02a0086p.06

7KH +RQRUDEOH *RUGRQ - 4XLVW 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU WKH
:HVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
3XUVXDQW WR 6L[WK &LUFXLW 5XOH
(/(&7521,& &,7$7,21 )(' $SS 3 WK &LU
)LOH 1DPH DS
81,7('67$7(6&28572)$33($/6
)257+(6,;7+&,5&8,7
BBBBBBBBBBBBBBBBB
:$<1( &2/(0$1
3HWLWLRQHU$SSHOODQW
Y
'21 '(:,77:DUGHQ
5HVSRQGHQW$SSHOOHH
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH6RXWKHUQ'LVWULFWRI2KLRDW&ROXPEXV
1R²$OJHQRQ/0DUEOH\'LVWULFW-XGJH
$UJXHG2FWREHU
'HFLGHGDQG)LOHG0DUFK
%HIRUH%2**6DQG*,/0$1&LUFXLW-XGJHVDQG
48,67'LVWULFW-XGJH
BBBBBBBBBBBBBBBBB
&2816(/
$5*8('0HO\QGD:&RRN5HLFK6&+$' &22.
,QGLDQ6SULQJV2KLRIRU$SSHOODQW-RQDWKDQ5)XONHUVRQ
2 ) ) ,& ( 2) 7 + ( $7 7 2 5 1 ( < * ( 1 ( 5 $ /

-- 1 of 6 --

&ROHPDQY'H:LWW 1R
&255(&7,216/,7,*$7,216(&7,21&ROXPEXV2KLR
IRU $SSHOOHH 21 %5,() 0HO\QGD : &RRN5HLFK
6&+$' &22. ,QGLDQ 6SULQJV 2KLR IRU $SSHOODQW
-RQDWKDQ 5 )XONHUVRQ 2)),&( 2) 7+( $77251(<
*(1(5$/ &255(&7,216 /,7,*$7,21 6(&7,21
&ROXPEXV 2KLR 'DYLG 0 *RUPOH\ 2)),&( 2) 7+(
$77251(< *(1(5$/ 2) 2+,2 &ROXPEXV 2KLR IRU
$SSHOOHH:D\QH&ROHPDQ&KLOOLFRWKH2KLRSURVH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
%2**6 &LUFXLW -XGJH :D\QH &ROHPDQ DSSHDOV WKH
GLVWULFWFRXUW¶VGHQLDORIKLVSHWLWLRQIRUKDEHDVFRUSXV,Q
0D\&ROHPDQZDVFRQYLFWHGE\DQ2KLRVWDWHFRXUWRI
LQYROXQWDU\PDQVODXJKWHUDQGIHORQLRXVDVVDXOWSXUVXDQWWR
DQRORFRQWHQGHUHSOHD&ROHPDQKDGNLFNHG2OLYLD:LOOLDPV
LQWKHDEGRPHQDQGRWKHUZLVHKDGEDWWHUHGKHU$VDUHVXOWRI
&ROHPDQ¶VYLROHQWDFWLRQV:LOOLDPVVXIIHUHGDPLVFDUULDJH
OHDGLQJ WR KLV FRQYLFWLRQ IRU LQYROXQWDU\ PDQVODXJKWHU
&ROHPDQDUJXHVWKDWWKHPDQVODXJKWHUFRQYLFWLRQYLRODWHGKLV
)RXUWHHQWK$PHQGPHQWVXEVWDQWLYHGXHSURFHVVULJKWVXQGHU
5RHY:DGH86 DQGLWVSURJHQ\EHFDXVH
WKH 2KLR LQYROXQWDU\ PDQVODXJKWHU VWDWXWH GLG QRW UHTXLUH
SURRIRIWKHPLVFDUULHGIHWXV¶VYLDELOLW\IRUFRQYLFWLRQ+H
DOVR DUJXHV WKDW KLV QLQH\HDU VHQWHQFH IRU WKH LQYROXQWDU\
PDQVODXJKWHUFRXQWFRQVWLWXWHVFUXHODQGXQXVXDOSXQLVKPHQW
)RUWKHIROORZLQJUHDVRQVZHDIILUPWKHGLVWULFWFRXUW¶VGHQLDO
RIKLVSHWLWLRQIRUKDEHDVFRUSXV
,
,Q WKH IDOO RI &ROHPDQ ZDV URPDQWLFDOO\ LQYROYHG
ZLWK2OLYLD:LOOLDPV2Q2FWREHU&ROHPDQZKLOH
SK\VLFDOO\DEXVLQJ:LOOLDPVNLFNHGKHULQWKHDEGRPHQ$W
WKH WLPH RI WKH DVVDXOW :LOOLDPV ZDV SUHJQDQW DQG
&ROHPDQ¶V EORZ WR :LOOLDPV¶V DEGRPHQ FDXVHG KHU WR
