01a0405p.06

99-2239; 99-2257Court of Appeals for the Sixth Circuit19 nov. 2001

Texte intégral

7KH +RQRUDEOH $YHUQ &RKQ 6HQLRU 8QLWHG 6WDWHV 'LVWULFW -XGJH IRU
WKH (DVWHUQ '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
:$/7(5 / *5266 -5 DQG
%$5%$5$ + *5266
&$/9,1 &
/,11(0$11 DQG3$75,&,$ *
/,11(0$11
3HWLWLRQHUV$SSHOODQWV
Y
&200,66,21(5 2) ,17(51$/
5(9(18(
5HVSRQGHQW$SSHOOHH
;!

1
1RV
2Q$SSHDOIURPWKH8QLWHG6WDWHV7D[&RXUW
1RV²-DPHV6+DOSHUQ
7D[&RXUW-XGJH
$UJXHG2FWREHU
'HFLGHGDQG)LOHG1RYHPEHU
%HIRUH'$8*+75(<DQG&/$<&LUFXLW-XGJHV
&2+16HQLRU'LVWULFW-XGJH

-- 1 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8(' *HUDOG - 5DSLHQ 7$)7 67(77,1,86
+2//,67(5 &LQFLQQDWL 2KLR IRU $SSHOODQWV 'DYLG ,
3LQFXV81,7('67$7(6'(3$570(172)-867,&(
$33(//$7( 6(&7,21 7$; ',9,6,21 :DVKLQJWRQ
'&IRU$SSHOOHH21%5,()*HUDOG-5DSLHQ-DPHV-
5\DQ 7$)7 67(77,1,86 +2//,67(5 &LQFLQQDWL
2KLR IRU $SSHOODQWV 'DYLG , 3LQFXV $ :UD\ 0XRLR
81,7(' 67$7(6 '(3$570(17 2) -867,&(
$33(//$7( 6(&7,21 7$; ',9,6,21 :DVKLQJWRQ
'&IRU$SSHOOHH
&/$< - DQQRXQFHG WKH MXGJPHQW RI WKH FRXUW DQG
GHOLYHUHG DQ RSLQLRQ LQ ZKLFK '$8*+75(< - DQG
&2+1'-FRQFXUUHGH[FHSWDVWR3DUW,,%&2+1'
- SS GHOLYHUHG D VHSDUDWH RSLQLRQ LQ ZKLFK
'$8*+75(<-FRQFXUUHGZKLFKFRQVWLWXWHVWKHRSLQLRQ
RIWKHFRXUWRQWKHLVVXHDGGUHVVHGLQ3DUW,,%
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
&/$<&LUFXLW-XGJH7D[SD\HUV:DOWHU/DQG%DUEDUD
+ *URVV -U DORQJ ZLWK &DOYLQ & DQG 3DWULFLD *
/LQQHPDQQDSSHDOIURPWKHRUGHURIWKH8QLWHG6WDWHV7D[
&RXUWYDOXLQJFHUWDLQJLIWVRIFRUSRUDWHVWRFNDWSHU
VKDUH7RWKHH[WHQWWKDWWKHYDOXDWLRQZDVEDVHGXSRQWKH
XVHRIDFRQWHVWHGYDOXDWLRQDSSURDFK,ZRXOGILQGWKDWWKH
WD[ FRXUW¶V GHFLVLRQ ZDV FOHDUO\ HUURQHRXV DQG ZRXOG
WKHUHIRUH UHYHUVH WKH WD[ FRXUW¶V GHFLVLRQ DQG UHPDQG IRU
IXUWKHUSURFHHGLQJV+RZHYHULQDVPXFKDV-XGJH'DXJKWUH\
DQG-XGJH&RKQILQGWKDWWKHWD[FRXUWGLGQRWFOHDUO\HUULQ
FRQFOXGLQJWKDWLWZDVDSSURSULDWHQRWWRWD[DIIHFWWKHVWRFN
LQ RUGHU WR GHWHUPLQH LWV IDLU PDUNHW YDOXH WKH WD[ FRXUW¶V
GHFLVLRQLV$)),50('
1RV *URVVHWDOY&RPPLVVLRQHU
2YHUDOO WKH HQWLUH YDOXDWLRQ SURFHVV LV D ILFWLRQ WKH
SXUSRVH RI ZKLFK LV WR GHWHUPLQH WKH SULFH WKDW WKH VWRFN
ZRXOGFKDQJHKDQGVIURPDZLOOLQJEX\HUDQGDZLOOLQJVHOOHU
+RZHYHU D FRXUW LV QRW UHTXLUHG WR SUHVXPH K\SRWKHWLFDO
XQOLNHO\ RU XQUHDVRQDEOH IDFWV LQ GHWHUPLQLQJ IDLU PDUNHW
YDOXH6HH(VWDWHRI:DWWV)GQ WK&LU
9DOXDWLRQLVDIDFWVSHFLILFWDVNH[HUFLVHWD[DIIHFWLQJ
LV EXW RQH WRRO LQ DFFRPSOLVKLQJ WKDW WDVN 7KH JRDO RI
YDOXDWLRQLVWRFUHDWHDILFWLRQDOVDOHDWWKHWLPHWKHJLIWZDV
PDGHWDNLQJLQWRDFFRXQWWKHIDFWVDQGFLUFXPVWDQFHVRIWKH
SDUWLFXODUWUDQVDFWLRQ7KH7D[&RXUWGLGWKDWDQGGHWHUPLQHG
WKDWWD[DIIHFWLQJZDVQRWDSSURSULDWHLQWKLVFDVH,GRQRW
ILQGLWVFRQFOXVLRQVFOHDUO\HUURQHRXV

