03a0099p.06

7KH +RQRUDEOH 'DQ $DURQ 3ROVWHU 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU
WKH 1RUWKHUQ 'LVWULFW RI 2KLR 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$7,21$/ +2&.(< /($*8(
3/$<(56¶ $662&,$7,21DQG
$17+21< $48,12
3ODLQWLIIV$SSHOOHHV
Y
3/<0287+ :+$/(56
+2&.(< &/8%HWDO
'HIHQGDQWV$SSHOODQWV
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW
1R²9LFWRULD$5REHUWV'LVWULFW-XGJH
$UJXHG)HEUXDU\
'HFLGHGDQG)LOHG$SULO
%HIRUH*,/0$1DQG*,%%216&LUFXLW-XGJHV
32/67(5'LVWULFW-XGJH
1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO
1R
BBBBBBBBBBBBBBBBB
&2816(/
$5*8('6WHSKHQ):DVLQJHU:$6,1*(5.,&.+$0
+$1/(<5R\DO2DN0LFKLJDQIRU$SSHOODQWV0LFKDHO
3 &RQZD\ *5,332 (/'(1 &KLFDJR ,OOLQRLV IRU
$SSHOOHHV21%5,()6WHSKHQ):DVLQJHU*UHJRU\'
+DQOH\:$6,1*(5.,&.+$0 +$1/(<5R\DO2DN
0LFKLJDQ IRU $SSHOODQWV 0LFKDHO 3 &RQZD\ -RKQ 5
0F&DPEULGJH.HOO\&:LOVRQ-RKQ(%XFKHLW*5,332
(/'(1&KLFDJR,OOLQRLVIRU$SSHOOHHV
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
-8/,$ 60,7+ *,%%216 &LUFXLW -XGJH 3ODLQWLII
DSSHOOHH 1DWLRQDO +RFNH\ /HDJXH 3OD\HUV¶ $VVRFLDWLRQ
1+/3$ EURXJKW WKLV DFWLRQ LQ WKH 8QLWHG 6WDWHV 'LVWULFW
&RXUWIRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDOOHJLQJWKDWWKH
2QWDULR+RFNH\/HDJXH 2+/ DQGDOORILWVPHPEHUWHDPV
FRQVSLUHGZLWKWKH1DWLRQDO+RFNH\/HDJXH 1+/ WRYLRODWH
6HFWLRQ RI WKH 6KHUPDQ $QWLWUXVW $FW 86& †
1+/3$VRXJKWGHFODUDWRU\MXGJPHQWDQGLQMXQFWLYHUHOLHIRQ
EHKDOI RI WKH KRFNH\ SOD\HUV LW UHSUHVHQWV 1+/3$ WKHQ
PRYHG IRU OHDYH WR DPHQG WKH FRPSODLQW WR DGG $QWKRQ\
$TXLQR DV D SODLQWLII DQG DOVR UHTXHVWHG D SUHOLPLQDU\
LQMXQFWLRQRQKLVEHKDOI7KHGLVWULFWFRXUWJUDQWHG1+/3$¶V
PRWLRQWRDPHQGDQGLVVXHGDSUHOLPLQDU\LQMXQFWLRQ2Q
1RYHPEHU WKLV FRXUW VWD\HG WKH SUHOLPLQDU\
LQMXQFWLRQ 'HIHQGDQWVDSSHOODQWV 2+/ DQG LWV PHPEHU
WHDPV DSSHDO WKH GLVWULFW FRXUW¶V JUDQW RI WKH SUHOLPLQDU\
LQMXQFWLRQ)RUWKHUHDVRQVVHWIRUWKEHORZZHUHYHUVHWKH
GLVWULFWFRXUW¶VJUDQWRIWKHSUHOLPLQDU\LQMXQFWLRQ