PLVFDUU\
1R &ROHPDQY'H:LWW
,,,
:HWKHUHIRUH$)),50WKHMXGJPHQWRIWKHGLVWULFWFRXUW
GHQ\LQJ&ROHPDQ¶VSHWLWLRQIRUDZULWRIKDEHDVFRUSXV

-- 2 of 6 --

&ROHPDQY'H:LWW 1R
%HFDXVH &ROHPDQ¶V FRQYLFWLRQ GRHV QRW WUDQVJUHVV DQ\
UHDVRQDEOHLQWHUSUHWDWLRQRIWKH)RXUWHHQWK$PHQGPHQWPXFK
OHVV RQH FOHDUO\ HVWDEOLVKHG E\ WKH 6XSUHPH &RXUW RI WKH
8QLWHG6WDWHVZHDIILUPWKHGLVWULFWFRXUW¶VMXGJPHQWILQGLQJ
&ROHPDQ¶VVXEVWDQWLYHGXHSURFHVVDUJXPHQWZLWKRXWPHULW
%&ROHPDQ¶V&UXHODQG8QXVXDO3XQLVKPHQW&ODLP
&ROHPDQ DOVR DUJXHV WKDW KLV VHQWHQFH RI QLQH \HDUV IRU
LQYROXQWDU\ PDQVODXJKWHU YLRODWHV KLV (LJKWK $PHQGPHQW
ULJKWDJDLQVWFUXHODQGXQXVXDOSXQLVKPHQW
7KH(LJKWK$PHQGPHQWGRHVIRUELGH[WUHPHVHQWHQFHVWKDW
DUH³JURVVO\GLVSURSRUWLRQDWHWRWKHFULPH´6HH+DUPHOLQY
0LFKLJDQ86 7RGHWHUPLQHZKHWKHU
DVHQWHQFHLV³JURVVO\GLVSURSRUWLRQDWH´FRXUWVORRNWRWKH
JUDYLW\ RI WKH RIIHQVH LQFOXGLQJ ZKHWKHU WKH FULPH ZDV
YLROHQW 6HH LG .HQQHG\ FRQFXUULQJ 8QLWHG
6WDWHVY+LOO)G WK&LU
&ROHPDQ¶V VHQWHQFH RI QLQH \HDUV IRU LQYROXQWDU\
PDQVODXJKWHU LV IDU IURP WKH ³JURVV GLVSURSRUWLRQDOLW\´
UHTXLUHGWRRIIHQGWKH(LJKWK$PHQGPHQW&ROHPDQ¶VDFWLRQV
ZHUHYLROHQWDQGGHSULYHG:LOOLDPVRIKHUFKLOGRUDWOHDVW
WKHDELOLW\WRH[HUFLVHKHUULJKWVRYHUKHUSUHJQDQF\$WOHDVW
DVLPSRUWDQWDVDZRPDQ¶VULJKWWRWHUPLQDWHKHUSUHJQDQF\LV
KHU ULJKW WR FKRRVH WR FDUU\ KHU FKLOG WR WHUP ,Q D
MXULVSUXGHQFHWKDWILQGVPDQGDWRU\OLIHVHQWHQFHVIRUWKHQRQ
YLROHQWSRVVHVVLRQRIFRFDLQHFRQVWLWXWLRQDOO\SHUPLVVLEOHVHH
+DUPHOLQ86DWZHZRXOGEHKDUGSUHVVHGWRILQG
QLQH\HDUVIRU&ROHPDQ¶VYLROHQWDFWEH\RQGWKHFRQVWLWXWLRQDO
SDOH&I%URZQY0D\OH:/ WK&LU
KROGLQJ WKDW D OLIH VHQWHQFH IRU QRQYLROHQW SHWW\ WKHIW
WKURXJKWKHDSSOLFDWLRQRI&DOLIRUQLD¶V³WKUHHVWULNHV´VWDWXWH
YLRODWHGWKH(LJKWK$PHQGPHQW ,QGHHGWKH6XSUHPH&RXUW
KDVQHYHUKHOGXQFRQVWLWXWLRQDODVHQWHQFHOHVVVHYHUHWKDQOLIH
LPSULVRQPHQWZLWKRXWWKHSRVVLELOLW\RISDUROH6HH6ROHPY
+HOP86 UHFRJQL]LQJIRUWKHILUVWWLPHWKDW
QRQFDSLWDO VHQWHQFHV ZHUH VXEMHFW WR (LJKWK $PHQGPHQW
UHYLHZ
1R &ROHPDQY'H:LWW
&ROHPDQ ZDV DUUHVWHG ILYH GD\V ODWHU 2Q 2FWREHU
&ROHPDQ ZDV LQGLFWHG IRU IHORQLRXV DVVDXOW DQG
LQYROXQWDU\ PDQVODXJKWHU SXUVXDQW WR 2KLR 5HY &RGH
†7KHLQGLFWPHQWDOOHJHGWKDW&ROHPDQFRPPLWWHG
LQYROXQWDU\PDQVODXJKWHUE\³XQODZIXOO\WHUPLQDW>LQJ@2OLYLD
:LOOLDPV¶SUHJQDQF\DVDSUR[LPDWHUHVXOWRIFRPPLWWLQJ
DIHORQ\´
