03a0130p.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
WKURXJK
%5,'*(3257 086,& ,1&HW
DO
3ODLQWLIIV$SSHOODQWV
Y
67,// 1 7+( :$7(5
38%/,6+,1*HWDO
'HIHQGDQWV$SSHOOHHV
WKURXJK
%5,'*(3257 086,& ,1&HW
DO
3ODLQWLIIV$SSHOODQWV
Y
'0 5(&25'6 ,1&HWDO
'HIHQGDQWV$SSHOOHHV
;!

1
1RV
WKURXJK
WKURXJK

$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH0LGGOH'LVWULFWRI7HQQHVVHHDW1DVKYLOOH
1RV

%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO
1RV

7KH +RQRUDEOH 'DYLG $ .DW] 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU WKH
1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ
²7KRPDV$+LJJLQV7RGG-&DPSEHOO
'LVWULFW-XGJHV
$UJXHGDQG6XEPLWWHG2FWREHU
'HFLGHGDQG)LOHG0D\
%HIRUH.(,7+DQG'$8*+75(<&LUFXLW-XGJHV
.$7='LVWULFW-XGJH
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 5LFKDUG 6 %XVFK .,1* %$//2:
1DVKYLOOH7HQQHVVHHIRU$SSHOODQWV+HQU\-)DVWKRII,9
67803)&5$''2&.0$66(< 38/0$1+RXVWRQ
7H[DV IRU $SSHOOHHV 21 %5,() 5LFKDUG 6 %XVFK
'¶/HVOL 0 'DYLV 9LUJLQLD ) )ODFN .,1* %$//2:
1DVKYLOOH7HQQHVVHHIRU$SSHOODQWV+HQU\-)DVWKRII,9
67803)&5$''2&.0$66(< 38/0$1+RXVWRQ
7H[DV0DU\(OOHQ0RUULV0,//(5 0$57,11DVKYLOOH
7HQQHVVHH(OHQD-;RLQLV'2'6213$5.(5',1.,16
%(+0 1DVKYLOOH 7HQQHVVHH .DUO 0 %UDXQ +$//
%227+ 60,7+ 6/29(5 1DVKYLOOH 7HQQHVVHH IRU
$SSHOOHHV
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
3(5 &85,$0 3ODLQWLIIV$SSHOODQWV %ULGJHSRUW 0XVLF
,QF6RXWKILHOG0XVLF,QF:HVWERXQG5HFRUGV,QFDQG
1LQH 5HFRUGV ,QF FROOHFWLYHO\ ³%ULGJHSRUW´ DSSHDO WKH

-- 1 of 11 --

1RV

%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO

17: LV RQH PXVLF SXEOLVKLQJ FRPSDQ\ RSHUDWLQJ XQGHU WZR GLVWLQFW
QDPHV 1WKH:DWHU 3XEOLVKLQJ ,QF DQG 1WKH:DWHU 3XEOLVKLQJ ,QF
GED 6WLOO 1 WKH :DWHU 3XEOLVKLQJ ,QF 7KH WZR DUPV RI WKH FRPSDQ\ DUH
QDPHG DV GLVWLQFW GHIHQGDQWV EXW WKH FRPSDQLHV FRQGXFW WKH VDPH
EXVLQHVV KDYH WKH VDPH RZQHUVKLS DQG KDYH VXEPLWWHG MRLQW PRWLRQV DQG
EULHIV 7KH RQO\ DSSDUHQW GLVWLQFWLRQ EHWZHHQ WKH WZR FRPSDQLHV LV WKDW
WKH\ DIILOLDWH ZLWK GLIIHUHQW SHUIRUPLQJ ULJKWV RUJDQL]DWLRQV ³352V´ 1
WKH:DWHU 3XEOLVKLQJ DIILOLDWHV ZLWK WKH $PHULFDQ 6RFLHW\ RI &RPSRVHUV
$XWKRUV DQG 3XEOLVKHUV ³$6&$3´ ZKLOH 6WLOO 1 WKH :DWHU 3XEOLVKLQJ
DIILOLDWHV ZLWK %URDGFDVW 0XVLF ,QF ³%0,´
GLVWULFWFRXUW¶VGLVPLVVDORIHOHYHQLQGLYLGXDODFWLRQVIRUODFN
RI SHUVRQDO MXULVGLFWLRQ RYHU 'HIHQGDQWV$SSHOOHHV 1WKH
:DWHU 3XEOLVKLQJ ,QF LQGLYLGXDOO\ DQG GED 6WLOO 1 WKH
:DWHU 3XEOLVKLQJ FROOHFWLYHO\ ³17:´ %ULGJHSRUW DOVR
DSSHDOVWKHGLVPLVVDORIHLJKWLQGLYLGXDODFWLRQVILOHGDJDLQVW
'HIHQGDQWV$SSHOOHHV '0 5HFRUGV ,QF LQGLYLGXDOO\ DQG
DVW%HOOPDUN5HFRUGV FROOHFWLYHO\³'0´ )RUWKHUHDVRQV
VHW IRUWK EHORZ ZH $)),50 WKH GLVWULFW FRXUW¶V RUGHU
JUDQWLQJ 17:¶V PRWLRQ WR GLVPLVV IRU ODFN RI SHUVRQDO
MXULVGLFWLRQ EXW 5(9(56( WKH UXOLQJ DV WR '0 DQG
5(0$1'IRUIXUWKHUILQGLQJV
,%$&.*5281'
7KLVDFWLRQLVRQHRIVHYHUDOKXQGUHGILOHGE\$SSHOODQWV
DJDLQVWHQWLWLHVDQGRULQGLYLGXDOVDVVRFLDWHGZLWKWKH³UDS´RU
³KLSKRS´ PXVLF LQGXVWU\ $SSHOODQWV DUH DOO 0LFKLJDQ
FRUSRUDWLRQV HQJDJHG LQ LQWHU DOLD PXVLF SXEOLVKLQJ
UHFRUGLQJDQGGLVWULEXWLQJVRXQGUHFRUGLQJVDQGRWKHUIRUPV
RIFRPPHUFLDOH[SORLWDWLRQRIPXVLFDOFRS\ULJKWV2Q0D\
$SSHOODQWVILOHGVXLWDOOHJLQJLQIULQJHPHQWXSRQWKHLU
FRS\ULJKWV LQ VHYHUDO VRXQG UHFRUGLQJV DQG PXVLFDO
FRPSRVLWLRQVWKURXJK³VDPSOLQJ´RI$SSHOODQWV¶UHFRUGLQJV
DQGRUFRPSRVLWLRQVLQVXEVHTXHQWUHFRUGLQJVFRPSRVLWLRQV
%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO
1RV

$V XVHG LQ WKH FRQWH[W RI WKLV OLWLJDWLRQ ³VDPSOLQJ´ LV WKH SURFHVV
RI FRS\LQJ SRUWLRQV RI SULRU PDVWHU VRXQG UHFRUGLQJV GLUHFWO\ RQWR QHZ
VRXQG UHFRUGLQJV DQG WKHQ UDSSLQJ RQ WRS RI WKH QHZ VRXQG UHFRUGLQJ
-$ 7KH DOOHJHGO\ LQIULQJLQJ VDPSOHV LQ WKH LQVWDQW DFWLRQ DUH
DVVHUWHG WR EH XVHG LQ UDS UHFRUGV DQG FRQWDLQ HOHPHQWV RI
%ULGJHSRUW6RXWKILHOG FRPSRVLWLRQV DQGRU :HVWERXQG1LQH 5HFRUG
UHFRUGLQJV VXFK DV V\QWKHVL]HU UK\WKP EDFNJURXQG SLDQR KRUQ YRFDOV
RU GUXPV
$ PXVLFDO FRPSRVLWLRQ FRQVLVWV RI UK\WKP KDUPRQ\ DQG PHORG\
6HH 0(/9,//( % 1,00(5 '$9,' 1,00(5 1,00(5 21 &23<5,*+7
† >'@ $V GHVFULEHG E\ $SSHOOHHV D PXVLFDO FRPSRVLWLRQ ³LV D
SDUWLFXODU VHTXHQFH DQG DUUDQJHPHQW RI O\ULFV DQGRU PXVLF WKDW FRPSULVH
ZKDW PRVW SHRSOH UHIHU WR DV D μVRQJ¶´ 8QGHU WKH FRS\ULJKW DFW ³μVRXQG
UHFRUGLQJV¶ DUH ZRUNV WKDW UHVXOW IURP WKH IL[DWLRQ RI D VHULHV RI PXVLFDO
VSRNHQ RU RWKHU VRXQGV EXW QRW LQFOXGLQJ WKH VRXQGV DFFRPSDQ\LQJ D
PRWLRQ SLFWXUH RU RWKHU DXGLRYLVXDO ZRUN ´ 86& † 6RXQG
UHFRUGLQJV DQG WKHLU XQGHUO\LQJ PXVLFDO FRPSRVLWLRQV DUH VHSDUDWH ZRUNV
ZLWK WKHLU RZQ GLVWLQFW FRS\ULJKWV 6HH 86& † D
7KH HLJKW DOOHJHGO\ LQIULQJLQJ FRPSRVLWLRQV DQG FRUUHVSRQGLQJ
DSSHOODWH FDVH QXPEHUV DUH DV IROORZV
1R ³%2%<$+($' DND %RE\DKHDG´ LQ ZKLFK
'0 DOOHJHGO\ RZQV WKH DGPLQLVWUDWLYH ULJKWV DQG SRVVLEO\
DQG SHUIRUPDQFHV 7KH RULJLQDO FRPSODLQW %ULGJHSRUW
0XVLF,QFY&0XVLF1R 0'7HQQ
DVVHUWHG QHDUO\ FODLPV DJDLQVW DSSUR[LPDWHO\
GHIHQGDQWV VHHNLQJ GHFODUDWRU\ MXGJPHQW LQMXQFWLYH UHOLHI
DQGGDPDJHVIRULQIULQJHPHQWDQGYLRODWLRQVRIWKH7HQQHVVHH
&RQVXPHU3URWHFWLRQ$FW7HQQ&RGH$QQ†HW
VHT2Q-XO\WKHGLVWULFWFRXUWVHYHUHGWKHFDVHE\
FRXQW LQWR FDVHV UHVXOWLQJ LQ WKH ILOLQJ RI QXPHURXV
DPHQGHGFRPSODLQWVEDVHGRQGLIIHUHQWDOOHJHGO\LQIULQJLQJ
PXVLFDOFRPSRVLWLRQVDQGRUVRXQGUHFRUGLQJV
2Q 6HSWHPEHU $SSHOODQWV ILOHG DQ DPHQGHG
FRPSODLQWQDPLQJ$SSHOOHH'0DVDGHIHQGDQWLQHLJKWRIWKH
QHZO\VHYHUHGFDVHV2Q2FWREHU$SSHOODQWVILOHG