-- 1 of 8 --

1R 1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO

0LNH 9DQ 5\Q LV D IRUPHU 8QLYHUVLW\ RI 0LFKLJDQ KRFNH\ SOD\HU
9DQ 5\Q ZDV GUDIWHG E\ WKH 1HZ -HUVH\ 'HYLOV DQ 1+/ KRFNH\ WHDP
ZKLOH VWLOO D VWXGHQW DW 0LFKLJDQ ,Q -XQH WKH 'HYLOV DFTXLUHG WKH
H[FOXVLYH ULJKWV WR QHJRWLDWH ZLWK DQG VLJQ 9DQ 5\Q 9DQ 5\Q SOD\HG
KRFNH\ IRU 0LFKLJDQ GXULQJ WKH VHDVRQ $IWHU WKDW VHDVRQ 9DQ
5\Q GHFLGHG WR H[SORUH KLV RSWLRQV WR EHFRPH D SURIHVVLRQDO KRFNH\
SOD\HU 9DQ 5\Q WRRN DGYDQWDJH RI WKH 2+/ UXOH LQ HIIHFW DW WKDW WLPH
ZKLFK DOORZHG FOXEV WR VLJQ RYHUDJH SOD\HUV UHJDUGOHVV RI ZKHUH WKH\ KDG
SOD\HG WKH SUHYLRXV VHDVRQ DQG KH VLJQHG ZLWK WKH 6DUQLD 6WLQJ 3XUVXDQW
WR WKH &ROOHFWLYH %DUJDLQLQJ $JUHHPHQW &%$ EHWZHHQ WKH 1+/ DQG WKH
1+/3$ LI 1HZ -HUVH\ GLG QRW VLJQ 9DQ 5\Q E\ -XQH KH ZRXOG
EHFRPH D IUHH DJHQW 7KHUHIRUH E\ VLJQLQJ ZLWK WKH 6WLQJ 9DQ 5\Q
EHOLHYHG WKDW KH ZRXOG EHFRPH DQ XQUHVWULFWHG IUHH DJHQW ZKLFK ZRXOG
KDYH DOORZHG KLP WR VLJQ ZLWK DQ\ 1+/ WHDP 1HZ -HUVH\ KRZHYHU
GHFODUHG WKDW 9DQ 5\Q¶V GHFLVLRQ WR SOD\ IRU WKH 6WLQJ UHQGHUHG KLP D
³GHIHFWHG´ SOD\HU XQGHU WKH &%$ WKHUHE\ SUHYHQWLQJ KLP IURP EHFRPLQJ
DQ XQUHVWULFWHG IUHH DJHQW 7KH 1+/3$ ILOHG D JULHYDQFH RQ 9DQ 5\Q¶V
,)$&78$/$1'352&('85$/+,6725<
7KH1+/3$DQXQLQFRUSRUDWHGODERUDVVRFLDWLRQRUJDQL]HG
XQGHU WKH ODZV RI 2QWDULR LV WKH H[FOXVLYH FROOHFWLYH
EDUJDLQLQJ UHSUHVHQWDWLYH IRU DOO FXUUHQW DQG IXWXUH 1+/
KRFNH\SOD\HUV7KH2+/LVRQHRIWKUHHDPDWHXUKRFNH\
OHDJXHVWKDWFRPSULVHWKH&DQDGLDQ+RFNH\/HDJXH &+/
7KH2+/FRQVLVWVRIWZHQW\WHDPVZKRVHSOD\HUVUDQJHLQDJH
IURPVL[WHHQWRWZHQW\:KLOHWKHYDVWPDMRULW\RIWKH2+/
FOXEVDUHORFDWHGZLWKLQ2QWDULR&DQDGDWZRRIWKHWHDPVDUH
ORFDWHGLQ0LFKLJDQDQGRQHWHDPLVORFDWHGLQ3HQQV\OYDQLD
$FFRUGLQJWRDSSHOOHHVWKH2+/LVDPDMRUVRXUFHRISOD\HUV
IRUWKH1+/DQGYDULRXVILQDQFLDODQGRWKHUDJUHHPHQWVH[LVW
EHWZHHQWKHWZRRUJDQL]DWLRQV
7KH2+/HOLJLELOLW\UXOHVSURYLGHWKDWHDFKWHDPPD\KDYH
RQO\ WKUHH WZHQW\\HDUROG SOD\HUV W\SLFDOO\ UHIHUUHG WR DV
³RYHUDJH´ SOD\HUV ,Q DGGLWLRQ WR OLPLWLQJ WKH QXPEHU RI
RYHUDJHSOD\HUVWKH2+/DGRSWHGDUXOHLQ$XJXVWRI
