01a0156p.06

,QUH.HQQHG\HWDO 1R
VWDWHPHQWVDUHFRQVLGHUHGGHIDPDWLRQSHUVH,QDGGLWLRQWKH
0LFKLJDQFRXUWDOVRPDGHUHIHUHQFHWRWKHIDFWWKDW'HEWRUV
PDGH WKHVH VWDWHPHQWV LQWHQWLRQDOO\ LQDVPXFK DV 'HEWRUV
FRQWLQXHGWRPDNHWKHVWDWHPHQWVWRWKLUGSDUWLHVHYHQDIWHU
WKH\EHFDPHDZDUHRIWKHUHVXOWVRIWKH'1$SDWHUQLW\WHVWV
ZKLFKH[FOXGHG:LOEXUDV'HEWRU'LDQH.HQQHG\¶VIDWKHU
7KHUHIRUH HYHQ LI DQ DUJXPHQW FRXOG EH PDGH WKDW WKH
EDQNUXSWF\ FRXUW VKRXOG QRW KDYH FRQVLGHUHG ERWK WKH
0LFKLJDQDVZHOODVWKH.HQWXFN\VWDWHFRXUWMXGJPHQWVDV
WKHGLVWULFWFRXUWSURSHUO\FRQFOXGHGWKHRXWFRPHGRHVQRW
FKDQJHLQDVPXFKDVWKH0LFKLJDQMXGJPHQWLQDQGRILWVHOI
SUHFOXGHV OLWLJDWLRQ RI WKLV LVVXH EHFDXVH WKH VWDWHPHQWV DW
LVVXHDUHGHIDPDWLRQSHUVHXQGHU0LFKLJDQODZPHDQLQJWKDW
WKHFRXUWVSUHVXPHWKDWWKHVSHDNHUVPDNHVXFKVWDWHPHQWV
NQRZLQJ WKDW VXEVWDQWLDO KDUP RU LQMXU\ ZLOO UHVXOW 6HH
0DUNRZLW])GDW KROGLQJWKDW³XQOHVVμWKHDFWRU
GHVLUHVWRFDXVHFRQVHTXHQFHVRIKLVDFWRUEHOLHYHVWKDW
WKHFRQVHTXHQFHVDUHVXEVWDQWLDOO\FHUWDLQWRUHVXOWIURPLW¶KH
KDVQRWFRPPLWWHGDμZLOOIXODQGPDOLFLRXVLQMXU\¶DVGHILQHG
XQGHU† D ´ %XUGHQ1:GDW ILQGLQJ
WKDWVWDWHPHQWVDVWRDODFNRIFKDVWLW\DUHGHIDPDWRU\SHUVH
PHDQLQJWKDWWKHZRUGVDUHDFWLRQDEOHLQWKHPVHOYHVDQGWKDW
GDPDJHVDUHSUHVXPHG
&21&/86,21
)RUWKHUHDVRQVVHWIRUWKDERYHWKHGLVWULFWFRXUW¶VRUGHULV
$)),50('

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
,QUH7+20$6 -26(3+
.(11('<DQG',$1(
0,&+(//( .(11('<
'HEWRUV
BBBBBBBBBBBBBBBBBBBBBBB
7+20$6 -26(3+ .(11('<
',$1( 0,&+(//( .(11('<
$SSHOODQWV
Y
3+,//,3 % 0867$,1(
3+<//,6 - 0867$,1(
$SSHOOHHV
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH:HVWHUQ'LVWULFWRI.HQWXFN\DW/RXLVYLOOH
1R²&KDUOHV0$OOHQ'LVWULFW-XGJH
$UJXHG-DQXDU\
'HFLGHGDQG)LOHG0D\
%HIRUH-21(6%$7&+(/'(5DQG&/$<&LUFXLW
-XGJHV

-- 1 of 6 --

,QUH.HQQHG\HWDO 1R
BBBBBBBBBBBBBBBBB
&2816(/
$5*8('5LFKDUG.HOO\+DUULV/RXLVYLOOH.HQWXFN\IRU
$SSHOODQWV5LFKDUG$6FKZDUW].58*(56&+:$57=
0255($8 /RXLVYLOOH .HQWXFN\ IRU $SSHOOHHV
21%5,()5LFKDUG.HOO\+DUULV/RXLVYLOOH.HQWXFN\IRU
$SSHOODQWV5LFKDUG$6FKZDUW].58*(56&+:$57=
0255($8/RXLVYLOOH.HQWXFN\IRU$SSHOOHHV
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
&/$<&LUFXLW-XGJH'HEWRUV$SSHOODQWV7KRPDV-RVHSK
.HQQHG\DQGKLVZLIH'LDQH0LFKHOOH.HQQHG\DSSHDOIURP
WKHMXGJPHQWHQWHUHGE\WKHGLVWULFWFRXUWRQ6HSWHPEHU
DIILUPLQJ WKH RUGHU HQWHUHG E\ WKH 8QLWHG 6WDWHV
%DQNUXSWF\ &RXUW IRU WKH :HVWHUQ 'LVWULFW RI .HQWXFN\
