKHZDV
³QRWLQIRUPHG´WKDWWKH6HWWOHPHQW$JUHHPHQW³FRQWDLQHGD
UHOHDVHRI>FODLPVDJDLQVWKHU@FRXQVHO´$SSHOODQW¶V%UDW
ERWK0F$OSLQDQGKHUKXVEDQGSHUVRQDOO\LQLWLDOHGHDFKSDJH
RIWKH$JUHHPHQW7KH$JUHHPHQWGLGQRWSURYLGHIRUWKH
GLVWULFW FRXUW WR UHWDLQ MXULVGLFWLRQ RYHU LWV WHUPV RU
HQIRUFHPHQW
2Q 6HSWHPEHU WKH GLVWULFW FRXUW HQWHUHG DQ
$JUHHG2UGHURI'LVPLVVDO:LWK3UHMXGLFHZKLFKSURYLGHG
LQSHUWLQHQWSDUW
7KH SDUWLHV EHLQJ LQ DJUHHPHQW DQG WKH &RXUW EHLQJ
RWKHUZLVHVXIILFLHQWO\DGYLVHGWKDWWKHSDUWLHVKHUHWRKDYH
VHWWOHGWKHLUGLVSXWHVWKH&RXUWKHUHE\RUGHUV
7KDWWKH&RPSODLQWILOHGKHUHLQLV',60,66('$6
6(77/(' :,7+ 35(-8',&( $6 72 $//
&/$,06DVVHUWHGWKHUHLQDQGWKLVDFWLRQLV2UGHUHG
VWULFNHQIURPWKHGRFNHWRIWKLV&RXUWLQLWVHQWLUHW\
7KDW WKLV &RXUW¶V 2UGHU RI $XJXVW LV
KHUHE\ DPHQGHG WR SURYLGH WKDW &RXQW ,, RI WKH
&RPSODLQWLV'LVPLVVHGZLWK3UHMXGLFH
7KDWWKH&RXUWDSSRLQWHG5HFHLYHU0RUULV*DKDIHU
LVKHUHE\RUGHUHGWRWXUQRYHUWRWKH'HIHQGDQWVDQ\
DQGDOOFRSLHVRIWKH5HFHLYHU¶V)LUVW,QWHULP5HSRUW
DVZHOODVDQ\GUDIWVWKHUHRIRUDQ\RWKHUGRFXPHQWV
ZKLFKKHPD\KDYHREWDLQHGRUJHQHUDWHGDVDUHVXOW
RIWKHSHUIRUPDQFHRIKLVGXWLHVDV5HFHLYHUKHUHLQ

-- 11 of 14 --

0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO
1R
,Q KHU PDOSUDFWLFH VXLW 0F$OSLQ DOOHJHV WKDW VKH ZRXOG QRW KDYH
DJUHHG WR WKH VHWWOHPHQW RU WR WKH ODQJXDJH LQ WKH UHOHDVH ³KDG LW QRW EHHQ
IRU WKH IHDU RI ORVLQJ WKH (VWDWH¶V $2& VWRFN DQG VWRFN RSWLRQV IRU QR
FRPSHQVDWLRQ ZKDWVRHYHU WKH HUURQHRXV DQG PLVOHDGLQJ VWDWHPHQWV IURP
>%UDQGRQ@ WKH H[WUHPH SUHVVXUH RI WKH FRQWLQXHG WKUHDW RI EHLQJ KHOG LQ
FRQWHPSW RQ *DKDIHU¶V SHQGLQJ PRWLRQ DQG WKH HUURQHRXV UHSUHVHQWDWLRQV
RI WKH YDOXH RI WKH FRPSDQ\´ $SSHOODQW¶V %U DW
$V LV DSSDUHQW IURP WKH ODQJXDJH RI WKH RUGHU WKH GLVWULFW
FRXUWGLGQRWH[SUHVVO\UHWDLQMXULVGLFWLRQRYHUWKH6HWWOHPHQW