-- 2 of 11 --

1RV

%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO

RZQV SDUW RI WKH FRS\ULJKW FRQWDLQHG RQ '0¶V VRXQG
UHFRUGLQJ ³7KH %HVW RI 7DJ 7HDP´
1R ³)RRO *HW $ &OXH´ LQ ZKLFK '0 DOOHJHGO\
RZQV WKH DGPLQLVWUDWLYH ULJKWV DQG SRVVLEO\ RZQV SDUW RI WKH
FRS\ULJKW FRQWDLQHG RQ WKH ³)XWXUH 5K\WKP´ DQG ³)RRO *HW
$ &OXH´ UHFRUGLQJV
1R ³)UHHVW\OH´ LQ ZKLFK '0 DOOHJHGO\ RZQV WKH
DGPLQLVWUDWLYH ULJKWV DQG SRVVLEO\ RZQV SDUW RI WKH
FRS\ULJKW FRQWDLQHG RQ ³%HVW RI 7DJ 7HDP´
1R ³)XQN\ 6LWXDWLRQ %DFN )URP $QRWKHU
0LVVLRQ´ FRQWDLQHG RQ '0¶V UHOHDVH ³7KH %HVW RI 7DJ
7HDP´
1R ³*HW 1DVW\´ LQ ZKLFK '0 DOOHJHGO\ RZQV WKH
DGPLQLVWUDWLYH ULJKWV DQG SRVVLEO\ RZQV SDUW RI WKH
FRS\ULJKW
1R ³,W¶V 6RPHWKLQ¶´ LQ ZKLFK '0 DOOHJHGO\
RZQV WKH DGPLQLVWUDWLYH ULJKWV DQG WKH FRS\ULJKW FRQWDLQHG
RQ ³7KH %HVW RI 7DJ 7HDP´
1R ³2UHJDQR )ORZ´ RQ '0¶V UHUHOHDVH ³)XWXUH
5K\WKP´ DQGRU ³)RRO *HW D &OXH´
1R ³3XPS ,W´ RQ '0¶V UHOHDVH ³6XSHU 4XDG´
$SSHOODQWV¶ %U DW Q
7KH HOHYHQ DOOHJHGO\ LQIULQJLQJ FRPSRVLWLRQV DQG FRUUHVSRQGLQJ
DSSHOODWH FDVH QXPEHUV DUH DV IROORZV
1R $JJUDYDWHG 0RQNH\V
1R %XGGDK 1DWXUH
1R %XPEHOO
1R *HWRV LQ WKH 0LQG
1R *RRG *LUO *RQH %DG
1R +DYLQ¶ 7KDQJV
1R , $LQ¶W *RLQJ %DFN
1R /HWWLQ¶ (P .QRZ
1R 6WUDLJKW *DQJVWDLVP
1R 6WUDLJKW 0DGQHVV
1R 7ZR WR WKH +HDG
$SSHOODQWV¶ %U DW Q VHH DOVR -$
DQDPHQGHGFRPSODLQWQDPLQJ$SSHOOHH17:DVDGHIHQGDQW
LQHOHYHQRIWKHQHZO\VHYHUHGFDVHV
%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO
1RV

8QGHU D W\SLFDO OLFHQVH DJUHHPHQW D SXEOLVKHU¶V FRPSRVLWLRQV DUH
LQFRUSRUDWHG LQWR D UHFRUG ODEHO¶V VRXQG UHFRUGLQJV $ ³PHFKDQLFDO
UR\DOW\´ LV WKH UR\DOW\ JHQHUDWHG IURP VDOHV RI WKH VRXQG UHFRUGLQJ
17: LV D 7H[DV FRUSRUDWLRQ ZLWK LWV SULQFLSDO SODFH RI
EXVLQHVVLQ7H[DV$VDPXVLFSXEOLVKHU17:¶VEXVLQHVV
FRQVLVWV SULPDULO\ RI RZQLQJ DQG H[SORLWLQJ PXVLFDO
FRPSRVLWLRQV WKURXJK PHFKDQLFDO OLFHQVLQJ $SSHOODQWV
DVVHUWWKDW17:KDVLQIULQJHGRQWKHLUPXVLFDOFRPSRVLWLRQ
FRS\ULJKWV E\ OLFHQVLQJ LQIULQJLQJ ZRUNV DV ZHOO DV E\
VDPSOLQJFHUWDLQSURWHFWHGFRPSRVLWLRQVDQGGLVWULEXWLQJWKH
LQIULQJLQJFRPSRVLWLRQVDQGVRXQGUHFRUGLQJVLQ7HQQHVVHH
DQGHOVHZKHUH
'0 LV D IDPLO\RZQHG DQG RSHUDWHG LQGHSHQGHQW UHFRUG
FRPSDQ\ ORFDWHG LQ )ORULGD WKDW SURGXFHV DQG GLVWULEXWHV
VRXQGUHFRUGLQJV,WDFTXLUHVFRS\ULJKWVGLVWULEXWHVVRXQG
UHFRUGLQJV DQG HQJDJHV LQ SXEOLVKLQJ DGPLQLVWUDWLRQ RI
FRS\ULJKWV DQG OLFHQVLQJ $SSHOODQWV DVVHUW WKDW '0 KDV
LQIULQJHGRQWKHLUFRS\ULJKWVE\VDPSOLQJFHUWDLQSURWHFWHG
FRPSRVLWLRQVDQGGLVWULEXWLQJWKHLQIULQJLQJFRPSRVLWLRQVDQG
VRXQGUHFRUGLQJVLQ7HQQHVVHHDQGHOVHZKHUH
2Q-XO\17:PRYHGWRGLVPLVVDOOHOHYHQDFWLRQV
DVVHUWHG DJDLQVW LW IRU ODFN RI SHUVRQDO MXULVGLFWLRQ DQG
LPSURSHUYHQXHDQGUHQHZHGWKHPRWLRQSRVWVHYHUDQFH2Q
2FWREHU'0PRYHGWRGLVPLVVIRUODFNRISHUVRQDO
MXULVGLFWLRQLPSURSHUYHQXHDQGIDLOXUHWRVWDWHDFODLPXSRQ
ZKLFKUHOLHIFDQEHJUDQWHG7KHGLVWULFWFRXUWJUDQWHGWKH
SDUWLHVDOLPLWHGWLPHWRFRQGXFWMXULVGLFWLRQDOGLVFRYHU\EXW
GLGQRWFRQGXFWDKHDULQJRQHLWKHU17:RU'0¶VPRWLRQVWR
GLVPLVV
,Q-DQXDU\WKHGLVWULFWFRXUWJUDQWHG17:¶VPRWLRQ
DQG EHWZHHQ -DQXDU\ DQG -DQXDU\ HQWHUHG GLVPLVVDO
RUGHUV LQ WKH 17: DFWLRQV IRU ODFN RI SHUVRQDO
MXULVGLFWLRQ2Q-DQXDU\WKHGLVWULFWFRXUWJUDQWHG

