The AI workspace for legal professionals
- Legal research with access to more than 1 million sources
- Document automation
- Matter management
- Hosted in the EU and Switzerland
Try it free for 14 days (10 questions/day during trial)
The AI workspace for legal professionals
Try it free for 14 days (10 questions/day during trial)
00-3013; 00-3437•01a0193p.06
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
1$7,21$/ 6$7(//,7(
632576 ,1&
3ODLQWLII$SSHOOHH
Y
(/,$',6 ,1&GED0HORG\
/DQH/RXQJHHWDO
'HIHQGDQWV
7,0( :$51(5
(17(57$,10(17 &203$1<
/3GED7LPH:DUQHU
&DEOH
'HIHQGDQW$SSHOODQW
;!
1
1RV
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW$NURQ
1R²'DYLG''RZG-U'LVWULFW-XGJH
$UJXHG0D\
'HFLGHGDQG)LOHG-XQH
%HIRUH-21(66,/(5DQG*,/0$1&LUFXLW-XGJHV
-- 1 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 5LFKDUG : &ODU\ &5$9$7+ 6:$,1(
0225(1HZ<RUN1HZ<RUNIRU$SSHOODQW0LFKDHO-
'HOO.5$0(5/(9,11$)7$/,6 )5$1.(/1HZ
<RUN1HZ<RUNIRU$SSHOOHH21%5,()5LFKDUG:
&ODU\&5$9$7+6:$,1( 0225(1HZ<RUN1HZ
<RUN ( 0DULH :KHHOHU $NURQ 2KLR IRU $SSHOODQW
0LFKDHO ' 6ORGRY -$9,7&+ %/2&. (,6(1
5$7+%21(&OHYHODQG2KLR0DUFXV:&RUZLQ6NLS0
.ODXEHU %RFD 5DWRQ )ORULGD IRU $SSHOOHH )UDQFLQH 5
6WUDXVV:DVKLQJWRQ'&IRU$PLFXV&XULDH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
521$/'/((*,/0$1&LUFXLW-XGJH2QWKHQLJKWRI
'HFHPEHUWKH0HORG\/DQH/RXQJHDFRPPHUFLDO
EDUORFDWHGLQ0DVVLOORQ2KLRVKRZHGWKHOLYHEURDGFDVWRI
DER[LQJPDWFKEHWZHHQ5LGGLFN%RZHDQG$QGUHZ*RORWD
WKH HYHQW 1DWLRQDO 6DWHOOLWH 6SRUWV ,QF 166 KDG
REWDLQHG WKH H[FOXVLYH ULJKW WR EURDGFDVW WKH HYHQW WR
FRPPHUFLDO HVWDEOLVKPHQWV LQ 2KLR 7LPH :DUQHU
(QWHUWDLQPHQW&RPSDQ\/3KDGREWDLQHGWKHH[FOXVLYHULJKW
WR EURDGFDVWWKHHYHQWRQDSD\SHUYLHZEDVLVWRLWV2KLR
UHVLGHQWLDO FXVWRPHUV 7KH 0HORG\ /DQH /RXQJH
HUURQHRXVO\OLVWHGDVDUHVLGHQWLDOFXVWRPHURI7LPH:DUQHU
RUGHUHGWKHHYHQWWKURXJK7LPH:DUQHU¶VVHUYLFH
$IWHUOHDUQLQJWKDWWKH0HORG\/DQH/RXQJHKDGVKRZQWKH
HYHQWWRLWVSDWURQVRQWKHQLJKWLQTXHVWLRQ166EURXJKWVXLW
DJDLQVW(OLDGLV,QFWKHFRUSRUDWHRZQHURIWKHEDU7KHVXLW
DOVR QDPHG (OLDGLV¶V WZR RZQHUV DQG 7LPH :DUQHU DV
GHIHQGDQWV166DOOHJHGWKDWWKHVKRZLQJRIWKHHYHQWLQD
FRPPHUFLDOHVWDEOLVKPHQWWKURXJK7LPH:DUQHU¶VUHVLGHQWLDO
VHUYLFHFRQVWLWXWHGDYLRODWLRQRIWKH)HGHUDO&RPPXQLFDWLRQV
-- 2 of 16 --
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
$FWRI86& &RPPXQLFDWLRQV$FW
ZKLFK DPRQJ RWKHU WKLQJV SURKLELWV WKH XQDXWKRUL]HG
GLYXOJHQFHRIZLUHRUUDGLRFRPPXQLFDWLRQV
(OLDGLVDQGLWVFRRZQHUVUHDFKHGDSURPSWVHWWOHPHQWZLWK
166166DQG7LPH:DUQHU WKHQILOHGFURVVPRWLRQVIRU
VXPPDU\MXGJPHQWDJDLQVWHDFKRWKHU7KHGLVWULFWFRXUWILUVW
JUDQWHGVXPPDU\MXGJPHQWWR166RQWKHLVVXHRIOLDELOLW\
DQG VXEVHTXHQWO\ HQWHUHG D ILQDO MXGJPHQW DZDUGLQJ 166
GDPDJHVFRVWVDQGDWWRUQH\IHHV
7LPH:DUQHUDSSHDOVWKHGLVWULFWFRXUW¶VUXOLQJVFODLPLQJ
WKDWWKHFRXUWHUUHGLQIDLOLQJWRJLYHSUHFOXVLYHHIIHFWWRDQ
DGYHUVHMXGJPHQWDJDLQVW166LQSULRUOLWLJDWLRQEHWZHHQWKH
SDUWLHVRQDQDOOHJHGO\FRQWUROOLQJLVVXH,QWKHDOWHUQDWLYH
7LPH:DUQHUFODLPVWKDW166ODFNVVWDQGLQJWRVXHXQGHUWKH
&RPPXQLFDWLRQV$FWDQGLQDQ\HYHQWWKDW166KDVIDLOHG
WRHVWDEOLVKDYLRODWLRQRIWKDWVWDWXWH)RUDOORIWKHUHDVRQV
VHW IRUWK EHORZ ZH $)),50 WKH MXGJPHQW RI WKH GLVWULFW
FRXUW
,%$&.*5281'
$ )DFWXDOEDFNJURXQG
166DQG7LPH:DUQHUREWDLQHGWKHLUUHVSHFWLYHULJKWVWR
EURDGFDVWWKHHYHQWWKURXJKVHSDUDWHFRQWUDFWV1HZ-HUVH\
6SRUWV3URGXFWLRQV,QFGED0DLQ(YHQWV 0DLQ(YHQWV
SURGXFHGWKHHYHQW,WJUDQWHG3D\3HU9LHZ1HWZRUNV,QF
GED9LHZHU¶V&KRLFH 9LHZHU¶V&KRLFH WKHH[FOXVLYHULJKW
WREURDGFDVWWKHHYHQWWRUHVLGHQWLDOKRXVHKROGV9LHZHU¶V
&KRLFHLQWXUQOLFHQVHG7LPH:DUQHUWRPDNHWKHWHOHFDVWRI
WKHHYHQWDYDLODEOHWRUHVLGHQWLDOFXVWRPHUVLQ2KLR0DLQ
(YHQWVJUDQWHG(QWHUWDLQPHQWE\- -,QF (-- DVHSDUDWH
H[FOXVLYH ULJKW WR EURDGFDVW WKH HYHQW WR FRPPHUFLDO
HVWDEOLVKPHQWV166REWDLQHGWKHULJKWWREHWKHFRPPHUFLDO
GLVWULEXWRURIWKHHYHQW¶VWHOHFDVWLQ2KLRIURP(--
0DLQ(YHQWVFUHDWHGDVLQJOHWHOHFDVWRIWKHHYHQWDQGVHQW
LWWRDWUDQVPLVVLRQVWDWLRQ)URPWKHWUDQVPLVVLRQVWDWLRQWKH
-- 3 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
VLJQDOZDVVHQWWRWZRGLIIHUHQWVDWHOOLWHV9LHZHU¶V&KRLFH
UHFHLYHGWKHVLJQDOIURPRQHRIWKHVDWHOOLWHV,WGHFRGHGWKH
VLJQDOUHVFUDPEOHGLWDQGVHQWLWWRDQRWKHUVHWRIVDWHOOLWHV
WKDWWUDQVPLWWHGWKHVLJQDOWRD7LPH:DUQHUIDFLOLW\LQ$NURQ
2KLR7KH$NURQIDFLOLW\NQRZQDVD³KHDGHQG´UHFHLYHV
SURJUDPVYLDVDWHOOLWHDQGGLVWULEXWHVWKHPWRVXEVFULEHUVLQ
WKH $NURQ UHJLRQ %HFDXVH WKH HYHQW ZDV D SD\SHUYLHZ
SURJUDP7LPH:DUQHUHQFU\SWHGLWDWWKH$NURQKHDGHQGVR
WKDWRQO\VXEVFULEHUVZKRKDGRUGHUHGWKHHYHQWZRXOGEHDEOH
WRGHFRGHDQGYLHZWKHSURJUDP
166UHFHLYHGLWVWUDQVPLVVLRQRIWKHWHOHFDVWIURPDFKDLQ
RI GLVWULEXWLRQ WKDW WUDFHV EDFN WR WKH VHFRQG VDWHOOLWH WKDW
UHFHLYHGWKHLQLWLDOVLJQDOIURP0DLQ(YHQWV$VDUHVXOWWKH
VLJQDOVWKDW166DQG7LPH:DUQHUUHFHLYHGLQWKHLUUHVSHFWLYH
2KLR IDFLOLWLHV ERWK RULJLQDWHG IURP WKH VDPH LQLWLDO
WUDQVPLVVLRQVHQWE\0DLQ(YHQWVDQGQHLWKHUSDUW\GLVSXWHV
WKHULJKWRIWKHRWKHUWRUHFHLYHWKHVLJQDOVLQ2KLRDFFRUGLQJ
WR WKHLU VHSDUDWH FRQWUDFWV 5DWKHU WKH GLVSXWH FHQWHUV RQ
7LPH:DUQHUDOORZLQJDFRPPHUFLDOHVWDEOLVKPHQWWRYLHZ
WKHHYHQWRQLWVUHVLGHQWLDOFXVWRPHUFDEOHQHWZRUN
0HORG\/DQH/RXQJH¶VDFFRXQWZDVOLVWHGLQWKHLQGLYLGXDO
QDPHRI*XVW(OLDGLVDFRRZQHURI(OLDGLV,QF,Q)HEUXDU\
RI.HQ6RYDFRROD7LPH:DUQHUHPSOR\HHVHUYLFHG
(OLDGLV¶VFDEOHDFFRXQW7LPH:DUQHUFRQFHGHVWKDW6RYDFRRO
VKRXOGKDYHUHFRJQL]HGWKDWWKH0HORG\/DQH/RXQJHZDVD
FRPPHUFLDOHVWDEOLVKPHQWDQGQRWDUHVLGHQFH7KHVWUXFWXUH
RIWKHEXLOGLQJDQH[WHULRULGHQWLILFDWLRQVLJQDQGQHRQEHHU
VLJQVLQWKHZLQGRZPDGHWKLVREYLRXV1HYHUWKHOHVVKDYLQJ
REWDLQHGUHVLGHQWLDOFDEOHVHUYLFHWKH0HORG\/DQH/RXQJH
KDGWKHFDSDELOLW\WRRUGHUSD\SHUYLHZSURJUDPV
7LPH :DUQHU¶V DFFRXQW UHFRUGV VKRZ WKDW 0HORG\ /DQH
/RXQJHKDGRUGHUHGRQHHDUOLHUSURJUDPDWWKHFRPPHUFLDO
UDWH%XW0HORG\/DQH/RXQJHRUGHUHGWKHHYHQWLQTXHVWLRQ
IURP 7LPH :DUQHU DW WKH UHVLGHQWLDO UDWH RI $V D
FRPPHUFLDOHVWDEOLVKPHQW0HORG\/DQH/RXQJHVKRXOGKDYH
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
RIWKHUHDVRQVVHWIRUWKDERYHZH$)),50WKHMXGJPHQWRI