XQGHUZKLFKDQ\RYHUDJHSOD\HUVLJQHGE\DQ2+/WHDPPXVW
KDYHEHHQRQD&DQDGLDQ+RFNH\$VVRFLDWLRQ &+$ RU86$
+RFNH\3OD\HU¶V5HJLVWUDWLRQ&HUWLILFDWHWKHSUHYLRXVVHDVRQ
7KLVUXOHFRPPRQO\UHIHUUHGWRDVWKH9DQ5\Q5XOH DOVR
1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO
1R
EHKDOI FKDOOHQJLQJ 1HZ -HUVH\¶V SRVLWLRQ DQG WKH 1+/3$ SUHYDLOHG 9DQ
5\Q WKHQ VLJQHG ZLWK WKH 6W /RXLV %OXHV DQRWKHU 1+/ WHDP DQG
UHFHLYHG KLJKHU FRPSHQVDWLRQ WKDQ WKH 'HYLOV RIIHUHG KLP 6KRUWO\
WKHUHDIWHU WKH 2+/ WHDPV DJUHHG WR WKH QHZ 9DQ 5\Q 5XOH HIIHFWLYHO\
EDUULQJ WZHQW\\HDUROG 8QLWHG 6WDWHV FROOHJH SOD\HUV IURP SOD\LQJ LQ WKH
2+/
UHIHUUHGWRDV³WKH5XOH´ HIIHFWLYHO\SUHYHQWV2+/WHDPV
IURP VLJQLQJ DQ\ WZHQW\\HDUROG 8QLWHG 6WDWHV FROOHJH
KRFNH\ SOD\HUV EHFDXVH WKH 1DWLRQDO &ROOHJLDWH $WKOHWLF
$VVRFLDWLRQ 1&$$ GRHV QRW DOORZ LQGLYLGXDOV KROGLQJ D
&+$RU86$+RFNH\3OD\HU¶V5HJLVWUDWLRQ&HUWLILFDWHWRSOD\
KRFNH\DWDQ1&$$VFKRRO
$QWKRQ\$TXLQRLVDWZHQW\\HDUROGKRFNH\SOD\HUZKR
KDV EHHQ DIIHFWHG E\ WKH 9DQ 5\Q 5XOH $W DJH VL[WHHQ
$TXLQRD&DQDGLDQFLWL]HQZDVGUDIWHGE\DQ2+/WHDPWKH
2ZHQ 6RXQG $WWDFN ,QVWHDG RI SOD\LQJ IRU WKH $WWDFN
$TXLQRFKRVHWRDWWHQG0HUULPDFN&ROOHJHLQ0DVVDFKXVHWWV
$TXLQREHJDQSOD\LQJKRFNH\DW0HUULPDFNGXULQJWKH
VHDVRQ DQG SOD\HG IRU WKUHH VHDVRQV ,Q -XQH
$TXLQRZDVGUDIWHGE\WKH'DOODV6WDUVDQ1+/KRFNH\WHDP
'XULQJWKHVHDVRQWKH$WWDFNWUDGHGLWVULJKWVWR
$TXLQRWRWKH2VKDZD*HQHUDOVDQRWKHU2+/WHDP:KLOH
DWWHQGLQJ 0HUULPDFN &ROOHJH $TXLQR ZDV SODFHG RQ WKH
*HQHUDOV¶ ³SURWHFWHG OLVW´ ZKLFK SUHYHQWHG $TXLQR IURP
QHJRWLDWLQJRUVLJQLQJZLWKDQ\RWKHUWHDPLQWKH&+/
$TXLQRGHFLGHGDJDLQVWUHWXUQLQJWR0HUULPDFNIRUDIRXUWK
VHDVRQ$IWHUGHFLGLQJQRWWRUHWXUQWR0HUULPDFN$TXLQR
EHOLHYHGWKDWKHKDGWZRRSWLRQVIRUZRUNLQJWRZDUGDFDUHHU
LQWKH1+/$TXLQRFRXOGDWWHPSWWRVLJQZLWKDQGSOD\IRU
WKHWHDPWKDWGUDIWHGKLPWKH6WDUV6LJQLQJZLWKWKH6WDUV
KRZHYHUZRXOGUHVXOWLQKLVEHFRPLQJDUHVWULFWHGDJHQWZLWK
WKDWWHDPIRUWKHQH[WHOHYHQ\HDUV,QWKHDOWHUQDWLYH$TXLQR
FRXOGSOD\LQWKH&+/PRVWOLNHO\IRUWKH*HQHUDOVDQ2+/
WHDPIRURQH\HDUDVDQRYHUDJHSOD\HUZKLFKZRXOGDOORZ
KLP WR EHFRPH D IUHH DJHQW LQ 7KH 9DQ 5\Q 5XOH
KRZHYHU FXUUHQWO\ SUHYHQWV $TXLQR IURP SOD\LQJ IRU WKH