-- 3 of 11 --

1RV

%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO

'0¶V PRWLRQ DQG GLVPLVVHG WKH HLJKW DFWLRQV IRU ODFN RI
SHUVRQDOMXULVGLFWLRQ7KHGLVWULFWFRXUWWKHUHIRUHGHQLHGDV
PRRWWKHPRWLRQVWRGLVPLVVIRULPSURSHUYHQXHDQGIDLOXUH
WR VWDWH D FODLP 7KH GLVWULFW FRXUW GHQLHG $SSHOODQWV¶
VXEVHTXHQW PRWLRQ IRU UHFRQVLGHUDWLRQ DQG HQWHUHG ILQDO
MXGJPHQW RQ WKH FODLPV DVVHUWHG DJDLQVW '0 DQG 17:
SXUVXDQW WR )HGHUDO 5XOH RI &LYLO 3URFHGXUH E 2Q
)HEUXDU\ %ULGJHSRUW ILOHG VXLW DJDLQVW 17: LQ
+RXVWRQ 7H[DV %ULGJHSRUW 0XVLF ,QF Y 17KH:DWHU
3XEOLVKLQJ,QF1R 6'7H[ILOHG)HE
EDVHGSULPDULO\RQWKHVDPHIDFWVDOOHJHGLQWKHLQVWDQWDFWLRQ
,,',6&866,21
$ 6WDQGDUGRI5HYLHZ
³7KHGHFLVLRQWRH[HUFLVHSHUVRQDOMXULVGLFWLRQLVDTXHVWLRQ
RIODZEDVHGRQWKH'XH3URFHVV&ODXVHRIWKH&RQVWLWXWLRQ´
7RELQY$VWUD3KDUP3URGV,QF)G WK&LU
FLWLQJ%XUJHU.LQJ&RUSY5XGHZLF]86
$VDTXHVWLRQRIODZWKLV&RXUWUHYLHZVGH
QRYR WKH GLVWULFW FRXUW¶V GHWHUPLQDWLRQ DV WR SHUVRQDO
MXULVGLFWLRQ6HHLG
% 3HUVRQDO-XULVGLFWLRQ6WDQGDUG
³:KHUHDIHGHUDOFRXUW¶VVXEMHFWPDWWHUMXULVGLFWLRQRYHUD
FDVHVWHPVIURPWKHH[LVWHQFHRIDIHGHUDOTXHVWLRQSHUVRQDO
MXULVGLFWLRQ RYHU D GHIHQGDQW H[LVWV μLI WKH GHIHQGDQW LV
DPHQDEOHWRVHUYLFHRISURFHVVXQGHUWKH>IRUXP@VWDWH¶VORQJ
DUPVWDWXWHDQGLIWKHH[HUFLVHRISHUVRQDOMXULVGLFWLRQZRXOG
QRWGHQ\WKHGHIHQGDQW>@GXHSURFHVV¶´%LUGY3DUVRQV
)G WK&LU FLWDWLRQRPLWWHG :KHUHWKH
VWDWHORQJDUPVWDWXWHH[WHQGVWRWKHOLPLWVRIWKHGXHSURFHVV
FODXVHWKHWZRLQTXLULHVDUHPHUJHGDQGWKHFRXUWQHHGRQO\
GHWHUPLQHZKHWKHUH[HUFLVLQJSHUVRQDOMXULVGLFWLRQYLRODWHV
FRQVWLWXWLRQDOGXHSURFHVV6HH1DWLRQZLGH0XW,QV&RY
7U\J,QW¶O,QV&R/WG)G WK&LU $V
%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO
1RV

8QGHU 7HQQHVVHH¶V ORQJDUP VWDWXWH MXULVGLFWLRQ PD\ EH DVVHUWHG RQ
³DQ\ EDVLV QRW LQFRQVLVWHQW ZLWK WKH FRQVWLWXWLRQ RI WKLV VWDWH RU RI WKH
8QLWHG 6WDWHV´ 7(11 &2'( $11 † D
³>W@KH 7HQQHVVHH ORQJDUP VWDWXWH KDV EHHQ LQWHUSUHWHG DV
FRWHUPLQRXVZLWKWKHOLPLWVRQSHUVRQDOMXULVGLFWLRQLPSRVHG
E\WKHGXHSURFHVVFODXVH´3D\QHY0RWRULVWV¶0XW,QV
&RV )G WK &LU ZH DGGUHVV RQO\
ZKHWKHU H[HUFLVLQJ SHUVRQDO MXULVGLFWLRQ RYHU $SSHOOHHV LV
FRQVLVWHQWZLWKIHGHUDOGXHSURFHVVUHTXLUHPHQWV
³3HUVRQDO MXULVGLFWLRQ FDQ EH HLWKHU JHQHUDO RU VSHFLILF
GHSHQGLQJXSRQWKHQDWXUHRIWKHFRQWDFWVWKDWWKHGHIHQGDQW
KDV ZLWK WKH IRUXP VWDWH´ %LUG )G DW ,Q WKH
LQVWDQWDFWLRQWKHGLVWULFWFRXUWUXOHGDVWRERWKJHQHUDODQG
VSHFLILF MXULVGLFWLRQ ILQGLQJ ERWK ODFNLQJ DJDLQVW '0 DQG
17:2QDSSHDO%ULGJHSRUWFKDOOHQJHVWKHGLVWULFWFRXUW¶V
ILQGLQJVRQO\DVWRVSHFLILFMXULVGLFWLRQ6SHFLILFMXULVGLFWLRQ
LVSURSHURYHU$SSHOOHHVRQO\LIWKHLUFRQWDFWZLWK7HQQHVVHH
VDWLVILHVWKHWKUHHSDUWWHVWHVWDEOLVKHGLQ6RXWKHUQ0DFKLQH
&RPSDQ\Y0RKDVFR,QGXVWULHV,QF
)LUVWWKHGHIHQGDQWPXVWSXUSRVHIXOO\DYDLOKLPVHOIRI
WKH SULYLOHJH RI DFWLQJ LQ WKH IRUXP VWDWH RU FDXVLQJ D
FRQVHTXHQFHLQWKHIRUXPVWDWH6HFRQGWKHFDXVHRI
DFWLRQPXVWDULVHIURPWKHGHIHQGDQW¶VDFWLYLWLHVWKHUH
)LQDOO\WKHDFWVRIWKHGHIHQGDQWRUFRQVHTXHQFHFDXVHG
E\ WKH GHIHQGDQW PXVW KDYH D VXEVWDQWLDO HQRXJK
FRQQHFWLRQZLWKWKHIRUXPVWDWHWRPDNHWKHH[HUFLVHRI
MXULVGLFWLRQRYHUWKHGHIHQGDQWUHDVRQDEOH
)G WK&LU
,Q WKH LQVWDQW DFWLRQ WKH GLVWULFW FRXUW FRQFOXGHG WKDW
QHLWKHU17:QRU'0KDGSXUSRVHIXOO\DYDLOHGWKHPVHOYHVRI
WKH SULYLOHJH RI DFWLQJ LQ RU FDXVLQJ D FRQVHTXHQFH LQ WKH
IRUXPVWDWHDQGWKHUHIRUHIRXQGSHUVRQDOMXULVGLFWLRQODFNLQJ
RYHUERWK17:DQG'0+DYLQJPDGHWKDWGHWHUPLQDWLRQ

-- 4 of 11 --

1RV

%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO

WKHGLVWULFWFRXUWGLGQRWPDNHILQGLQJVDVWRWKHUHPDLQLQJ
WZR HOHPHQWV RI WKH 0RKDVFR WHVW 2Q DSSHDO WKH SDUWLHV
FKLHIO\ GLVSXWH WKH GLVWULFW FRXUW¶V SXUSRVHIXO DYDLOPHQW
ILQGLQJV EXW DOVR SUHVHQW DUJXPHQWV DV WR WKH UHPDLQLQJ
0RKDVFRIDFWRUV+RZHYHUEHFDXVHWKHGLVWULFWFRXUWGLGQRW
DGGUHVVWKHVHIDFWRUVDQGEHFDXVHWKHDSSHOODWHUHFRUGGRHV
QRWOHQGLWVHOIWRDUXOLQJRQWKHVHIDFWRUVDVWRHDFKRIWKH
LQGLYLGXDO DFWLRQV EHIRUH WKH &RXUW ZH DGGUHVV RQO\ WKH
GLVWULFWFRXUW¶VSXUSRVHIXODYDLOPHQWGHWHUPLQDWLRQ
7KHGLVWULFWFRXUWGLGQRWFRQGXFWDQHYLGHQWLDU\KHDULQJ
DQGZHWKHUHIRUHUHYLHZWKHSOHDGLQJVDQGRWKHUGRFXPHQWDU\
HYLGHQFH LQ D OLJKW PRVW IDYRUDEOH WR %ULGJHSRUW ZLWKRXW
FRQVLGHULQJ $SSHOOHHV¶ FRQWURYHUWLQJ DVVHUWLRQV 6HH
&DOSKDORQ &RUS Y 5RZOHWWH )G WK &LU
³μ'LVPLVVDOLQWKLVSURFHGXUDOSRVWXUHLVSURSHURQO\
LI DOO WKH VSHFLILF IDFWV ZKLFK WKH SODLQWLII DOOHJHV
FROOHFWLYHO\IDLOWRVWDWHDSULPDIDFLHFDVHIRUMXULVGLFWLRQ¶´
.HUU\6WHHO,QFY3DUDJRQ,QGXV)G WK
&LU TXRWLQJ7KHXQLVVHQY0DWWKHZV)G
WK &LU $V SODLQWLII %ULGJHSRUW EHDUV WKH
EXUGHQ RI HVWDEOLVKLQJ MXULVGLFWLRQ VHH 7RELQ )G DW
EXW QHHG RQO\ PDGH D SULPD IDFLH VKRZLQJ 6HH
&DOSKDORQ)GDW
& 3XUSRVHIXO$YDLOPHQW
8QGHUWKHILUVWSURQJRIWKH0RKDVFRWHVW$SSHOODQWVPXVW
HVWDEOLVKWKDW$SSHOOHHVSXUSRVHIXOO\DYDLOHGWKHPVHOYHVRI
WKHSULYLOHJHRIDFWLQJLQ7HQQHVVHHRUFDXVLQJDFRQVHTXHQFH
LQ7HQQHVVHH³μ>3@XUSRVHIXODYDLOPHQWLVVRPHWKLQJDNLQWR
DGHOLEHUDWHXQGHUWDNLQJWRGRRUFDXVHDQDFWRUWKLQJWREH
GRQHLQ>WKHIRUXPVWDWH@RUFRQGXFWZKLFKFDQEHSURSHUO\
UHJDUGHGDVDSULPHJHQHUDWLQJFDXVHRIWKHHIIHFWVUHVXOWLQJ
LQ>WKHIRUXPVWDWH@VRPHWKLQJPRUHWKDQDSDVVLYHDYDLOPHQW
RI>WKHIRUXPVWDWH¶V@RSSRUWXQLWLHV´1HRJHQ&RUSY1HR
*HQ 6FUHHQLQJ ,QF )G WK &LU
LQWHUQDOFLWDWLRQDQGTXRWDWLRQRPLWWHG ³7KHμSXUSRVHIXO
%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO
1RV