WKHGLVWULFWFRXUW
-- 4 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
LPSRVHDQ\RIWKHDGGLWLRQDOSHQDOWLHVSURYLGHGE\WKHVWDWXWH
IRUVXFKDYLRODWLRQ6HHHJ86& H & LL
JUDQWLQJ FRXUWV WKH GLVFUHWLRQ WR LQFUHDVH DQ DZDUG RI
GDPDJHVE\DQDPRXQWRIQRWPRUHWKDQIRUHDFK
YLRODWLRQRIVXEVHFWLRQ D LIWKHYLRODWLRQLVZLOOIXO
$FFRUGLQJWR H & L ,, DSDUW\DJJULHYHGE\D
QRQZLOOIXOYLRODWLRQRIPD\UHFRYHUGDPDJHVRIQRWOHVV
WKDQ RU PRUH WKDQ ³DV WKH FRXUW FRQVLGHUV
MXVW´7KHGLVWULFWFRXUWIRXQGWKDW166ZRXOGKDYHUHFHLYHG
DOPRVWLIWKH0HORG\/DQH/RXQJHKDGSXUFKDVHGWKH
HYHQWIURP166,WIXUWKHUUHFRJQL]HGWKDW166SDLG
WR LQYHVWLJDWH FRPSOLDQFH LQ WKH $NURQ DUHD ZLWK 166¶V
WUDQVPLVVLRQ ULJKWV WR EURDGFDVW WKH HYHQW RQ WKH QLJKW LQ
TXHVWLRQ 166 DOVR SUHVHQWHG SURRI WKDW LW LQFXUUHG
DSSUR[LPDWHO\ LQ DGPLQLVWUDWLYH FRVWV WKDW ZHUH
QHFHVVDU\ WR LGHQWLI\ 7LPH :DUQHU DV WKH VRXUFH RI WKH
0HORG\ /DQH /RXQJH¶V WUDQVPLVVLRQ RI WKH HYHQW HYHQ
WKRXJKWKLVILJXUHZDVQRWPHQWLRQHGLQWKHGLVWULFWFRXUW¶V
IRUPDOILQGLQJVRIIDFW$OWKRXJKWKHGLVWULFWFRXUWGLGQRW
VSHFLI\SUHFLVHO\KRZLWDUULYHGDWWKHILQDOILJXUHRI
ZHFRQFOXGHWKDWWKHSURRIVXSSRUWVWKHGDPDJHFDOFXODWLRQ
WKDWWKHDPRXQWLVZHOOZLWKLQWKHVWDWXWRU\UDQJHDQGWKDWWKH
DZDUGLVQRWFOHDUO\HUURQHRXV
:H DOVR ILQG QR HUURU LQ WKH GLVWULFW FRXUW¶V DZDUG RI
DWWRUQH\IHHVDQGFRVWVWR1667LPH:DUQHUGLGQRWGLVSXWH
WKHKRXUO\UDWHFKDUJHGE\166¶VDWWRUQH\VDVXQUHDVRQDEOH
,QDGGLWLRQWKHGLVWULFWFRXUWGLVDOORZHGWKHFXPXODWLYHKRXUV
FKDUJHGE\DVHFRQG166DWWRUQH\WKDWLWIHOWVKRXOGQRWEH
LPSRVHGRQ7LPH:DUQHU:HWKHUHIRUHILQGQREDVLVWRVHW
DVLGHWKHDZDUGRIDWWRUQH\IHHVDQGFRVWVWR166
,,,&21&/86,21
,Q FRQFOXVLRQ ZH KROG WKDW 166 LV QRW SUHFOXGHG IURP
EULQJLQJ WKLV DFWLRQ DJDLQVW 7LPH :DUQHU WKDW 166 KDV
VWDQGLQJWRVXHDQGWKDW166KDVHVWDEOLVKHG7LPH:DUQHU¶V
YLRODWLRQRIWKHILUVWVHQWHQFHRI86& D )RUDOO
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
SDLG166IRUWKHULJKWWRVKRZWKHHYHQWZKLFKZRXOGKDYH
FRVWLW
166 KLUHG LQYHVWLJDWRUV WR YLVLW YDULRXV FRPPHUFLDO
HVWDEOLVKPHQWVWRPRQLWRUZKHWKHUWKRVHVKRZLQJWKHHYHQW
KDGREWDLQHGWKHULJKWWRGRVRWKURXJK166DVWKHSURSHU
GLVWULEXWLRQFKDQQHO$QLQYHVWLJDWRUYLVLWHGWKH0HORG\/DQH
/RXQJHRQWKHQLJKWLQTXHVWLRQDQGXOWLPDWHO\GHWHUPLQHG
WKDW LW ZDV EURDGFDVWLQJ WKH HYHQW WKURXJK 7LPH :DUQHU¶V
UHVLGHQWLDOSD\SHUYLHZV\VWHP7KH0HORG\/DQH/RXQJH
FODLPVWKDWLWZRXOGQRWKDYHFKRVHQWRVKRZWKHHYHQWKDGLW
EHHQUHTXLUHGWRSD\166¶VKLJKFRPPHUFLDOUDWH2QO\
SDWURQVZHUHLQWKHEDUDWWKHWLPHWKHHYHQWZDVEURDGFDVW
% 3URFHGXUDO EDFNJURXQG DQG SULRU OLWLJDWLRQ
EHWZHHQWKHSDUWLHV
166 FRPPHQFHG LWV DFWLRQ LQ WKH 8QLWHG 6WDWHV 'LVWULFW
&RXUWIRUWKH1RUWKHUQ'LVWULFWRI2KLRLQ1RYHPEHURI
(OLDGLV ,QF DQG LWV FRRZQHUV VRRQ VHWWOHG ZLWK 166
DJUHHLQJWRWKHHQWU\RIMXGJPHQWDJDLQVWWKHPIRUYLRODWLQJ
86&ZKLFKLVSDUWRIWKH&RPPXQLFDWLRQV$FW
DQGSD\LQJLQQRPLQDOGDPDJHV166¶VFODLPDJDLQVW
7LPH:DUQHUSURFHHGHG
,Q -XO\ RI WKH GLVWULFW FRXUW HQWHUHG VXPPDU\
MXGJPHQW LQ IDYRU RI 166 ILQGLQJ WKDW 7LPH :DUQHU KDG
YLRODWHG$EHQFKWULDORQWKHLVVXHRIGDPDJHVZDV
KHOGVHYHUDOPRQWKVODWHU7KHGLVWULFWFRXUWGHWHUPLQHGWKDW
7LPH :DUQHU ZDV OLDEOH IRU LQ VWDWXWRU\ GDPDJHV
166IXUWKHUVRXJKWDQGZDVDZDUGHGDWWRUQH\IHHVDQGFRVWV
SXUVXDQWWR86& H % LLL WRWDOLQJ
LQ0DUFKRI7LPH:DUQHUDSSHDOVWKHUXOLQJVRIWKH
GLVWULFWFRXUWUDLVLQJWKUHHDOWHUQDWLYHDUJXPHQWV
)LUVW7LPH:DUQHUFRQWHQGVWKDWWKHGLVWULFWFRXUWHUUHGE\
IDLOLQJ WR JLYH SUHFOXVLYH HIIHFW WR D VHSDUDWH GLVWULFW FRXUW
MXGJPHQW UHQGHUHG LQ -XO\ RI WKDW DURVH IURP D
VXEVWDQWLDOO\LGHQWLFDOFODLPE\166DJDLQVW7LPH:DUQHU
166OHDUQHGWKDWDFRPPHUFLDOHVWDEOLVKPHQWLQ$NURQ2KLR
-- 5 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
FDOOHG/\QGVWDOGHU,QFGED&RDFK¶V&RUQHUKDGVKRZQD
ER[LQJPDWFKEHWZHHQ(YDQGHU+RO\ILHOGDQG%REE\&]\]
WKDW &RDFK¶V &RUQHU REWDLQHG YLD UHVLGHQWLDOFDEOH VHUYLFH
IURP7LPH:DUQHULQ0DUFKRI$VLQWKHFDVHEHIRUH
XV7LPH:DUQHUKDGREWDLQHGWKHH[FOXVLYHULJKWIURPWKH
SURGXFHUWRGLVWULEXWHWKHPDWFKWRUHVLGHQWLDOFXVWRPHUVLQ
2KLRZKLOH166UHFHLYHGWKHH[FOXVLYHOLFHQVHWRVHOOWKH
VDPHSURJUDPWR2KLR¶VFRPPHUFLDOHVWDEOLVKPHQWV
166FRPPHQFHGDQDFWLRQDJDLQVW&RDFK¶V&RUQHUDQGLWV
RZQHULQWKH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH1RUWKHUQ
'LVWULFWRI2KLRLQ$XJXVWRI:KHQ166OHDUQHGRI
7LPH :DUQHU¶V UROH LQ SURYLGLQJ WKH EURDGFDVW WR &RDFK¶V
&RUQHULWDGGHG7LPH:DUQHUDVDGHIHQGDQW,QWKDWVXLW
1DWLRQDO 6DWHOOLWH 6SRUWV ,QF Y /\QGVWDOGHU ,QF GED
&RDFK¶V&RUQHUHWDO1R&9 1'2KLR
166DOOHJHGWKDWERWK&RDFK¶V&RUQHUDQG7LPH:DUQHUKDG
YLRODWHG86&&RDFK¶V&RUQHUVHWWOHGZLWK166
7LPH :DUQHU WKHQ ILOHG D PRWLRQ IRU VXPPDU\ MXGJPHQW
DOOHJLQJWKDW166KDGIDLOHGWRHVWDEOLVKHLWKHUDFRQWUDFWXDO
RUDVWDWXWRU\FODLPDJDLQVWLW
7KHGLVWULFWFRXUWKHOGDKHDULQJRQ7LPH:DUQHU¶VPRWLRQ
IRU VXPPDU\ MXGJPHQW LQ -XO\ RI ,W LVVXHG D EHQFK
UXOLQJ DW WKDW KHDULQJ JUDQWLQJ 7LPH :DUQHU¶V PRWLRQ IRU
VXPPDU\MXGJPHQWRQWKHEDVLVWKDW166³IDLOHGWRVWDWHD
FODLPSXUVXDQWWRWKHWHUPVRIWKHFRQWUDFWV>IRUGLVWULEXWLRQ@
DWLVVXHLQWKLVFDVHDVZHOODV86&´166GLGQRW
DSSHDO 7LPH :DUQHU DUJXHV WKDW WKH &RDFK¶V &RUQHU
GHFLVLRQSUHFOXGHV166IURPUDLVLQJWKHLGHQWLFDOFODLP
LQWKHSUHVHQWFDVH
6HFRQGHYHQLIZHFRQFOXGHWKDW166LVQRWERXQGE\WKH
&RDFK¶V&RUQHUGHFLVLRQ7LPH:DUQHUDUJXHVWKDW166GRHV
QRW TXDOLI\ DV D ³SHUVRQ DJJULHYHG´ XQGHU G ,W
WKHUHIRUHFRQWHQGVWKDW166ODFNVWKHVWDQGLQJWRVXH7LPH
:DUQHUIRUDQDOOHJHGYLRODWLRQRI
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
&RPPXQLFDWLRQV$FWDQGWKHVXEVHTXHQWDPHQGPHQWVWKHUHWR
WR SURWHFW WKH LQWHJULW\ RI HOHFWURQLF FRPPXQLFDWLRQV IURP
QHJOLJHQW DV ZHOO DV ZLOOIXO GLYXOJHQFHV E\ LQWHUPHGLDULHV
6HFWLRQ H IRUH[DPSOHGLVWLQJXLVKHV EHWZHHQZLOOIXO
DQG QRQZLOOIXO GLYXOJHQFHV LQ WKH VHWWLQJ RI VWDWXWRU\
GDPDJHV %RWK 166 DQG 7LPH :DUQHU ZHUH VXFK
LQWHUPHGLDULHVLQWKHWUDQVPLVVLRQRIWKHHYHQWLQTXHVWLRQ
DQG ZHUH RQO\ DXWKRUL]HG WR SDUWDNH LQ WKH WUDQVPLVVLRQ
LQVRIDUDVWKHLUUHVSHFWLYHWUDQVPLVVLRQULJKWVDXWKRUL]HGWKHP
WR GR VR %HFDXVH WKH 0HORG\ /DQH /RXQJH ZDV QRW
DXWKRUL]HGE\0DLQ(YHQWVWRUHFHLYHWKHWUDQVPLVVLRQRIWKH