-- 2 of 8 --

1R 1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO

$SSHOODQWV DWWHPSW WR DSSHDO WKH GLVWULFW FRXUW¶V GHFLVLRQ GHQ\LQJ
WKHLU PRWLRQ WR GLVPLVV RQ IRUXP QRQ FRQYHQLHQV JURXQGV $SSHOODQWV
DUJXH WKDW WKH RUGHU LV DSSHDODEOH EHFDXVH LW VHUYHG DV D EDVLV IRU JUDQWLQJ
WKH LQMXQFWLRQ DQG ZDV WKHUHIRUH LQH[WULFDEO\ LQWHUWZLQHG ZLWK WKH GLVWULFW
FRXUW¶V UXOLQJ JUDQWLQJ WKH SUHOLPLQDU\ LQMXQFWLRQ $Q DSSHOODWH FRXUW KDV
GLVFUHWLRQ WR H[HUFLVH SHQGHQW DSSHOODWH MXULVGLFWLRQ ³ZKHUH WKH DSSHDODEOH
DQG QRQDSSHDODEOH LVVXHV DUH LQH[WULFDEO\ LQWHUWZLQHG´ PHDQLQJ ³ZKHQ
UHVROXWLRQ RI WKH FROODWHUDO DSSHDO QHFHVVDULO\ UHVROYHV WKH SHQGHQW
FODLP DV ZHOO´ %UHQQDQ Y 7RZQVKLS RI 1RUWKYLOOH )G
WK &LU TXRWDWLRQV RPLWWHG ,Q WKH SUHVHQW FDVH D UHVROXWLRQ
RI WKH DSSHDO RI WKH GLVWULFW FRXUW¶V JUDQW RI D SUHOLPLQDU\ LQMXQFWLRQ GRHV
QRW QHFHVVDULO\ UHVROYH WKH LVVXH RI ZKHWKHU 0LFKLJDQ LV D SURSHU IRUXP
0RUHRYHU WKH GHFLVLRQ RI ZKHWKHU WR GLVPLVV D FDVH XQGHU WKH GRFWULQH RI
IRUXP QRQ FRQYHQLHQV UHVWV ZLWKLQ WKH VRXQG GLVFUHWLRQ RI WKH WULDO FRXUW
DQG WKH GHQLDO RI VXFK D PRWLRQ LV QRW DQ DSSHDODEOH LQWHUORFXWRU\ RUGHU
XQGHU 86& † 6HH 9DQ &DXZHQEHUJKH Y %LDUG 86
7KHUHIRUH ZH GHFOLQH WR FRQVLGHU DSSHOODQWV¶ DSSHDO RI WKH
GLVWULFW FRXUW¶V GHQLDO RI DSSHOODQWV¶ PRWLRQ WR GLVPLVV IRU IRUXP QRQ
FRQYHQLHQV
*HQHUDOV:KLOHWKH1+/GUDIWVPDQ\SOD\HUVIURPWKH2+/
ZKLFK PLUURUV WKH VW\OH RI SOD\ UXOHV SUDFWLFH DQG JDPH
VFKHGXOHRIWKH1+/SOD\HUVDUHDOVRGUDIWHGIURP$PHULFDQ
FROOHJHVDQGKLJKVFKRROV&DQDGLDQ-XQLRUOHDJXHV$PHULFDQ
-XQLRU/HDJXHVPLQRUSURIHVVLRQDOOHDJXHV³PLGJHW´OHDJXHV
DQGLQWHUQDWLRQDOOHDJXHV:KLOHWKHSDUWLHVGLVDJUHHDERXW
$TXLQR¶V RSWLRQV IRU EHFRPLQJ DQ XQUHVWULFWHG IUHH DJHQW
$TXLQR¶VSRVLWLRQLVWKDWSOD\LQJIRUWKH*HQHUDOVLVWKHRQO\
URXWHWREHFRPLQJDQXQUHVWULFWHGIUHHDJHQW+LVSRVLWLRQLV
WKDWDVVXPLQJKHFRXOGMRLQDSURIHVVLRQDOOHDJXHRWKHUWKDQ
WKH1+/RUWKH&+/KHZRXOGIDOOLQWR³GHIHFWHG´VWDWXV
FDXVLQJWKH6WDUVWRKROGKLVH[FOXVLYHULJKWVLQSHUSHWXLW\
2Q0DUFKDSSHOOHH1+/3$EURXJKWWKLVDFWLRQ
DOOHJLQJWKDWLQDGRSWLQJWKH9DQ5\Q5XOHWKH2+/DQGLWV
PHPEHU WHDPV FRQVSLUHG ZLWK WKH 1+/ LQ YLRODWLRQ RI
6HFWLRQRIWKH6KHUPDQ$FW7KHRULJLQDOFRPSODLQWVRXJKW
GHFODUDWRU\ DQG LQMXQFWLYH UHOLHI RQ EHKDOI RI SUHVHQW DQG
IXWXUH1+/SOD\HUV2Q0D\DSSHOODQWVPRYHGWR
GLVPLVVRQWKHJURXQGVRIIRUXPQRQFRQYHQLHQVDQGODFNRI
SHUVRQDOMXULVGLFWLRQ7KHGLVWULFWFRXUWGHQLHGDSSHOODQWV¶
1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO
1R
PRWLRQWRGLVPLVV1DW¶O+RFNH\/HDJXH3OD\HUV¶$VV¶QY
3O\PRXWK:KDOHUV+RFNH\&OXEHWDO)6XSSG
('0LFK 2Q-XO\DSSHOOHHVPRYHGWR
DGG $QWKRQ\ $TXLQR DV D SODLQWLII DQG UHTXHVWHG D
SUHOLPLQDU\LQMXQFWLRQRQKLVEHKDOI
2Q$XJXVWWKHGLVWULFWFRXUWJUDQWHG1+/3$¶V
UHTXHVWWRDPHQGWKHFRPSODLQWWRDGG$TXLQRDVDSODLQWLII
DQG JUDQWHG D SUHOLPLQDU\ LQMXQFWLRQ RUGHULQJ WKH 2+/ WR
UHIUDLQIURPDSSO\LQJWKH9DQ5\Q5XOHZKLFKSURKLELWVDQ\
2+/WHDPIURPFRQVLGHULQJRUKLULQJ$TXLQR7KLVWLPHO\
DSSHDOIROORZHG
$IWHUILOLQJWKHLUDSSHDODSSHOODQWVVXEPLWWHGDPRWLRQWR
VWD\ WKH SUHOLPLQDU\ LQMXQFWLRQ SHQGLQJ GLVSRVLWLRQ RI WKH
DSSHDO2Q1RYHPEHUDSDQHORIWKLVFRXUWJUDQWHG
DSSHOODQWV¶PRWLRQIRUDVWD\DQGRUGHUHGDQH[SHGLWHGDSSHDO
7KHFDVHZDVDVVLJQHGWRWKLVSDQHODQGSODFHGRQWKHRUDO
DUJXPHQWFDOHQGDUIRU)HEUXDU\$SSHOOHHVWKHQILOHG
DPRWLRQVHHNLQJUHFRQVLGHUDWLRQDQGUHTXHVWLQJWKDWWKHFRXUW
OLIWWKHVWD\7KLVSDQHOGHQLHGWKHPRWLRQIRUUHFRQVLGHUDWLRQ
DQGGHIHUUHGUXOLQJRQWKHLVVXHVVXUURXQGLQJWKHSUHOLPLQDU\
LQMXQFWLRQXQWLODIWHURUDODUJXPHQW
,,$1$/<6,6
$ )RUHLJQ7UDGH$QWLWUXVW,PSURYHPHQWV$FW
$SSHOODQWVILUVWDUJXHWKDWWKLVFRXUWODFNVVXEMHFWPDWWHU
MXULVGLFWLRQ RYHU $TXLQR¶V DQWLWUXVW FODLPV EHFDXVH WKHVH
FODLPV DUH EDUUHG E\ WKH )RUHLJQ 7UDGH $QWLWUXVW
,PSURYHPHQWV$FW )7$,$ 86&†DZKLFKOLPLWVWKH
H[WUDWHUULWRULDODSSOLFDWLRQRIWKH6KHUPDQ$FW,QUXOLQJRQ
DSSHOOHHV¶PRWLRQWRDPHQGWKHGLVWULFWFRXUWGHWHUPLQHGWKDW
WKH )7$,$ GLG QRW SURKLELW WKH FRXUW IURP H[HUFLVLQJ
MXULVGLFWLRQRYHU$TXLQR¶VDQWLWUXVWFODLPVEHFDXVH$TXLQR
DGHTXDWHO\DOOHJHGWKDWWKH9DQ5\Q5XOHLVDQXQUHDVRQDEOH
UHVWUDLQWRIWUDGHDQGWKDWWKH5XOHVLJQLILFDQWO\DIIHFWV8QLWHG
6WDWHVFRPPHUFH$SSHOODQWVQRZDUJXHQRWRQO\ WKDWWKH
)7$,$EDUV$TXLQR¶VDQWLWUXVWFODLPVEXWDOVRWKDWWKHEDUWR