DYDLOPHQW¶ UHTXLUHPHQW LV VDWLVILHG ZKHQ WKH GHIHQGDQW¶V
FRQWDFWVZLWKWKHIRUXPVWDWHμSUR[LPDWHO\UHVXOWIURPDFWLRQV
E\WKHGHIHQGDQWKLPVHOIWKDWFUHDWHDμVXEVWDQWLDOFRQQHFWLRQ¶
ZLWKWKHIRUXP6WDWH¶DQGZKHQWKHGHIHQGDQW¶VFRQGXFWDQG
FRQQHFWLRQZLWKWKHIRUXPDUHVXFKWKDWKHμVKRXOGUHDVRQDEO\
DQWLFLSDWHEHLQJKDOHGLQWRFRXUWWKHUH¶´&RPSX6HUYH,QFY
3DWWHUVRQ )G WK &LU TXRWLQJ
%XUJHU .LQJ 86 DW 7KH ³μSXUSRVHIXO
DYDLOPHQW¶UHTXLUHPHQWHQVXUHVWKDWDGHIHQGDQWZLOOQRWEH
KDOHG LQWR D MXULVGLFWLRQ VROHO\ DV D UHVXOW RI μUDQGRP¶
μIRUWXLWRXV¶ RU μDWWHQXDWHG¶ FRQWDFWV RU RI WKH μXQLODWHUDO
DFWLYLW\RIDQRWKHUSDUW\RUDWKLUGSHUVRQ¶´%XUJHU.LQJ
86DW LQWHUQDOFLWDWLRQRPLWWHG VHHDOVR/DN,QFY
'HHU &UHHN (QWHUV )G WK &LU
7KHHPSKDVLVLQWKHSXUSRVHIXODYDLOPHQWLQTXLU\LVZKHWKHU
WKHGHIHQGDQWKDVHQJDJHGLQ³VRPHRYHUWDFWLRQVFRQQHFWLQJ
WKH GHIHQGDQW ZLWK WKH IRUXP VWDWH´ 'HDQ Y 0RWHO
2SHUDWLQJ/3)G WK&LU ,ID
SODLQWLIIFDQGHPRQVWUDWHSXUSRVHIXODYDLOPHQWWKHDEVHQFH
RI SK\VLFDO FRQWDFWV ZLWK WKH IRUXP VWDWH ZLOO QRW GHIHDW
SHUVRQDO MXULVGLFWLRQ RYHU D QRQUHVLGHQW GHIHQGDQW 6HH
%XUJHU.LQJ86DW&RPSX6HUYH)GDW
6WUHDPRIFRPPHUFH³SOXV´WKHRU\
$VDSUHOLPLQDU\PDWWHUZHQRWHWKDWLQWKHLQVWDQWDFWLRQ
WKHGLVWULFWFRXUWDVZHOODVWKHSDUWLHVRQDSSHDOSUHVXPH
WKDWWKLV&LUFXLWKDVDGRSWHG-XVWLFH2¶&RQQRU¶VDSSURDFKWR
SXUSRVHIXODYDLOPHQWDVDUWLFXODWHGLQ$VDKL0HWDO,QGXVWU\
&RPSDQ\ /WG Y 6XSHULRU &RXUW 86
2¶&RQQRU- SOXUDOLW\RS ,Q$VDKLZKLFKUHIOHFWVWKH
6XSUHPH &RXUW¶V PRVW UHFHQW GLVFXVVLRQ RI SXUSRVHIXO
DYDLOPHQWWKH&RXUWGHEDWHGZKHWKHUDIRUHLJQPDQXIDFWXUHU
WKDWSODFHVDSURGXFWLQWKHVWUHDPRIFRPPHUFHSXUSRVHIXOO\
DYDLOVLWVHOIRIWKHSULYLOHJHRIFRQGXFWLQJEXVLQHVVLQDVWDWH
ZKHUH WKH SURGXFW XOWLPDWHO\ LV IRXQG ,Q KHU SOXUDOLW\
RSLQLRQZKLFKHPEUDFHVZKDWKDVFRPHWREHNQRZQDVWKH
³VWUHDPRIFRPPHUFHμSOXV¶´WKHRU\-XVWLFH2¶&RQQRURSLQHG

-- 5 of 11 --

1RV

%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO

WKDW ³>W@KH SODFHPHQW RI D SURGXFW LQWR WKH VWUHDP RI
FRPPHUFH ZLWKRXW PRUH LV QRW DQ DFW RI WKH GHIHQGDQW
SXUSRVHIXOO\GLUHFWHGWRZDUGWKHIRUXP6WDWH´$VDKL
86DW$OWKRXJKDPDMRULW\RIWKH$VDKL&RXUWDJUHHG
WKDWMXULVGLFWLRQZDVQRWSURSHU-XVWLFH2¶&RQQRUVHFXUHG
RQO\WKUHHRWKHUMXVWLFHVWRMRLQLQKHUDUWLFXODWLRQRIDVWUHDP
RIFRPPHUFH³SOXV´WKHRU\6HHLGDW
:KLOHVRPHDSSHOODWHFRXUWVKDYHH[SUHVVO\DGRSWHGRQHRI
$VDKL¶VFRQIOLFWLQJFRQFHSWLRQVRIPLQLPXPFRQWDFWVYLDWKH
VWUHDP RI FRPPHUFH PRVW FLUFXLWV LQFOXGLQJ WKH 6L[WK
&LUFXLWKDYHDYRLGHGH[SOLFLWO\DUWLFXODWLQJDSUHIHUHQFH6HH
HJ3HQQ]RLO3URGV&RY&ROHOOL $VVRFV)G
G&LU GHFOLQLQJWRH[SUHVVO\DGRSWDQ\RIWKH$VDKL
SOXUDOLW\SRVLWLRQV %DURQHY5LFK%URV,QWHUVWDWH'LVSOD\
)LUHZRUNV&R)G WK&LU DGRSWLQJ
DSRVLWLRQFRQVLVWHQWZLWKWKDWRI-XVWLFH%UHQQDQ 5XVWRQ
*DV7XUELQHV,QFY'RQDOGVRQ&RPSDQ\)G
WK&LU VDPH %RLWY*DU7HF3URGXFWV,QF
)G VW&LU DGRSWLQJDSRVLWLRQFRQVLVWHQW
ZLWKWKDWRI-XVWLFH2¶&RQQRU DQG0DGDUDY+DOO)G
WK&LU VDPH 9HUPHXOHQY5HQDXOW
86$,QF)G WK&LU ³%HFDXVH
MXULVGLFWLRQ RYHU >WKH GHIHQGDQW@ LQ WKLV FDVH LV
FRQVLVWHQWZLWKGXHSURFHVVXQGHUWKHPRUHVWULQJHQWμVWUHDP
RI FRPPHUFH SOXV¶ DQDO\VLV DGRSWHG E\ WKH >2¶&RQQRU@
SOXUDOLW\ ZH QHHG QRW GHWHUPLQH ZKLFK VWDQGDUG DFWXDOO\
FRQWUROVWKLVFDVH´ 0DGDUDY+DOO)G
WK&LU FRQFOXGLQJWKDWH[HUFLVHRIMXULVGLFWLRQPXVW
VDWLVI\WKHWHVWDUWLFXODWHGE\WKH2¶&RQQRUSOXUDOLW\
$OWKRXJK WKLV &LUFXLW WKXVIDU KDV DYRLGHG H[SUHVVO\
DGRSWLQJDSRVLWLRQWKHRQO\SXEOLVKHGRSLQLRQVLQRXU&LUFXLW
GLUHFWO\ DGGUHVVLQJ WKH LVVXH DOEHLW DGPLWWHGO\ LQ GLFWD
H[SUHVVDOHDQLQJWRZDUG-XVWLFH2¶&RQQRU¶VDSSURDFK,Q
&RPSX6HUYHZHQRWHGWKDWWKH³LQMHFWLRQRI>D@SURGXFW
LQWRWKHVWUHDPRIFRPPHUFHZLWKRXWPRUHZRXOGEHDWEHVW
DGXELRXVJURXQGIRUMXULVGLFWLRQ´6HH&RPSX6HUYH)G
%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO
1RV