HYHQW IURP 7LPH :DUQHU 7LPH :DUQHU KDV YLRODWHG WKH
SURKLELWLRQVRIWKHILUVWVHQWHQFHRI D
( 7KH GLVWULFW FRXUW¶V ILQGLQJV RI VWDWXWRU\
GDPDJHVDWWRUQH\IHHVDQGFRVWVZHUHQRWFOHDUO\
HUURQHRXV
)LQDOO\7LPH:DUQHUFKDOOHQJHVWKHGLVWULFWFRXUW¶VDZDUG
RILQVWDWXWRU\GDPDJHVWR166DQGLWVRUGHUIRU7LPH
:DUQHUWRSD\166¶VDWWRUQH\IHHVDQGFRVWVLQWKHVXPRI
,W DUJXHV WKDW WKH DPRXQW RI GDPDJHV ZDV
GLVSURSRUWLRQDWHHVSHFLDOO\LQOLJKWRIZKDW166¶VPHDVXUH
RIGDPDJHVZRXOGKDYHEHHQXQGHUVWDWHFRQWUDFWODZ7KH
GLVWULFWFRXUWKHOGDKHDULQJLQRUGHUWRDVVHVV166¶VGDPDJHV
DQGLVVXHGWZRVHSDUDWHPHPRUDQGXPRSLQLRQVRQWKLVLVVXH
,WILUVWGHWHUPLQHGWKHDPRXQWRIGDPDJHVDFFRUGLQJWRLWV
DXWKRULW\XQGHU86& H & L ,, DQGH[SODLQHG
LWVDZDUGLQDQHLJKWSDJHRSLQLRQGDWHG'HFHPEHU
,WWKHQFDOFXODWHGWKHDZDUGIRUDWWRUQH\IHHVDQGFRVWVXQGHU
86& H % LLL VHWWLQJIRUWKLWVUHDVRQLQJLQD
IRXUSDJHRSLQLRQGDWHG0DUFK
7LPH:DUQHU¶VEDVLFDUJXPHQWLVWKDWWKHDZDUGLVJURVVO\
GLVSURSRUWLRQDWHWRDQ\KDUPVXIIHUHGE\1667KHGLVWULFW
FRXUWKRZHYHUSURYLGHGDGHWDLOHGDFFRXQWRILWVILQGLQJVRI
IDFWDQGFRQFOXVLRQVRIODZZLWKUHJDUGWRWKHFDOFXODWLRQRI
GDPDJHV6LJQLILFDQWO\LWIRXQGWKDW7LPH:DUQHUGLGQRW
ZLOOIXOO\YLRODWHWKHVWDWXWHDQGWKHUHIRUHWKHFRXUWGLGQRW
-- 6 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
,GDW
:HWKXVFRQFOXGHWKDWHYHQWKRXJK7LPH:DUQHUGLGQRW
LQWHUFHSW WKH FRPPXQLFDWLRQ LQ TXHVWLRQ LW QRQHWKHOHVV
GLYXOJHG WKH WHOHFDVW RI WKH HYHQW WR DQ XQDXWKRUL]HG
DGGUHVVHHLQYLRODWLRQRIWKHILUVWVHQWHQFHRI D 7LPH
:DUQHUKRZHYHUPDNHVDFRPSHOOLQJDUJXPHQWWKDWLWGLG
QRWYLRODWHWKHWKLUGVHQWHQFHRI D $FFRUGLQJWRWKDW
VHQWHQFH³>Q@RSHUVRQQRWEHLQJHQWLWOHGWKHUHWRVKDOOUHFHLYH
RUDVVLVWLQUHFHLYLQJDQ\LQWHUVWDWHRUIRUHLJQFRPPXQLFDWLRQ
E\UDGLRDQGXVHVXFKFRPPXQLFDWLRQIRUKLVRZQEHQHILW
RUIRUWKHEHQHILWRIDQRWKHUQRWHQWLWOHGWKHUHWR´86&
D HPSKDVLVDGGHG
:HUHDGWKHFODXVH³QRSHUVRQQRWEHLQJHQWLWOHGWKHUHWR´
DVUHIHUULQJWRSHUVRQVZKRZHUHQHYHUDXWKRUL]HGWRUHFHLYH
WKHFRPPXQLFDWLRQLQTXHVWLRQ8QOLNHWKHILUVWVHQWHQFHRI
D ZKLFKORRNVDWWKHUHODWLRQVKLSEHWZHHQWKHRULJLQDO
VHQGHUDQGWKHXOWLPDWHUHFHLYHULQGHWHUPLQLQJZKHWKHUWKH
FRPPXQLFDWLRQLVDXWKRUL]HGWKHWKLUGVHQWHQFHRQO\DSSOLHV
WRSHUVRQVZKRZHUHQHYHUDXWKRUL]HGWREHLQSRVVHVVLRQRI
WKHFRPPXQLFDWLRQLQWKHILUVWSODFH
7LPH:DUQHUGRHVQRWILWZLWKLQWKLVGHILQLWLRQEHFDXVHLW
ZDVFRQWUDFWXDOO\DXWKRUL]HGWRUHFHLYHWKHFRPPXQLFDWLRQRI
WKHHYHQWDWLWVKHDGHQGLQ$NURQDQGWRIXUWKHUUHOD\WKDW
FRPPXQLFDWLRQWRLWVUHVLGHQWLDOFXVWRPHUVLQWKHDUHD:H
WKHUHIRUH FDQQRW DJUHH ZLWK WKH GLVWULFW FRXUW WKDW 7LPH
:DUQHU YLRODWHG WKH SURKLELWLRQ HQXQFLDWHG LQ WKH WKLUG
VHQWHQFHRI D 1RQHWKHOHVV7LPH:DUQHULVXQDEOHWR
HVFDSH OLDELOLW\ XQGHU WKH ILUVW VHQWHQFH RI D IRU
GLYXOJLQJ WKH FRPPXQLFDWLRQ WKDW LW ZDV DXWKRUL]HG WR
GLVWULEXWHRQDOLPLWHGEDVLVRQO\ZKHQRQHRIWKHUHFLSLHQWV
RIWKDWWUDQVPLVVLRQZDVDQXQDXWKRUL]HGDGGUHVVHHRI0DLQ
(YHQWVWKHVHQGHU
$OWKRXJK7LPH:DUQHUSURWHVWVWKDWWKLVRXWFRPHUHVXOWVLQ
D IHGHUDO PDQGDWH RI LQIDOOLELOLW\ RQ WKH SDUW RI FDEOH
RSHUDWRUV ZH EHOLHYH WKDW &RQJUHVV HQDFWHG WKH
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
)LQDOO\DVLWVODVWOLQHRIGHIHQVH7LPH:DUQHUDUJXHVWKDW
166¶VFDXVHRIDFWLRQXQGHUIDLOVEHFDXVH7LPH:DUQHU
GLGQRW³LQWHUFHSW´DFRPPXQLFDWLRQZLWKLQWKHPHDQLQJRI
WKH&RPPXQLFDWLRQV$FW,WPDLQWDLQVWKDWWKHFOHDUSXUSRVH
RIWKH$FWLVWRSURKLELWDQGSXQLVKDFWVRIFRPPXQLFDWLRQV
SLUDF\ZKLFKLVIDUUHPRYHGIURPZKDW7LPH:DUQHUVD\V
RFFXUUHG LQ WKH SUHVHQW FDVH $OWKRXJK 7LPH :DUQHU
FRQFHGHVWKDW166PD\KDYHDFODLPDJDLQVWLWEDVHGRQVWDWH
ODZEUHDFKRIFRQWUDFWLWDUJXHVWKDW166KDVSXUVXHGWKH
ZURQJFDXVHRIDFWLRQXQGHU
,,$1$/<6,6
$ 6WDQGDUGRIUHYLHZ
:HUHYLHZGHQRYRWKHGLVWULFWFRXUW¶VJUDQWRIVXPPDU\
MXGJPHQW6HHHJ+ROORZD\Y%UXVK)G
WK&LU 6XPPDU\MXGJPHQWLVSURSHUZKHQWKHUHDUH
QRJHQXLQHLVVXHVRIPDWHULDOIDFWLQGLVSXWHDQGWKHPRYLQJ
SDUW\LVHQWLWOHGWRMXGJPHQWDVDPDWWHURIODZ)HG5&LY
3 F ,QGHFLGLQJDPRWLRQIRUVXPPDU\MXGJPHQWWKH
FRXUW PXVW YLHZ WKH HYLGHQFH DQG GUDZ DOO UHDVRQDEOH
LQIHUHQFHVLQIDYRURIWKHQRQPRYLQJSDUW\6HH0DWVXVKLWD
(OHF,QGXV&RY=HQLWK5DGLR&RUS86
7KH MXGJH LV QRW WR ³ZHLJK WKH HYLGHQFH DQG
GHWHUPLQHWKHWUXWKRIWKHPDWWHUEXWWRGHWHUPLQHZKHWKHU
WKHUHLVDJHQXLQHLVVXHIRUWULDO´$QGHUVRQY/LEHUW\/REE\
,QF 86 $ JHQXLQH LVVXH IRU WULDO
H[LVWVRQO\ZKHQWKHUHLVVXIILFLHQW³HYLGHQFHRQZKLFKWKH
MXU\FRXOGUHDVRQDEO\ILQGIRUWKHSODLQWLII´,GDW
:HZLOOQRWGLVWXUEDGLVWULFWFRXUW¶VGHWHUPLQDWLRQRIDQ
DZDUGIRUGDPDJHVXQOHVVFOHDUO\HUURQHRXV6HH0H\HUVY
&LW\RI&LQFLQQDWL)G WK&LU
-- 7 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
% 166 LV QRW ERXQG E\ WKH GHFLVLRQ LQ &RDFK¶V
&RUQHU
166 EURXJKW VXLW LQ ERWK WKLV FDVH DQG LQ WKH &RDFK¶V
&RUQHUFDVHXQGHU86&6HFWLRQGHILQHVZKDW
FRQVWLWXWHVWKHXQDXWKRUL]HGSXEOLFDWLRQRUXVHRIHOHFWURQLF
FRPPXQLFDWLRQV,WLQFOXGHVVXFKSURKLELWHGSUDFWLFHVDVWKH
GLYXOJHQFH RI ZLUH RU UDGLR FRPPXQLFDWLRQV E\ SHUVRQV
DXWKRUL]HG WR UHFHLYH WKHP WR RWKHUV ZKR DUH QRW VR
DXWKRUL]HGDQGWKHLQWHUFHSWLRQRIDQ\UDGLRFRPPXQLFDWLRQ
E\ D SHUVRQ QRW DXWKRUL]HG WR UHFHLYH WKDW FRPPXQLFDWLRQ
IURPWKHVHQGHU6HH86& D $FFRUGLQJWR
³>D@Q\SHUVRQDJJULHYHGE\DQ\YLRODWLRQRIVXEVHFWLRQ D RI
WKLVVHFWLRQPD\EULQJDFLYLODFWLRQLQD8QLWHG6WDWHV
GLVWULFWFRXUWRULQDQ\RWKHUFRXUWRIFRPSHWHQWMXULVGLFWLRQ´
86& H $ )XUWKHUPRUHWKHVWDWXWHGLUHFWV
WKDW³WKHWHUPμDQ\SHUVRQDJJULHYHG¶VKDOOLQFOXGHDQ\SHUVRQ
ZLWKSURSULHWDU\ULJKWVLQWKHLQWHUFHSWHGFRPPXQLFDWLRQE\
ZLUH RU UDGLR LQFOXGLQJ ZKROHVDOH RU UHWDLO GLVWULEXWRUV RI
VDWHOOLWHFDEOHSURJUDPPLQJ´86& G
,Q LWV PRWLRQ EHIRUH WKH FRXUW LQ &RDFK¶V &RUQHU 7LPH
:DUQHU DUJXHG WKDW LW ZDV HQWLWOHG WR VXPPDU\ MXGJPHQW
EHFDXVH 166 ZDV QRW D ³SHUVRQ DJJULHYHG´ ZLWKLQ WKH
PHDQLQJ RI G DQG FRXOG WKHUHIRUH QRW SXUVXH D
FODLPIRUDQDOOHJHGYLRODWLRQRI D 166UHVSRQGHGE\
DUJXLQJ WKDW VWDQGLQJ WR VXH XQGHU LV QRW OLPLWHG WR
WKRVH ZKR PHHW WKH VWDWXWRU\ GHILQLWLRQ RI D ³SHUVRQ
DJJULHYHG´
7KH GLVWULFW FRXUW JUDQWHG 7LPH :DUQHU¶V PRWLRQ IRU
VXPPDU\ MXGJPHQW LQ WKH &RDFK¶V &RUQHU FDVH ,Q
DUWLFXODWLQJLWVUHDVRQLQJIURPWKHEHQFKRQ-XO\WKH
FRXUWKHOGWKDW166KDGIDLOHGWRVWDWHDFODLPXQGHUERWKWKH