&ROHPDQSOHGQRFRQWHVWWRWKHLQYROXQWDU\PDQVODXJKWHU
DQGIHORQLRXVDVVDXOWFRXQWV3XUVXDQWWRKLVSOHDWKH2KLR
WULDOFRXUWVHQWHQFHGKLPWRQLQH\HDUVRILPSULVRQPHQWIRU
LQYROXQWDU\PDQVODXJKWHUWRUXQFRQFXUUHQWO\ZLWKDVHYHQ
\HDUVHQWHQFHIRUIHORQLRXVDVVDXOW
&ROHPDQ DSSHDOHG KLV FRQYLFWLRQ WR WKH 2KLR &RXUW RI
$SSHDOVDUJXLQJWKDW2KLR5HY&RGH†WKHEDVLVIRU
KLVLQYROXQWDU\PDQVODXJKWHUFRQYLFWLRQZDVXQFRQVWLWXWLRQDO
EHFDXVH LW GLG QRW UHTXLUH SURRI RI WKH WHUPLQDWHG IHWXV¶V
YLDELOLW\7KH2KLR&RXUWRI$SSHDOVDIILUPHGKLVFRQYLFWLRQ
XSKROGLQJ WKH VWDWXWH¶V FRQVWLWXWLRQDOLW\ &ROHPDQ WKHQ
DSSHDOHG WR WKH 2KLR 6XSUHPH &RXUW ZKLFK VXPPDULO\
DIILUPHGWKH&RXUWRI$SSHDOV
&ROHPDQ WKHQ ILOHG D SHWLWLRQ IRU KDEHDV FRUSXV LQ WKH
8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH6RXWKHUQ'LVWULFWRI2KLR
7KHUH&ROHPDQDUJXHGWKDWKLVFRQYLFWLRQDQGVHQWHQFHIRU
LQYROXQWDU\ PDQVODXJKWHU YLRODWHG ERWK KLV )RXUWHHQWK
$PHQGPHQW VXEVWDQWLYH GXH SURFHVV ULJKWV DQG KLV (LJKWK
$PHQGPHQW ULJKW WR EH IUHH IURP FUXHO DQG XQXVXDO
SXQLVKPHQW7KHGLVWULFWFRXUWIRXQGERWKDUJXPHQWVZLWKRXW
PHULWDQGGHQLHG&ROHPDQ¶VSHWLWLRQIRUKDEHDVFRUSXV
&ROHPDQ QRZ DSSHDOV WKH GLVWULFW FRXUW¶V GHQLDO RI KLV
SHWLWLRQ
,,
,QWKLVFDVHRXUFRQVLGHUDWLRQRI&ROHPDQ¶VSHWLWLRQIRU
KDEHDVFRUSXVLVOLPLWHGE\WKH$QWL7HUURULVPDQG(IIHFWLYH
'HDWK3HQDOW\$FWRI7KH$FWSURKLELWVIHGHUDOFRXUWV
IURPLVVXLQJDZULWRIKDEHDVFRUSXVZLWKUHVSHFWWRDQ\FODLP

-- 3 of 6 --

&ROHPDQY'H:LWW 1R
WKDWZDV³DGMXGLFDWHGRQWKHPHULWVLQWKHVWDWHFRXUWXQOHVV
WKHDGMXGLFDWLRQRIWKHFODLPUHVXOWHGLQDGHFLVLRQWKDWZDV
FRQWUDU\ WR RU LQYROYHG DQ XQUHDVRQDEOH DSSOLFDWLRQ RI
FOHDUO\HVWDEOLVKHG)HGHUDOODZDVGHWHUPLQHGE\WKH6XSUHPH
&RXUW RI WKH8QLWHG6WDWHV´86&† G 7KH
2KLR FRXUWV LQ WKLV FDVH GHFLGHG DJDLQVW &ROHPDQ DOO WKH
LVVXHV WKDW KH FXUUHQWO\ UDLVHV 7KXV 6HFWLRQ G
DSSOLHV
&ROHPDQ DUJXHV WKDW WKH VWDWH PD\ QRW SURKLELW WKH
WHUPLQDWLRQRIDSUHJQDQF\EHIRUHWKHYLDELOLW\RIWKHIHWXV
EHFDXVH RI WKH 6XSUHPH &RXUW¶V LQWHUSUHWDWLRQ RI WKH
)RXUWHHQWK$PHQGPHQWLQ5RHY:DGH86
$FFRUGLQJO\ &ROHPDQ FRQWHQGV WKDW KLV FRQYLFWLRQ IRU
WHUPLQDWLQJ :LOOLDPV¶V SUHJQDQF\ HYHQ LI DV D UHVXOW RI
FRPPLWWLQJ D IHORQ\ ZLWKRXW DQ\ SURRI RI KHU IHWXV¶V
YLDELOLW\ YLRODWHG KLV ULJKWV XQGHU WKH )RXUWHHQWK
$PHQGPHQW$OVRDSSHDOLQJKLVVHQWHQFH&ROHPDQXUJHVXV
LQWKHDOWHUQDWLYHWRKROGWKDWQLQH\HDUVIRUWKHPDQVODXJKWHU