DW,Q7RELQWKHFRXUWGLGQRWH[SUHVVO\DGRSW-XVWLFH
2¶&RQQRU¶VVWUHDPRIFRPPHUFH³SOXV´WHVWEXWGLGFLWHZLWK
DSSURYDOIURP-XVWLFH2¶&RQQRU¶VRSLQLRQDQGDFNQRZOHGJHG
ZLWKRXWUHEXNHWKDWWKHGLVWULFWFRXUWKDGUHOLHGKHDYLO\RQ
-XVWLFH2¶&RQQRU¶VRSLQLRQ6HH7RELQ)GDW
,QWKHLQVWDQWDFWLRQWKHSDUWLHVGRQRWFDOOXSRQWKH&RXUW
WR DGRSW RQH $VDKL DSSURDFK RYHU WKH RWKHU DQG WKXV LW LV
WHPSWLQJ RQFH DJDLQ WR GHIHU FRPPLWWLQJ WR RQH SDUWLFXODU
DSSURDFK +RZHYHU XQOLNH RWKHU LQVWDQFHV LQ ZKLFK DQ
DQDO\VLV XQGHU DOO WKUHH $VDKL DSSURDFKHV ZRXOG \LHOG WKH
VDPHUHVXOWWKXVSHUPLWWLQJDYRLGLQJHVWDEOLVKLQJDFOHDUUXOH
WKHIDFWVLQWKHLQVWDQWDFWLRQSDUWLFXODUO\XQGHUWKHUHOD[HG
SULPDIDFLHVWDQGDUGZRXOGVHHPWRGLFWDWHGLIIHUHQWUHVXOWV
XQGHUWKHWKUHH$VDKLSOXUDOLW\DSSURDFKHV7KHUHIRUHLQVWHDG
RIXQGHUWDNLQJWKHWLPHFRQVXPLQJWDVNRIDQDO\]LQJWKHIDFWV
XQGHUDOOWKUHHDSSURDFKHVDQGWKHQEHLQJOHIWWRVHOHFWDQ
DSSURDFKEDVHGXSRQWKHHQGUHVXOWZHPDNHFOHDUWRGD\RXU
SUHIHUHQFHIRU-XVWLFH2¶&RQQRU¶VVWUHDPRIFRPPHUFH³SOXV´
DSSURDFK IRU WKH UHDVRQV VHW IRUWK LQ WKDW RSLQLRQ DQG
FRQGXFWWKHUHPDLQGHURIRXUDQDO\VLVDFFRUGLQJO\
3XUSRVHIXODYDLOPHQWDVWR17:
D /LFHQVLQJDQGUR\DOWLHV
7RVKRZSXUSRVHIXODYDLOPHQWE\17:%ULGJHSRUWILUVW
DUJXHVWKDW17:LVVXHGPHFKDQLFDOOLFHQVHVWR5DS$/RW
5HFRUGV ³5$/´ DQGRWKHUHQWLWLHVIRUDOOHJHGO\LQIULQJLQJ
FRPSRVLWLRQV DQG KDV UHFHLYHG UR\DOWLHV WKHUHIURP
%ULGJHSRUW DVVHUWV WKDW LQ UHODWLRQ WR WKHVH PHFKDQLFDO
OLFHQVHV17:KDVDILQDQFLDOLQWHUHVWLQ5$/VHOOLQJDVPDQ\
UHFRUGVDVSRVVLEOHWKDWFRQWDLQ17:¶VFRPSRVLWLRQV17:
GRHVQRWGHVLUHWROLPLWH[SORLWDWLRQRILWVFRPSRVLWLRQVWRD
³OHVVWKDQQDWLRQDO´PDUNHW17:KDVQRREMHFWLRQWR17:¶V
FRPSRVLWLRQVEHLQJVROGLQ7HQQHVVHHDQG17:NQRZVWKDW
5$/ GLVWULEXWHV QDWLRQDOO\ DQG LV OLNHO\ WR H[SORLW 17:¶V
FRPSRVLWLRQV WKURXJKRXW WKH HQWLUHW\ RI WKH 8QLWHG 6DWHV

-- 6 of 11 --

1RV

%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO

LQFOXGLQJLQ7HQQHVVHH%DVHGRQWKHUDWLRQDOHVHWIRUWKLQ
7RELQ %ULGJHSRUW DUJXHV WKDW WKH IRUHJRLQJ FRQGXFW
FRQVWLWXWHVSXUSRVHIXODYDLOPHQW
,Q7RELQWKHFRXUWIRXQGSXUSRVHIXODYDLOPHQWEDVHGRQWKH
H[LVWHQFH RI D QDWLRQZLGH GLVWULEXWLRQ DJUHHPHQW 7KH
DJUHHPHQW UHTXLUHG WKH GHIHQGDQW GLVWULEXWLRQ FRPSDQ\
$VWUDWRGLVWULEXWHWKHGUXJURWLGULQHRQEHKDOIRIGHIHQGDQW
PDQXIDFWXUHU 'XSKDU WKURXJKRXW $VWUD¶V WHUULWRU\ 7KH
UHOHYDQWDJUHHPHQWGHILQHGWKHGLVWULEXWLRQWHUULWRU\DV³WKH
8QLWHG6WDWHVRI$PHULFDLWVWHUULWRULHVDQGSRVVHVVLRQVDQG
3XHUWR 5LFR´ 7RELQ )G DW H[SODLQLQJ WKDW D
PDQXIDFWXUHUFDQQRWLQVXODWHLWVHOIIURPVXLWPHUHO\E\XVLQJ
DQLQGHSHQGHQWQDWLRQDOGLVWULEXWRUWRPDUNHWLWVSURGXFWV
,QFRQWUDVWWR7RELQ17:¶VFRQWDFWVZLWK7HQQHVVHHLQWKH
LQVWDQWDFWLRQODFNWKHDGGLWLRQDOHOHPHQWSUHVHQWLQ7RELQ
FKLHIO\WKHIDFWWKDWWKH7RELQGHIHQGDQWVZHUHQRWPHUHO\
DZDUHWKDWWKHLUGLVWULEXWRUZDVOLNHO\WRPDUNHWWKHSURGXFWLQ
DOOILIW\VWDWHVUDWKHUWKHSDUWLHV¶FRQWUDFWUHTXLUHGLW8QOLNH
LQ7RELQ%ULGJHSRUWGRHVQRWDVVHUWWKDW17:HQWHUHGLQWRD
GLVWULEXWLRQ DJUHHPHQW ZLWK 5$/ RU DQ\ RWKHU SDUW\ WKDW
SODFHG DQ DIILUPDWLYH REOLJDWLRQ XSRQ WKH WKLUG SDUW\ WR
GLVWULEXWH17:¶VFRPSRVLWLRQVLQ7HQQHVVHHRUHOVHZKHUH
%ULGJHSRUWHYHQFRQFHGHVLQLWVEULHIWKDWZLWKUHVSHFWWRWKH
5$/17: OLFHQVLQJ ³>K@RZ WKH VXEMHFW FRPSRVLWLRQ LV
H[SORLWHGLVμSUHWW\PXFKRXWRI>17:¶V@KDQGV¶´17:¶V
NQRZOHGJH WKDW 5$/ ZDV OLNHO\ WR GLVWULEXWH 17:¶V
FRPSRVLWLRQVQDWLRQDOO\FRXSOHGZLWKLWVODFNRIREMHFWLRQWR
7HQQHVVHH VDOHV LI VXFK VDOHV ZHUH HYHU WR RFFXU LV
LQVXIILFLHQW FRQGXFW XSRQ ZKLFK WR SUHGLFDWH SXUSRVHIXO
DYDLOPHQW
$VIXUWKHUVXSSRUWIRULWVSRVLWLRQ%ULGJHSRUWDVVHUWVWKDW
DOOHJHGO\ LQIULQJLQJ 17: FRPSRVLWLRQV RQ 5$/ VRXQG
UHFRUGLQJV KDYH EHHQ VROG E\ DW OHDVW WZR 1DVKYLOOH
7HQQHVVHHUHWDLOHUV+RZHYHU%ULGJHSRUWGRHVQRWDGGXFH
DQ\ HYLGHQFH WKDW 17: WRRN DQ\ DFWLRQV WR GLUHFW WKH
%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO
1RV

³6\QFKURQL]DWLRQ´ LV WKH SURFHVV RI FRPELQLQJ VRXQG UHFRUGLQJV RI
PXVLFDO FRPSRVLWLRQV ZLWK YLVXDO LPDJHV $ V\QFKURQL]DWLRQ OLFHQVH LV
D OLFHQVH IRU XVH RI D FRPSRVLWLRQ LQ D ILOP SUHUHFRUGHG UDGLR RU
WHOHYLVLRQ SURJUDP RU UDGLR RU WHOHYLVLRQ FRPPHUFLDO 6HH /,1'(< 21
(17(57$,10(17 38%/,6+,1* $1' 7+( $576 † G HG 8QGHU
FRS\ULJKW ODZ DQ HQWLW\ ZLVKLQJ WR V\QFKURQL]H PXVLF ZLWK YLVXDO LPDJHV
LQ D YLGHR PRWLRQ SLFWXUH HWF PXVW REWDLQ D V\QFKURQL]DWLRQ OLFHQVH
IURP WKH PXVLFDO FRPSRVLWLRQ FRS\ULJKW KROGHU DQG PXVW DOVR REWDLQ D
OLFHQVH IURP WKH VRXQG UHFRUGLQJ FRS\ULJKW KROGHU
7KH UHFRUG DOVR UHIOHFWV WKDW 0U 7RYDO ZDV DVNHG HDUOLHU LQ KLV
GHSRVLWLRQ LI 17: ³XQGHUWDNH>V@ DQ\ IRUP RI DGYHUWLVLQJ RU PDUNHWLQJ WR
HQFRXUDJH H[SORLWDWLRQ RI LWV PXVLFDO FRPSRVLWLRQV´ 8QIRUWXQDWHO\ WKH
SDJHV RI WKH GHSRVLWLRQ FRQWDLQLQJ 0U 7RYDO¶V UHVSRQVH WR WKDW TXHVWLRQ
KDYH QRW EHHQ PDGH SDUW RI WKH MRLQW DSSHQGL[
FRPSRVLWLRQVWR7HQQHVVHH5DWKHU%ULGJHSRUWDVVHUWVWKDW
17:GRHVQRWGRXEWWKDWVXFKVDOHVKDYHRFFXUUHGDQGGRHV
QRWREMHFWWR7HQQHVVHHGLVWULEXWLRQDQGVDOHV%ULGJHSRUW
PDNHVVLPLODUDUJXPHQWVZLWKUHVSHFWWRDV\QFKURQL]DWLRQ
OLFHQFHUHODWHGWRWKHILOP³'DQJHURXV0LQGV´+RZHYHUDV
ZLWKWKHPHFKDQLFDOOLFHQVHVWKH&RXUWILQGVWKHVHFRQWDFWV
WRR UDQGRP IRUWXLWRXV DQG DWWHQXDWHG IRU D ILQGLQJ RI
SXUSRVHIXODYDLOPHQW
E $GYHUWLVLQJ
%ULGJHSRUWDVVHUWVWKDW17:KDVHQJDJHGLQDGYHUWLVLQJDQG
PDUNHWLQJ DFWLYLWLHV GLUHFWHG DW 7HQQHVVHH DQG WKDW WKHVH
DFWLYLWLHV UHTXLUH D ILQGLQJ RI SXUSRVHIXO DYDLOPHQW
%ULGJHSRUW DOVR DUJXHV WKDW 5$/ DGYHUWLVHV QDWLRQDOO\
LQFOXGLQJ LQ 7HQQHVVHH ³RQ EHKDOI RI DQG WR WKH ILQDQFLDO
EHQHILWRI17:´RQQDWLRQDOWHOHYLVLRQDQGUDGLRVSRWVDQG
LQQDWLRQDOPDJD]LQHV$SSHOODQWV¶%UDW$VHYLGHQFHRI
17:¶V PDUNHWLQJ DFWLYLWLHV 17: SRLQWV WR D VLQJOH
VWDWHPHQWIURPWKHGHSRVLWLRQRI0U%UXFH7RYDO17:¶V
&(2WKDW³>Z@HDWWHPSWWRPDUNHWQDWLRQDOO\´