JUDQWLQJVXPPDU\MXGJPHQWWR&UHGLWRUV$SSHOOHHV3KLOOLS
%0XVWDLQHDQGKLVZLIH3K\OOLV-0XVWDLQH±3ODLQWLIIVLQ
WKHXQGHUO\LQJDGYHUVDU\SURFHHGLQJDQGSDUHQWVRI'HEWRU
'LDQH.HQQHG\±RQ&UHGLWRUV¶FODLPIRUQRQGLVFKDUJHDELOLW\
RIWKHLUMXGJPHQWREWDLQHGDJDLQVW'HEWRUVLQ0LFKLJDQVWDWH
FRXUWRQDGHIDPDWLRQVXLWLQWKHDPRXQWRI:HQRZ
$)),50WKHGLVWULFWFRXUW¶VMXGJPHQWRQWKHEDVLVWKDWWKH
GHEWLVQRQGLVFKDUJHDEOHXQGHU.DZDDXKXDY*HLJHU
86
%$&.*5281'
7KLV FDVH EHJDQ LQ ,QJKDP &RXQW\ &LUFXLW &RXUW LQ
/DQVLQJ0LFKLJDQ7KHUHRQ2FWREHU&UHGLWRUV
ILOHG VXLW DJDLQVW 'HEWRUV DQG D WKLUG GHIHQGDQW *HRUJH
:LOEXUDOOHJLQJIUDXGDQGGHIDPDWLRQDPRQJRWKHUWKLQJV
7KH EDVLV RI WKH GHIDPDWLRQ FODLP ZDV WKDW 'HEWRUV DQG
:LOEXUPDGHIDOVHDQGGHIDPDWRU\VWDWHPHQWVWRWKLUGSDUWLHV
UHJDUGLQJ WKH SDWHUQLW\ RI 'HEWRU 'LDQH .HQQHG\
6SHFLILFDOO\&UHGLWRUVFODLPHGWKDW'HEWRUVPDGHVWDWHPHQWV
1R ,QUH.HQQHG\HWDO
:HQHHGQRWGHFLGHZKHWKHUWKHEDQNUXSWF\FRXUWSURSHUO\
UHOLHG XSRQ WKH 0LFKLJDQ DQG .HQWXFN\ MXGJPHQWV LQ
UHQGHULQJLWVGHFLVLRQEHFDXVH0LFKLJDQODZVWDQGLQJDORQH
SURYLGHVWKHEDVLVIRUSUHFOXVLRQ8QGHU0LFKLJDQODZZRUGV
DVWRDODFNRIFKDVWLW\DUHGHIDPDWLRQSHUVH±LHLQMXULRXV
E\ WKHLU QDWXUH LW WKHUHIRUH ZDV XQQHFHVVDU\ IRU WKH
EDQNUXSWF\FRXUWWRFRQVLGHUWKH.HQWXFN\MXGJPHQWLQRUGHU
WRILQGWKDW'HEWRUVZHUHHVWRSSHGIURPOLWLJDWLQJZKHWKHU
WKHVH GHIDPDWRU\ VWDWHPHQWV ZHUH LQWHQWLRQDO DQG
VXEVWDQWLDOO\ FHUWDLQ WR FDXVH KDUP IRU SXUSRVHV RI
† D ,Q %XUGHQ Y (OLDV %URWKHUV %LJ %R\
5HVWDXUDQWV 1:G 0LFK &W $SS WKH
0LFKLJDQ&RXUWRI$SSHDOV UHFHQWO\DGGUHVVHGDFODLPIRU
GHIDPDWLRQDQGVSHFLILFDOO\GLVWLQJXLVKHGGHIDPDWLRQSHUVH
IURPGHIDPDWLRQSHUTXRGDVIROORZV
7KHHOHPHQWVRIDFDXVHRIDFWLRQIRUGHIDPDWLRQDUH
DIDOVHDQGGHIDPDWRU\VWDWHPHQWFRQFHUQLQJWKHSODLQWLII
DQXQSULYLOHJHGSXEOLFDWLRQWRDWKLUGSDUW\ IDXOW
DPRXQWLQJ WR DW OHDVW WR QHJOLJHQFH RQ WKH SDUW RI WKH
SXEOLVKHU HLWKHU DFWLRQDELOLW\ RI WKH VWDWHPHQW
LUUHVSHFWLYHRIVSHFLDOKDUP GHIDPDWLRQSHUVH RUWKH
H[LVWHQFH RI VSHFLDO KDUP FDXVHG E\ WKH SXEOLFDWLRQ
GHIDPDWLRQSHUTXRG
,GDW7KHFRXUWZHQWRQWRUHFRJQL]HWKDW
0&/ 06$ $ LV WKH
FRGLILFDWLRQ RI WKH FRPPRQODZ SULQFLSOH WKDW ZRUGV
LPSXWLQJDODFNRIFKDVWLW\RUWKHFRPPLVVLRQRIDFULPH
FRQVWLWXWHGHIDPDWLRQSHUVHDQGDUHDFWLRQDEOHHYHQLQ
WKH DEVHQFH RI DQ DELOLW\ WR SURYH DFWXDO RU VSHFLDO
GDPDJHV DV HYLGHQFHG E\ WKH VWDWXWH¶V LQGLFDWLRQ WKDW
VXFKZRUGVDUH³DFWLRQDEOHLQWKHPVHOYHV´