RIDIHWXVLVFUXHODQGXQXVXDOSXQLVKPHQWXQGHUWKH(LJKWK
$PHQGPHQW:HDGGUHVVHDFKRIKLVDUJXPHQWVVHSDUDWHO\
EHORZ
$&ROHPDQ¶V6XEVWDQWLYH'XH3URFHVV&ODLP
&ROHPDQ DUJXHV WKDW KLV FRQYLFWLRQ IRU LQYROXQWDU\
PDQVODXJKWHU SXUVXDQW WR 2KLR 5HY &RGH † LV
XQFRQVWLWXWLRQDO EHFDXVH LW YLRODWHG WKH VXEVWDQWLYH GXH
SURFHVV ULJKWV DQQRXQFHG LQ 5RH Y :DGH DQG LWV SURJHQ\
7KHUHOHYDQWVHFWLRQRIWKH2KLRFRGHSURYLGHVDVIROORZV
³1RSHUVRQVKDOOFDXVHWKHGHDWKRIDQRWKHURUWKHXQODZIXO
WHUPLQDWLRQRIDQRWKHU¶VSUHJQDQF\DVDSUR[LPDWHUHVXOWRI
WKH RIIHQGHU¶V FRPPLWWLQJ RU DWWHPSWLQJ WR FRPPLW D
PLVGHPHDQRU RI DQ\ GHJUHH´ 2KLR 5HY &RGH †
%HFDXVHWKHVWDWXWHGRHVQRWUHTXLUHWKHVWDWHWRDOOHJHRUWR
SURYHWKHYLDELOLW\RIWKHWHUPLQDWHGIHWXV&ROHPDQFRQWHQGV
WKDWWKHVWDWXWHLVEH\RQGWKHVWDWH¶VSUHVFULSWLYHSRZHUXQGHU
5RHDQGLVWKHUHIRUHXQFRQVWLWXWLRQDO
&ROHPDQ¶VDUJXPHQWPLVFRQFHLYHVWKHQDWXUHRIWKHULJKW
HVWDEOLVKHG LQ 5RH &ROHPDQ VHHV 5RH DV DQ DEVROXWH
1R &ROHPDQY'H:LWW
,QGHHG WKLV LV ZK\ IDFLDO FRQVWLWXWLRQDO FKDOOHQJHV DUH XQLYHUVDOO\
XQVXFFHVVIXO DV GHIHQVHV WR FULPLQDO SURVHFXWLRQV IRU QRQH[SUHVVLYH
FRQGXFW ,I WKH VWDWXWH LV FRQVWLWXWLRQDO DV DSSOLHG WR WKH GHIHQGDQW¶V
DFWLYLWLHV LW D IRUWLRUDUL IDLOV WKH 6DOHUQR VWDQGDUG
EHDWWDFNHGDVRYHUEURDG´ *UHQGHOOY2KLR6XSUHPH&RXUW
)G WK &LU ³,W LV ZHOOVHWWOHG WKDW
IDFLDO FRQVWLWXWLRQDO FKDOOHQJHV UHO\LQJ RQ WKH RYHUEUHDGWK
GRFWULQHDQGWKHUHVXOWDQWFKLOOLQJHIIHFWVXFKRYHUEUHDGWKKDV
RQ VSHHFK DUH OLPLWHG WR WKH )LUVW $PHQGPHQW VSKHUH´
2XWVLGHWKH)LUVW$PHQGPHQWFRQWH[WZHZLOORQO\XSKROGD
IDFLDO FKDOOHQJH WR D VWDWXWH LI WKH FKDOOHQJLQJ SDUW\ FDQ
GHPRQVWUDWHWKDWWKHUHLVQRFRQVWLWXWLRQDODSSOLFDWLRQRIWKH
VWDWXWH 8QLWHG 6WDWHV Y 6DOHUQR 86
5HQR Y )ORUHV 86 ³7R
SUHYDLO RQ VXFK D IDFLDO FKDOOHQJH WKH >FKDOOHQJLQJ SDUW\@
μPXVW HVWDEOLVK WKDW QR VHW RI FLUFXPVWDQFHV H[LVWV XQGHU
ZKLFKWKH>VWDWXWH@ZRXOGEHYDOLG¶´ 2IFRXUVHWKHUHLVD
FRQVWLWXWLRQDO DSSOLFDWLRQ RI WKH 2KLR LQYROXQWDU\
PDQVODXJKWHUVWDWXWH±&ROHPDQ¶VFDVH
6HFRQG HYHQ LI ZH ZHUH LQFOLQHG WR HQJDJH LQ DQ
RYHUEUHDGWKDQDO\VLVWKHVWDWXWHGRHVQRWDSSHDUWRUHDFKDQ\
SURWHFWHG FRQGXFW 7KH VWDWXWH SURKLELWV WKH ³XQODZIXO
WHUPLQDWLRQRIDQRWKHU¶VSUHJQDQF\DVDSUR[LPDWHUHVXOWRI
WKHRIIHQGHU¶VFRPPLWWLQJDPLVGHPHDQRU´7RSUHYDLO
WKHVWDWHDSSHDUVUHTXLUHGWRHVWDEOLVKDWOHDVWWZRHOHPHQWV
XQGHUWKHVWDWXWH WKDWWKHWHUPLQDWLRQRIWKHSUHJQDQF\