-- 3 of 8 --

1R 1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO

$TXLQR¶V DQWLWUXVW FODLPV GHSULYHG WKH GLVWULFW FRXUW RI
MXULVGLFWLRQ WR LVVXH DQ LQMXQFWLRQ $SSHOODQWV EDVH WKH
DUJXPHQWWKDWWKHGLVWULFWFRXUWODFNHGMXULVGLFWLRQWRHQMRLQ
DSSOLFDWLRQRIWKH5XOHRQDFRQWHQWLRQWKDWWKH1+/3$GLG
QRWGHPRQVWUDWHDQ\ULJKWWRDSUHOLPLQDU\LQMXQFWLRQRQLWV
RZQEHKDOI
$SSHOODQWV¶ DUJXPHQW IDLOV IRU WZR UHDVRQV )LUVW WKH
GLVWULFW FRXUW¶V MXULVGLFWLRQ WR LVVXH DQ LQMXQFWLRQ ZDV QRW
GHSHQGHQWRQWKHYLDELOLW\RI$TXLQR¶VFODLPV,QGHQ\LQJWKH
PRWLRQ WR GLVPLVV WKH GLVWULFW FRXUW GHWHUPLQHG WKDW WKH
1+/3$KDGVWDQGLQJWRVHHNLQMXQFWLYHUHOLHIRQEHKDOIRI
SUHVHQW DQG IXWXUH 1+/ SOD\HUV 7KH PRWLRQ IRU D
SUHOLPLQDU\ LQMXQFWLRQ VSHFLILFDOO\ QRWHG WKDW WKH 1+/3$
VRXJKWUHOLHIRQEHKDOIRI$TXLQRLIKHZDVQRWDGGHGDVD
SDUW\ &RQVHTXHQWO\ HYHQ LI WKH )7$,$ EDUV $TXLQR¶V
FODLPVWKH1+/3$¶VFODLPIRULQMXQFWLYHUHOLHIRQKLVEHKDOI
DQGRQEHKDOIRIRWKHUSOD\HUVUHPDLQV6HFRQGLQWKHGLVWULFW
FRXUWDSSHOODQWVUDLVHGWKHDUJXPHQWWKDWWKH)7$,$EDUUHG
$TXLQR¶VFODLPVLQUHVSRQVHWRWKHPRWLRQWRDPHQG:H
DSSURSULDWHO\FRQVLGHUWKHLVVXHRQO\LQWKHFRQWH[WLQZKLFK
LW ZDV UDLVHG LQ WKH GLVWULFW FRXUW 6HH (VWDWH RI 4XLUN Y
&,5)G WK&LU <HWWKHGLVWULFW
FRXUW¶V JUDQW RI WKH PRWLRQ WR DPHQG LV QRW DQ DSSHDODEOH
LQWHUORFXWRU\RUGHUXQGHU86&†7KXVDQDSSHDO
RIWKH)7$,$LVVXHLVQRWSURSHUO\EHIRUHWKHFRXUW
% 3UHOLPLQDU\,QMXQFWLRQ
:HUHYLHZDORZHUFRXUW¶VGHFLVLRQWRJUDQWDSUHOLPLQDU\
LQMXQFWLRQIRUDEXVHRIGLVFUHWLRQ,QUH'H/RUHDQ0RWRU&R
)G WK &LU 7KH GLVWULFW FRXUW¶V
GHWHUPLQDWLRQZLOOEHGLVWXUEHGRQO\LIWKHGLVWULFWFRXUWUHOLHG
XSRQFOHDUO\HUURQHRXVILQGLQJVRIIDFWLPSURSHUO\DSSOLHG
WKH JRYHUQLQJ ODZ RU XVHG DQ HUURQHRXV OHJDO VWDQGDUG
1LJKWFOXEV,QFY&LW\RI3DGXFDK)G WK
&LU TXRWLQJ&RQQHFWLRQ'LVWULE&RY5HQR)G
WK&LU :KHQFRQVLGHULQJDPRWLRQIRU
SUHOLPLQDU\LQMXQFWLRQWKHGLVWULFWFRXUWVKRXOGFRQVLGHUIRXU
1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO
1R
IDFWRUV ZKHWKHUWKHPRYLQJSDUW\KDVDVWURQJOLNHOLKRRG
RIVXFFHVVRQWKHPHULWV ZKHWKHUWKHPRYLQJSDUW\ZLOO
VXIIHULUUHSDUDEOHLQMXU\ZLWKRXWWKHLQMXQFWLRQ ZKHWKHU
WKHLVVXDQFHRIWKHLQMXQFWLRQZRXOGFDXVHVXEVWDQWLDOKDUPWR
RWKHUVDQG ZKHWKHUWKHSXEOLFLQWHUHVWZRXOGEHVHUYHGE\
LVVXDQFH RI WKH LQMXQFWLRQ ,G 7KH IRXU FRQVLGHUDWLRQV
DSSOLFDEOHWRSUHOLPLQDU\LQMXQFWLRQGHFLVLRQVDUHIDFWRUVWREH
EDODQFHGQRWSUHUHTXLVLWHVWKDWPXVWEHPHW'H/RUHDQ
)GDW 0RUHRYHUDGLVWULFWFRXUWLVQRWUHTXLUHGWR
PDNHVSHFLILFILQGLQJVFRQFHUQLQJHDFKRIWKHIRXUIDFWRUV
XVHGLQGHWHUPLQLQJDPRWLRQIRU SUHOLPLQDU\LQMXQFWLRQLI
IHZHUIDFWRUVDUHGHWHUPLQDWLYHRIWKHLVVXH,G
/LNHOLKRRGRI6XFFHVVRQWKH0HULWV
$IWHUUHFRJQL]LQJWKDWWKHFRXUWPXVWGHWHUPLQHZKHWKHUWKH
9DQ5\Q5XOHDPRXQWVWRDQXQUHDVRQDEOHUHVWUDLQWRIWUDGH
LQYLRODWLRQRI6HFWLRQRIWKH6KHUPDQ$FWXQGHUHLWKHUD
SHUVHDQDO\VLVRUDUXOHRIUHDVRQDQDO\VLVWKHGLVWULFWFRXUW
DSSOLHGDSHUVHDQDO\VLVEHFDXVHLWIRXQGWKDWWKH9DQ5\Q
5XOHFRQVWLWXWHVDJURXSER\FRWW8QGHUWKHSHUVHDQDO\VLV
WKHGLVWULFWFRXUWFRQFOXGHGWKDWDSSHOOHHVKDGDVXEVWDQWLDO
OLNHOLKRRGRIVXFFHVVRQWKHPHULWV $SSHOODQWVFRQWHQGWKDW
WKH GLVWULFW FRXUW HUUHG LQ DSSO\LQJ D SHU VH UXOH DQG LQ LWV
FRQFOXVLRQDERXWWKHOLNHOLKRRGRIVXFFHVVRQWKHPHULWV
6HFWLRQRIWKH6KHUPDQ$FWSURYLGHVWKDW³(YHU\FRQWUDFW
FRPELQDWLRQLQWKHIRUPRIWUXVWRURWKHUZLVHRUFRQVSLUDF\
LQUHVWUDLQWRIWUDGHRUFRPPHUFHDPRQJWKHVHYHUDO6WDWHVRU
ZLWK IRUHLJQ QDWLRQV LV KHUHE\ GHFODUHG WR EH LOOHJDO´
86&†%HFDXVHQHDUO\HYHU\FRQWUDFWWKDWELQGVSDUWLHV
WR DQ DJUHHG FRXUVH RI FRQGXFW ³LV D UHVWUDLQW RI WUDGH´ RI
VRPH VRUW WKH 6XSUHPH &RXUW KDV OLPLWHG WKH UHVWULFWLRQV
FRQWDLQHGLQ6HFWLRQWREDURQO\³XQUHDVRQDEOHUHVWUDLQWVRI
WUDGH´1DW¶O&ROOHJLDWH$WKOHWLF$VV QY%RDUGRI5HJHQWVRI
8QLYRI2NOD86 KHUHLQDIWHUUHIHUUHGWR
DV³%RDUGRI5HJHQWV´ ,QRUGHUWRHVWDEOLVKWKHLUDQWLWUXVW
FODLPDSSHOOHHVPXVWSURYHWKDWDSSHOODQWV SDUWLFLSDWHGLQ
DQ DJUHHPHQW WKDW XQUHDVRQDEO\ UHVWUDLQHG WUDGH LQ WKH