FRQWUDFWVDWLVVXHLQWKDWFDVHDQGXQGHU86&7KH
SHUWLQHQWSDUWVRIWKH&RDFK¶V&RUQHUUXOLQJZHUHDVIROORZV
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
'0G 7KDWFRXUWIDFHGZLWKDVLPLODUIDFWSDWWHUQ
WRWKHRQHLQ&DEOHYLVLRQKHOGWKDW
>H@YHQDVVXPLQJDVWKHVHGHIHQGDQWVFRQWHQGWKDWWKHUH
ZDV QR μLQWHUFHSWLRQ¶ KHUH EHFDXVH >WKH EDU@ ZDV
μDXWKRUL]HG¶E\>WKHUHVLGHQWLDOGLVWULEXWRU@WRUHFHLYHWKH
(YHQW RQ D SD\SHUYLHZ EDVLV GHIHQGDQWV VWLOO KDYH
YLRODWHGWKH$FWEHFDXVHWKH\FOHDUO\ZHUHQRWDXWKRUL]HG
WR WKHQ EURDGFDVW WKH (YHQW WR WKH SDWURQV RI D
FRPPHUFLDOHVWDEOLVKPHQWVXFKDV>WKHEDU@>7@KH
ILUVWDQGWKLUGVHQWHQFHVRI> D @GRQRWUHTXLUH
DQ μLQWHUFHSWLRQ¶ RI D FDEOH WUDQVPLVVLRQ DQG FOHDUO\
SURVFULEH WKH XQDXWKRUL]HG GLYXOJHQFH RU XVH RI
FRPPXQLFDWLRQVZKLFKKDYHEHHQμUHFHLYHG¶OHJDOO\IRU
FHUWDLQSXUSRVHV
,GDW
$VLPLODUFRQFOXVLRQZDVUHDFKHGLQWKHXQUHSRUWHGFDVHRI
-RH+DQG3URPRWLRQVY'0%9HQWXUHV,QF1RV&,9$
&,9$ :/ (' /D
0D\ XQSXEOLVKHGWDEOHGHFLVLRQ ,Q-RH+DQG
3URPRWLRQV&R[&DEOHKDGWKHH[FOXVLYHULJKWWRGLVWULEXWH
DER[LQJPDWFKWRLWVUHVLGHQWLDOFXVWRPHUVYLDSD\SHUYLHZ
SURJUDPPLQJZKLOH-RH+DQG3URPRWLRQVKDGWKHH[FOXVLYH
ULJKW WR GLVWULEXWH WKH HYHQW WR FRPPHUFLDO HVWDEOLVKPHQWV
-XVWDV166KDVVXHG7LPH:DUQHULQWKHFDVHEHIRUHXV-RH
+DQG3URPRWLRQVVXHG&R[&DEOHIRUSURYLGLQJWKHEURDGFDVW
RIWKHHYHQWWRVHYHUDOFRPPHUFLDOHVWDEOLVKPHQWVWKDWZHUH
HUURQHRXVO\ UHFHLYLQJ UHVLGHQWLDO VHUYLFH IURP &R[ &DEOH
6HHLGDW 7KDWFRXUWKHOGDVIROORZV
,WLVXQGLVSXWHGWKDW&R[&DEOHUHFHLYHGWKHSD\SHUYLHZ
HYHQW VDWHOOLWH VLJQDO GLYXOJHG WKH VDWHOOLWH VLJQDO YLD
FRD[LDO FDEOH WR WKUHH FRPPHUFLDO HVWDEOLVKPHQWV QRW
DXWKRUL]HG WR UHFHLYH WKH HYHQW DQG WKDW LW UHFHLYHG
SD\PHQWIURPWKHUHVWDXUDQWV7KHVHIDFWVDUHVXIILFLHQW
WRLPSRVHOLDELOLW\XQGHUWKHILUVWDQGWKLUGVHQWHQFHVRI
6HFWLRQ D
-- 8 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
LV XQDYDLOLQJ,Q&DEOHYLVLRQDGLVWULEXWRUZLWKH[FOXVLYH
ULJKWV WR EURDGFDVW D ER[LQJ PDWFK WR FRPPHUFLDO
HVWDEOLVKPHQWV VXHG D VSRUWV EDU XQGHU WKDW KDG
LPSURSHUO\REWDLQHGWKHER[LQJPDWFKIURPDUHVLGHQWLDOSD\
SHUYLHZVHUYLFH&DEOHYLVLRQFLWHG6PLWKIRUWKHSURSRVLWLRQ
WKDWZKHQ³WKHUH>LV@QRLQWHUFHSWLRQWKHPHUHIDFWWKDWWKHEDU
GLYXOJHGRUSXEOLVKHG>DVLPLODUER[LQJPDWFK@FDQQRWPDNH
LWOLDEOHXQGHU6HFWLRQ D ´6HHLGDW FLWLQJ6PLWK
)GDW RULJLQDODOWHUDWLRQVDQGLQWHUQDOTXRWDWLRQ
PDUNVRPLWWHG
)RU WKH UHDVRQV SUHYLRXVO\ GLVFXVVHG KRZHYHU WKLV
SURSRVLWLRQ LV QRW D FRUUHFW VWDWHPHQW RI WKH ODZ 6PLWK¶V
KROGLQJLVOLPLWHGWRDQLQWHUSUHWDWLRQRIWKHVHFRQGVHQWHQFH
RI D QRW WKH HQWLUH SURYLVLRQ $V D UHVXOW
&DEOHYLVLRQ¶V UHOLDQFH RQ WKH EURDG GLFWD IURP 6PLWK LV
PLVSODFHG%HFDXVH&DEOHYLVLRQLVDQXQSXEOLVKHGGHFLVLRQ
ZHDUHQRWERXQGE\LWVKROGLQJ6HH0F&ORXGY7HVWD
)GQ WK&LU
:HDUHERXQGKRZHYHUWRSURSHUO\DSSO\WKHILUVWVHQWHQFH
RI D $QDXWKRUL]HGLQWHUPHGLDU\RIDFRPPXQLFDWLRQ
VXFKDV7LPH:DUQHU YLRODWHVWKHILUVWVHQWHQFHRI D
ZKHQLWGLYXOJHVWKDWFRPPXQLFDWLRQWKURXJKDQHOHFWURQLF
FKDQQHO WR RQH ³RWKHU WKDQ WKH DGGUHVVHH´ LQWHQGHG E\ WKH
VHQGHU VXFK DV 0DLQ (YHQWV 7LPH :DUQHU UHVSRQGV E\
DUJXLQJWKDWDWDOOWLPHVLWZDVWUDQVPLWWLQJWKHHYHQWWKURXJK
IXOO\DXWKRUL]HGFKDQQHOV%XWWKLVLVLQFRUUHFWEHFDXVH7LPH
:DUQHU ZDV QRW DXWKRUL]HG WR WUDQVPLW WKH HYHQW WR
FRPPHUFLDOHVWDEOLVKPHQWV
:KHQ YLHZHG LQ WKLV OLJKW ZH FRQFOXGH WKDW WKH GLVWULFW
FRXUWGLGQRWHUULQKROGLQJWKDW7LPH:DUQHUYLRODWHGWKH
ILUVWVHQWHQFHRI D 7KHGLVWULFWFRXUWIRXQGWKDW7LPH
:DUQHUKDGLPSURSHUO\GLYXOJHGWKHFRPPXQLFDWLRQRIWKH
HYHQWWRWKH0HORG\/DQH/RXQJHDQ³DGGUHVVHH´WKDWZDV
QRW DXWKRUL]HG E\ 0DLQ (YHQWV WR UHFHLYH LW IURP 7LPH
:DUQHU 7KLV FRQFOXVLRQ ILQGV VXSSRUW IURP WKH FDVH RI
7KDW¶V(QWHUWDLQPHQW,QFY-37,QF)6XSS
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
:LWKUHJDUGWRWKHUXOLQJ>166@KDVIDLOHGWRVWDWHD
FODLPSXUVXDQWWRWKHWHUPVRIWKHFRQWUDFWVDWLVVXHLQ
WKLVFDVHDVZHOODV8QLWHG6WDWHV&RGH6HFWLRQ
3DUDJUDSK H RI WKH 7HOHYLVLRQ /LFHQVLQJ
$JUHHPHQWSURYLGHVIRUWKHHQIRUFHPHQWRIXQDXWKRUL]HG
GLVSOD\RIWKHFORVHGFLUFXLWWHOHYLVLRQIHHG7KDWDOVR
SURYLGHVWKDW-RH+DQG3URPRWLRQV>WKHOLFHQVRURIWKH
HYHQW@FRXOGQRWDVVHUWDQ\SLUDF\FODLP ZLWKRXWSULRU
QRWLFH
>7KHDJUHHPHQW@SURYLGHVWKDWDVXEOLFHQVHH>166@KDV
QRULJKWVWRHQIRUFHDELOLW\TXRWH³,WEHLQJXQGHUVWRRG
WKDW\RXUVXEOLFHQVHHVKDOOKDYHQRULJKWWRFRPPHQFHRU
VHWWOHDQ\FODLPRUOLWLJDWLRQKHUHXQGHU´
7KHRWKHUUHOHYDQWDJUHHPHQWLVWKH0DUFK
&ORVHG &LUFXLW 7HOHYLVLRQ $JUHHPHQW HQWHUHG LQWR
EHWZHHQ>WKHOLFHQVRU@DQG>166@
7KDWDJUHHPHQWDWSDUDJUDSKSURYLGHVWKDWWKHUHLVQR
ULJKWWRDSLUDF\DFWLRQWREHSXUVXHGE\>166@
>166¶V@ HIIRUW WR RYHUFRPH WKH ODQJXDJH RI WKH
FRQWUDFWGRHVQRWFUHDWHDPDWHULDOIDFWIRUWULDO
7LPH :DUQHU QRZ DUJXHV WKDW WKH GLVWULFW FRXUW EHORZ
VKRXOGKDYHJLYHQSUHFOXVLYHHIIHFWWRWKHHDUOLHUUXOLQJLQ
&RDFK¶V&RUQHU,WFODLPVWKDW&RDFK¶V&RUQHUGHWHUPLQHG
WKDWZKHQDFRPPHUFLDOHVWDEOLVKPHQWVKRZVDVSRUWLQJHYHQW
RUGHUHG WKURXJK D UHVLGHQWLDOFDEOH VHUYLFH UDWKHU WKDQ
SURSHUO\ SD\LQJ WKH IHHV H[DFWHG E\ WKH FRPPHUFLDO
GLVWULEXWRUWKHGLVWULEXWRUGRHVQRWKDYHVWDQGLQJWRVXHWKH
DXWKRUL]HG UHVLGHQWLDOVHUYLFH SURYLGHU XQGHU 166
REYLRXVO\GLVDJUHHV
2XU FLUFXLW KDV KHOG WKDW D SULRU GHFLVLRQ VKDOO KDYH
SUHFOXVLYH HIIHFW RQ DQ LVVXH UDLVHG LQ D ODWHU FDVH LI IRXU
HOHPHQWVDUHPHW
WKHSUHFLVHLVVXHUDLVHGLQWKHSUHVHQWFDVHPXVWKDYH
EHHQUDLVHGDQGDFWXDOO\OLWLJDWHGLQWKHSULRUSURFHHGLQJ
GHWHUPLQDWLRQRIWKHLVVXHPXVWKDYHEHHQQHFHVVDU\
-- 9 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
WR WKH RXWFRPH RI WKH SULRU SURFHHGLQJ WKH SULRU
SURFHHGLQJPXVWKDYHUHVXOWHGLQDILQDOMXGJPHQWRQWKH
PHULWVDQG WKHSDUW\DJDLQVWZKRPHVWRSSHOLVVRXJKW
PXVWKDYHKDGDIXOODQGIDLURSSRUWXQLW\WROLWLJDWHWKH
LVVXHLQWKHSULRUSURFHHGLQJ
6PLWKY6(&)G WK&LU HQEDQF
TXRWLQJ 'HWURLW 3ROLFH 2IILFHUV $VV¶Q Y <RXQJ )G
WK&LU
,QWKHSUHVHQWFDVHWKHGLVWULFWFRXUWFRQFOXGHGWKDW7LPH
:DUQHUKDGIDLOHGWRHVWDEOLVKWKHVHFRQGDQGIRXUWKHOHPHQWV
RIWKLVWHVW%HFDXVH7LPH:DUQHUDQG166GLVDJUHHDVWR
ZKHWKHUWKHVHIRXUHOHPHQWVZHUHPHWDQDQDO\VLVRIHDFKLV
QHFHVVDU\ LQ RUGHU WR GHFLGH LI WKH GLVWULFW FRXUW HUUHG E\