-- 2 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
)G WK&LU 7KXVWKHIDFWWKDWWD[DIIHFWLQJPD\
KDYHEHHQDSSURYHGLQRWKHUFDVHVDQGZDVHYHQDSSURYHGLQ
SULRUUHWXUQVILOHGE\WKH7D[SD\HUVGRHVQRWDQGVKRXOGQRW
SUHFOXGHDGLIIHUHQWUHVXOWLQDQRWKHUFDVHSDUWLFXODUO\ZKHUH
WKHUH LV GLVDJUHHPHQW RYHU ZKHWKHU WR WD[ DIIHFW LQ
GHWHUPLQLQJWKHYDOXHRIVWRFNLQWKHILUVWSODFH
,,,&RQFOXVLRQ
5HYLHZLQJWKHFRQIOLFWLQJH[SHUWV¶RSLQLRQVLWDSSHDUVWKDW
'U%DMDM¶VYDOXDWLRQZDVIURPDQDFDGHPLFSHUVSHFWLYHDQG
KHFOHDUO\WRRNDVFKRODUO\DSSURDFKWRWKHYDOXDWLRQLVVXH
0F&R\¶V YDOXDWLRQ RQ WKH RWKHU KDQG ZDV IURP WKH
SHUVSHFWLYHRIDEXVLQHVVSURIHVVLRQDOZKRKDVSHUIRUPHG
QXPHURXV YDOXDWLRQV LQ KLV SURIHVVLRQDO FDUHHU 7KLV
GLVWLQFWLRQLVREVHUYHGQRWWRGLPLQLVK0F&R\¶VH[SHUWLVHRU
HOHYDWH'U%DMDM¶VEXWVLPSO\WRSRLQWRXWWKHGLIIHUHQWZD\V
WKHH[SHUWVDSSURDFKHGWKHYDOXDWLRQTXHVWLRQWRWKHIDFWVDW
KDQG 8OWLPDWHO\ WKH 7D[ &RXUW IRXQG WKDW 'U %DMDM¶V
PHWKRG ZDV WKH EHWWHU UHDVRQHG RQH XQGHU WKH IDFWV DQG
FLUFXPVWDQFHVRIWKHFDVH,FDQQRWVD\WKLVZDVFOHDUHUURU
7KH 7D[SD\HUV VSHQG D JRRG GHDO RI WLPH DUJXLQJ WKDW
ZLOOLQJ EX\HUV ZRXOG QRW NQRZ 'U %DMDM¶V YDOXDWLRQ
WHFKQLTXHVDQGWKDW'U%DMDMXVHGGDWDDYDLODEOHDIWHUWKH
GDWHRIWKHJLIWDQGWKHUHIRUHWKH7D[&RXUWHUUHGLQDSSO\LQJ
WKHZLOOLQJEX\HUZLOOLQJVHOOHUUXOH7KLVDUJXPHQWLVSRRUO\
FRQFHLYHG )LUVW WKH 7D[ &RXUW LV QRW SURKLELWHG IURP
FRQVLGHULQJSRVWYDOXDWLRQGDWDLIUHOHYDQWWRVKHGOLJKWRQ
IDFWV H[LVWLQJ RQ WKH GDWH RI WKH YDOXDWLRQ 6HH (VWDWH RI
*LOIRUGY&RPP¶URI,QWHUQDO5HY7&
6HFRQG WKH SXUSRVH RI YDOXDWLRQ LV WR GHWHUPLQH ZKDW D
ZLOOLQJ EX\HU ZRXOG SD\ DQG ZKDW D ZLOOLQJ VHOOHU ZRXOG
DFFHSWIRUWKHVWRFNRQWKHGDWHRIWKHYDOXDWLRQLWLVQRWWR
GHWHUPLQHZKDWPHWKRGRORJ\WKHZLOOLQJEX\HUZRXOGDSSO\
7KH ZLOOLQJ EX\HUZLOOLQJ VHOOHU UXOH SUHVXSSRVHV WKDW WKH