,GDW7KHFRXUWQRWHGWKDWZKHQWKHZRUGVDWLVVXHIDOO
XQGHU† ³LQMXU\WRWKHUHSXWDWLRQRIWKHSHUVRQLV
SUHVXPHG´$FFRUGLQJO\DVIRXQGE\WKHGLVWULFWFRXUW
XQGHU0LFKLJDQODZLWLVSUHVXPHGWKDWZKHQ'HEWRUVPDGH
VWDWHPHQWVDVWR&UHGLWRUV¶FKDVWLW\LQWKHFDVHDWKDQGWKH\
ZHUHVXEVWDQWLDOO\FHUWDLQWKDWKDUPZRXOGUHVXOWEHFDXVHVXFK

-- 2 of 6 --

,QUH.HQQHG\HWDO 1R
% $SSOLFDWLRQRIWKH7HVW
,QUHQGHULQJLWVGHFLVLRQWKHEDQNUXSWF\FRXUWRSLQHGDV
IROORZV
,QVXPPDWLRQWKLV&RXUWILQGVWKDWWKHIDFWVQHFHVVDU\WR
VXSSRUW D GHWHUPLQDWLRQ RI QRQGLVFKDUJHDELOLW\ XQGHU
† D RIWKH3ODLQWLIIV¶GHIDPDWLRQFODLPDUHFOHDUO\
HVWDEOLVKHG E\ WKH SULRU .HQWXFN\ DQG 0LFKLJDQ
MXGJPHQWV)LUVWWKH0LFKLJDQMXGJPHQWHVWDEOLVKHVWKDW
WKH VWDWHPHQWV DW LVVXH ZHUH LQ IDFW PDGH ZKLOH WKH
.HQWXFN\ MXGJPHQW HVWDEOLVKHV WKDW WKH\ ZHUH
GHIDPDWRU\ LQ FKDUDFWHU DQG LQWHQWLRQDO LQ QDWXUH
6HFRQG WKH .HQWXFN\ MXGJPHQW HVWDEOLVKHV WKDW WKH
VWDWHPHQWV ZHUH LQKHUHQWO\ LQMXULRXV JLYLQJ ULVH WR DQ
LQIHUHQFHRIDQH[SHFWDWLRQRIKDUPDQGLQWHQWWRLQMXUH
/DVWO\WKH0LFKLJDQMXGJPHQWH[SUHVVO\HVWDEOLVKHGWKDW
WKHVWDWHPHQWVZHUHPDGHZLWKRXWMXVWFDXVHRUH[FXVH
-$DW ,QILQGLQJWKDWWKHEDQNUXSWF\FRXUWGLGQRW
HUULQUHQGHULQJWKLVGHFLVLRQWKHGLVWULFWFRXUWVWDWHG
$SSHOODQWVDUJXHWKDWWKHWULDOFRXUW>EDQNUXSWF\FRXUW@
GHQLHGIXOOIDLWKDQGFUHGLWWRWKH0LFKLJDQMXGJPHQWE\
LPSXWLQJWKHPRUHVWULQJHQW³LQWHQWLRQDO´VWDQGDUGXVHG
LQ .HQWXFN\ ZKHQ WKH 0LFKLJDQ FRXUW KDG QRW IRXQG
³LQWHQW´ $SSHOODQWV DUJXH WKDW WKH %DQNUXSWF\ &RXUW
ZDV RQO\ DEOH WR LPSXWH ³LQWHQW´ E\ ORRNLQJ DW WKH
.HQWXFN\MXGJPHQW+RZHYHULWLVQRWPHUHO\.HQWXFN\
ODZEXW0LFKLJDQODZDVZHOOWKDWZRUGVLPSXWLQJODFN
RIFKDVWLW\DUHGHIDPDWRU\SHUVHLHLQMXULRXVE\WKHLU
QDWXUH0&/ )XUWKHUPRUHWKH0LFKLJDQ
MXGJPHQWIRXQGWKDWWKH.HQQHG\VPDGHWKHLULQMXULRXV
VWDWHPHQWV HYHQ DIWHU WKH\ NQHZ WKDW '1$ WHVWV KDG
FRQFOXVLYHO\ HVWDEOLVKHG WKH IDOVLW\ RI WKH LQMXULRXV
VWDWHPHQWV 7KXV HYHQ ZLWKRXW UHIHUHQFH WR WKH
.HQWXFN\ MXGJPHQW LW LV DSSDUHQW WKDW WKH GHEW LV
QRQGLVFKDUJHDEOHFRQVLVWHQWZLWK.DZDDXKDX
-$DW
1R ,QUH.HQQHG\HWDO
WR WKH HIIHFW WKDW &UHGLWRU 3KLOOLS 0XVWDLQH ZDV QRW 'LDQH
.HQQHG\¶VELRORJLFDOIDWKHUEXWUDWKHU*HRUJH:LOEXUZDV
KHUELRORJLFDOIDWKHUGHVSLWH'HEWRUV¶NQRZOHGJHRIWKHUHVXOW
RIWKH'1$SDUHQWDJHWHVWLQGLFDWLQJWKDWWKHSUREDELOLW\RI
:LOEXUEHLQJKHUIDWKHUZDV)ROORZLQJDEHQFKWULDORQ
-DQXDU\WKH,QJKDP&RXQW\&RXUWHQWHUHGMXGJPHQW
LQIDYRURI&UHGLWRUVDQGDJDLQVW'HEWRUVLQWKHWRWDODPRXQW