$JUHHPHQW QRU RUGHU 0F$OSLQ KHUVHOI WR WDNH DQ\ DFWLRQ
DOWKRXJKWKHFRXUW¶VGLUHFWLYHWR*DKDIHULQFRUSRUDWHGKLV DQG
SRWHQWLDOO\0F$OSLQ¶V GXWLHVXQGHUWKH$JUHHPHQW
,Q -XQH 0F$OSLQ DQG KHU KXVEDQG UHWDLQHG QHZ
FRXQVHO 5DPELFXUH0LOOHU .XHEOHUKHUHLQDIWHUUHIHUUHGWR
DV ³50.´ WR SXUVXH D OHJDO PDOSUDFWLFH VXLW DJDLQVW WKH
DWWRUQH\V ZKR UHSUHVHQWHG WKH 0RFN (VWDWH LQ WKH GLVWULFW
FRXUWDFWLRQEHIRUH-XGJH+RRG%HIRUHILOLQJ0F$OSLQ¶V
PDOSUDFWLFH FODLP LQ WKH )D\HWWH &LUFXLW &RXUW RQ
6HSWHPEHU 50. ZKLFK WRRN WKH FDVH RQ D
FRQWLQJHQF\EDVLVREWDLQHGIURP7LP0F$OSLQDQDSSUDLVDO
RI $2&¶V UHDO HVWDWH KROGLQJV LQ )ORULGD 7KH DSSUDLVDO
VXJJHVWHG WKDW $2& ZDV ZRUWK PRUH WKDQ WKH DPRXQW
LQGLFDWHG LQ LWV ILQDQFLDO VWDWHPHQW XSRQ ZKLFK
0F$OSLQDOOHJHGO\UHOLHGLQDJUHHLQJWRWKHVHWWOHPHQWDQG
50.UHOLHGRQWKLVDSSUDLVDODORQJZLWKVHYHUDOGRFXPHQWV
WKDW0F$OSLQKDGREWDLQHGIURP*DKDIHU¶VLQYHVWLJDWLRQWR
VXSSRUW0F$OSLQ¶VDOOHJDWLRQWKDW%UDQGRQ*LOIHGGHUDQG
1DVK FRPPLWWHG PDOSUDFWLFH LQ DGYLVLQJ KHU WR VHWWOH KHU
FODLPVDJDLQVW$2&,QGHHG0F$OSLQDGPLWVLQKHUEULHI
WKDW WKH GRFXPHQWV 50. LV QRZ UHO\LQJ XSRQ WR VXSSRUW
0F$OSLQ¶VPDOSUDFWLFHFODLPDUH³WKHYHU\GRFXPHQWVZKLFK
WKH'LVWULFW&RXUWRUGHUHGWREHUHWXUQHGWR>WKH@'HIHQGDQWV´
$SSHOODQW¶V %U DW VHH DOVR $SSHOODQW¶V 5HSO\ %U DW
UHIHUULQJWRWKHVXEVWDQFHRIYDULRXVFRUSRUDWHGRFXPHQWV
VHL]HG IURP $2& E\ *DKDIHU LQ KLV FDSDFLW\ DV $2&¶V
UHFHLYHU
1R 0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO

REVHUYHGLQWKLVFDVH³WKHRUGHURIFLYLOFRQWHPSWZDVHQWHUHG
SRVWMXGJPHQWRQDUHRSHQLQJRIWKHDFWLRQIRUWKHSXUSRVHRI
UHFRQVLGHULQJWKHFRQWHPSWPRWLRQ7KXVWKHFRQFHUQWKDWLW
UHSUHVHQWVDQLQWHUORFXWRU\RUGHULVQRWSUHVHQW´
7KHPRWLRQVSDQHODOVRSURSHUO\UHMHFWHGWKHGHIHQGDQWV¶
VHFRQG DUJXPHQW DJDLQVW DSSHOODWH MXULVGLFWLRQ ± WKDW WKH
GLVWULFWFRXUW¶V-DQXDU\RUGHUKROGLQJ0F$OSLQLQFRQWHPSW
ZDV QRW D QHZ RUGHU EXW PHUHO\ DQ HQIRUFHPHQW RI WKH