IDLOLQJ WR JLYH SUHFOXVLYH HIIHFW WR WKH &RDFK¶V &RUQHU
GHFLVLRQ
,GHQWLW\RILVVXHV
7LPH:DUQHU DUJXHVWKDWWKH&RDFK¶V&RUQHUFRXUWZDV
IDFHGZLWKWKHSUHFLVHWKUHVKROGTXHVWLRQWKDWWKHGLVWULFWFRXUW
HQFRXQWHUHG LQ WKH FXUUHQW FDVH 7KLV TXHVWLRQ LV ZKHWKHU
166KDVVWDQGLQJWRVXHXQGHULQSDUWLFXODUZKHWKHU
166KDGDSURSULHWDU\LQWHUHVWLQWKHFRPPXQLFDWLRQWKDWZDV
VHQWIURP7LPH:DUQHUYLDLWVDXWKRUL]HGUHVLGHQWLDOFDEOH
VHUYLFHWRLWVSD\SHUYLHZFXVWRPHUV7LPH:DUQHUIXUWKHU
FRQWHQGVWKDWWKHELIXUFDWLRQRIWKHVDWHOOLWHWUDQVPLVVLRQRI
WKH+RO\ILHOG&]\]ER[LQJPDWFKDWLVVXHLQ&RDFK¶V&RUQHU
ZDVLGHQWLFDOWRWKHPDQQHULQZKLFKWKHHYHQWLQTXHVWLRQ
ZDVVHQWWR7LPH:DUQHUDQG166LQ2KLRRQ'HFHPEHU
166FRXQWHUVWKDWWKHUHLVQRLGHQWLW\RILVVXHVLQWKHVHWZR
FDVHV )LUVW LW FRQWHQGV WKDW WKH WUDQVPLVVLRQV DW LVVXH LQ
&RDFK¶V&RUQHUDUHGLVWLQJXLVKDEOHIURPWKHRQHVLQYROYHGLQ
WKHSUHVHQWFDVH6SHFLILFDOO\7LPH:DUQHUGLVWULEXWHGWKH
+RO\ILHOG&]\] ER[LQJ PDWFK WR LWV UHVLGHQWLDO FXVWRPHUV
WKURXJKLWV+RPH%R[2IILFH +%2 VHUYLFHQRWWKURXJKD
SD\SHUYLHZQHWZRUN7KHGLIIHUHQFHLVWKDWDOOUHVLGHQWLDO
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
HOHFWURQLF WUDQVPLVVLRQ 7KDW SURWHFWV ERWK WKH
WUDQVPLVVLRQDQGLWVFRQWHQWVLVFRQVLVWHQWZLWKWKHVWDWXWRU\
GHILQLWLRQ RI D ³FRPPXQLFDWLRQ´ 6HH HJ 86&
D VWDWLQJ WKDW D ³FRPPXQLFDWLRQ E\ ZLUH´ LV D
³WUDQVPLVVLRQRIZULWLQJVLJQVVLJQDOVSLFWXUHVDQGVRXQGV
RIDOONLQGVE\DLGRIZLUHFDEOHRURWKHUOLNHFRQQHFWLRQ´
%RWK 166 DQG 7LPH :DUQHU KDG FRQWUDFWHG ZLWK
GLVWULEXWRUVDXWKRUL]HGE\0DLQ(YHQWVIRUWKHULJKWWRREWDLQ
D WUDQVPLVVLRQ RI WKH HYHQW RQ WKH QLJKW RI 'HFHPEHU
7KH GLIIHUHQFH EHWZHHQ WKHLU ULJKWV ZDV WKDW 166
FRQWUDFWHGIRUWKHULJKWWRGLVWULEXWHWKHFRPPXQLFDWLRQWR
FRPPHUFLDOHVWDEOLVKPHQWVZKLOH7LPH:DUQHUREWDLQHGWKH
ULJKWWRUHOD\WKHFRPPXQLFDWLRQWRUHVLGHQWLDOFXVWRPHUV$V
VXFKERWKSDUWLHVKDGSURSULHWDU\LQWHUHVWVLQWKHWUDQVPLVVLRQ
RIWKHFRQWHQWRIWKHER[LQJPDWFKUHJDUGOHVVRIWKHVDWHOOLWH
WUDQVIHUVRUHQFU\SWLRQVWKDWWKHWUDQVPLVVLRQVXQGHUZHQWLQ
WKHSURFHVV
*LYHQ WKDW 166 KDG D SURSULHWDU\ LQWHUHVW LQ WKH
WUDQVPLVVLRQRIWKHHYHQWWKHQH[WTXHVWLRQLVZKHWKHU7LPH
:DUQHU³LQWHUFHSWHG´WKDWFRPPXQLFDWLRQ:HFRQFOXGHWKDW
LWGLGQRW7KH6XSUHPH&RXUWKDVGHILQHGDQLQWHUFHSWLRQIRU
WKHSXUSRVHVRIWREHD³WDNLQJRUVHL]XUHE\WKHZD\RU
EHIRUHDUULYDODWWKHGHVWLQHGSODFH´*ROGPDQ86DW
8QGHUWKLVGHILQLWLRQ7LPH:DUQHUGLGQRWLQWHUFHSWWKH
FRPPXQLFDWLRQ DW LVVXH 5DWKHU LW VLPSO\ UHGLUHFWHG WKH
DXWKRUL]HGWUDQVPLVVLRQRIWKHHYHQWWRLWVVXEVFULEHUVZKR
RUGHUHGWKHSURJUDPLQFOXGLQJRQHWKH0HORG\/DQH/RXQJH
WKDWZDVLQFRUUHFWO\OLVWHGDVDUHVLGHQWLDOFXVWRPHU
%XW WKH DEVHQFH RI DQ ³LQWHUFHSWLRQ´ GRHV QRW JHW 7LPH
:DUQHURIIWKHKRRNRI$VSUHYLRXVO\H[SODLQHG7LPH
:DUQHU¶VUHOLDQFHRQ6PLWKY&LQFLQQDWL3RVW 7LPHV6WDU
)G WK&LU DQG%XIDOLQRY0LFKLJDQ%HOO
7HOHSKRQH&R)G WK&LU LVPLVSODFHG
6LPLODUO\ 7LPH :DUQHU¶V FLWDWLRQ WR &DEOHYLVLRQ RI
0LFKLJDQ,QFY6SRUWV3DODFH,QF1R:/
WK&LU-XQH XQSXEOLVKHGWDEOHGHFLVLRQ
-- 10 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
HYHQ LI DQ LQWHUFHSWLRQ LV QRW D UHTXLUHG HOHPHQW RI WKH
YLRODWLRQ
7R VWDUW ZLWK 7LPH :DUQHU DUJXHV WKDW 166 KDG QR
SURSULHWDU\ ULJKW LQ WKH WHOHFDVW WKDW 7LPH :DUQHU ZDV
GLVWULEXWLQJ (VVHQWLDOO\ DFFRUGLQJ WR 7LPH :DUQHU DQ
HOHFWURQLFWUDQVPLVVLRQFDQEHVHYHUHGIURPWKHFRQWHQWRIWKH
PDWHULDOWKDWLVEHLQJWUDQVPLWWHG7RVXSSRUWWKHYLHZWKDW
RQO\SURWHFWVWKHSK\VLFDOPHDQVRIDWUDQVPLVVLRQDQG
QRWLWVFRQWHQW7LPH:DUQHUFLWHV*ROGPDQY8QLWHG6WDWHV
86 RYHUUXOHG RQ RWKHU JURXQGV E\
.DW]Y8QLWHG6WDWHV86 7KH&RXUWLQ
*ROGPDQVWDWHGWKDW³>W@KHSURWHFWLRQLQWHQGHGDQGDIIRUGHG
E\ WKH >RULJLQDO &RPPXQLFDWLRQV $FW@ LV RI WKH PHDQV RI
FRPPXQLFDWLRQ´86DW HPSKDVLVDGGHG
%XW *ROGPDQ DFWXDOO\ VXSSRUWV WKH FRQFOXVLRQ WKDW WKH
&RPPXQLFDWLRQV$FWZDVGHVLJQHGWRSURWHFWWKHFRQWHQWRI
D WUDQVPLVVLRQ DV ZHOO ,Q WKDW FDVH IHGHUDO DJHQWV XVHG
QRQHOHFWURQLF HDYHVGURSSLQJ LQVWUXPHQWV WR OLVWHQ WR
FRQYHUVDWLRQV LQ DQ HQFORVHG URRP E\ SHUVRQV ZKR ZHUH
HYHQWXDOO\LQGLFWHGIRUFRQVSLUDF\WRYLRODWHWKH%DQNUXSWF\
$FW6HHLGDW2QHRIWKRVHGHIHQGDQWVDUJXHGWKDW
WKHIHGHUDODJHQWVKDGYLRODWHGWKH&RPPXQLFDWLRQV$FWE\
RYHUKHDULQJDQGGLYXOJLQJWKHFRQWHQWVRIZKDWKHVDLGZKLOH
RQ WKH WHOHSKRQH +ROGLQJ WKDW VXFK RYHUKHDULQJ DQG
GLYXOJLQJZDVQRWDYLRODWLRQRIWKH&RXUWVWDWHG
:KDWLVSURWHFWHGLVWKHPHVVDJHLWVHOIWKURXJKRXWWKH
FRXUVH RI LWV WUDQVPLVVLRQ E\ WKH LQVWUXPHQWDOLW\ RU
DJHQF\RIWUDQVPLVVLRQ:RUGVZULWWHQE\DSHUVRQDQG
LQWHQGHG XOWLPDWHO\ WR EH FDUULHG DV VR ZULWWHQ WR D
WHOHJUDSK RIILFH GR QRW FRQVWLWXWH D FRPPXQLFDWLRQ
ZLWKLQWKHWHUPVRIWKH$FWXQWLOWKH\DUHKDQGHGWRDQ
DJHQWRIWKHWHOHJUDSKFRPSDQ\
,GDW
7KHDERYHSDVVDJHXQGHUVFRUHVWKHSURWHFWLRQSURYLGHGE\
WRWKHPHVVDJH¶VFRQWHQWRQFHLWLVLQWKHSLSHOLQHRIDQ
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
+%2 VXEVFULEHUV KDG DFFHVV WR YLHZ WKH +RO\ILHOG&]\]
PDWFKZKHUHDVRQO\WKHUHVLGHQWLDOFXVWRPHUVZKRRUGHUHG
WKH %RZH*RORWD HYHQW WKURXJK WKH SD\SHUYLHZ QHWZRUN
FRXOG YLHZ WKH SURJUDP 6HFRQG 166 DUJXHV WKDW WKH
OLFHQVLQJDJUHHPHQWVDVEHWZHHQ7LPH:DUQHUDQG166ZHUH
IXQGDPHQWDOO\GLIIHUHQW
:H EHOLHYH WKDW 7LPH :DUQHU¶V DUJXPHQW LV WKH PRUH
SHUVXDVLYH RQ WKLV ³LGHQWLW\ RI LVVXHV´ HOHPHQW $OWKRXJK
+%2DQGSD\SHUYLHZDUHGLIIHUHQWVXEVFULEHUVHUYLFHVWKH
NH\LVVXHLQERWKFDVHVLVWKHVDPH±WKHFRQVHTXHQFHVRID
FRPPHUFLDOHVWDEOLVKPHQWJDLQLQJDFFHVVWRYLHZDER[LQJ
PDWFKE\EHLQJLQDFFXUDWHO\OLVWHGDVDUHVLGHQWLDOFXVWRPHURI
7LPH:DUQHU$VDUHVXOW7LPH:DUQHUKDVVDWLVILHGWKHILUVW
HOHPHQWIRULVVXHSUHFOXVLRQ
1HFHVVDU\WRWKHRXWFRPHRIWKHSULRUSURFHHGLQJ
7KHGLVWULFWFRXUWKHOGWKDW7LPH:DUQHUIDLOHGWRHVWDEOLVK
WKDW166¶VODFNRIVWDQGLQJXQGHUZDVQHFHVVDU\WRWKH
JUDQW RI VXPPDU\ MXGJPHQW IRU 7LPH :DUQHU LQ &RDFK¶V
&RUQHU,WGHWHUPLQHGWKDWWKH&RDFK¶V&RUQHUGHFLVLRQZDV
LQVWHDG SULPDULO\ EDVHG RQ WKH FRQFOXVLRQ WKDW 166 ZDV
FRQWUDFWXDOO\ EDUUHG IURP SXUVXLQJ DQ DFWLRQ DJDLQVW 7LPH
:DUQHU EHFDXVH RI WKH SDUWLFXODU ODQJXDJH LQ WKH OLFHQVH
DJUHHPHQWVLQYROYHGLQWKDWFDVH$VVXFKLWKHOGWKDWWKH
DOWHUQDWLYH JURXQG LQ &RDFK¶V &RUQHU IRU JUDQWLQJ 7LPH