RI 7KH FRXUW IRXQG QR FDXVH RI DFWLRQ DJDLQVW
:LOEXU
0HDQZKLOH RQ -XQH .HQWXFN\ )DUP %XUHDX
0XWXDO ,QVXUDQFH &RPSDQ\ ³.)%´ ILOHG D GHFODUDWRU\
MXGJPHQWDFWLRQDJDLQVW'HEWRUVLQ-HIIHUVRQ&RXQW\&LUFXLW
&RXUW LQ .HQWXFN\ 'HEWRUV ZHUH LQVXUHG XQGHU D
KRPHRZQHU¶V SROLF\ LVVXHG E\ .)% DW WKH WLPH RI WKH
GHIDPDWLRQVXLWLQ0LFKLJDQDQG.)%ILOHGVXLWVHHNLQJD
GHFODUDWLRQWKDWWKHFODLPVDULVLQJRXWRIWKH0LFKLJDQODZVXLW
GLG QRW FRPH ZLWKLQ WKH VFRSH RI 'HEWRUV¶ LQVXUDQFH
FRYHUDJH 7KH .HQWXFN\ FLUFXLW FRXUW JUDQWHG VXPPDU\
MXGJPHQW WR .)% ILQGLQJ WKDW EHFDXVH WKH GHIDPDWRU\
VWDWHPHQWVZHUHLQKHUHQWO\LQMXULRXVWKHFODLPVLQ0LFKLJDQ
ZHUHRXWVLGH'HEWRUV¶LQVXUDQFHSROLF\
$V D UHVXOW RI WKH SURFHHGLQJV LQ WKH 0LFKLJDQ DQG
.HQWXFN\VWDWHFRXUWV'HEWRUVFODLPWKDWWKH\ZHUHIRUFHG
LQWR ILOLQJ &KDSWHU EDQNUXSWF\ 'HEWRUV DWWHPSWHG WR
GLVFKDUJHWKH0LFKLJDQMXGJPHQWORGJHGDJDLQVWWKHPDVZHOO
DV RWKHU GHEWV +RZHYHU &UHGLWRUV ILOHG DQ DGYHUVDU\
SURFHHGLQJ FODLPLQJ WKDW WKHLU MXGJPHQW REWDLQHG DJDLQVW
'HEWRUVLQ0LFKLJDQZDVQRQGLVFKDUJHDEOHLQDVPXFKDVWKH
GHEWZDVWKHUHVXOWRI³ZLOOIXODQGPDOLFLRXVLQMXU\E\WKH
GHEWRUWRDQRWKHUHQWLW\RUWRWKHSURSHUW\RIDQRWKHUHQWLW\´
XQGHU86&† D
2Q 2FWREHU WKH EDQNUXSWF\ FRXUW HQWHUHG D
PHPRUDQGXP RSLQLRQ JUDQWLQJ VXPPDU\ MXGJPHQW WR
&UHGLWRUV LQ WKH DGYHUVDU\ SURFHHGLQJ ILQGLQJ WKH GHEW WR
&UHGLWRUVQRQGLVFKDUJHDEOHEDVHGXSRQWKHSUHYLRXVGHFLVLRQV
LQWKH0LFKLJDQDQG.HQWXFN\VWDWHFRXUWV6SHFLILFDOO\WKH
EDQNUXSWF\FRXUWRSLQHGDVIROORZV

-- 3 of 6 --

,QUH.HQQHG\HWDO 1R
,QVXPPDWLRQWKLV&RXUWILQGVWKDWWKHIDFWVQHFHVVDU\
WRVXSSRUWDGHWHUPLQDWLRQRIQRQGLVFKDUJHDELOLW\XQGHU
† D RIWKH3ODLQWLIIV¶GHIDPDWLRQFODLPDUHFOHDUO\
HVWDEOLVKHG E\ WKH SULRU .HQWXFN\ DQG 0LFKLJDQ
MXGJPHQWV)LUVWWKH0LFKLJDQMXGJPHQWHVWDEOLVKHVWKDW
WKH VWDWHPHQWV DW LVVXH ZHUH LQ IDFW PDGH ZKLOH WKH
.HQWXFN\ MXGJPHQW HVWDEOLVKHV WKDW WKH\ ZHUH
GHIDPDWRU\ LQ FKDUDFWHU DQG LQWHQWLRQDO LQ QDWXUH
6HFRQG WKH .HQWXFN\ MXGJPHQW HVWDEOLVKHV WKDW WKH
VWDWHPHQWV ZHUH LQKHUHQWO\ LQMXULRXV JLYLQJ ULVH WR DQ
LQIHUHQFHRIDQH[SHFWDWLRQRIKDUPDQGLQWHQWWRLQMXUH
/DVWO\WKH0LFKLJDQMXGJPHQWH[SUHVVO\HVWDEOLVKHGWKDW
WKHVWDWHPHQWVZHUHPDGHZLWKRXWMXVWFDXVHRUH[FXVH
&RQVHTXHQWO\WKH3ODLQWLIIVDUHHQWLWOHGWRMXGJPHQWDV
DPDWWHURIODZSXUVXDQWWR† D ZLWKUHJDUGWRWKH
QRQGLVFKDUJHDELOLW\RIWKHLUGHIDPDWLRQFODLP
-$DW IRRWQRWHRPLWWHG 7KH2FWREHU
RUGHUH[SUHVVO\VWDWHVWKDWLWLVQRWDILQDORUGHU