UHTXLUHPHQWVWKDWWKHFRXUWLPSRVHGRQ0F$OSLQLQWKHFRXUVH
RIWKHXQGHUO\LQJOLWLJDWLRQ,QVXSSRUWRIWKHLUSRVLWLRQWKH
GHIHQGDQWV FLWHG :KLWWLQJWRQ Y 0LOE\ )G WK
&LU FHUWGHQLHG86 LQZKLFKWKLVFRXUW
KHOGWKDWWKH³PHUHIDFWWKDWDMXGJPHQWSUHYLRXVO\HQWHUHG
KDVEHHQUHHQWHUHGRUUHYLVHGLQDQLPPDWHULDOZD\GRHVQRW
WROOWKHWLPHZLWKLQZKLFKUHYLHZPXVWEHVRXJKW´,GDW
7KHGHIHQGDQWV¶DUJXPHQWODFNVPHULW7KHGLVWULFWFRXUW¶V
-DQXDU\RUGHUZDVPRUHWKDQDUHHQWU\RU³LPPDWHULDO´
UHYLVLRQ RI RQH RI WKH FRXUW¶V HDUOLHU RUGHUV 7KLV SDQHO
WKHUHIRUH KDV MXULVGLFWLRQ WR GHWHUPLQH ZKHWKHU WKH GLVWULFW
FRXUWH[FHHGHGWKHVFRSHRILWVDXWKRULW\LQKROGLQJ0F$OSLQ
LQFRQWHPSW
7KH'LVWULFW&RXUW¶V-XULVGLFWLRQWR,VVXHWKH2UGHUV
%HFDXVH WKH GLVWULFW FRXUW KHOG 0F$OSLQ LQ FRQWHPSW RI
VHWWOHPHQWWHUPVWKDWZHUHQRWLQFRUSRUDWHGLQWRDQ\RIWKH
FRXUW¶VRUGHUVZHPXVWGHWHUPLQHZKHWKHUWKHGLVWULFWFRXUW
KDGMXULVGLFWLRQWRHQIRUFHWKHVHWWOHPHQWDJUHHPHQWLQLWV
HQWLUHW\ DQG LI QRW ZKHWKHU WKH GLVWULFW FRXUW¶V FRQWHPSW
MXGJPHQWZDVZLWKLQWKHVFRSHRILWVMXULVGLFWLRQWRHQIRUFHLWV
SULRURUGHUVDJDLQVWWKHSDUWLHV
-XULVGLFWLRQWR(QIRUFHWKH6HWWOHPHQW$JUHHPHQW
$OWKRXJK LW KDG DOUHDG\ GLVPLVVHG WKH SDUWLHV¶ VXLW ZLWK
SUHMXGLFHDQGVWULFNHQWKHFDVHIURPLWVGRFNHWWKHGLVWULFW
FRXUW FLWHG )HGHUDO 5XOH RI &LYLO 3URFHGXUH E DV
DXWKRULW\ IRU HQIRUFLQJ WKH 6HWWOHPHQW $JUHHPHQW DJDLQVW
0F$OSLQ5XOH E PD\LQFHUWDLQFLUFXPVWDQFHVEH

-- 12 of 14 --

0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO
1R
7KH FRQWLQXLQJ YLDELOLW\ RI WKH KROGLQJ LQ )R[ ZDV FDOOHG LQWR
TXHVWLRQ LQ %\UG Y 5HQR )G '& &LU
RUDQFLOODU\$QFLOODU\MXULVGLFWLRQH[LVWV WRSHUPLWDFRXUW
WRGLVSRVHRIIDFWXDOO\LQGHSHQGHQWFODLPVDQGRU WRHQDEOH
DFRXUWWRPDQDJHLWVSURFHHGLQJVYLQGLFDWHLWVDXWKRULW\DQG
HIIHFWXDWHLWVGHFUHHV6HH.RNNRQHQY*XDUGLDQ/LIH,QV
&RRI$PHULFD86
$SSHOODWH-XULVGLFWLRQ
$OWKRXJKRQ$XJXVWDSDQHORIWKLVFRXUWGHQLHG