-- 4 of 8 --

1R 1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO

UHOHYDQWPDUNHW6HH/DZY1DW¶O&ROOHJLDWH$WKOHWLF$VV Q
)G WK &LU 7KH GLVWULFW FRXUW
IRXQG DQG WKH SDUWLHV GR QRW FRQWHVW WKDW DSSHOODQWV KDYH
HQWHUHGLQWRDQDJUHHPHQWYLDWKHLUDGRSWLRQRIWKH9DQ5\Q
5XOH$SSHOODQWVKRZHYHUFRQWHVWWKHGLVWULFWFRXUW¶VILQGLQJ
WKDWWKH9DQ5\Q5XOHLVDQXQUHDVRQDEOHUHVWUDLQWRIWUDGH
³7ZRDQDO\WLFDODSSURDFKHVDUHXVHGWRGHWHUPLQHZKHWKHU
DGHIHQGDQW¶VFRQGXFWXQUHDVRQDEO\UHVWUDLQVWUDGHWKHSHUVH
UXOHDQGWKHUXOHRIUHDVRQ´,GDW FLWLQJ6&)&,/&
,QFY9LVD86$,QF )G WK&LU
7KHSHUVHUXOHLGHQWLILHVFHUWDLQSUDFWLFHVWKDW³DUHHQWLUHO\
YRLG RI UHGHHPLQJ FRPSHWLWLYH UDWLRQDOHV´ ,G ,I D FRXUW
GHWHUPLQHVWKDWDSUDFWLFHLVLOOHJDOSHUVHQRH[DPLQDWLRQRI
WKH SUDFWLFH¶V LPSDFW RQ WKH PDUNHW RU WKH SURFRPSHWLWLYH
MXVWLILFDWLRQV IRU WKH SUDFWLFH LV QHFHVVDU\ IRU ILQGLQJ D
YLRODWLRQRIDQWLWUXVWODZ,G7KHUXOHRIUHDVRQKRZHYHU
UHTXLUHVDFRXUWWRDQDO\]HWKHKLVWRU\RIWKHUHVWUDLQWDQGWKH
UHVWUDLQW¶V HIIHFW RQ FRPSHWLWLRQ ,G VHH 6PLWK Y 3UR
)RRWEDOO,QF)G '&&LU 7KH
UXOHRIUHDVRQDQDO\VLVHPSOR\VDEXUGHQVKLIWLQJIUDPHZRUN
6HH&DOLIRUQLD'HQWDO$VV¶QY)7&86Q
)LUVWWKHSODLQWLIIPXVWHVWDEOLVKWKDWWKHUHVWUDLQW
SURGXFHV VLJQLILFDQW DQWLFRPSHWLWLYH HIIHFWV ZLWKLQ WKH
UHOHYDQW SURGXFW DQG JHRJUDSKLF PDUNHWV 6HH 7DQDND Y
8QLYRI6RXWKHUQ&DO)G WK&LU
³,IWKHSODLQWLIIPHHWVWKLVEXUGHQWKHGHIHQGDQWPXVWFRPH
IRUZDUG ZLWK HYLGHQFH RI WKH UHVWUDLQW¶V SURFRPSHWLWLYH
HIIHFWV´ WR HVWDEOLVK WKDW WKH DOOHJHG FRQGXFW MXVWLILHV WKH
RWKHUZLVHDQWLFRPSHWLWLYHLQMXULHV,GVHHDOVR8QLWHG6WDWHV
Y%URZQ8QLY)G G&LU ,IWKH
GHIHQGDQWLVDEOHWRGHPRQVWUDWHSURFRPSHWLWLYHHIIHFWVWKH
SODLQWLIIWKHQPXVWVKRZWKDWDQ\OHJLWLPDWHREMHFWLYHVFDQEH
DFKLHYHGLQDVXEVWDQWLDOO\OHVVUHVWULFWLYHPDQQHU/DZ
)GDW
7KH 6XSUHPH &RXUW KDV VWDWHG WKDW WKH SHU VH UXOH LV D
³GHPDQGLQJ´VWDQGDUGWKDWVKRXOGEHDSSOLHGRQO\LQFOHDUFXW
FDVHV&RQWLQHQWDO79,QFY*7(6\OYDQLD,QF86
1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO
1R
$SSHOOHHV DUJXH WKDW WKH GLVWULFW FRXUW FRQVLGHUHG DQG UHMHFWHG
DSSHOODQWV¶ SURIIHUHG MXVWLILFDWLRQV IRU WKH 9DQ 5\Q 5XOH 7KH GLVWULFW
FRXUW KRZHYHU FOHDUO\ VWDWHG WKDW LW ZDV DSSO\LQJ WKH SHU VH UXOH DQG
LQVHUWHG D IRRWQRWH DW WKH HQG RI LWV PHULWV DQDO\VLV QRWLQJ WKDW WKH FDVHV
FLWHG E\ GHIHQGDQWV LQ VXSSRUW RI WKH DSSOLFDWLRQ RI WKH UXOH RI UHDVRQ
ZHUH ³GLVWLQJXLVKDEOH RQ WKH IDFWV´
DFFRUG:DONHU3URFHVV(TXLS,QFY)RRG
0DFK &KHP&RUS86 ILQGLQJWKDW
³WKHDUHDRISHUVHLOOHJDOLW\LVFDUHIXOO\OLPLWHG´ 7KHUHIRUH
³FRXUWVFRQVLVWHQWO\KDYHDQDO\]HGFKDOOHQJHGFRQGXFWXQGHU
WKHUXOHRIUHDVRQZKHQGHDOLQJZLWKDQLQGXVWU\LQZKLFK
VRPHKRUL]RQWDOUHVWUDLQWVDUHQHFHVVDU\IRUWKHDYDLODELOLW\RI
DSURGXFW´VXFKDVVSRUWVOHDJXHV/DZ)GDW
0RUHRYHUWKH6XSUHPH&RXUWKDVUHFRJQL]HGWKDWLQFDVHV
LQYROYLQJ LQGXVWULHV ³LQ ZKLFK KRUL]RQWDO UHVWUDLQWV RQ
FRPSHWLWLRQDUHHVVHQWLDOLIWKHSURGXFWLVWREHDYDLODEOHDW
DOO´WKHUXOHRIUHDVRQDQDO\VLVVKRXOGDSSO\6HH%RDUGRI
5HJHQWV86DW%DQNVY1&$$)G
WK &LU ILQGLQJ WKDW ³>X@QGHU WKH 6XSUHPH
&RXUW¶V UXOLQJ LQ >%RDUG RI 5HJHQWV@ DOOHJDWLRQV WKDW WKH
1&$$UXOHVUHVWUDLQWUDGHRUFRPPHUFHPD\QRWEHYLHZHG
DVSHUVHYLRODWLRQVRIWKH6KHUPDQ$FW´ VHHDOVR0DUN&
$QGHUVRQ 6HOI5HJXODWLRQ DQG /HDJXH 5XOHV 8QGHU WKH
6KHUPDQ$FW&DS8/5HY QRWLQJWKDW
³>L@WLVQRZZHOOHVWDEOLVKHGWKURXJKWKHP\ULDGRIFDVHODZ
WKDWUXOHVDQGUHJXODWLRQVQRUPDOO\HPSOR\HGE\SURIHVVLRQDO
VSRUWVOHDJXHVDQGRWKHURUJDQL]DWLRQVDUHQRWVXEMHFWWRWKH
SHU VH UXOH EXW UDWKHU ZLOO EH DQDO\]HG XQGHU WKH UXOH RI
UHDVRQ´ 5REHUW()UHLWDV2YHUYLHZ/RRNLQJ$KHDGDW
6SRUWV DQG WKH $QWLWUXVW /DZ $QWLWUXVW 6SULQJ
VWDWLQJ WKDW ³LW LV QRZ VHWWOHG WKDW WKH SUDFWLFHV
W\SLFDOO\ DVVRFLDWHG ZLWK WKH RUJDQL]DWLRQ RI SURIHVVLRQDO
VSRUWVOHDJXHVDQGRWKHURUJDQL]DWLRQVVXFKDVWKH1&$$DUH
QRW VXEMHFW WR WKH SHU VH UXOH´ %HFDXVH KRFNH\ OHDJXHV
LQYROYHWKHVDPHW\SHVRIUHVWUDLQWVGLVFXVVHGE\WKH6XSUHPH
&RXUWLQ%RDUGRI5HJHQWVWKHGLVWULFWFRXUWHUUHGLQIDLOLQJWR
DSSO\WKHUXOHRIUHDVRQDQDO\VLV