7KHUHDIWHURQ2FWREHU&UHGLWRUVILOHGDPRWLRQ
WRYROXQWDULO\GLVPLVVWKRVHSRUWLRQVRIWKHFRPSODLQWXSRQ
ZKLFKWKHGLVWULFWFRXUWGLGQRWJUDQWVXPPDU\MXGJPHQWDQG
WRPDNHWKHFRXUW¶VMXGJPHQWILQDO7KHEDQNUXSWF\FRXUW
HQWHUHG DQ RUGHU RQ 1RYHPEHU VXVWDLQLQJ WKH
&UHGLWRUV¶PRWLRQWKHRUGHUSURYLGHVDVIROORZV
,7,6)857+(525'(5('$1'$'-8'*('WKDW
IRUWKHUHDVRQVVWDWHGLQWKH&RXUW¶V2SLQLRQDQG2UGHU
RI2FWREHUWKHGHEWFUHDWHGE\WKH
MXGJPHQWUHQGHUHGE\WKH&LUFXLW&RXUWIRUWKH&RXQW\RI
,QJKDP 6WDWH RI 0LFKLJDQ RI DQG FRQFHUQLQJ WKH
3ODLQWLIIV¶GHIDPDWLRQFODLPVDJDLQVWWKH'HIHQGDQWVLV
KHUHE\ GHFODUHG WR EH QRQGLVFKDUJHDEOH LQ WKH IXOO
DPRXQWRISXUVXDQWWR86&† D
7KLVLVDILQDODQGDSSHDODEOHMXGJPHQWWKHUHEHLQJQR
MXVWUHDVRQIRUGHOD\
.HQQHG\ Y 0XVWDLQH ,Q UH .HQQHG\ 1R
$3 1R %DQNU :' .\ 1RY
1R ,QUH.HQQHG\HWDO
:H QRWH WKDW QHLWKHU &UHGLWRUV QRU 'HEWRUV FLWH WR 0DUNRZLW] LQ WKHLU
EULHIV 5DWKHU 'HEWRUV DQG &UHGLWRUV HDFK DUJXH *HLJHU¶V HIIHFW RQ WKH
VWDWXV RI WKH ODZ LQ WKH 6L[WK &LUFXLW +RZHYHU WKHVH DUJXPHQWV DUH IRU
QDXJKW LQDVPXFK DV 0DUNRZLW] FOHDUO\ VHW IRUWK WKH HIIHFW RI *HLJHU RQ WKH
ODZ LQ WKLV FLUFXLW 6HH 0DUNRZLW] Y &DPSEHOO ,Q UH 0DUNRZLW]
)G DW WK &LU
-$DW
:HDJUHHZLWKWKHGLVWULFWFRXUW$OWKRXJK*HLJHUKDG\HW
WREHGHFLGHGDQGWKHEDQNUXSWF\FRXUWZDVODERULQJXQGHU
FDVH ODZ ZKLFK VHW IRUWK WKH LQFRUUHFW VWDQGDUG IRU
QRQGLVFKDUJHDEOLW\WKHEDQNUXSWF\FRXUWQRQHWKHOHVVFDSWXUHG
WKHHVVHQFHRI*HLJHU¶VWHVWLQLWVUHDVRQLQJQDPHO\WKDWRQO\
DFWVGRQHZLWKWKHLQWHQWWRFDXVHLQMXU\±DQGQRWPHUHO\DFWV
GRQHLQWHQWLRQDOO\±ULVHWRWKHOHYHORIZLOOIXODQGPDOLFLRXV
LQMXU\IRUSXUSRVHVRIVDWLVI\LQJ† D 6HH*HLJHU
86DW0DUNRZLW])GDW KROGLQJWKDW³XQOHVV
μWKHDFWRUGHVLUHVWR FDXVHFRQVHTXHQFHVRIKLVDFWRU
EHOLHYHV WKDW WKH FRQVHTXHQFHV DUH VXEVWDQWLDOO\ FHUWDLQ WR
UHVXOWIURPLW¶KHKDVQRWFRPPLWWHGDμZLOOIXODQGPDOLFLRXV
LQMXU\¶DVGHILQHGXQGHU† D ´
,QGHHGWKHEDQNUXSWF\FRXUWVWDWHGLQSURQJVRQHDQGWZR
RI LWV WKUHH SURQJ WHVW WKDW WR ILQG &UHGLWRUV¶ MXGJPHQW
QRQGLVFKDUJHDEOHLQWKLVFDVHWKH&UHGLWRUVKDGWRSURYHWKDW
'HEWRUVDFWHGZLWKLQWHQWDVZHOODVZLWKVXEVWDQWLDOFHUWDLQW\
WKDW KDUP ZRXOG UHVXOW IURP WKHLU DFWLRQV 7KLV WHVW LV
FRQVLVWHQWZLWK*HLJHUDVZHOODV0DUNRZLW]7KHUHIRUHLW
LVQRWWKHWHVWWKDWWKHEDQNUXSWF\FRXUWDSSOLHGLQUHQGHULQJ
LWVGHFLVLRQILQGLQJWKHGHEWQRQGLVFKDUJHDEOHWKDWLVDWLVVXH
KHUHUDWKHUWKHEDQNUXSWF\FRXUW¶VDSSOLFDWLRQRIWKHWHVWDQG
XVH RI 0LFKLJDQ DQG .HQWXFN\ GHFLVLRQV WR ILQG WKH GHEW