WKH GHIHQGDQWV¶ PRWLRQ WR GLVPLVV WKLV DSSHDO IRU ODFN RI
MXULVGLFWLRQ WKH GHIHQGDQWV UHDVVHUW LQ WKHLU EULHI WKDW ZH
FDQQRWKHDU0F$OSLQ¶VFKDOOHQJHWRWKHGLVWULFWFRXUW¶VRUGHU
KROGLQJKHULQFRQWHPSWEHFDXVHWKDWRUGHUZDVQRWDILQDO
DSSHDODEOH MXGJPHQW EXW PHUHO\ DQ HQIRUFHPHQW RI WKH
GLVWULFWFRXUW¶VHDUOLHUUXOLQJV
7KHPRWLRQVSDQHOSURSHUO\GHQLHGWKHGHIHQGDQWV¶UHTXHVW
WR GLVPLVV WKLV DSSHDO ,Q WKHLU PRWLRQ WR GLVPLVV WKH
GHIHQGDQWVILUVWDUJXHGWKDWWKHGLVWULFWFRXUW¶VRUGHURIFLYLO
FRQWHPSWZDVQRWDSSHDODEOHXQGHU)R[Y&DSLWDO&R
86 LQ ZKLFK WKH 6XSUHPH &RXUW KHOG WKDW
³H[FHSWLQFRQQHFWLRQZLWKDQDSSHDOIURPDILQDOMXGJPHQW
RUGHFUHHDSDUW\WRDVXLWPD\QRWUHYLHZXSRQDSSHDODQ
RUGHUILQLQJRULPSULVRQLQJKLPIRUWKHFRPPLVVLRQRIDFLYLO
FRQWHPSW´$VWKHPRWLRQVSDQHOQRWHGLQUHMHFWLQJWKLV
DUJXPHQW)R[GRHVQRWSUHFOXGHUHYLHZ RIFLYLOFRQWHPSW
RUGHUVJHQHUDOO\WKHUXOHDUWLFXODWHGLQ)R[VLPSO\VWDQGVIRU
WKH SURSRVLWLRQ WKDW D ³MXGJPHQW RI FLYLO FRQWHPSW LV QRW
>LWVHOI@DILQDOGHFUHH´DQGWKHUHIRUHLVQRWDSSHDODEOHLQWKH
DEVHQFHRIDILQDOMXGJPHQW%OD\ORFNY&KHNHU2LO&R
)G WK&LU $VWKLVFRXUW H[SODLQHGLQ
3HDERG\&RDO&RY/RFDO8QLRQ1RVDQG
80:)G WK&LU ³DOOWKDWLVUHTXLUHGLVWKDW
DILQDORUGHUH[LVWVRWKDWWKHSROLF\RISUHYHQWLQJSLHFHPHDO
OLWLJDWLRQLVVHUYHG´,GDW$VWKHPRWLRQVSDQHOFRUUHFWO\
1R 0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO

5XOH -XGJPHQW IRU 6SHFLILF $FWV 9HVWLQJ 7LWOH SURYLGHV LQ
SHUWLQHQW SDUW
,I D MXGJPHQW GLUHFWV D SDUW\ WR H[HFXWH D FRQYH\DQFH RI ODQG RU
WR GHOLYHU GHHGV RU RWKHU GRFXPHQWV RU WR SHUIRUP DQ\ RWKHU
VSHFLILF DFW DQG WKH SDUW\ IDLOV WR FRPSO\ ZLWKLQ WKH WLPH
VSHFLILHG WKH FRXUW PD\ GLUHFW WKH DFW WR EH GRQH DW WKH FRVW RI
WKH GLVREHGLHQW SDUW\ E\ VRPH RWKHU SHUVRQ DSSRLQWHG E\ WKH
FRXUW DQG WKH DFW ZKHQ VR GRQH KDV OLNH HIIHFW DV LI GRQH E\ WKH