-- 7 of 11 --

1RV

%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO

:H WDNH QR SRVLWLRQ WRGD\ DV WR ZKHWKHU SRVW$VDKL HYLGHQFH RI
QDWLRQZLGH DGYHUWLVLQJ LV VXIILFLHQW IRU D ILQGLQJ RI SXUSRVHIXO DYDLOPHQW
EXW QRWH WKDW DW OHDVW WZR RI RXU VLVWHU FLUFXLWV KDYH GHWHUPLQHG WKDW VXFK
FRQGXFW LV LQVXIILFLHQW 6HH )HGHUDWHG 5XUDO (OHF ,QV &RUS Y .RRWHQDL
(OHF &RRS )G WK &LU ³HYLGHQFH RI PHUH
SODFHPHQW RI DGYHUWLVHPHQWV LQ QDWLRQDOO\ GLVWULEXWHG SDSHUV RU MRXUQDOV
GRHV QRW ULVH WR WKH OHYHO RI SXUSRVHIXO FRQWDFW ZLWK D IRUXP UHTXLUHG E\
WKH &RQVWLWXWLRQ LQ RUGHU WR H[HUFLVH SHUVRQDO MXULVGLFWLRQ RYHU WKH
DGYHUWLVHU´ 6LQJOHWDU\ Y %5; ,QF )G WK &LU
³DGYHUWLVLQJ LQ QDWLRQDO SXEOLFDWLRQV LV QRW LQ LWVHOI VXIILFLHQW WR
VXEMHFW D GHIHQGDQW WR SHUVRQDO MXULVGLFWLRQ´ EXW VHH 8QLWHG 6WDWHV 6(&
Y &DUULOOR )G WK &LU ³DGYHUWLVLQJ WKDW LV
UHDVRQDEO\ FDOFXODWHG WR UHDFK WKH IRUXP PD\ FRQVWLWXWH SXUSRVHIXO
DYDLOPHQW RI WKH SULYLOHJHV RI GRLQJ EXVLQHVV LQ WKH IRUXP´
$OWKRXJK LW KDV EHHQ HVWDEOLVKHG LQ WKLV &LUFXLW WKDW
³>D@GYHUWLVLQJLVDPRQJWKHDFWLYLWLHVWKDWFRQVWLWXWHμUHDFKLQJ
RXW¶WRIRUXPVWDWHUHVLGHQWV´&UHHFKY5REHUWV)G
WK&LU FLWLQJ/$.)GDW WKHLQVWDQW
UHFRUG GRHV QRW VXSSRUW D ILQGLQJ RI SXUSRVHIXO DYDLOPHQW
EDVHGXSRQDVLQJOHVWDWHPHQWWKDW17:³DWWHPSWVWRPDUNHW
QDWLRQDOO\´7KHUHFRUGGRHVQRWFRQWDLQDQ\HYLGHQFHRI
DGYHUWLVLQJ GLUHFWO\ WDUJHWLQJ RU HYHQ DFWXDOO\ UHDFKLQJ
7HQQHVVHH1RUGRHVWKHUHFRUGUHIOHFWWKHH[WHQWDQGQDWXUH
RI 17:¶V DGYHUWLVLQJ 0RUHRYHU %ULGJHSRUW GRHV QRW
DFWXDOO\DGGXFHDQ\HYLGHQFHWKDW5$/XQGHUWRRNDGYHUWLVLQJ
H[SUHVVO\RQ17:¶VEHKDOIQRUGRHV%ULGJHSRUWSURYLGHDQ\
EDVLVRQZKLFKWRLPSXWH5$/¶VFRQGXFWWR17:
F 17:¶VFRQWUDFWZLWK%OXHZDWHU
$SSHOODQWV¶ DVVHUWLRQV DV WR 17:¶V FRQWUDFW ZLWK
%OXHZDWHUD7HQQHVVHHFRUSRUDWLRQUHTXLUHDEULHIGHSDUWXUH
IURPWKH&RXUW¶VSXUSRVHIXODYDLOPHQWDQDO\VLV%ULGJHSRUW
DVVHUWVWKDW17:¶VFRQWUDFWZLWK7HQQHVVHHEDVHG%OXHZDWHU
LVVXIILFLHQWIRUDILQGLQJRISHUVRQDOMXULVGLFWLRQEHFDXVHWKH
FRQWUDFWLVZLWKD7HQQHVVHHHQWLW\DQGFRQWDLQVFKRLFHRIODZ
DQGYHQXHSURYLVLRQVUHODWLQJWR7HQQHVVHH17:GRHVQRW
GLVSXWHWKDWLWFRQWUDFWHGZLWK%OXHZDWHUWRFROOHFWIRUHLJQ
%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO
1RV

UR\DOWLHVUHODWHGWR17:¶VFRPSRVLWLRQVRUWKDWWKHFRQWUDFW
FRQWDLQHGDFKRLFHRIODZDQGYHQXHSURYLVLRQVGHVLJQDWLQJ
7HQQHVVHHODZDQGYHQXH$SSHOOHHVGRKRZHYHUFRPSODLQ
WKDW%ULGJHSRUWGLGQRWDVVHUWWKLVPDWWHUEHIRUHWKHGLVWULFW
FRXUWDQGWKXVWKDWLWLVQRWDSSURSULDWHIRUFRQVLGHUDWLRQRQ
DSSHDO
$VWRWKH%OXHZDWHUFRQWUDFWWKHGLVWULFWFRXUWGLGQRWPDNH
D ILQGLQJ DV WR SXUSRVHIXO DYDLOPHQW DQG LQVWHDG LQ D
IRRWQRWHLQGLFDWHGWKDWWKHFRQWUDFWFRXOGQRWVHUYHDVDEDVLV
IRU MXULVGLFWLRQ EHFDXVH %ULGJHSRUW GLG QRW DVVHUW WKDW WKH
FRQWUDFWLVUHODWHGWRWKHLQIULQJHPHQWDFWLRQDJDLQVW17:
%ULGJHSRUW IRU WKH ILUVW WLPH RQ DSSHDO QRZ PDNHV VXFK
DUJXPHQWV DUJXPHQWV ZKLFK ZH GHFOLQH WR DGGUHVV 6HH
3UHIHUUHG5;Y$P3UHVFULSWLRQ3ODQ)G WK
&LU ³VXEMHFWWROLPLWHGH[FHSWLRQVWKLVFRXUWZLOOQRW
FRQVLGHULVVXHVQRWSUHVHQWHGWRWKHGLVWULFWFRXUWEXWUDLVHG
IRUWKHILUVWWLPHRQDSSHDO´ 2YHUVWUHHWY/H[LQJWRQ)D\HWWH
8UEDQ &RXQW\ *RY¶W )G WK &LU
%DLOH\Y)OR\G&RXQW\%GRI(GXF)G WK
&LU H[SODLQLQJ WKDW WKH ³FRXUW ZLOO QRW FRQVLGHU
DUJXPHQWVUDLVHGIRUWKHILUVWWLPHRQDSSHDOXQOHVVRXUIDLOXUH
WR FRQVLGHU WKH LVVXH ZLOO UHVXOW LQ D SODLQ PLVFDUULDJH RI
MXVWLFH´ :HILQGQREDVLVWRGHSDUWIURPWKLVSULQFLSOHLQWKH
LQVWDQWDFWLRQ
G 17:¶VDIILOLDWLRQZLWK$6&$3DQG%0,
:LWKUHVSHFWWR17:¶VDIILOLDWLRQZLWK$6&$3DQG%0,
%ULGJHSRUW FLWHV WKH IROORZLQJ FRQGXFW LQ VXSSRUW RI
SXUSRVHIXO DYDLOPHQW 17: LQLWLDOO\ DIILOLDWHG ZLWK
$6&$3 DQG %0, WKURXJK WKH 352V¶ 7HQQHVVHH RIILFHV
WKH352VFROOHFWUR\DOWLHVPRQLWRUSHUIRUPDQFHVDQG
SHUIRUPHQIRUFHPHQWIXQFWLRQVRQEHKDOIRIWKHLUPHPEHUV
DQG 17:OLFHQVHGLWVHQWLUHPXVLFFRPSRVLWLRQFDWDORJWR
$6&$3 DQG %0, ZKLFK LQ WXUQ UHOLFHQVHG WKHVH
FRPSRVLWLRQVWRWKLUGSDUWLHV