QRQGLVFKDUJHDEOHXQGHU† D LVWKHSLYRWDOLVVXH

-- 4 of 6 --

,QUH.HQQHG\HWDO 1R
*HLJHU LQ UHQGHULQJ LWV GHFLVLRQ WKDW &UHGLWRUV¶ MXGJPHQW
DJDLQVW'HEWRUVZDVQRQGLVFKDUJHDEOHXQGHU† D ,Q
GRLQJVRWKHEDQNUXSWF\FRXUWDSSOLHGWKHIROORZLQJWHVW
:LWKWKDWGHILQLWLRQ>RIGHIDPDWLRQIURPWKH0LFKLJDQ
FRXUWV@ LQ PLQG WKH FUHGLWRU VHHNLQJ WKH † D
QRQGLVFKDUJHDELOLW\GHWHUPLQDWLRQPXVWGHPRQVWUDWH
WKH GHEWRU LQWHQWLRQDOO\ SXEOLVKHG D GHIDPDWRU\
VWDWHPHQW WKH GHEWRU NQHZ WKDW WKH GHIDPDWRU\
VWDWHPHQWZDVVXEVWDQWLDOO\FHUWDLQWRKDUPWKHSHUVRQ
DERXWZKRPWKHVWDWHPHQWFRQFHUQHGDQG WKHUHZDV
QRMXVWFDXVHRUH[FXVHIRUPDNLQJWKHVWDWHPHQW
-$DW
7KHGLVWULFWFRXUWIRXQGWKDWGHVSLWHWKHEDQNUXSWF\FRXUW¶V
UHOLDQFHRQFDVHODZZKLFKVHWIRUWKWKHLQFRUUHFWVWDQGDUGIRU
GHWHUPLQLQJ ZKHWKHU D GHEW LV QRQGLVFKDUJHDEOH XQGHU
† D WKH EDQNUXSWF\ FRXUW QRQHWKHOHVV PDQDJHG WR
FUDIWWKHDSSURSULDWHWHVWIRUGHWHUPLQLQJQRQGLVFKDUJHDELOLW\
XQGHUSUHYDLOLQJ6XSUHPH&RXUWSUHFHGHQW6SHFLILFDOO\WKH
GLVWULFWFRXUWRSLQHGDVIROORZV
$SSHOODQWV DUJXH WKDW WKH %DQNUXSWF\ &RXUW
HUURQHRXVO\DSSOLHGWKHVWDQGDUGVRI3HUNLQVY6FKDUIIH
)G WK&LU DVWDQGDUGGLVFUHGLWHGE\
.DZDDXKDXY*HLJHU86 .DZDDXKDX
KHOG WKDW 6HF D QRQGLVFKDUJHDEOLW\ UHTXLUHG D
ILQGLQJWKDWWKHGHEWRULQWHQGHGLQMXU\UDWKHUWKDQRQO\D
ILQGLQJWKDWWKHGHEWRULQWHQGHGWKHDFWZKLFKFDXVHGWKH
LQMXU\ $OWKRXJK WKH .DZDDXKDX RSLQLRQ ZDV QRW
DYDLODEOH WR WKH %DQNUXSWF\ &RXUW -XGJH 5REHUWV¶
DQDO\VLVZDVHQWLUHO\FRQVLVWHQWZLWKWKHUHTXLUHPHQWVRI
.DZDDXKDX 7KH %DQNUXSWF\ &RXUW QRWHG WKDW WKH
.HQQHG\VFRQWLQXHGWRPDNHWKHVWDWHPHQWVLQTXHVWLRQ
HYHQDIWHUUHFHLYLQJFOHDUSURRIWKDWWKHVWDWHPHQWVZHUH
IDOVH DV QRWHG E\ WKH .HQWXFN\ FRXUW DQG DV LV
DEXQGDQWO\ FOHDU ZLWKRXW WKH .HQWXFN\ MXGJPHQW WKH
VWDWHPHQWVZHUHLQMXULRXVE\WKHLUYHU\QDWXUHWKXVLWLV
FOHDU WKDW LQ PDNLQJ WKH VWDWHPHQWV WKH .HQQHG\V
LQWHQGHGLQMXU\
1R ,QUH.HQQHG\HWDO
$OWKRXJK WKH SDUWLHV IDLOHG WR SURYLGH WKLV &RXUW DV ZHOO DV WKH
GLVWULFW FRXUW ZLWK D FRS\ RI WKH EDQNUXSWF\ FRXUW¶V 1RYHPEHU
RUGHU ZH REWDLQHG D FRS\ IURP WKH 8QLWHG 6WDWHV %DQNUXSWF\ &RXUW IRU
WKH :HVWHUQ 'LVWULFW RI .HQWXFN\
%HFDXVH WKH PRWLRQ IRU UHFRQVLGHUDWLRQ ZDV ILOHG ZLWKLQ WHQ GD\V RI
WKH GLVWULFW FRXUW¶V ILQDO RUGHU HQWHUHG RQ 1RYHPEHU 'HEWRUV
ZHUH LQ FRPSOLDQFH ZLWK WKH UHOHYDQW SURFHGXUDO UXOHV 6HH )(' 5 %5
3 VWDWLQJ WKDW 5XOH RI WKH )HGHUDO 5XOHV RI &LYLO 3URFHGXUH