SDUW\ 2Q DSSOLFDWLRQ RI WKH SDUW\ HQWLWOHG WR SHUIRUPDQFH WKH
FOHUN VKDOO LVVXH D ZULW RI DWWDFKPHQW RU VHTXHVWUDWLRQ DJDLQVW WKH
SURSHUW\ RI WKH GLVREHGLHQW SDUW\ WR FRPSHO REHGLHQFH WR WKH
MXGJPHQW 7KH FRXUW PD\ DOVR LQ SURSHU FDVHV DGMXGJH WKH SDUW\
LQ FRQWHPSW
6WDWLQJ LQ SHUWLQHQW SDUW WKDW ³5HFHLYHU¶V FRXQVHO VKDOO UHWDLQ DOO
FRSLHV RI WKH 5HFHLYHU¶V )LUVW ,QWHULP 5HSRUW DQG WKH 5HFHLYHU VKDOO QRW
GLVFORVH WR DQ\RQH RWKHU WKDQ KLV FRXQVHO DQ\WKLQJ UHJDUGLQJ WKH VXEVWDQFH
RI KLV ZRUN DV 5HFHLYHU KHUHLQ´
6WDWLQJ LQ SHUWLQHQW SDUW WKDW ³WKH 5HFHLYHU VKDOO UHWXUQ DOO
GRFXPHQWV WDNHQ IURP WKH GHIHQGDQW¶V SUHPLVHV WKDW WKH 5HFHLYHU VKDOO
QRW GLVFORVH DQ\ GRFXPHQW RU SRUWLRQ WKHUHRI WR DQ\RQH DQG WKDW DQ\
FRSLHV PDGH VKDOO DOVR EH UHWXUQHG WR WKH GHIHQGDQWV´ 7KH RUGHU DOVR
SUHFOXGHG 0F$OSLQ IURP GHSRVLQJ *DKDIHU DQG VWDWHG WKDW ³WKH 5HFHLYHU
VKDOO QRW EH UHTXLUHG WR SURGXFH DQ\ GRFXPHQW RU UHVSRQG WR DQ\
GLVFRYHU\ KHUHLQ´
$ZDUHWKDW0F$OSLQZDVLQKHUPDOSUDFWLFHDFWLRQDJDLQVW
KHUIRUPHUDWWRUQH\VDVVHUWLQJFODLPVRI5REHUW0RFN¶VVWRFN
RZQHUVKLSLQYLRODWLRQRIWKH6HWWOHPHQW$JUHHPHQW$2&
DQG LWV FRGHIHQGDQWV PRYHG WKH GLVWULFW FRXUW RQ
1RYHPEHU SXUVXDQW WR )HGHUDO 5XOH RI &LYLO
3URFHGXUHWRKROG0F$OSLQLQFRQWHPSWRILWVGLVPLVVDO
RUGHUDQGWRGLYHVW0F$OSLQRIDQ\GRFXPHQWVFRYHUHGE\WKH
$JUHHPHQWDQGWKHFRXUW¶VSULRURUGHUV,QWKHLUPRWLRQWKH
GHIHQGDQWVDOOHJHGWKDW0F$OSLQKDGYLRODWHGQRWRQO\WKH
H[SUHVV WHUPV RI WKH 6HWWOHPHQW $JUHHPHQW EXW DOVR WKH
GLVWULFWFRXUW¶VRUGHUVRI0DUFK-XO\

-- 13 of 14 --

0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO
1R
'LVPLVVLQJ WKH DFWLRQ ZLWK SUHMXGLFH DQG VWDWLQJ LQ SHUWLQHQW SDUW
WKDW WKH ³5HFHLYHU 0RUULV *DKDIHU LV KHUHE\ RUGHUHG WR WXUQ RYHU WR WKH
'HIHQGDQWV DQ\ DQG DOO FRSLHV RI WKH 5HFHLYHU¶V )LUVW ,QWHULP 5HSRUW DV
ZHOO DV DQ\ GUDIWV WKHUHRI RU DQ\ RWKHU GRFXPHQWV ZKLFK KH PD\ KDYH