:DUQHU¶VPRWLRQIRUVXPPDU\MXGJPHQW±QDPHO\WKDW166
ZDVQRWD³SHUVRQDJJULHYHG´XQGHU±ZDVQRWQHFHVVDU\
WRWKDWFRXUW¶VMXGJPHQW
7LPH:DUQHUDUJXHVWKDWWKHGLVWULFWFRXUWHUUHGLQUHDFKLQJ
WKLVFRQFOXVLRQ,WQRWHVWKDW&RDFK¶V &RUQHULVDFDVHLQ
ZKLFKWZRDOWHUQDWLYHEXWLQGHSHQGHQWJURXQGVVXSSRUWWKH
FRXUW¶VXOWLPDWHMXGJPHQW7LPH:DUQHUFODLPVWKDWXQGHU
WKH³ZHLJKWRIIHGHUDODXWKRULW\DSODLQWLIILVSUHFOXGHGIURP
UHOLWLJDWLQJDQLVVXHDFWXDOO\GHFLGHGDJDLQVWLWLQDSULRUFDVH
HYHQ LI WKH FRXUW LQ WKH SULRU FDVH UHVWHG LWV MXGJPHQW RQ
DOWHUQDWLYHJURXQGV´,WFLWHVWKH6HFRQG6HYHQWK1LQWKDQG
-- 11 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
'& &LUFXLWV DV XSKROGLQJ WKLV JHQHUDO SULQFLSOH RI LVVXH
SUHFOXVLRQ6HH:LOOLDPVY:DUG)G G
&LU 0DJQXV(OHFV,QFY/D5HSXEOLFD$UJHQWLQD
)G WK &LU ,Q UH :HVWJDWH
&DOLIRUQLD &RUS )G WK &LU
<DPDKD&RUSRI$PHULFDY8QLWHG6WDWHV)G
'&&LU
7KLV SULQFLSOH RI LVVXH SUHFOXVLRQ KRZHYHU LV
FRXQWHUEDODQFHG E\ FRXUWV DQG FRPPHQWDULHV WKDW KDYH
DGRSWHGWKHRSSRVLWHFRQFOXVLRQ)RUH[DPSOHWKH$PHULFDQ
/DZ ,QVWLWXWH $/, HQGRUVHV 166¶V SRVLWLRQ WKDW ³>L@I D
MXGJPHQW RI D FRXUW RI ILUVW LQVWDQFH LV EDVHG RQ
GHWHUPLQDWLRQV RI WZR LVVXHV HLWKHU RI ZKLFK VWDQGLQJ
LQGHSHQGHQWO\ZRXOGEHVXIILFLHQWWRVXSSRUWWKHUHVXOWWKH
MXGJPHQW LV QRW FRQFOXVLYH ZLWK UHVSHFW WR HLWKHU LVVXH
VWDQGLQJDORQH´5HVWDWHPHQW 6HFRQG RI-XGJPHQWV
FPW L )XUWKHUPRUH RQH OHDGLQJ FRPPHQWDU\
GHVFULEHVWKH5HVWDWHPHQW¶VYLHZDVWKH³QHZ´DQG³PRGHUQ´
UXOH 6HH -DPHV :P 0RRUH HW DO 0RRUH¶V )HGHUDO
3UDFWLFH>@>E@DWWR GHG
$WOHDVWIRXUFLUFXLWV WKH7KLUG)RXUWK(LJKWKDQG7HQWK
KDYHDGRSWHGWKLVPRGHUQUXOH6HH$UDE$IULFDQ,QW¶O%DQN
Y(SVWHLQ)G G&LU 5LWWHUY0RXQW
6W0DU\¶V&ROOHJH)G WK&LU
%DNHU(OHF&R2SY&KDVNH)G WK
&LU 7XUQH\Y2¶7RROH)GQ WK
&LU ,QDGGLWLRQWKH6HYHQWK&LUFXLWKDVHPEUDFHGWKH
PRGHUQUXOHLQWKHFRQWH[WRIWKH%ODFN/XQJ%HQHILWV$FWLQ
3HDERG\&RDO&RY6SHVH)G WK&LU
HQEDQF ZLWKRXWFLWLQJLWVFRQWUDU\KROGLQJLQ0DJQXV
(OHFWURQLFV)GDW
7KH LVVXH LV D FORVH RQH JLYHQ WKH SROLF\ LPSOLFDWLRQV
LQYROYHG 7LPH :DUQHU DUJXHV WKDW E\ QRW UHFRJQL]LQJ
&RDFK¶V&RUQHUDVSUHFOXGLQJUHOLWLJDWLRQRIZKHWKHU166KDV
VWDQGLQJWRVXHXQGHU166LVIUHHWRUHOLWLJDWHWKHVDPH
LVVXH DJDLQ 166 FRXQWHUV E\ DUJXLQJ WKDW EHFDXVH WKH
&RDFK¶V &RUQHU FRXUW GHFLGHG WKDW 166 ZDV FRQWUDFWXDOO\
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
HIIHFWRUPHDQLQJRIVXFKLQWHUFHSWHGFRPPXQLFDWLRQWRDQ\
SHUVRQ´86& D
7KLVFRXUWDIILUPHGWKHGLVPLVVDORI%XIDOLQR¶VFRPSODLQW
FRQFOXGLQJ WKDW WKHUH ZDV QR LQWHUFHSWHG FRPPXQLFDWLRQ
LQYROYHG %XIDOLQR )G DW &RQVHTXHQWO\
%XIDOLQR¶VVWDWHPHQWWKDW³>L@QRUGHUWRFRQVWLWXWHDYLRODWLRQ
RI 6HFWLRQ WKHUH PXVW EH ERWK DQ LQWHUFHSWLRQ DQG D
GLYXOJHQFH´ LG WKRXJK ZRUGHG H[SDQVLYHO\ LV SURSHUO\
FRQILQHG WR DQ LQWHUSUHWDWLRQ RI WKH VHFRQG VHQWHQFH RI
D 7KH VWDWHPHQWV IURP 6PLWK DQG %XIDOLQR WKDW
SXUSRUWHGO\OLPLWWKHVFRSHRIDUHWKXVRYHUO\EURDG
WDNHQ RXW RI FRQWH[W DQG WKHUHIRUH QRW GHILQLWLYH LQ
GHWHUPLQLQJ WKH DSSOLFDELOLW\ RI WR WKH SUHVHQW
FLUFXPVWDQFHV6HH&RFD&ROD)GDW
,QFRQFOXVLRQZHILQGQRPHULWLQ7LPH:DUQHU¶VDUJXPHQW
WKDW166GRHVQRWKDYHVWDQGLQJWRVXHXQGHU :H
DJUHH ZLWK WKH GLVWULFW FRXUW WKDW WKH SODLQ ODQJXDJH RI WKH
ZRUG³LQFOXGH´LQ G GRHVQRWUHQGHUWKHGHILQLWLRQ
RID³SHUVRQDJJULHYHG´DQH[FOXVLYHRQH)XUWKHUPRUHWKH
OHJLVODWLYHKLVWRU\RIWKHDPHQGPHQWVWRWKH&RPPXQLFDWLRQV
$FWLQDQGUHYHDOVWKDW&RQJUHVVLQWHQGHGWREULQJ
FDEOHDQGVDWHOOLWHFRPPXQLFDWLRQVXQGHUWKHSURWHFWLRQRI
WKDW$FWE\H[SDQGLQJQRWOLPLWLQJWKHJURXSRISHUVRQVZKR
KDYHVWDQGLQJWRVXHIRULWVYLRODWLRQ&RQVHTXHQWO\ZHKROG
WKDWWKHGHILQLWLRQRID³SHUVRQDJJULHYHG´LQ G LV
QRQH[FOXVLYH DQG WKDW WKH GLVWULFW FRXUW GLG QRW HUU LQ
GHWHUPLQLQJWKDW166KDGVWDQGLQJWRVXH7LPH:DUQHUXQGHU
' 7LPH :DUQHU YLRODWHG WKH ILUVW VHQWHQFH RI
D
7LPH :DUQHU QH[W DUJXHV WKDW WKH GLVWULFW FRXUW HUUHG LQ
KROGLQJ7LPH:DUQHUOLDEOHIRUYLRODWLQJ D )LUVWLW
FRQWHQGVWKDWDQLQWHUFHSWLRQLVUHTXLUHGWRVWDWHDFODLPIRUD
YLRODWLRQXQGHUWKDWVHFWLRQ6HFRQGLWPDLQWDLQVWKDWLWLVQRW
OLDEOH XQGHU HLWKHU WKH ILUVW RU WKLUG VHQWHQFHV RI D
-- 12 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
6PLWKVXHGERWKWKHQHZVSDSHUDQG:XQNHU7KHGHFLVLRQLQ
6PLWK D WZRSDJH SHU FXULDP RSLQLRQ SULPDULO\ GLVFXVVHV
6PLWK¶V FODLP XQGHU WKH )HGHUDO :LUHWDS /DZ 86&
ZKLFK LW IRXQG LQDSSOLFDEOH ,W WKHQ VXPPDULO\
FRQFOXGHG WKDW 6PLWK¶V FODLP XQGHU PXVW DOVR EH
GLVPLVVHG³VLQFHWKDWVHFWLRQLVYLRODWHGRQO\ZKHQDSHUVRQ
ERWKLQWHUFHSWVDQGGLYXOJHVDFRPPXQLFDWLRQZKLFKLVQRW
WKH FDVH LQ UHJDUG WR WKLV GHIHQGDQW´ ,G DW FLWLQJ
%XIDOLQR)GDW
%HFDXVH:XQNHUZDVWKHLQWHQGHGDGGUHVVHHUHFLSLHQWRI
6PLWK¶V WHOHSKRQH FRQYHUVDWLRQ DQG QR ³LQWHUFHSWLRQ´ RI D
FRPPXQLFDWLRQZDVLQYROYHGZDVQRWLPSOLFDWHGE\
WKHIDFWVLWXDWLRQLQ6PLWK$VVXFKWKHEURDGVWDWHPHQWLQ
6PLWKWRWKHHIIHFWWKDWUHTXLUHVERWKDQLQWHUFHSWLRQDQG
GLYXOJHQFHRIDFRPPXQLFDWLRQLVGLFWDEHFDXVHLWZDVQRW
QHFHVVDU\IRUWKHGLVSRVLWLRQRIWKDWFDVH6HH&RFD&ROD&R
Y3URFWHU *DPEOH&R)G WK&LU
KROGLQJWKDWDSULRUFDVH¶VVZHHSLQJODQJXDJHUHJDUGLQJD
VHFWLRQ RI WKH /DQKDP $FW ZDV QRW ELQGLQJ ZKHUH LW RQO\
DGGUHVVHG D QDUURZ LVVXH WKHUHXQGHU DQG IDLOHG WR DGGUHVV
RWKHULVVXHVDULVLQJZLWKLQWKHVDPHVHFWLRQ
%XIDOLQR LV DOVR GLVWLQJXLVKDEOH ,Q WKDW FDVH :LOOLDP
%XIDOLQRZDVDUHVLGHQWLDOFXVWRPHURID0LFKLJDQWHOHSKRQH
FRPSDQ\ 7ZR FRPSDQ\ OLQHPHQ ZHUH ZRUNLQJ RQ D
WHOHSKRQHSROHWRWUDQVIHUOLQHVLQDFDEOHER[%HFDXVHRQH
RIWKHVHUYLFHPHQKDGLQFRPSOHWHLQIRUPDWLRQKHWULHGWRFDOO
WKHRIILFHE\FRQQHFWLQJWRDQXQNQRZQOLQHLQWKHFDEOHER[
,QDFWXDOLW\KHFDOOHG%XIDOLQR¶VUHVLGHQFH%XIDOLQRWKHQ
VXHG WKH 0LFKLJDQ WHOHSKRQH FRPSDQ\ DOOHJLQJ WKDW LWV
ZRUNHUVKDGLOOHJDOO\WDSSHGLQWRKLVKRPHWHOHSKRQHOLQHLQ
YLRODWLRQ RI +LV FRPSODLQW VSHFLILFDOO\ DOOHJHG D
YLRODWLRQRIWKHVHFRQGVHQWHQFHRIRQO\ZKLFKLVQRZ
WKHVHFRQGVHQWHQFHRI D DVDUHVXOWRIWKHDPHQGPHQWV
FRQWDLQHGLQWKH&DEOH&RPPXQLFDWLRQV3ROLF\$FWRI
$FFRUGLQJWRWKDWVHQWHQFH³>Q@RSHUVRQQRWEHLQJDXWKRUL]HG
E\WKHVHQGHUVKDOOLQWHUFHSWDQ\UDGLRFRPPXQLFDWLRQDQG
GLYXOJHRUSXEOLVKWKHH[LVWHQFHFRQWHQWVVXEVWDQFHSXUSRUW
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