-- 8 of 11 --

1RV

%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO

:LWK UHVSHFW WR WKH FROOHFWLRQ PRQLWRULQJ HQIRUFHPHQW
DQGOLFHQVLQJDFWLYLWLHVWKHUHFRUGGRHVQRWVXSSRUWDILQGLQJ
RI SXUSRVHIXO DYDLOPHQW $V ZLWK WKH PHFKDQLFDO OLFHQVHV
JUDQWHG WR 5$/ WKH UHFRUG GRHV QRW UHIOHFW WKDW %0, RU
$6&$3KDYHDQ\DIILUPDWLYHGXW\WROLFHQVHRUPDUNHWWKH
VXEMHFW FRPSRVLWLRQV VSHFLILFDOO\ LQ 7HQQHVVHH RU HYHQ
QDWLRQDOO\ $V WR WKH UR\DOW\ FROOHFWLRQ PRQLWRULQJ DQG
HQIRUFHPHQWIXQFWLRQVWKHQDWXUHRIWKHVHIXQFWLRQVKDVQRW
EHHQVXEPLWWHGZLWKVXIILFLHQWFODULW\WRWKH&RXUWDVWRSHUPLW
DSXUSRVHIXODYDLOPHQWILQGLQJ
:LWKUHVSHFWWRWKHLQLWLDOFRQWUDFWXDODIILOLDWLRQZLWKWKH
352VWKURXJKWKH7HQQHVVHHRIILFHVRIWKHVHRUJDQL]DWLRQV
LQDQDO\]LQJZKHWKHUFRQWUDFWXDOUHODWLRQVKLSVDUHVXIILFLHQW
WR FRQIHU VSHFLILF MXULVGLFWLRQ WKH &RXUW IRFXVHV RQ WKH
DFWLRQVRIWKHGHIHQGDQWLQWKHQHJRWLDWLRQDQGSHUIRUPDQFH
RIWKHFRQWUDFWWRGHWHUPLQHZKHWKHULWVKRXOGEHVXEMHFWWR
VXLWLQWKHIRUXPVWDWH6HH1DWLRQZLGH)GDW$V
H[SODLQHGLQ1DWLRQZLGH
>7@KHH[LVWHQFHRIDFRQWUDFWZLWKDFLWL]HQRIWKHIRUXP
VWDWHVWDQGLQJDORQHZLOOQRWVXIILFHWRFRQIHUSHUVRQDO
MXULVGLFWLRQ RYHU D IRUHLJQ GHIHQGDQW 5DWKHU ³SULRU
QHJRWLDWLRQV DQG FRQWHPSODWHG IXWXUH FRQVHTXHQFHV
DORQJ ZLWK WKH WHUPV RI WKH FRQWUDFW DQG WKH SDUWLHV¶
DFWXDO FRXUVH RI GHDOLQJ PXVW EH HYDOXDWHG LQ
GHWHUPLQLQJ ZKHWKHU WKH GHIHQGDQW SXUSRVHIXOO\
HVWDEOLVKHGPLQLPXPFRQWDFWVZLWKLQWKHIRUXP´
,GDW LQWHUQDOFLWDWLRQRPLWWHG
$VWRWKHVHIDFWRUV%ULGJHSRUWGRHVQRWDVVHUWWKDW17:
KDG DQ\ W\SH RI VXEVWDQWLDO FRQWDFWV RU QHJRWLDWLRQV
VSHFLILFDOO\ZLWKWKH7HQQHVVHHRIILFHVRI%0,DQG$6&$3
WKDWWKHFRQWUDFWV¶WHUPVFRQWDLQHG7HQQHVVHHIRUXPRUYHQXH
VHOHFWLRQ FODXVHV RU WKDW WKH SDUWLHV¶ FRXUVH RI GHDOLQJ
LPSOLFDWHGFRQGXFWLQWKH7HQQHVVHHIRUXPRWKHUWKDQE\ZD\
RILQLWLDODIILOLDWLRQDQGWKHFROOHFWLRQRIUR\DOWLHVIRUVRQJV
%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO
1RV

SHUIRUPHG LQ 7HQQHVVHH %ULGJHSRUW HYHQ QRWHV WKDW DIWHU
LQLWLDODIILOLDWLRQ17:¶VFRQWDFWZLWK%0,DQG$6&$3ZDV
PDLQWDLQHGWKURXJKRIILFHVQRWEDVHG7HQQHVVHH%DVHGRQ
WKHIRUHJRLQJZHFDQQRWILQGWKDW17:¶V³SULRUQHJRWLDWLRQV
DQGFRQWHPSODWHGIXWXUHFRQVHTXHQFHVDORQJZLWKWKHWHUPV
RI WKH FRQWUDFW DQG WKH SDUWLHV¶ DFWXDO FRXUVH RI GHDOLQJ´
VXSSRUWDILQGLQJRISXUSRVHIXODYDLOPHQW
H ,QWHUQHWVDOHV
,Q WKLV &LUFXLW ³RSHUDWLRQ RI DQ ,QWHUQHW ZHEVLWH FDQ
FRQVWLWXWHWKHSXUSRVHIXODYDLOPHQWRIWKHSULYLOHJHRIDFWLQJ
LQDIRUXPVWDWHXQGHUWKHILUVW0RKDVFRIDFWRUμLIWKHZHEVLWH
LV LQWHUDFWLYH WR D GHJUHH WKDW UHYHDOV VSHFLILFDOO\ LQWHQGHG
LQWHUDFWLRQZLWKUHVLGHQWVRIWKHVWDWH¶´%LUG)GDW
TXRWLQJ1HRJHQ)GDW %ULGJHSRUWDVVHUWVWKDW
17:DOORZVDQGH[SHFWVLWVFRPSRVLWLRQVWREHVROGRQWKH
LQWHUQHW DQG WKXV KDV DYDLOHG LWVHOI RI GRLQJ EXVLQHVV LQ
7HQQHVVHH+RZHYHU%ULGJHSRUWGRHVQRWDVVHUWWKDW17:
KRVWVRURSHUDWHVDZHEVLWHOHWDORQHRQHWKDWLVVXIILFLHQWO\
LQWHUDFWLYHIRUDILQGLQJDSXUSRVHIXODYDLOPHQW(YHQXQGHU
WKH PRUH UHOD[HG SULPD IDFLH VWDQGDUG %ULGJHSRUW¶V
DUJXPHQWVDUHLQVXIILFLHQWWRHVWDEOLVKSXUSRVHIXODYDLOPHQW
DVWKHUHVXOWRILQWHUQHWDFWLYLW\
I 6XPPDU\RISXUSRVHIXODYDLOPHQWDQDO\VLVDVWR
17:
$VQRQHRIWKHIRUHJRLQJIDFWRUVVXSSRUWH[HUFLVLQJVSHFLILF
SHUVRQDOMXULVGLFWLRQRYHU17:WKH&RXUWDIILUPVWKHGLVWULFW
FRXUW¶VGLVPLVVDORIDOODFWLRQVDJDLQVW17:
3XUSRVHIXODYDLOPHQWDVWR'0
$VZLWK17:WKHGLVWULFWFRXUWFRQFOXGHGWKDW'0GLGQRW
SXUSRVHIXOO\DYDLOLWVHOIRIWKHIRUXPVWDWHDQGIRXQGSHUVRQDO
MXULVGLFWLRQ ODFNLQJ 2Q DSSHDO %ULGJHSRUW VHWV IRUWK
QXPHURXV UHDVRQV DV WR ZK\ '0 KDV SXUSRVHIXOO\ DYDLOHG

-- 9 of 11 --

1RV

%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO

LWVHOI RI WKH 7HQQHVVHH IRUXP :H ILQG WZR RI WKHVH
DUJXPHQWV SHUVXDVLYH DQG GLVSRVLWLYH DV WR D ILQGLQJ RI
SXUSRVHIXODYDLOPHQWDQGWKXVGRQRWDGGUHVVWKHUHPDLQGHU
RI$SSHOODQWV¶DUJXPHQWV
D 1DWLRQZLGH GLVWULEXWLRQ DJUHHPHQWEHWZHHQ'0
DQG5\FR
7KH UHFRUG UHIOHFWV WKDW '0 HQWHUHG LQWR D GLVWULEXWLRQ
FRQWUDFWZLWK5\FR'LVWULEXWLRQ3DUWQHUV ³5\FR´ LQZKLFK
'0VRXJKWQDWLRQZLGHGLVWULEXWLRQRILWVUHFRUGVWKURXJKRXW
³WKH8QLWHG6WDWHVLWVWHUULWRULHVFRPPRQZHDOWKSRVVHVVLRQV
´ 5HO\LQJ XSRQ 7RELQ %ULGJHSRUW DVVHUWV WKDW WKLV
QDWLRQZLGHGLVWULEXWLRQDJUHHPHQWLVVXIILFLHQWIRUDILQGLQJ
RISXUSRVHIXODYDLOPHQW
,Q 7RELQ WKH &RXUW LQGHHG IRXQG SXUSRVHIXO DYDLOPHQW
EDVHGRQWKHH[LVWHQFHRIDQDWLRQZLGHGLVWULEXWLRQDJUHHPHQW
6DOLHQWO\WKHWHUULWRU\LQWKH7RELQGLVWULEXWLRQDJUHHPHQWZDV
GHILQHGDV³WKH8QLWHG6WDWHVRI$PHULFDLWVWHUULWRULHVDQG
SRVVHVVLRQV DQG 3XHUWR 5LFR´ 7RELQ )G DW
$OWKRXJK LQ 7RELQ ZH PHQWLRQHG D QXPEHU RI IDFWRUV
VXSSRUWLQJRXUILQGLQJRISXUSRVHIXODYDLOPHQWWKHSULPDU\
HPSKDVLV RI WKH RSLQLRQ LV RQ WKH ³GHOLEHUDWH GHFLVLRQ
>'XSKDU PDGH@ WR PDUNHW ULWRGULQH LQ DOO VWDWHV´ DV
RSSRVHGWRVHHNLQJRQO\DUHJLRQDOGLVWULEXWLRQDJUHHPHQW
,G:HIRXQGSXUSRVHIXODYDLOPHQWHYHQWKRXJK'XSKDUGLG
³QRWKLQJ LQ SDUWLFXODU WR SXUSRVHIXOO\ DYDLO LWVHOI RI WKH
.HQWXFN\PDUNHWDVGLVWLQJXLVKHGIURPDQ\RWKHUVWDWHLQWKH
XQLRQ´,GDW
,QWKHLQVWDQWDFWLRQ'0GRHVQRWH[SOLFLWO\DGPLWWKDWLW
DIILUPDWLYHO\ UHTXLUHG 5\FR WR GLVWULEXWH LWV UHFRUGV
WKURXJKRXWWKHIRUHJRLQJWHUULWRU\+RZHYHU'0GRHVDGPLW
YLDGHSRVLWLRQWHVWLPRQ\RI'0¶VSUHVLGHQW0DUN:DWVRQ
WKDWKLVXQGHUVWDQGLQJZDVWKDW'0¶VUHFRUGLQJVZRXOGEH
GLVWULEXWHG QDWLRQZLGH ³LQ DOO VWDWHV´ SXUVXDQW WR WKH
SDUWLHV¶DJUHHPHQW-$7KHODQJXDJHLQWKH'05\FR
%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO
1RV