REWDLQHG RU JHQHUDWHG DV D UHVXOW RI WKH SHUIRUPDQFH RI KLV GXWLHV DV
5HFHLYHU´
DQG 6HSWHPEHU 0F$OSLQ REMHFWHG WR WKH
GHIHQGDQWV¶PRWLRQWRHQIRUFHDUJXLQJWKDWWKHGLVWULFWFRXUW
ODFNHG MXULVGLFWLRQ WR JUDQW WKH PRWLRQ XQGHU WKH 6XSUHPH
&RXUW¶VGHFLVLRQLQ.RNNRQHQY*XDUGLDQ/LIH,QV&R
86 ,QDQRUGHUHQWHUHGRQ-DQXDU\WKH
GLVWULFWFRXUWKHOGRYHU0F$OSLQ¶VREMHFWLRQVWKDW³>Z@KLOH
.RNNRQHQGRHVLQVRPHZD\VOLPLWWKH&RXUW¶VMXULVGLFWLRQLQ
YROXQWDU\ GLVPLVVDO FDVHV ZLWK UHJDUG WR HQIRUFHPHQW RI D
VHWWOHPHQWDJUHHPHQWWKH6XSUHPH&RXUWQRWHGWKDW)HGHUDO
5XOHRI&LYLO3URFHGXUH E SHUPLWVWKHGLVWULFWFRXUWWR
UHRSHQDFDVHIRUμDQ\RWKHUUHDVRQMXVWLI\LQJUHOLHI¶´7KH
GLVWULFWFRXUWWKHQFRQVLGHUHGZKDWLWWHUPHGWKH³'HIHQGDQWV¶
PRWLRQ WR UHRSHQ WKH DERYHVW\OHG DFWLRQ IRU WKH OLPLWHG
SXUSRVHRIHQIRUFLQJWKH&RXUW¶V2UGHUVDQGWKHWHUPVRIWKH
VHWWOHPHQWDJUHHPHQW´DQGRUGHUHG WKDW0F$OSLQEHKHOG
LQFRQWHPSW WKDW0F$OSLQ³WUDQVIHUWRWKHGHIHQGDQWVDQ\
DQGDOOGRFXPHQWVUHOHYDQWWR$SSDODFKLDQ2LO&RUSRUDWLRQ
DQGRUDQ\DQGDOOGRFXPHQWVXSRQZKLFKDFODLPDJDLQVWWKH
GHIHQGDQWVFRXOGEHEDVHG WKDW0F$OSLQGHOHWH³DQ\DQG
DOOFODLPVWKDW5REHUW0RFNRZQHGDQ\VKDUHVRI$SSDODFKLDQ
2LO&RUSRUDWLRQLQ>KHU@PDOSUDFWLFHFRPSODLQW´DQG WKDW
WKHGHIHQGDQWVEHDZDUGHG³DOODWWRUQH\FRVWVDQGH[SHQVHV
JHQHUDWHGLQWKHLUHQIRUFHPHQWRIWKHVHWWOHPHQWDJUHHPHQW´
,QUHVSRQVHWRWKHGLVWULFWFRXUW¶V-DQXDU\RUGHUZKLFK
0F$OSLQ DVVHUWV ZDV HQWHUHG ZLWKRXW MXULVGLFWLRQ DQG LQ
YLRODWLRQRIGXHSURFHVVEHFDXVHWKHGLVWULFWFRXUWGLGQRWKROG
DQ HYLGHQWLDU\ RU RWKHU KHDULQJ EHIRUH KROGLQJ KHU LQ
FRQWHPSW0F$OSLQDPHQGHGKHUPDOSUDFWLFHFODLPWRUHPRYH
DOO GLUHFW UHIHUHQFHV WR 5REHUW 0RFN DQG UHWXUQHG WR WKH
GHIHQGDQWVQRQSULYLOHJHGGRFXPHQWVWKDW0F$OSLQ¶VFRXQVHO
EHOLHYHGZHUHUHOHYDQWWR$2&RUXSRQZKLFKDFODLPDJDLQVW
1R 0F$OSLQY/H[LQJWRQ
$XWR7UXFN6WRSHWDO

WKH GHIHQGDQWV FRXOG EH EDVHG 0F$OSLQ¶V FRXQVHO WKHQ