EDUUHGIURPSXUVXLQJDFODLPDJDLQVW7LPH:DUQHU166KDG
QR LQFHQWLYHWRDSSHDOWKDWFRXUW¶VVHFRQGDU\GHFLVLRQWKDW
166IDLOHGWRVWDWHDFODLPXQGHU
:HILQG166¶VSRLQWSHUVXDVLYHEHFDXVHZKLOHLWPLJKW
KDYHZRQWKH³EDWWOH´RYHU166ZRXOGDOPRVWVXUHO\
KDYH ORVW WKH ³ZDU´ LQ EHLQJ XQDEOH WR RYHUFRPH WKH
FRQWUDFWXDO SURKLELWLRQ RQ FRPPHQFLQJ OLWLJDWLRQ DJDLQVW
7LPH:DUQHU)XUWKHUPRUHWKHGLVWULFWFRXUW¶VRUDOUXOLQJLQ
&RDFK¶V &RUQHU WUDQVFULEHV LQWR RQO\ D WZRSDUDJUDSK
FRQFOXVRU\ VWDWHPHQW UHJDUGLQJ 166¶V FODLP XQGHU
ZKLFKZDVIDURYHUVKDGRZHGE\WKHEDODQFHRILWVWKUHHSDJH
GLVFXVVLRQRXWOLQLQJWKHFRQWUDFWXDOREVWDFOHVWKDWSUHYHQWHG
166IURPVXLQJ7LPH:DUQHU
7KLVFLUFXLWKDVQRWGHFLGHGZKHWKHUDOWHUQDWLYHJURXQGVIRU
D MXGJPHQW DUH HDFK ³QHFHVVDU\ WR WKH RXWFRPH´ IRU WKH
SXUSRVHVRILVVXHSUHFOXVLRQLQDVXEVHTXHQWFDVHLQYROYLQJ
RQO\ RQH RI WKH JURXQGV %DVHG RQ WKH DFWXDO GHFLVLRQ LQ
&RDFK¶V&RUQHUZHGRQRWILQGLWQHFHVVDU\WRIXOO\UHVROYH
WKLV LVVXH DW WKH SUHVHQW WLPH :H GR KROG KRZHYHU WKDW
ZKHUHDVLQ&RDFK¶V&RUQHURQHJURXQGIRUWKHGHFLVLRQLV
FOHDUO\SULPDU\DQGWKHRWKHURQO\VHFRQGDU\WKHVHFRQGDU\
JURXQGLVQRW³QHFHVVDU\WRWKHRXWFRPH´IRUWKHSXUSRVHVRI
LVVXHSUHFOXVLRQ&RDFK¶V&RUQHU¶VVHFRQGDU\KROGLQJWKDW
166 IDLOHG WR VWDWH D FODLP XQGHU ZDV WKXV QRW
QHFHVVDU\ WR WKH JUDQWLQJ RI 7LPH :DUQHU¶V PRWLRQ IRU
VXPPDU\MXGJPHQW
)LQDOMXGJPHQWRQWKHPHULWV
$OWKRXJKWKHGLVWULFWFRXUWKHOGWKDWWKH&RDFK¶V&RUQHU
GHFLVLRQZDVDILQDOMXGJPHQWRQWKHPHULWVIRUWKHSXUSRVHRI
LVVXHSUHFOXVLRQ166DUJXHVWKDWLWZDVQRW,QSDUWLFXODULW
FODLPVWKDWWKHFRXUW¶VMXGJPHQWLQ&RDFK¶V&RUQHUZDVD
GLVPLVVDORI166¶VVXLWZLWKRXWSUHMXGLFHIRUIDLOXUHWRVWDWH
DFODLP7KLVDUJXPHQWLVZLWKRXWPHULW&RDFK¶V&RUQHU
JUDQWHG 7LPH :DUQHU¶V PRWLRQ IRU VXPPDU\ MXGJPHQW
SXUVXDQWWR5XOHRIWKH)HGHUDO5XOHVRI&LYLO3URFHGXUH
-- 13 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
)XUWKHUPRUHWKHGLVWULFWFRXUWPDGHFOHDUWKDWLWVMXGJPHQW
ZDV ILQDO ,W UHFRJQL]HG WKDW ³ERWK SDUWLHV ZLOO PRUH WKDQ
OLNHO\KDYHDGLVDJUHHPHQWRYHUHYHU\WKLQJ,VD\SUHWW\PXFK
DQG\RXFDQWDNHLWXSWRWKH6L[WK&LUFXLWDQGWKH\FDQWHOOXV
ZKHWKHU,ZDVULJKWRUZURQJ´)LQDOO\VXPPDU\MXGJPHQW
LV UHFRJQL]HG DV D ILQDO MXGJPHQW IRU WKH SXUSRVH RI LVVXH
SUHFOXVLRQ6HH0D\HUY'LVWHO7RRO 0DFK&R)G
WK&LU KROGLQJWKDWZKHUHWKHIDFWVDQGOHJDO
WKHRU\ RI D FRPSODLQW DUH LGHQWLFDO WR WKRVH RI D SUHYLRXV
FRPSODLQW D JUDQW RI VXPPDU\ MXGJPHQW RQ WKH SULRU
FRPSODLQWLVDILQDOMXGJPHQWDQGFRXOGEHWKHEDVLVIRULVVXH
SUHFOXVLRQLQDVXEVHTXHQWFDVH 7LPH:DUQHUKDVWKHUHIRUH
VDWLVILHGWKLVWKLUGHOHPHQWIRULVVXHSUHFOXVLRQ
)XOODQGIDLURSSRUWXQLW\WROLWLJDWH
7XUQLQJWRWKHILQDOHOHPHQW7LPH:DUQHUFRQWHQGVWKDW
WKHGLVWULFWFRXUWLQ&RDFK¶V&RUQHUJUDQWHGLWVPRWLRQIRU
VXPPDU\MXGJPHQWDIWHUIXOOEULHILQJDQGDUJXPHQWDQGWKDW
ERWKSDUWLHVKDGDVXIILFLHQWRSSRUWXQLW\WROLWLJDWHWKH
LVVXHEHIRUHWKDWFRXUW166KRZHYHUDUJXHVWKDWWKHGLVWULFW
FRXUWLQ&RDFK¶V&RUQHUSULPDULO\IRFXVHGRQWKHTXHVWLRQRI
ZKHWKHU166¶VOLFHQVHDJUHHPHQWFRQWUDFWXDOO\EDUUHGLWIURP
LQLWLDWLQJDVXLWDJDLQVW7LPH:DUQHU,WWKHUHIRUHFRQWHQGV
WKDWWKHTXHVWLRQRIZKHWKHU166KDGDSURSULHWDU\ULJKWLQWKH
FRPPXQLFDWLRQXQGHUZDVVHFRQGDU\7KHGLVWULFWFRXUW
DJUHHGZLWK166
:H EHOLHYH WKDW 7LPH :DUQHU KDV WKH PRUH SHUVXDVLYH
DUJXPHQWRQWKLVLVVXH1RWKLQJLQWKH&RDFK¶V&RUQHUFDVH
SUHYHQWHG HLWKHU 166 RU 7LPH :DUQHU IURP UDLVLQJ DOO
SRWHQWLDODUJXPHQWVDERXWWKHDSSOLFDELOLW\RIWRWKH
FLUFXPVWDQFHVRIWKHLUFDVH'HVSLWHWKHFRQWUDFWXDOODQJXDJH
WKDW ZDV XOWLPDWHO\ KHOG WR EDU 166 IURP UDLVLQJ D FODLP
DJDLQVW7LPH:DUQHULQ&RDFK¶V&RUQHU166VWLOOKDGDIXOO
DQGIDLURSSRUWXQLW\WROLWLJDWHWKHFODLPWKDWLWUDLVHGXQGHU
$VVXFKZHFRQFOXGHWKDW7LPH:DUQHUKDVVDWLVILHG
WKLVILQDOHOHPHQWIRULVVXHSUHFOXVLRQ
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
D GRHV QRW LQYROYH WKH LQWHUFHSWLRQ RI D
FRPPXQLFDWLRQ DW DOO ,W SURKLELWV LQWHUPHGLDULHV ZKR DUH
DXWKRUL]HGWRUHFHLYHDFRPPXQLFDWLRQE\ZLUHRUUDGLRIURP
GLYXOJLQJWKHFRQWHQWVRIWKHWUDQVPLVVLRQWRDQ\SHUVRQRWKHU
WKDQWKHDGGUHVVHHLQWHQGHGE\WKHVHQGHU
2XUFLUFXLWKDVSUHYLRXVO\UHFRJQL]HG&RQJUHVV¶VLQWHQWWR
H[SDQGUDWKHUWKDQFRQWUDFWWKHUHDFKRIWKH&RPPXQLFDWLRQV
$FWZKHQLWDPHQGHG
,Q YLHZ RI >SURPRWLQJ WKH JURZWK RI VDWHOOLWH
SURJUDPPLQJ DQG IDFLOLWDWLQJ LQGLYLGXDO UHFHSWLRQ RI
XQHQFU\SWHG VDWHOOLWH VLJQDOV@ &RQJUHVV DPHQGHG WKH
&RPPXQLFDWLRQV $FW WR DXWKRUL]H WKH UHFHLSW RI
XQVFUDPEOHG VDWHOOLWH SURJUDPPLQJ IRU SULYDWH
YLHZLQJ>Z@KLOHOHDYLQJLQWDFWWKHSURKLELWLRQVDJDLQVW
XQDXWKRUL]HG XVH RI UDGLR RU ZLUH FRPPXQLFDWLRQV
FRQWDLQHGLQ86& D
/RVFKLDYRY&LW\RI'HDUERUQ)G WK&LU
HPSKDVLVDGGHG 7LPH:DUQHUKRZHYHUDUJXHVWKDW
³LVYLRODWHGRQO\ZKHQ D SHUVRQERWKLQWHUFHSWVDQG
GLYXOJHVDFRPPXQLFDWLRQ´FLWLQJ6PLWKY&LQFLQQDWL3RVW
7LPHV6WDU )G WK &LU DQG %XIDOLQR Y
0LFKLJDQ%HOO7HOHSKRQH&R)G WK&LU
7KHGLVWULFWFRXUWDFNQRZOHGJHGWKHVHROGHUSUHFHGHQWVLQD
IRRWQRWHEXWGLVWLQJXLVKHGWKHPRQWKHEDVLVWKDWWKH\ZHUH
ERWKGHFLGHGEHIRUHWKHDQGDPHQGPHQWVWRWKH
&RPPXQLFDWLRQV$FW%RWKFDVHVDUHDOVRGLVWLQJXLVKDEOHRQ
WKHLUIDFWV
6PLWKIRUH[DPSOHLQYROYHGDQHPSOR\HHRIWKH'RPHVWLF
5HODWLRQV &RXUW LQ +DPLOWRQ &RXQW\ 2KLR ZKR KDG D
WHOHSKRQH FRQYHUVDWLRQ ZLWK +RZDUG :XQNHU D SULYDWH
FLWL]HQ 7KH FRXUW HPSOR\HH WROG :XQNHU WKDW KH FRXOG
DUUDQJH D ³IL[´ LQ D GLYRUFH FDVH SHQGLQJ LQ WKDW FRXUW
:XQNHUUHFRUGHGWKLVFRQYHUVDWLRQDQGUHOHDVHGWKHUHFRUGLQJ
WRWKHORFDOQHZVSDSHUZKLFKSXEOLVKHGWKHFRQWHQWVRIWKH
6PLWK:XQNHUFRQYHUVDWLRQ6HH6PLWK)GDW
-- 14 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
DJJULHYHG´XQGHU G WKHSXUSRVHRIWKHDPHQGPHQW
ZDVH[SODLQHGDVIROORZV
6HFWLRQRI>WKH6DWHOOLWH+RPH9LHZHU$FWRI@
DPHQGV>@RIWKH&RPPXQLFDWLRQV$FWSHUWDLQLQJWR
WKH SLUDF\ RI VDWHOOLWH FDEOH SURJUDPPLQJ 7KH
&RPPLWWHH¶V DPHQGPHQW LV LQWHQGHG WR GHWHU SLUDF\
SUDFWLFHVE\ VWLIIHQLQJDSSOLFDEOHFLYLODQGFULPLQDO
SHQDOWLHV H[SDQGLQJVWDQGLQJWRVXHDQG PDNLQJ
WKH PDQXIDFWXUH VDOH PRGLILFDWLRQ RI GHYLFHV RU
HTXLSPHQWZLWKNQRZOHGJHWKDWLWVSULPDU\SXUSRVHLVWR
DVVLVW LQ XQDXWKRUL]HG GHFU\SWLRQ RI VDWHOOLWH FDEOH
SURJUDPPLQJH[SUHVVO\DFWLRQDEOHDVDFULPLQDODFW
+5 5HS 1R ,, DW UHSULQWHG LQ