-- 5 of 8 --

1R 1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO

$OORIWKHFDVHVUHOLHGXSRQE\WKHGLVWULFWFRXUWLQDSSO\LQJ
WKH SHUVHUXOHZHUHGHFLGHGSULRUWRWKH6XSUHPH&RXUW¶V
GHFLVLRQ LQ %RDUG RI 5HJHQWV $IWHU WKH 6XSUHPH &RXUW¶V
GHFLVLRQLQ%RDUGRI5HJHQWVFRXUWVKDYHDSSOLHGWKHUXOHRI
UHDVRQWRHOLJLELOLW\UXOHVDQGIUHTXHQWO\FRQFOXGHGWKDWVXFK
UXOHVGRQRWYLRODWHDQWLWUXVWODZ6HHHJ7DQDND)G
DW0F&RUPDFNY1&$$)G
WK&LU 7RVFDQRY3*$7RXU,QF)6XSSG
('&DO $VGLVFXVVHGDERYHXQGHUWKH
UXOH RI UHDVRQ DSSHOOHHV KDYH WKH LQLWLDO EXUGHQ RI
GHPRQVWUDWLQJVLJQLILFDQWDQWLFRPSHWLWLYHHIIHFWVZLWKLQWKH
UHOHYDQWSURGXFWDQGJHRJUDSKLFPDUNHWV,QWKHSUHVHQWFDVH
WKH³SURGXFW´PDGHDYDLODEOHE\WKH2+/LVDPDWHXUKRFNH\
7KHUH DUH KRUL]RQWDO UHVWUDLQWV WKDW DUH QHFHVVDU\ IRU WKH
SURGXFWWRH[LVWLQFOXGLQJUXOHVVXFKDVWKRVHUHVWULFWLQJWKH
QXPEHU RI SOD\HUV DQG WKH DJHV RI SOD\HUV 6HH %RDUG RI
5HJHQWV86DW QRWLQJWKDWZKDWDVSRUWVOHDJXHDQG
LWVPHPEHUV³PDUNHWLVFRPSHWLWLRQLWVHOI2IFRXUVH
WKLVZRXOGEHFRPSOHWHO\LQHIIHFWLYHLIWKHUHZHUHQRUXOHV
WRFUHDWHDQGGHILQHWKHFRPSHWLWLRQWREHPDUNHWHG´ ,WLV
GLIILFXOWKRZHYHUWRGHILQHWKHUHOHYDQWPDUNHW³7KHWHUP
μUHOHYDQWPDUNHW¶HQFRPSDVVHVQRWLRQVRIJHRJUDSK\DVZHOO
DVSURGXFWXVHTXDOLW\DQGGHVFULSWLRQ´7DQDND)G
DW TXRWDWLRQRPLWWHG ³)DLOXUHWRLGHQWLI\DUHOHYDQW
PDUNHW LV D SURSHU JURXQG IRU GLVPLVVLQJ D 6KHUPDQ $FW
FODLP´,G FLWLQJ%LJ%HDU/RGJLQJ$VV QY6QRZ6XPPLW
,QF)G WK&LU
$SSHOOHHV GR QRW GHILQH D UHOHYDQW PDUNHW LQ WKHLU
FRPSODLQW,QVWHDGWKH\UHO\RQWKHGLVWULFWFRXUW¶VVWDWHPHQW
LQWKHRUGHUJUDQWLQJWKHSUHOLPLQDU\LQMXQFWLRQWKDW³3ODLQWLII
KDV GHILQHG WKH μPDUNHW¶ DW LVVXH KHUH DV WKH μPDUNHW IRU
FRPSHWLWLRQDPRQJ2+/DQG&+/WHDPVIRUSOD\HUVHUYLFHV¶
DQGDUJXHVWKDWWKH5XOHOLPLWVFRPSHWLWLRQDPRQJDJURXS
RISOD\HUVLQVXFKDPDUNHWZKLFKKDVYDOXHWRWKH1+/´
$FFRUGLQJWRWKHGLVWULFWFRXUW³>E@HFDXVHKHLVD\HDUROG
86 FROOHJH KRFNH\ SOD\HU $TXLQR LV H[FOXGHG IURP WKLV
PDUNHW´ 7KH PDUNHW IRU SOD\HU VHUYLFHV LQ WKH 2+/
KRZHYHULVQRWDPDUNHWWKDWLQYROYHVHFRQRPLFFRPSHWLWLRQ
1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO
1R
7KH2+/UXOHVFOHDUO\OLPLWWKHDPRXQWDSOD\HUPD\EHSDLG
WRVFKRROLQJDQGDOLPLWHGVWLSHQG,QVWHDGWKHHIIHFWRQWKH
PDUNHW DV GHILQHG E\ DSSHOOHHV LV RQ DWKOHWLF FRPSHWLWLRQ
ZKLFKLVQRWSURWHFWHGE\WKHDQWLWUXVWODZV6HH7RVFDQR
)6XSSGDW FLWLQJ0 +7LUH&RY+RXVLHU5DFLQJ
7LUH &RUS )G VW &LU 0LG6RXWK
*UL]]OLHV Y 1DW¶O )RRWEDOO /HDJXH )G G &LU
7KHDSSOLFDWLRQRIWKH9DQ5\Q5XOHGRHVQRWUHVXOW
LQDQ\HFRQRPLFLQMXU\WRWKH³PDUNHWIRUFRPSHWLWLRQDPRQJ
2+/ DQG &+/ WHDPV IRU SOD\HU VHUYLFHV´ EXW PHUHO\
VXEVWLWXWHV RQH DUJXDEO\ OHVV VNLOOHG SOD\HU IRU DQRWKHU
DUJXDEO\PRUHVNLOOHGSOD\HU:KLOHDSOD\HUEDUUHGE\WKH
5XOHLVSUHFOXGHGIURPWDNLQJDGYDQWDJHRIWKHEHQHILWVRI
SOD\LQJ RQ DQ 2+/ WHDP QXPHURXV RWKHU FDWHJRULHV RI
SOD\HUVLQFOXGLQJDQ\RQHXQGHUVL[WHHQRURYHUWZHQW\DUH
VLPLODUO\EDUUHG
$SSHOODQWV DUJXH WKDW WKH UHOHYDQW PDUNHW VKRXOG QRW EH
FRQILQHGWRWKH2+/RUWKH&+/EXWUDWKHUWKDWWKHUHOHYDQW
PDUNHWVKRXOGEHGHILQHGDVDOORUJDQL]DWLRQVWKDWFRPSHWHIRU
VHUYLFHV RI KRFNH\ SOD\HUV DJHG VL[WHHQ WKURXJK WZHQW\
$FFRUGLQJWRDSSHOODQWVLQWKLVPDUNHWWKHSURIIHUHGHYLGHQFH
GHPRQVWUDWHVWKDWWKH9DQ5\Q5XOHLVSURFRPSHWLWLYH,WLV
KRZHYHUDSSHOOHHV¶GXW\WRDOOHJHWKDWWKH9DQ5\Q5XOHKDV
KDG VLJQLILFDQW DQWLFRPSHWLWLYH HIIHFWV ZLWKLQ D UHOHYDQW
PDUNHW6HH7DQDND)GDW7KHUHIRUHZH
GHFOLQH WRDSSO\WKHUXOHRIUHDVRQWRDYDULHW\RISRVVLEOH
³UHOHYDQWPDUNHWV´RUSURFHHGWRH[DPLQHWKHSURFRPSHWLWLYH
HIIHFWVRIWKH9DQ5\Q5XOHRQDPDUNHWWKDWKDVQRWEHHQ
DOOHJHGDVDUHOHYDQWPDUNHWE\DSSHOOHHV
:KLOHDSSHOOHHVKDYHHVWDEOLVKHGWKDWWKH9DQ5\Q5XOH
PLJKW UHVXOW LQ VLJQLILFDQW SHUVRQDO LQMXU\ WR $TXLQR
DSSHOOHHVKDYHIDLOHGWRSUHVHQW HYLGHQFHRIDQLQMXU\WRD
GHILQDEOHPDUNHW7KHDQWLWUXVWODZVZHUHHQDFWHGIRU³WKH
SURWHFWLRQ RI FRPSHWLWLRQ QRW FRPSHWLWRUV´ $WODQWLF
5LFKILHOG &R Y 86$ 3HWUROHXP &R 86
TXRWDWLRQRPLWWHG 7KHUHIRUHDSSHOOHHVKDYHIDLOHG
WR HVWDEOLVK WKDW WKH 9DQ 5\Q 5XOH KDV D VLJQLILFDQW