ZDV³XQODZIXO´DQG WKDWLWZDVFDXVHGE\WKHGHIHQGDQW¶V
FRPPLVVLRQ RI D PLVGHPHDQRU :H DUH QRW DZDUH RI DQ\
2KLRODZWKDWPDNHVDZRPDQ¶VSURFXULQJRIDFRQVHQVXDO
DERUWLRQ D ³PLVGHPHDQRU´ WULJJHULQJ WKH LQYROXQWDU\
PDQVODXJKWHUVWDWXWH0RUHRYHUVXFKDFRQVHQVXDODERUWLRQ
YHU\OLNHO\ZRXOGQRWEH³XQODZIXO´DVLQWHUSUHWHGE\2KLR
FRXUWV,QWKLVVHQVHWKHVWDWXWHVHHPVZHOOWDLORUHGWRWDUJHW
DFWLYLW\ OLNH &ROHPDQ¶V WKDW LQWHUIHUHV ZLWK WKH ZRPDQ¶V
ULJKWWRFRQWLQXHRUXQGHUFHUWDLQOLPLWHGFLUFXPVWDQFHVWR
WHUPLQDWHKHUSUHJQDQF\

-- 4 of 6 --

&ROHPDQY'H:LWW 1R
KHUFRQVHQW3URWHFWLQJWKHDELOLW\WRH[HUFLVHDIXQGDPHQWDO
ULJKWLVDFRPSHOOLQJVWDWHLQWHUHVWWKDWZRXOGVXUYLYHVWULFW
VFUXWLQ\HYHQLILWZHUHUHTXLUHG
&ROHPDQ DOVR KDOWLQJO\ DUJXHV WKDW WKH VWDWXWH LV
XQFRQVWLWXWLRQDOO\ RYHUEURDG LQ WKDW LW PD\ LQ DGGLWLRQ WR
&ROHPDQ¶VFRQGXFWDOVRSURVFULEHFRQVWLWXWLRQDOO\SURWHFWHG
FRQGXFW+HUH&ROHPDQVHHNVWRLQYDOLGDWHWKHPDQVODXJKWHU
VWDWXWHE\LQYRNLQJWKHULJKWVRIWKHZRPDQZKRPKHDEXVHG
7KHUH DUH WZR SUREOHPV ZLWK &ROHPDQ¶V RYHUEUHDGWK
DUJXPHQWHDFKLQGHSHQGHQWO\IDWDOWRKLVFODLP
)LUVW LQ WKH RYHUEUHDGWK GRFWULQH &ROHPDQ LV WU\LQJ WR
DVVHUWDIHDWXUHRIRXU)LUVW$PHQGPHQWMXULVSUXGHQFHWKDWLV
LQDSSOLFDEOHWR&ROHPDQ¶V)RXUWHHQWK$PHQGPHQWDUJXPHQW
7KHRYHUEUHDGWKGRFWULQHLVDQH[FHSWLRQWRWKHWUDGLWLRQDO
UXOHVRIVWDQGLQJE\DOORZLQJOLWLJDQWVWRDVVHUWWKHULJKWVRI
SDUWLHV QRW EHIRUH WKH FRXUW 7ULSOHWW *ULOOH ,QF Y &LW\ RI
$NURQ)G WK&LU 6HHDOVR6HFUHWDU\
RI6WDWHRI0GY-RVHSK+0XQVRQ&R86
KROGLQJ WKDW JHQHUDOO\ D OLWLJDQW FDQQRW DVVHUW WKH
ULJKWV RI WKLUG SDUWLHV ,Q WKH IUHH VSHHFK FRQWH[W WKH
RYHUEUHDGWKGRFWULQHLVGHVLJQHG³WRSUHYHQWWKHFKLOOLQJRI
IXWXUHSURWHFWHG H[SUHVVLRQ´'HMD9XRI1DVKYLOOH,QFY
0HWURSROLWDQ*RY¶WRI1DVKYLOOH)G WK&LU
([SUHVVLYHFRQGXFWDVDFRQVWLWXWLRQDOO\SURWHFWHG
DFWLYLW\ LV LGLRV\QFUDWLFDOO\ VHQVLWLYH WR FULPLQDO VDQFWLRQV
DQGVWDWHUHJXODWLRQ6HH1HZ<RUNY)HUEHU86
7RDYRLGWKLVUHFRJQL]HGFKLOOLQJHIIHFWZH
KDYHSHUPLWWHGWKRVHZKRVHFRQGXFWLVFOHDUO\XQSURWHFWHGWR
PRXQW D IDFLDO FKDOOHQJH DJDLQVW D UHJXODWLRQ WKDW DOVR
VXEVWDQWLDOO\UHJXODWHVSURWHFWHGFRQGXFW
1HLWKHUWKH6XSUHPH&RXUWQRUWKLVFRXUWKDVDSSOLHGWKH
RYHUEUHDGWK GRFWULQH ZKHQ WKH )LUVW $PHQGPHQW ZDV QRW
LPSOLFDWHG6HH8QLWHG6WDWHVY6DOHUQR86
³:H KDYH QRW UHFRJQL]HG DQ RYHUEUHDGWK GRFWULQH
RXWVLGHWKHOLPLWHGFRQWH[WRIWKH)LUVW$PHQGPHQW´ 6FKDOO
Y 0DUWLQ 86 Q ³2XWVLGH WKH