DSSO\ LQ EDQNUXSWF\ SURFHHGLQJV )(' 5 &,9 3 H VWDWLQJ WKDW D
PRWLRQ WR DOWHU RU DPHQG D MXGJPHQW PXVW EH ILOHG QR ODWHU WKDQ WHQ GD\V
DIWHU HQWU\ RI MXGJPHQW
:H QRWH WKDW WKH SDUWLHV IDLOHG WR SURYLGH XV ZLWK D FRPSOHWH MRLQW
DSSHQGL[ :KLFK LV WR VD\ WKH MRLQW DSSHQGL[ VXEPLWWHG LQ FRQQHFWLRQ
ZLWK WKLV FDVH IDLOHG WR SURYLGH XV ZLWK WKH RUGHUV DQG RSLQLRQV QHHGHG WR
UHYLHZ WKH FODLPV LQYROYHG $V D UHVXOW ZH REWDLQHG WKH UHFRUG IURP WKH
ORZHU FRXUWV +RZHYHU WKH SDUWLHV VKRXOG EH UHPLQGHG WKDW LW LV QRW WKH
&RXUW¶V GXW\ WR VHDUFK WKH UHFRUG IRU UHOHYDQW PDWHULDOV DQG IDLOXUH WR
SURYLGH WKH &RXUW ZLWK WKH UHFRUG LW QHHGV FDQ OHDG WR GLVPLVVDO RI WKH
DSSHDO 6HH 0RUDOHV Y $P +RQGD 0RWRU &R ,QF )G
Q WK &LU
XQSXEOLVKHGRUGHUJUDQWLQJ3ODLQWLIIV¶PRWLRQIRUYROXQWDU\
GLVPLVVDORIFODLPVDQGWRPDNHMXGJPHQWILQDO
2Q 'HFHPEHU 'HEWRUV ILOHG D PRWLRQ IRU
UHFRQVLGHUDWLRQRIWKHFRXUW¶V1RYHPEHURUGHUZKLFKWKH
EDQNUXSWF\FRXUWGHQLHGLQDPHPRUDQGXPRSLQLRQDQGRUGHU
HQWHUHGRQ-DQXDU\'HEWRUVWKHUHDIWHUDSSHDOHGWKH
EDQNUXSWF\ FRXUW¶V GHFLVLRQ WR WKH 8QLWHG 6WDWHV 'LVWULFW
&RXUW IRU WKH :HVWHUQ 'LVWULFW RI .HQWXFN\ ,Q D
PHPRUDQGXPRSLQLRQDQGRUGHUGDWHG6HSWHPEHU
WKHGLVWULFWFRXUW DIILUPHGWKHEDQNUXSWF\FRXUW¶VGHFLVLRQ
ILQGLQJ&UHGLWRUV¶MXGJPHQWDJDLQVW'HEWRUVQRQGLVFKDUJHDEOH
XQGHU.DZDDXKDXY*HLJHU86 7KHUHDIWHU
WKHGLVWULFWFRXUWLVVXHGLWVFRUUHVSRQGLQJMXGJPHQWDIILUPLQJ
WKHEDQNUXSWF\FRXUW¶VRUGHUDQGLWLVIURPWKLVMXGJPHQWWKDW
'HEWRUVQRZDSSHDO

-- 5 of 6 --

,QUH.HQQHG\HWDO 1R
',6&866,21
:KHQWKLV&RXUWFRQVLGHUVDQDSSHDOWDNHQIURPWKHGLVWULFW
FRXUW¶V ILQDO RUGHU LQ D EDQNUXSWF\ FDVH WKH &RXUW
LQGHSHQGHQWO\UHYLHZVWKHEDQNUXSWF\FRXUW¶VGHFLVLRQ6HH
.RHQLJ6SRUWLQJ*RRGV,QFY0RUVH5G&R ,QUH.RHQLJ
6SRUWLQJ*RRGV,QF )G WK&LU ,Q
GRLQJVRWKH&RXUWUHYLHZVWKHEDQNUXSWF\FRXUW¶VILQGLQJVRI
IDFWIRUFOHDUHUURUDQGLWVFRQFOXVLRQVRIODZGHQRYR6HH
0LOOHUV&RYH(QHUJ\&R,QFY0RRUH ,QUH0LOOHUV&RYH
(QHUJ\&R,QF )G WK&LU 7KLV
&RXUWUHYLHZVWKHJUDQWRIDPRWLRQIRUVXPPDU\MXGJPHQWGH
QRYRDVDPDWWHURIODZ6HH0DUNRZLW]Y&DPSEHOO ,QUH
0DUNRZLW] )G WK&LU
$ 7HVW IRU 'HWHUPLQLQJ 'LVFKDUJHDELOLW\ 8QGHU
6HFWLRQ D
6HFWLRQ D RI WKH %DQNUXSWF\ &RGH SURYLGHV IRU DQ
H[FHSWLRQ WR WKH GLVFKDUJHDELOLW\ RI FHUWDLQ GHEWV
6SHFLILFDOO\† D SURYLGHVIRUSXUSRVHVRIWKLVDFWLRQ
DVIROORZV
D $ GLVFKDUJH XQGHU 6HFWLRQ D
E RIWKLVWLWOHGRHVQRWGLVFKDUJHDQLQGLYLGXDO
GHEWRUIURPDQ\GHEW±