-- 6 of 8 --

1R 1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO

7KH IRXUWK IDFWRU LQ GHWHUPLQLQJ ZKHWKHU WR JUDQW D SUHOLPLQDU\
LQMXQFWLRQ DVNV ZKHWKHU WKH SXEOLF LQWHUHVW LV DGYDQFHG LQ LVVXLQJ WKH
LQMXQFWLRQ 7KH GLVWULFW FRXUW IRXQG WKLV IDFWRU ZHLJKHG LQ IDYRU RI
DSSHOOHHV EHFDXVH ³WKH SXEOLF LQWHUHVW LV EHVW VHUYHG E\ SURPRWLQJ
FRPSHWLWLRQ´ %HFDXVH DSSHOOHHV KDYH IDLOHG WR HVWDEOLVK D OLNHOLKRRG WKDW
WKH 9DQ 5\Q 5XOH LQMXUHV HFRQRPLF FRPSHWLWLRQ KRZHYHU WKH SXEOLF
LQWHUHVW QR ORQJHU ZHLJKV LQ IDYRU RI JUDQWLQJ D SUHOLPLQDU\ LQMXQFWLRQ
DQWLFRPSHWLWLYHHIIHFWRQDUHOHYDQWPDUNHW$WWKLVVWDJHRI
WKHOLWLJDWLRQDSSHOOHHVKDYHIDLOHGWRHVWDEOLVKWKDWWKHUHLVD
VXEVWDQWLDOOLNHOLKRRGRIVXFFHVVRQWKHPHULWVWRZDUUDQWD
SUHOLPLQDU\LQMXQFWLRQ
,UUHSDUDEOH+DUP
+DYLQJGHWHUPLQHGWKDWDSSHOOHHVKDYHQRWHVWDEOLVKHGD
VXEVWDQWLDO OLNHOLKRRG RI VXFFHVV RQ WKH PHULWV ZH QH[W
H[DPLQHZKHWKHU$TXLQRZLOOVXIIHULUUHSDUDEOHKDUPLIWKH
SUHOLPLQDU\ LQMXQFWLRQ GRHV QRW LVVXH 7KH GLVWULFW FRXUW
IRXQGWKDWWKHSUHOLPLQDU\LQMXQFWLRQZDVQHFHVVDU\EHFDXVH
WKHUH ZDV VXIILFLHQW HYLGHQFH WKDW $TXLQR FRXOG VXIIHU
LUUHSDUDEOHKDUPLQWKHDEVHQFHRIDQLQMXQFWLRQ7KHGLVWULFW
FRXUW UHFRJQL]HG WKDW ³>L@I >$TXLQR@ LV SURKLELWHG IURP
DWWHPSWLQJWRWU\RXWIRUDSODFHRIWKH2KVDZD>VLF@*HQHUDO¶V
>VLF@ URVWHU ZKHWKHU KLV >VLF@ LV UHWDLQHG RQ 2VKDZD¶V
SURWHFWHG OLVW RU QRW KH PD\ ORVH KLV ODVW RSSRUWXQLW\ WR
GHYHORSFULWLFDOVNLOOVLQDQHQYLURQPHQWWKDWFORVHO\PLPLFV
WKH1+/ZKLFKFRXOGSODFHKLPLQDQRSWLPDOSRVLWLRQIRUKLV
IXWXUH1+/FDUHHU´,QDGGLWLRQWKHGLVWULFWFRXUWQRWHGWKDW
³>K@HZLOODOVRORVHWKHRSSRUWXQLW\WRREWDLQIUHHDJHQWVWDWXV
WKHUHE\UHGXFLQJKLVEDUJDLQLQJSRZHUZLWKWKH1+/DQGWKH
DELOLW\ DVDIUHHDJHQW WRFKRRVHWKHEHVWFOXEORFDWLRQDQG
FRQWUDFW´
,QDSSHOOHHV¶VXSSOHPHQWDOUHSO\LQVXSSRUWRIWKHLUPRWLRQ
IRUUHFRQVLGHUDWLRQRIWKLVFRXUW¶VJUDQWRIDSSHOODQWV¶PRWLRQ
WR VWD\ WKH SUHOLPLQDU\ LQMXQFWLRQ DSSHOOHHV VWDWHG WKDW
³>D@IWHU-DQXDU\$TXLQRZLOOEHXQDEOHWRSOD\ZLWK
DQ\2+/WHDPZLWKRXWDFKDQJHWRWKH2+/WUDGHDQGURVWHU
1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO
1R
GHDGOLQH´ $SSHOOHHV¶ 6XSSOHPHQWDO 5HSO\ LQ 6XSSRUW RI
0RWLRQIRU5HFRQVLGHUDWLRQˆ FLWLQJ'HFODUDWLRQRI$QWRQ
.DUO7KXQˆ 7KHGHDGOLQHZDV-DQXDU\ 7KXQ
'HFODUDWLRQ ˆ 0RUHRYHU DSSHOOHHV QRWHG WKDW ³>D@V D
SUDFWLFDOPDWWHUWKH2+/WHDPVW\SLFDOO\GHFLGHRQWKHLUILQDO
URVWHUDQGWKHLURYHUDJHSOD\HUVDVHDUO\DVSRVVLEOH,WLV
YHU\XQOLNHO\WKDWPRUHVORWVZLOOUHPDLQRSHQDV-DQXDU\WK
DSSURDFKHG >VLF@´ $SSHOOHHV¶ 6XSSOHPHQWDO 5HSO\ LQ
6XSSRUW RI 0RWLRQ IRU 5HFRQVLGHUDWLRQ ˆ FLWLQJ 7KXQ
'HFODUDWLRQˆ
'XHWRWKLVFRXUW¶VGHFLVLRQWRJUDQWDSSHOODQWV¶PRWLRQWR
VWD\DQGRXUGHFLVLRQWRGHQ\UHFRQVLGHUDWLRQRIWKDWPRWLRQ
WKHDOOHJHGLUUHSDUDEOHKDUPWR$TXLQRKDVDOUHDG\RFFXUUHG
7KHSUDFWLFDOLWLHVRIWKHVSRUWVZRUOGZRXOGSUHYHQW$TXLQR
IURPODWHUHQWHULQJWKH2+/HYHQLIZHDIILUPHGWKHGLVWULFW
FRXUW7KHUHIRUHDSSHOOHHV¶DUJXPHQWUHJDUGLQJLUUHSDUDEOH
KDUPLVPRRW
6LPLODUO\ VHYHUDO RI DSSHOODQWV¶ DUJXPHQWV UHJDUGLQJ
LUUHSDUDEOHKDUPDUHDOVRQRORQJHUDSSOLFDEOH$SSHOODQWV
DUJXHGWKDWDOORZLQJ$TXLQRWRSOD\IRU2VKDZDZRXOGDIIHFW
WKH FRPSHWLWLYH EDODQFH ZLWKLQ WKH OHDJXH DQG WKH 2+/¶V
DELOLW\WRFRPSHWHIRUQHZWDOHQWDQGUHWDLQH[LVWLQJWDOHQW
%HFDXVH$TXLQRZLOOQRWEHDEOHWRSOD\LQWKH2+/GXULQJ
WKHVHDVRQWKHVHDUJXPHQWVKDYHORVWDOOIRUFH
$SSHOODQWV DOVR DUJXH WKDW LI WKH 2+/ LV HQMRLQHG IURP
HQIRUFLQJWKH9DQ5\Q5XOHFXUUHQW2+/SOD\HUVZKRDUH
IXWXUHRYHUDJHSOD\HUVZLOOEHGLVSODFHG7KLVDUJXPHQWLV
VSHFXODWLYHDQGDVWKHGLVWULFWFRXUWUHFRJQL]HGRWKHUSOD\HUV
IURPRXWVLGHWKH2+/DUHDEOHWRFRPSHWHIRUWKHVORWVDV
RYHUDJHSOD\HUV7KHUHIRUHDWWKLVVWDJHLQWKHSURFHHGLQJ
WKHUH LV DQ H[WUHPHO\ ORZ OLNHOLKRRG WKDW HLWKHU $TXLQR RU
DSSHOODQWV ZRXOG VXIIHU DQ\ DGGLWLRQDO KDUP EDVHG RQ RXU
GHFLVLRQWRUHYHUVHRUDIILUPWKHGLVWULFWFRXUW¶VJUDQWRIWKH
SUHOLPLQDU\LQMXQFWLRQ

-- 7 of 8 --

1R 1DW¶O+RFNH\/HDJXHHWDOY
3O\PRXWK:KDOHUV+RFNH\HWDO

,,,&21&/86,21
)RUDOOWKHUHDVRQVVHWIRUWKDERYHZHUHYHUVHWKHGLVWULFW
FRXUW¶V JUDQW RI D SUHOLPLQDU\ LQMXQFWLRQ DQG UHPDQG IRU
IXUWKHUSURFHHGLQJVFRQVLVWHQWZLWKWKLVRSLQLRQ

-- 8 of 8 --