OLPLWHG)LUVW$PHQGPHQWFRQWH[WDFULPLQDOVWDWXWHPD\QRW
1R &ROHPDQY'H:LWW
SURKLELWLRQRQVWDWHUHJXODWLRQRUSURWHFWLRQRIIHWDOKHDOWK
EHIRUH YLDELOLW\ ,Q 5RH WKH 6XSUHPH &RXUW KHOG WKDW D
ZRPDQ¶V ULJKW WR SULYDF\ GHULYHG IURP WKH VXEVWDQWLYH
FRPSRQHQWV RI WKH )RXUWHHQWK $PHQGPHQW¶V 'XH 3URFHVV
&ODXVHLQFOXGHVDZRPDQ¶VULJKWWRGHFLGHZKHWKHURUQRWWR
WHUPLQDWH KHU RZQ SUHJQDQF\ $OWKRXJK WKH SUHFLVH
MXVWLILFDWLRQIRUWKHULJKWKDVQHYHUEHHQIXOO\DUWLFXODWHGWKH
ULJKWDSSHDUVWRUHVWDWOHDVWLQSDUWRQDSUHJQDQWZRPDQ¶V
LQWHUHVW LQ VHOIGHWHUPLQDWLRQ DQG WKH SURIRXQG HIIHFW WKDW
SUHJQDQF\KDVXSRQWKHZRPDQ6HH3ODQQHG3DUHQWKRRGRI
6RXWKHDVWHUQ 3HQQV\OYDQLD Y &DVH\ 86
2¶&RQQRUSOXUDOLW\RSLQLRQ ³7KHVHPDWWHUVLQYROYLQJWKH
PRVWLQWLPDWHDQGSHUVRQDOFKRLFHVDSHUVRQPD\PDNHLQD
OLIHWLPHFKRLFHVFHQWUDOWRSHUVRQDOGLJQLW\DQGDXWRQRP\DUH
FHQWUDO WR WKH OLEHUW\ SURWHFWHG E\ WKH )RXUWHHQWK
$PHQGPHQW´ 7RSUHVHUYHWKLVDXWRQRP\WKHDERUWLRQULJKW
GUDZVLWVFRQVWLWXWLRQDOHVVHQFHIURPSHUPLWWLQJWKHZRPDQ
DGHFLVLRQUHJDUGLQJWKHIDWHRIKHUSUHJQDQF\7KH³HVVHQWLDO
KROGLQJRI5RH´LVD³UHFRJQLWLRQRIWKHULJKWRIWKHZRPDQWR
FKRRVHWRKDYHDQDERUWLRQEHIRUHYLDELOLW\DQGWRREWDLQLW
ZLWKRXWXQGXHLQIOXHQFHIURPWKHVWDWH´,GDW HPSKDVLV
DGGHG
7KH &RXUW¶V FUHDWLRQ RI WKLV ULJKW XQGHU WKH )RXUWHHQWK
$PHQGPHQWZDVQRWKRZHYHUDGHWHUPLQDWLRQWKDWWKHVWDWH
KDVQRSUHVFULSWLYHLQWHUHVWLQPDWWHUVLQYROYLQJWKHXQERUQ
4XLWHWRWKHFRQWUDU\WKH&RXUWLQ5RHUHFRJQL]HGWKDWWKH
VWDWHKDGLPSRUWDQWLQWHUHVWVLQSURWHFWLQJIHWDOOLIH5RH
86DW KROGLQJWKDWWKHVWDWHPDLQWDLQV³DQLPSRUWDQW
DQGOHJLWLPDWHLQWHUHVWLQSURWHFWLQJWKHSRWHQWLDOLW\RIKXPDQ
OLIH´ 7KH&RXUWKHOGWKDWWKLVLPSRUWDQWUHJXODWRU\LQWHUHVW
ZDV QRW VXIILFLHQWO\ ³FRPSHOOLQJ´ WR VXSSRUW DQ DEVROXWH
SURKLELWLRQ RI DERUWLRQ 7KH 7H[DV VWDWXWH FULPLQDOL]LQJ
DERUWLRQ DW DQ\ VWDJH LQ D ZRPDQ¶V SUHJQDQF\ WKHUHIRUH
FRXOGQRWVXUYLYH³VWULFWVFUXWLQ\´XQGHUZKLFKWKHVWDWHPXVW
LGHQWLI\D³FRPSHOOLQJVWDWHLQWHUHVW´PRWLYDWLQJDUHJXODWLRQ
DQGHPSOR\RQO\WKRVHPHDQV³QDUURZO\WDLORUHG´WRDFKLHYH
WKDWLQWHUHVW6HHLGDW

-- 5 of 6 --

&ROHPDQY'H:LWW 1R
7KH SURWHFWLRQ RI IHWDO OLIH LV QRW WKH RQO\ OHJLWLPDWH VWDWH LQWHUHVW LQ
WKH UHJXODWLRQ RI DERUWLRQ 7KH &RXUW DOVR UHFRJQL]HG WKDW WKH VWDWH KDV D
OHJLWLPDWH LQWHUHVW LQ SURWHFWLQJ WKH KHDOWK RI WKH PRWKHU ZKLFK EHFRPHV
FRPSHOOLQJ DIWHU WKH ILUVW WULPHVWHU RI SUHJQDQF\ 7KLV LQWHUHVW ZRXOG