IRUZLOOIXODQGPDOLFLRXVLQMXU\E\WKHGHEWRUWR
DQRWKHUHQWLW\RUWRWKHSURSHUW\RIDQRWKHUHQWLW\
86&† D ,Q3HUNLQVY6FKDUIIH)G
WK &LU WKLV &RXUW KHOG WKDW ³ZLOOIXO DQG
PDOLFLRXVLQMXU\´DVXVHGZLWKLQ† D FRXOGEHIRXQG
ZKHQ DQ DFWRU LQWHQGV WKH DFW FRPPLWWHG UHJDUGOHVV RI
ZKHWKHUKHLQWHQGVWKHFRQVHTXHQFHVWKHUHRI+RZHYHULQ
.DZDDXKDXY*HLJHU86 WKH6XSUHPH
&RXUW DGGUHVVHG WKH ³SLYRWDO TXHVWLRQ´ RI ZKHWKHU
³† D ¶VFRPSDVVFRYHU>V@DFWVGRQHLQWHQWLRQDOO\WKDW
FDXVHLQMXU\RURQO\DFWVGRQHZLWKWKHDFWXDOLQWHQWWR
FDXVHLQMXU\´,QDQVZHULQJWKLVLQTXLU\WKH6XSUHPH&RXUW
KHOGWKDWRQO\DFWVGRQHZLWKWKHLQWHQWWRFDXVHLQMXU\±DQG
1R ,QUH.HQQHG\HWDO
QRWPHUHO\DFWVGRQHLQWHQWLRQDOO\±ULVHWRWKHOHYHORIZLOOIXO
DQGPDOLFLRXVLQMXU\IRUSXUSRVHVRIVDWLVI\LQJ† D
6HHLG7KH&RXUWUHDVRQHGDVIROORZV
7KH ZRUG ³ZLOOIXO´ LQ D PRGLILHV WKH ZRUG
³LQMXU\´ LQGLFDWLQJ WKDW QRQGLVFKDUJHDELOLW\ WDNHV D
GHOLEHUDWHRULQWHQWLRQDOLQMXU\QRWPHUHO\DGHOLEHUDWHRU
LQWHQWLRQDODFWWKDWOHDGVWRLQMXU\+DG&RQJUHVVPHDQW
WRH[HPSWGHEWVUHVXOWLQJIURPXQLQWHQWLRQDOO\LQIOLFWHG
LQMXULHVLWPLJKWKDYHGHVFULEHGLQVWHDG³ZLOOIXODFWVWKDW
FDXVH LQMXU\´ 2U &RQJUHVV PLJKW KDYH VHOHFWHG DQ
DGGLWLRQDOZRUGRUZRUGVLH³UHFNOHVV´RU³QHJOLJHQW´
WR PRGLI\ ³LQMXU\´ 0RUHRYHU DV WKH (LJKWK &LUFXLW
REVHUYHGWKH D IRUPXODWLRQWULJJHUVLQWKHODZ\HU¶V
PLQG WKH FDWHJRU\ ³LQWHQWLRQDO WRUWV´ DV GLVWLQJXLVKHG
IURP QHJOLJHQW RU UHFNOHVV WRUWV ,QWHQWLRQDO WRUWV
JHQHUDOO\UHTXLUHWKDWWKHDFWRULQWHQG³WKHFRQVHTXHQFHV
RI DQ DFW´ QRW VLPSO\ ³WKH DFW LWVHOI´ 5HVWDWHPHQW
6HFRQG RI 7RUWV † $ &RPPHQW D S
HPSKDVLVDGGHG
,G
$OLWWOHPRUHWKDQD\HDUDIWHUWKH6XSUHPH&RXUW¶VGHFLVLRQ
LQ*HLJHUWKLV&RXUWKDGRFFDVLRQWRUHYLVLWWKHPHDQLQJRI
³ZLOOIXODQGPDOLFLRXVLQMXU\´LQOLJKWRIWKH6XSUHPH&RXUW¶V
SURQRXQFHPHQW DQG KHOG ³WKDW WKH 3HUNLQV VWDQGDUG IRU
μZLOOIXODQGPDOLFLRXVLQMXU\¶ZDVHIIHFWLYHO\RYHUUXOHGE\WKH
6XSUHPH&RXUWLQ*HLJHUDQGZHQRZH[SUHVVO\RYHUUXOHWKDW
VWDQGDUG´6HH0DUNRZLW]Y&DPSEHOO ,QUH0DUNRZLW]
)G WK &LU 7KH &RXUW DUWLFXODWHG WKLV
FLUFXLW¶VQHZVWDQGDUGLQOLJKWRI*HLJHUDVIROORZV³ZHQRZ
KROGWKDWXQOHVVμWKHDFWRUGHVLUHVWRFDXVHFRQVHTXHQFHVRI
KLVDFWRUEHOLHYHVWKDWWKHFRQVHTXHQFHVDUHVXEVWDQWLDOO\
FHUWDLQWRUHVXOWIURPLW¶KHKDVQRWFRPPLWWHGDμZLOOIXODQG
PDOLFLRXVLQMXU\¶DVGHILQHGXQGHU† D ´,GDW
FLWDWLRQRPLWWHG
,QWKHPDWWHUDWKDQGWKHEDQNUXSWF\FRXUWFLWHGDQGUHOLHG
XSRQ3HUNLQVDVZHOODV:KHHOHUY/DXGDQL)G
WK&LU ERWKRIZKLFKKDYHVLQFHEHHQRYHUUXOHGE\

-- 6 of 6 --