IXUQLVKHG WKH GHIHQGDQWV ZLWK D SULYLOHJH ORJ LGHQWLI\LQJ
GRFXPHQWV WKDW ZHUH ZLWKKHOG IURP SURGXFWLRQ XQGHU WKH
GLVWULFWFRXUW¶VRUGHU
0F$OSLQ WLPHO\ DSSHDOHG WKH GLVWULFW FRXUW¶V -DQXDU\
RUGHUWRWKH6L[WK&LUFXLWRQWKHEDVLVWKDWWKHGLVWULFWFRXUW
ODFNHG MXULVGLFWLRQ WR HQIRUFH WKH 6HWWOHPHQW $JUHHPHQW
%HIRUHWKHDSSHDOZDVVFKHGXOHGIRUKHDULQJKRZHYHUWKH
GHIHQGDQWVILOHGDPRWLRQ HQWHUHG$SULO IRUIXUWKHU
FRQWHPSW SURFHHGLQJV EDVHG RQ 0F$OSLQ¶V IDLOXUH IXOO\ WR
FRPSO\ZLWKWKHRUGHU3XUVXDQWWRWKLVPRWLRQWKHGLVWULFW
FRXUW UXOHG RQ 0D\ WKDW 0F$OSLQ KDG IDLOHG WR
FRPSO\ZLWKWKHFRXUW¶V-DQXDU\RUGHUDQGWKDW0F$OSLQ
ZRXOGULVNEHLQJKHOGLQIXUWKHUFRQWHPSWLIVKHGLGQRWILOH
SURRIZLWKWKHFRXUWRIIXOOFRPSOLDQFHZLWKWKH-DQXDU\
RUGHU ZLWKLQ WHQ GD\V RI HQWU\ RI WKH 0D\ UXOLQJ 7KH
GLVWULFWFRXUWIXUWKHUKHOGWKDWEDVHGRQSDUDJUDSKRIWKH
6HWWOHPHQW$JUHHPHQW0F$OSLQZDVEDUUHGIURPDVVHUWLQJ
DQ\SULYLOHJHVWKDWZRXOGDOORZKHUWRUHWDLQDQ\$2&UHODWHG
GRFXPHQWV)LQDOO\WKHFRXUWVWDWHGWKDWLWV-DQXDU\RUGHU
GLUHFWLQJ0F$OSLQWRGHOHWHIURPKHUPDOSUDFWLFHFRPSODLQW
DQ\FODLPVUHIHUULQJWR5REHUW0RFN¶VVWRFNLQ$2&UHTXLUHG
WKHUHPRYDOQRWRQO\RIGLUHFWUHIHUHQFHVWR0RFNEXWRI³DQ\
VWDWHPHQWWKDWLQIHUVRULPSOLHVWKDW5REHUW0RFNRZQHGDQ\
VKDUHVRI$2&´2Q0D\0F$OSLQILOHGDPRWLRQ
WRVWD\WKHGLVWULFWFRXUW¶VSURFHHGLQJVSHQGLQJDQDSSHDOWR
WKLVSDQHO7KHGLVWULFWFRXUWJUDQWHG0F$OSLQ¶VPRWLRQRQ
-XQHDQGWKHFDVHZDVVWD\LQJSHQGLQJDGHFLVLRQE\
WKLVFRXUW
,,
7KLVFRXUWUHYLHZVGHQRYRWKHGLVWULFWFRXUW VGHWHUPLQDWLRQ
WKDWLWKDGVXEMHFWPDWWHUMXULVGLFWLRQWRHQIRUFHWKHWHUPVRI
WKH VHWWOHPHQW DJUHHPHQW 6HH &DXGLOO Y 1RUWK $PHULFDQ
0HGLD &RUS )G WK &LU FLWLQJ
+LOOLDUGY8QLWHG6WDWHV3RVWDO6HUY)G WK
&LU 6XEMHFWPDWWHUMXULVGLFWLRQPD\EHLQGHSHQGHQW

-- 14 of 14 --

Continue your research in ChatGPT or Claude

Connect Omnilex to search the legal corpus from your AI assistant.