MXVWLI\ D YDULHW\ RI UHJXODWLRQV RQ WKH PDQQHU LQ ZKLFK DERUWLRQV DUH
SHUIRUPHG 7KH FRPELQDWLRQ RI WKHVH WZR LQWHUHVWV XQGHUOD\ WKH &RXUW¶V
WULPHVWHU IUDPHZRUN LQ 5RH 8QGHU WKH WULPHVWHU IUDPHZRUN WKH VWDWH ZDV
DOORZHG WR DGRSW UHJXODWLRQV QDUURZO\ WDLORUHG WR SURWHFW WKH KHDOWK RI WKH
PRWKHU DIWHU WKH ILUVW WULPHVWHU DQG UHJXODWLRQV QDUURZO\ WDLORUHG WR
SURWHFW IHWDO KHDOWK LQFOXGLQJ D FRPSOHWH SURVFULSWLRQ RI DERUWLRQV H[FHSW
ZKHQ QHFHVVDU\ WR SUHVHUYH WKH OLIH RU KHDOWK RI WKH PRWKHU DIWHU WKH
VHFRQG WULPHVWHU 6HH 5RH 86 DW %HFDXVH WKLV WULPHVWHU
IUDPHZRUN ZDV QRW QHFHVVDU\ WR WKH &RXUW¶V UHVROXWLRQ RI WKH FDVH EHIRUH
LW LW LV QRW FOHDU WR ZKDW H[WHQW WKH IUDPHZRUN KDV HYHU ERXQG WKLV FRXUW
LQ LWV DERUWLRQ GHFLVLRQV 6HH &DVH\ 86 DW 2¶&RQQRU SOXUDOLW\
RSLQLRQ ³:H VHH KRZ WLPH KDV RYHUWDNHQ VRPH RI 5RH¶V IDFWXDO
DVVXPSWLRQV DGYDQFHV LQ PDWHUQDO KHDOWK FDUH DOORZ DERUWLRQV VDIH WR WKH
PRWKHU ODWHU LQ SUHJQDQF\ WKDQ ZDV WUXH LQ DQG DGYDQFHV LQ QHRQDWDO
FDUH KDYH DGYDQFHG YLDELOLW\ WR D SRLQW VRPHZKDW HDUOLHU´ :HEVWHU Y
5HSURGXFWLYH +HDOWK 6HUY 86 5HKQTXLVW
FRQFXUULQJ VXJJHVWLQJ WKH FRPSHOOLQJ VWDWH LQWHUHVW LQ IHWDO OLIH DW OHDVW
VKLIWV ZLWK PHGLFDO WHFKQRORJ\ DQG LWV HIIHFWV RQ WKH SRLQW RI YLDELOLW\
7KXV WKH &RXUW LQ &DVH\ KHOG WKDW HYHQ EHIRUH YLDELOLW\ WKH VWDWH PD\
DGYDQFH LWV LQWHUHVW LQ IHWDO OLIH E\ IRU H[DPSOH SHUVXDGLQJ ZRPHQ WR
FDUU\ WKHLU FKLOGUHQ WR WHUP DV ORQJ DV LW GRHV QRW SODFH DQ XQGXH EXUGHQ
RQ WKH H[HFXWLRQ RI WKH ZRPDQ¶V GHFLVLRQ &DVH\ 86 DW
2¶&RQQRU SOXUDOLW\ RSLQLRQ ,Q VKRUW LW LV LQDFFXUDWH IRU &ROHPDQ WR
DUJXH WKDW WKH VWDWH KDV QR FRQVWLWXWLRQDOO\ VXIILFLHQW LQWHUHVW LQ UHJXODWLQJ
IHWDO OLIH EHIRUH YLDELOLW\ HYHQ ZKHQ GLUHFWO\ OLPLWLQJ SUHJQDQW ZRPHQ¶V
ULJKWV PXFK OHVV KLV
,Q 5RH VWULFW VFUXWLQ\ ZDV WULJJHUHG E\ WKH ZRPDQ¶V
VXEVWDQWLYHGXHSURFHVVULJKWWRGHFLGHWKHRXWFRPHRIKHU
SUHJQDQF\DQLQWHUHVWGLUHFWO\UHJXODWHGE\WKH7H[DVVWDWXWH
IRUELGGLQJ ZRPHQ IURP SURFXULQJ DERUWLRQV :KLOH WKH
ZRPDQ¶V OLEHUW\ LQWHUHVW LQ WKH DERUWLRQ GHFLVLRQ UHPDLQV
FRQVWDQWWKHVWDWH¶VUHJXODWRU\LQWHUHVWJURZVRYHUWKHWHUPRI
WKHSUHJQDQF\$WOHDVWDFFRUGLQJWRWKH&RXUWLQ5RHWKH
VWDWH¶VLQWHUHVWLQSURWHFWLQJIHWDOOLIHEHFRPHV³FRPSHOOLQJ´
DQG WKHUHE\ FDSDEOH RI VXUYLYLQJ VWULFW VFUXWLQ\ ZKHQ WKH