86&&$1 HPSKDVLVDGGHG
/LPLWLQJWKHDYDLODELOLW\RIFLYLODFWLRQVWRWKRVHSHUVRQV
ZKR PHHW WKH GHILQLWLRQ RI D ³SHUVRQ DJJULHYHG´ LQ
G DQGUHTXLULQJWKDWWKH\KDYH³SURSULHWDU\ULJKWV
LQ>DQ@LQWHUFHSWHGFRPPXQLFDWLRQ´LVLQFRQVLVWHQWZLWKWKH
LQWHQWRI&RQJUHVVDVH[SUHVVHGLQWKH&DEOH&RPPXQLFDWLRQV
3ROLF\ $FW RI DQG WKH 6DWHOOLWH +RPH 9LHZHU $FW LQ
%RWK DFWV ZHUH LQWHQGHG WR H[SDQG WKH VFRSH RI
SURWHFWLRQSURYLGHGE\WKH&RPPXQLFDWLRQV$FWQRWOLPLWLW
,Q SDUWLFXODU 7LPH :DUQHU¶V DUJXPHQW IOLHV LQ WKH IDFH RI
&RQJUHVV¶VH[SOLFLWLQWHUHVWLQ³H[SDQGLQJVWDQGLQJWRVXH´
XQGHUWKH$FW%\DGGLQJVDWHOOLWHFRPPXQLFDWLRQVXQGHUWKH
SURWHFWLRQ RI DORQJ ZLWK ZLUH DQG UDGLR
FRPPXQLFDWLRQV&RQJUHVVVRXJKWWRPDNHFOHDUWKDWWKRVH
ZLWK³SURSULHWDU\ULJKWVLQWKHLQWHUFHSWHGFRPPXQLFDWLRQE\
ZLUH RU UDGLR LQFOXGLQJ ZKROHVDOH RU UHWDLO GLVWULEXWRUV RI
VDWHOOLWH FDEOH SURJUDPPLQJ´ 86& G KDYH
VWDQGLQJWRVXH
%XWWKLVH[SOLFLWUHIHUHQFHWRDVXEVHWRISHUVRQVDJJULHYHG
ZDVQRWLQWHQGHGWRH[FOXGHRWKHUVZKRVXVWDLQLQMXULHVIURP
D YLRODWLRQ RI DQ\ RI WKH SURKLELWLRQV RULJLQDOO\ OLVWHG LQ
D ,QSDUWLFXODUWKHSURKLELWLRQLQWKHILUVWVHQWHQFHRI
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
,Q VXP ZH DJUHH ZLWK WKH GLVWULFW FRXUW WKDW WKH VHFRQG
HOHPHQW ³QHFHVVDU\WR WKH RXWFRPH´ VHWIRUWKLQ6PLWKY
6(&)G WK&LU HQEDQF KDVQRW
EHHQPHWEXWGLVDJUHHWKDWWKHIRXUWKHOHPHQW ³IXOODQGIDLU
RSSRUWXQLW\WROLWLJDWH´ ZDVODFNLQJ%XWEHFDXVHDOOIRXU
HOHPHQWVRI6PLWKPXVWEHVDWLVILHGEHIRUHWKHSULRURSLQLRQ
ZLOO EH JLYHQ SUHFOXVLYH HIIHFW 166 LV QRW ERXQG E\ WKH
GHFLVLRQLQ&RDFK¶V&RUQHU:HWKHUHIRUHWXUQWRWKHLVVXHV
RI ZKHWKHU 166 KDV VWDQGLQJ WR VXH XQGHU RI WKH
&RPPXQLFDWLRQV $FW DQG ZKHWKHU LW KDV VXIILFLHQWO\
HVWDEOLVKHGDFODLPDJDLQVW7LPH:DUQHUIRUDYLRODWLRQRI
WKDW$FW
& 166KDVVWDQGLQJWRVXH7LPH:DUQHUEHFDXVH
WKH GHILQLWLRQ RI D ³SHUVRQ DJJULHYHG´ LQ
G LVQRQH[FOXVLYH
&RQJUHVVHQDFWHGWKH&DEOH&RPPXQLFDWLRQV3ROLF\$FWRI
WRDGGUHVV³DSUREOHPZKLFKLVLQFUHDVLQJO\SODJXLQJWKH
FDEOHLQGXVWU\±WKHWKHIWRIFDEOHVHUYLFH´+55HS1R
DW UHSULQWHG LQ 86&&$1
7KLV VWDWXWH DPHQGHG DQG VXSSOHPHQWHG WKH
&RPPXQLFDWLRQV$FW6HHLG7KHOHJLVODWLRQDGGHG
VXEVHFWLRQV E ± H WR 7KHVH QHZ SURYLVLRQV ZHUH
LQWHQGHG WR DGGUHVV ³WKH JURZLQJ SUDFWLFH RI LQGLYLGXDOV
WDNLQJ GRZQ VDWHOOLWH GHOLYHUHG SURJUDPPLQJ IRU SULYDWH
KRPHYLHZLQJE\PHDQVRISULYDWHO\RZQHGEDFN\DUGHDUWK
VWDWLRQV´ 6HH 86&&$1 DW 7KH RULJLQDO
SURKLELWLRQV FRQWDLQHG LQ KRZHYHU ZHUH UHWDLQHG
ZLWKRXWDPHQGPHQWLQZKDWLVQRZFRGLILHGDW D
6HFWLRQ D WKHUHIRUHOLVWVWKHW\SHVRIXQDXWKRUL]HG
SXEOLFDWLRQ RU XVH RI HOHFWURQLF FRPPXQLFDWLRQV WKDW KDYH
EHHQSURKLELWHGVLQFHWKH&RPPXQLFDWLRQV$FWILUVWEHFDPH
ODZ,WVHWVIRUWKVHSDUDWHSURKLELWLRQVLQHDFKVHQWHQFH7KH
ILUVWVHQWHQFHVWDWHV
>1@R SHUVRQ UHFHLYLQJ DVVLVWLQJ LQ UHFHLYLQJ
WUDQVPLWWLQJRUDVVLVWLQJLQWUDQVPLWWLQJDQ\LQWHUVWDWHRU
-- 15 of 16 --
1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
1RV
IRUHLJQFRPPXQLFDWLRQE\ZLUHRUUDGLRVKDOOGLYXOJHRU
SXEOLVKWKHH[LVWHQFHFRQWHQWVVXEVWDQFHSXUSRUWHIIHFW
RUPHDQLQJWKHUHRIH[FHSWWKURXJKDXWKRUL]HGFKDQQHOV
RIWUDQVPLVVLRQRUUHFHSWLRQWRDQ\SHUVRQRWKHUWKDQ
WKHDGGUHVVHHKLVDJHQWRUDWWRUQH\
86& D 7KH VHFRQG VHQWHQFH RI D
SURKLELWVSLUDF\DVLVLWWUDGLWLRQDOO\XQGHUVWRRG
1R SHUVRQ QRW EHLQJ DXWKRUL]HG E\ WKH VHQGHU VKDOO
LQWHUFHSW DQ\ UDGLR FRPPXQLFDWLRQ DQG GLYXOJH RU
SXEOLVKWKHH[LVWHQFHFRQWHQWVVXEVWDQFHSXUSRUWHIIHFW
RUPHDQLQJRIVXFKLQWHUFHSWHGFRPPXQLFDWLRQWRDQ\
SHUVRQ
,G)LQDOO\WKHWKLUGVHQWHQFHSURYLGHV
1R SHUVRQ QRW EHLQJ HQWLWOHG WKHUHWR VKDOO UHFHLYH RU
DVVLVW LQ UHFHLYLQJ DQ\ LQWHUVWDWH RU IRUHLJQ
FRPPXQLFDWLRQE\UDGLRDQGXVHVXFKFRPPXQLFDWLRQ RU
DQ\LQIRUPDWLRQWKHUHLQFRQWDLQHG IRUKLVRZQEHQHILWRU
IRUWKHEHQHILWRIDQRWKHUQRWHQWLWOHGWKHUHWR
,G
&RQJUHVVKDVFULPLQDOL]HGWKHXQDXWKRUL]HGLQWHUFHSWLRQRI
FRPPXQLFDWLRQV SURKLELWHG E\ D 6HH 86&
H 6XEVHFWLRQ H DOVR SURYLGHV IRU SULYDWH FLYLO
HQIRUFHPHQW RI DV QRZ DPHQGHG 6HH 86&
H $ ³$Q\SHUVRQDJJULHYHGE\DQ\YLRODWLRQRI
VXEVHFWLRQ D RIWKLVVHFWLRQPD\EULQJDFLYLODFWLRQLQD
8QLWHG6WDWHVGLVWULFWFRXUWRULQDQ\RWKHUFRXUWRIFRPSHWHQW
MXULVGLFWLRQ´ $VDUHVXOWVHWVIRUWKERWKFLYLODQG
FULPLQDOSHQDOWLHVIRULWVYLRODWLRQ6HH86& H
)XUWKHUPRUH H GHVLJQDWHV YDU\LQJ SHQDOWLHV
GHSHQGLQJRQZKHWKHURUQRWDYLRODWLRQRIWKHVHFWLRQZDV
ZLOOIXO7KHWHUP³SHUVRQDJJULHYHG´ZDVQRWGHILQHGZKHQ
H $ ZDVRULJLQDOO\HQDFWHG
1RV 1DWLRQDO6DWHOOLWH6SRUWV,QF
Y(OLDGLV,QFHWDO
6HFWLRQ RI WKH &RPPXQLFDWLRQV $FW ZDV IXUWKHU
DPHQGHGE\WKH6DWHOOLWH+RPH9LHZHU$FWRI3XE/
1R6WDW7KDW$FWDPHQGHG
E\ DGGLQJ WKH IROORZLQJ GHILQLWLRQ RI D ³SHUVRQ
DJJULHYHG´WR G
G 'HILQLWLRQV
)RUSXUSRVHVRIWKLVVHFWLRQ±
WKHWHUP³DQ\SHUVRQDJJULHYHG´VKDOOLQFOXGH
DQ\SHUVRQZLWKSURSULHWDU\ULJKWVLQWKHLQWHUFHSWHG
FRPPXQLFDWLRQ E\ ZLUH RU UDGLR LQFOXGLQJ
ZKROHVDOH RU UHWDLO GLVWULEXWRUV RI VDWHOOLWH FDEOH
SURJUDPPLQJ
86& G 7KH&RPPXQLFDWLRQV$FWHOVHZKHUH
GHILQHV D ³FRPPXQLFDWLRQ E\ ZLUH´ DV D ³WUDQVPLVVLRQ RI
ZULWLQJVLJQVVLJQDOVSLFWXUHVDQGVRXQGVRIDOONLQGVE\DLG
RIZLUHFDEOHRURWKHUOLNHFRQQHFWLRQ´86& D
DQGD³FRPPXQLFDWLRQE\UDGLR´DVD³WUDQVPLVVLRQE\UDGLR
RIZULWLQJVLJQVVLJQDOVSLFWXUHVDQGVRXQGVRIDOONLQGV´
86& E
7LPH :DUQHU FRQWHQGV WKDW &RQJUHVV ZRXOG QRW KDYH
DPHQGHG WR DGG WKH GHILQLWLRQ RI ³DQ\ SHUVRQ
DJJULHYHG´ LI LW KDG LQWHQGHG WR JUDQW EURDG VWDQGLQJ WR
DQ\RQH SRWHQWLDOO\ LQMXUHG E\ WKH VWDWXWH 5DWKHU 7LPH
:DUQHUDUJXHVWKDW&RQJUHVVLQWHQGHGWROLPLWVWDQGLQJWRVXH
XQGHUWRWKRVHZKRPHHWWKHGHILQLWLRQRID³SHUVRQ
DJJULHYHG´ XQGHU G $V D UHVXOW 7LPH :DUQHU
FODLPVWKDWWKHGLVWULFWFRXUWHUUHGLQFRQFOXGLQJWKDW166KDG
VWDQGLQJWRVXHXQGHU
7KHGLVWULFWFRXUWKHOGWKDWWKHXVHRIWKHZRUG³LQFOXGH´LQ
WKHVWDWXWRU\SKUDVH³DQ\SHUVRQDJJULHYHGVKDOOLQFOXGHDQ\
SHUVRQ´GRHVQRWPHDQWKDWRQO\SHUVRQVZKRPHHWWKDW
GHILQLWLRQ KDYH VWDQGLQJ WR VXH :H DJUHH 7KH GLVWULFW
FRXUW¶VLQWHUSUHWDWLRQLVFRQVLVWHQWZLWKWKHOHJLVODWLYHKLVWRU\
RI G ,QWKH+RXVH5HSRUWDFFRPSDQ\LQJWKH
DPHQGPHQW WR WKDW DGGHG WKH GHILQLWLRQ RI ³SHUVRQ
-- 16 of 16 --
Connect Omnilex to search the legal corpus from your AI assistant.