7KH GLVWLQFWLRQ WKDW WKH &RXUW ILQGV EHWZHHQ '0 DQG 17: LV
WZRIROG )LUVW QR FRQWUDFW ODQJXDJH LV SUHVHQWHG WR WKH &RXUW DV WR WKH
17:5$/ GLVWULEXWLRQ DJUHHPHQW 6HFRQG %ULGJHSRUW GRHV QRW VHW IRUWK
VXIILFLHQW IDFWV DV WR 17: WR ILQG WKDW 17: DFWXDOO\ UHTXLUHG 5$/ RU DQ\
RWKHU SDUW\ WR PDUNHW GLVWULEXWH RU OLFHQVH 17:¶V FRPSRVLWLRQV
QDWLRQDOO\ LQ 7HQQHVVHH VSHFLILFDOO\ RU HOVHZKHUH ,I VXFK LV WKH QDWXUH
RI WKH UHODWLRQVKLS EHWZHHQ 17: DQG 5$/ WKDW IDFW LV QRW GLVFHUQLEOH
IURP WKH UHFRUG EHIRUH WKH &RXUW
DJUHHPHQWLVQHDUO\LGHQWLFDOWRWKDWLQ7RELQDQGYLHZLQJWKH
IDFWVLQDOLJKWPRVWIDYRUDEOHWR$SSHOODQWVWKH&RXUWILQGV
WKDWWKHIRUHJRLQJVXSSRUWVDSULPDIDFLHSXUSRVHIXODYDLOPHQW
ILQGLQJ
E '0¶VZHEVLWHDQGLQWHUQHWVDOHV
$VIXUWKHUVXSSRUWIRUDILQGLQJRISXUSRVHIXODYDLOPHQW
%ULGJHSRUWQRWHVWKDW'0RSHUDWHVDZHEVLWHGPUHFRUGVFRP
WKURXJKZKLFKXVHUVFDQDFFHVV'0¶VFDWDORJDQGSXUFKDVH
'0¶VUHFRUGV7KURXJKWKH'0VLWHXVHUVVHOHFWDUHFRUGLQJ
RIFKRLFHDQGWKHQDUHUHGLUHFWHGWR$PD]RQFRPWRFRPSOHWH
WKHLUSXUFKDVHV
$VLQGLFDWHGVXSUD³RSHUDWLRQRIDQ,QWHUQHWZHEVLWHFDQ
FRQVWLWXWHWKHSXUSRVHIXODYDLOPHQWRIWKHSULYLOHJHRIDFWLQJ
LQDIRUXPVWDWHXQGHUWKHILUVW0RKDVFRIDFWRUμLIWKHZHEVLWH
LV LQWHUDFWLYH WR D GHJUHH WKDW UHYHDOV VSHFLILFDOO\ LQWHQGHG
LQWHUDFWLRQZLWKUHVLGHQWVRIWKHVWDWH¶´%LUG)GDW
TXRWLQJ 1HRJHQ )G DW ,Q %LUG WKH FRXUW
FRQFOXGHG ³WKDW E\ PDLQWDLQLQJ D ZHEVLWH RQ ZKLFK 2KLR
UHVLGHQWV FDQ UHJLVWHU GRPDLQ QDPHV DQG E\ DOOHJHGO\
DFFHSWLQJWKHEXVLQHVVRI2KLRUHVLGHQWVWKH'RWVWHU
GHIHQGDQWV KDYH VDWLVILHG WKH SXUSRVHIXODYDLOPHQW
UHTXLUHPHQW´,G7KHGHIHQGDQWVLQ%LUGRSHUDWHGDZHEVLWH
WKURXJK ZKLFK XVHUV FRXOG UHJLVWHU GRPDLQ QDPHV DQG WKH
SODLQWLII PHUHO\ VHL]HG RQ GHIHQGDQWV¶ DGPLVVLRQ WKDW WKH\
SURFHVVHG ,QWHUQHW GRPDLQQDPH UHJLVWUDWLRQV
3ODLQWLIIVWKHQHVWLPDWHGDQXPEHURIVDOHVWKDWZHUHOLNHO\WR

-- 10 of 11 --

1RV

%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO

KDYH RFFXUUHG LQ 2KLR $FFRUGLQJ WR %LUG RI WKH
GHIHQGDQWV¶VDOHVRFFXUUHGLQWKH86%LUGWKHQGLYLGHGWKH
RIWKHVDOHVHTXDOO\DPRQJWKHVWDWHVZKLFK
UHVXOWHGLQWKHFRQFOXVLRQWKDWWUDQVDFWLRQVLQYROYHGDQ
2KLR UHVLGHQW 6SHFLILFDOO\ QRWLQJ WKDW LW ³PXVW GUDZ DOO
SHUPLVVLEOHLQIHUHQFHVLQIDYRURI%LUGDWWKLVVWDJHRIWKH
SURFHHGLQJVEHFDXVHQRHYLGHQWLDU\KHDULQJRUGLVFRYHU\KDV
RFFXUUHG´LGDWWKH%LUGFRXUWUHJDUGHGWKHIRUHJRLQJ
³HYLGHQFH´DVVXIILFLHQWWRHVWDEOLVKSXUSRVHIXODYDLOPHQW
,QWKHLQVWDQWDFWLRQDVLQ%LUGWKHUHLVHYLGHQFHLQGLFDWLQJ
WKHYROXPHRIEXVLQHVV'0FRQGXFWVWKURXJKWKHLQWHUQHWIRU
DWOHDVWWZRRIWKHDOOHJHGO\LQIULQJLQJDOEXPVLHLQWHUQHW
VDOHVRI7DJ7HDPDQGRI)XWXUH5K\WKP7KHIDFWVDUH
QRWFOHDUUHJDUGLQJWKHQXPEHURI$PD]RQFRPVDOHVWKDW
PLJKWKDYHRULJLQDWHGE\OLQNLQJWKURXJKWKH'0ZHEVLWHEXW
YLHZLQJ WKH FXPXODWLYH IDFWV LQ $SSHOODQWV¶ IDYRU ZH
FRQFOXGHWKDW%ULGJHSRUWKDVDGGXFHGHYLGHQFHVXIILFLHQWWR
VXSSRUWDSULPDIDFLHILQGLQJRISXUSRVHIXODYDLOPHQW
5HPDLQLQJ0RKDVFRIDFWRUV
$OWKRXJK$SSHOODQWVXUJHXVWRSURFHHGEH\RQGWKHGLVWULFW
FRXUW¶V SXUSRVHIXO DYDLOPHQW DQDO\VLV DQG DQQRXQFH WKDW
MXULVGLFWLRQLVSURSHUZHGHFOLQHWRGRVRLQWKHLQVWDQWDFWLRQ
7KHUHPDLQLQJWZRSURQJVRIWKH0RKDVFRWHVWRIWHQLPSOLFDWH
D IDFWLQWHQVLYH DQDO\VLV DQG WKH DSSHOODWH UHFRUG LV QRW
VXIILFLHQWO\GHYHORSHGWRSHUPLWXVWRGHWHUPLQHUHODWLYHWR
HDFK RI WKH HLJKW LQGLYLGXDO DFWLRQV DVVHUWHG DJDLQVW '0
ZKHWKHU'0¶VDFWLYLWLHVLQWKHIRUXPVWDWHDUH VXIILFLHQWO\
UHODWHGWRHDFKRIWKHDFWLRQVWRVXSSRUWSHUVRQDOMXULVGLFWLRQ
7KLVPDWWHULVPRUHDSSURSULDWHO\GHWHUPLQHGE\WKHGLVWULFW
FRXUWRQUHPDQG
,,,&21&/86,21
%DVHGRQWKHIRUHJRLQJZH$)),50WKHGLVWULFWFRXUW¶V
RUGHUJUDQWLQJ17:¶VPRWLRQWRGLVPLVVIRUODFNRISHUVRQDO
%ULGJHSRUW0XVLFHWDO
Y6WLOO1WKH:DWHU
3XEOLVKLQJHWDO
1RV

MXULVGLFWLRQ +RZHYHU ZH 5(9(56( WKH GLVWULFW FRXUW¶V
SXUSRVHIXODYDLOPHQWGHWHUPLQDWLRQDVWR'0DQG5(0$1'
DSSHOODWH&DVH1RV±IRUIXUWKHUILQGLQJVDV
WRWKHSURSULHW\RIH[HUFLVLQJVSHFLILFSHUVRQDOMXULVGLFWLRQ
RYHU'0

-- 11 of 11 --