IHWXVEHFRPHVYLDEOH,GDW
2KLR¶VLQWHUHVWLQWKHSURWHFWLRQRIIHWDOOLIHQHHGQRWEH
FRPSHOOLQJKRZHYHUWRMXVWLI\WKHDSSOLFDWLRQRIWKH2KLR
1R &ROHPDQY'H:LWW
2I FRXUVH QRW HYHU\ VWDWH UHJXODWLRQ LV VXEMHFW WR VWULFW VFUXWLQ\
,QVWHDG D VWDWH SUHVFULSWLRQ LV UHTXLUHG WR VXUYLYH VWULFW VFUXWLQ\ RQO\ ZKHQ
WKH UHJXODWHG DFWLYLW\ LV SURWHFWHG E\ ³FHUWDLQ IXQGDPHQWDO ULJKWV´ ,G DW
6HH DOVR &ODUN Y -HWHU 86 H[SODLQLQJ WKH
GLIIHUHQW OHYHOV RI FRQVWLWXWLRQDO VFUXWLQ\ $EVHQW D FRQVWLWXWLRQDO
SURWHFWLRQ RI WKH UHJXODWHG DFWLYLW\ FRXUWV JHQHUDOO\ GHIHU WR WKH MXGJPHQW
RI WKH HQDFWLQJ OHJLVODWXUH UHTXLULQJ RQO\ WKDW WKH UHJXODWLRQ EH ³UDWLRQDOO\
UHODWHG´ WR D ³OHJLWLPDWH´ VWDWH LQWHUHVW 6DQ $QWRQLR ,QGHS 6FK 'LVW Y
5RGULJXH] 86
LQYROXQWDU\ PDQVODXJKWHU VWDWXWH WR &ROHPDQ¶V DFWLRQV
3XQLVKLQJ&ROHPDQ¶VDFWLRQVLQQRZD\LPSOLFDWHVDZRPDQ¶V
ULJKWWRGHWHUPLQHWKHGLVSRVLWLRQRIKHUSUHJQDQF\UHFRJQL]HG
LQ 5RH DQG LWV SURJHQ\ &ROHPDQ¶V YLROHQW DVVDXOW ZDV
ZLWKRXW WKH FRQVHQW RI KLV KHOSOHVV JLUOIULHQG 2OLYLD
:LOOLDPV,WLV:LOOLDPVWKHSUHJQDQWZRPDQZKRKROGVWKH
OLPLWHGULJKWWRWHUPLQDWHKHUSUHJQDQF\EHIRUHYLDELOLW\DQG
&ROHPDQ PD\ QRW LQYRNH LW RQ KHU EHKDOI 7KH ULJKW
UHFRJQL]HGLQ5RHQRWEHLQJLPSOLFDWHGWKHVWDWH¶VLQWHUHVWLQ
SURWHFWLQJWKHOLIHRIWKHXQERUQQHHGQRWEH³FRPSHOOLQJ´WR
VXVWDLQWKHUHJXODWLRQRI&ROHPDQ¶VDFWLRQV
,I ZH NQRZ DQ\WKLQJ IURP 5RH LW LV WKDW WKH VWDWH KDV D
OHJLWLPDWH DQG LPSRUWDQW LQWHUHVW LQ SURWHFWLQJ IHWDO OLIH
WKURXJKRXW WKH SUHJQDQF\ HYHQ EHIRUH YLDELOLW\ 5RH
86DW FKDUDFWHUL]LQJWKHVWDWH¶VLQWHUHVWLQIHWDOKHDOWK
DV ³OHJLWLPDWH DQG LPSRUWDQW´ &DVH\ 86 DW
2¶&RQQRUSOXUDOLW\RSLQLRQ DQ³HVVHQWLDOKROGLQJ´RI5RH
³LVWKHSULQFLSOHWKDWWKH6WDWHKDVOHJLWLPDWHLQWHUHVWVIURPWKH
RXWVHWRIWKHSUHJQDQF\LQSURWHFWLQJWKHOLIHRIWKHIHWXV
WKDWPD\EHFRPHDFKLOG´ 2KLR¶VSXUVXLWRIWKDWOHJLWLPDWH
LQGHHGLPSRUWDQWLQWHUHVWE\FULPLQDOL]LQJYLROHQWDVVDXOWVRQ
ZRPHQWKDWWHUPLQDWHIHWDOOLIHLVFHUWDLQO\FRQVWLWXWLRQDO
,QOLJKWRIWKHWUXHPHDQLQJRI5RH&ROHPDQ¶VDUJXPHQWLV
IUDXJKW ZLWK LURQ\ 7KH 2KLR LQYROXQWDU\ PDQVODXJKWHU
VWDWXWH DV DSSOLHG WR DFWLRQV OLNH &ROHPDQ¶V SURWHFWV D
ZRPDQ¶VULJKWWRGHWHUPLQHWKHIDWHRIKHUSUHJQDQF\7KH
VXEVWDQWLYH GXH SURFHVV ULJKW LQ 5RH LV D GHFLVLRQDO ULJKW
DJDLQVW JRYHUQPHQWDO LQWHUIHUHQFH ZKLFK LV PHDQLQJOHVV
ZKHQDSULYDWHSDUW\WHUPLQDWHVDZRPDQ¶VSUHJQDQF\ZLWKRXW

-- 6 of 6 --