SULFHZLOOEHWKHIDLUPDUNHWYDOXH9DOXDWLRQWKURXJKWKHXVH
RI H[SHUW PHWKRGRORJ\ LV WKH PHDQV QRW WKH HQG WR
DSSOLFDWLRQRIWKHZLOOLQJEX\HUZLOOLQJVHOOHUUXOH
1RV *URVVHWDOY&RPPLVVLRQHU
)$&76
7KH FRPPRQ TXHVWLRQ SUHVHQWHG E\ WKLV FRQVROLGDWHG
DSSHDOLVWKHIDLUPDUNHWYDOXHRIFHUWDLQVKDUHVRIFRUSRUDWH
VWRFNWUDQVIHUUHGDVJLIWVE\7D[SD\HUV:DOWHU/*URVV-U
DQG 3DWULFLD * /LQQHPDQQ WR WKHLU UHVSHFWLYH FKLOGUHQ
7D[SD\HUV%DUEDUD+*URVVDQG&DOYLQ&/LQQHPDQQWKH
ZLIHDQGKXVEDQGRIWKHDIRUHPHQWLRQHGWD[SD\HUVDUHSDUWLHV
EHFDXVH WKH\ FRQVHQWHG WR KDYLQJ WKH JLIWV PDGH E\ WKHLU
UHVSHFWLYHVSRXVHVDVDOVRKDYLQJEHHQPDGHRQHKDOIE\WKHP
IRU IHGHUDO JLIW WD[ SXUSRVHV 7KH VKDUHV LQ TXHVWLRQ DUH
VKDUHVRIVWRFNRI3HSVL&ROD%RWWOHUV,QF ³* -´ DQ2KLR
FRUSRUDWLRQWKDWERWWOHVDQGGLVWULEXWHVYDULRXVEHYHUDJHVLQ
2KLRDQG.HQWXFN\* -¶VEXVLQHVVRSHUDWLRQVFDQEHWUDFHG
EDFN WR D SDUWQHUVKLS IRUPHG LQ WKH V EHWZHHQ WZR
PDUULHGFRXSOHV,VDDF1DQG(VWKHU0-DUVRQDQG:DOWHU/
DQG1HOO5*URVV7KLVEXVLQHVVZDVLQFRUSRUDWHGLQ
%\ WKH WLPH WKH TXHVWLRQHG JLIWV ZHUH PDGH LQ WKH
IRXQGHUVRIWKHFRUSRUDWLRQZHUHGHFHDVHGDQGRZQHUVKLSRI
* -KDGGHYROYHGWRWKHLUUHODWLYHVWKH*URVVIDPLO\JURXS
ZKLFKLQFOXGHGPHPEHUVRIWKH/LQQHPDQQIDPLO\ DQGWKH
-DUVRQIDPLO\JURXS'LUHFWO\DQGWKURXJKYRWLQJWUXVWVHDFK
IDPLO\JURXSRZQHGRIWKHRXWVWDQGLQJVKDUHVRIVWRFN
RI* -
%\ D ZULWWHQ DJUHHPHQW GDWHG 1RYHPEHU * -¶V
VKDUHKROGHUV HOHFWHG WR EH WD[HG DV D VPDOO EXVLQHVV
FRUSRUDWLRQ ³6FRUSRUDWLRQ´ SXUVXDQWWR6XEFKDSWHU6RIWKH
,QWHUQDO5HYHQXH&RGH,5&††IRUDWOHDVW
\HDUV 7KLV VXEFKDSWHU ZDV HQDFWHG WR HOLPLQDWH WKH WD[
GLVDGYDQWDJHV WKDW PLJKW GLVVXDGH VPDOO EXVLQHVVHV IURP
DGRSWLQJWKHFRUSRUDWHIRUPDQGWROHVVHQWKHWD[EXUGHQRQ
VXFK EXVLQHVVHV 7KH VWDWXWH DFFRPSOLVKHV WKHVH JRDOV E\
PHDQV RI D SDVVWKURXJK V\VWHP XQGHU ZKLFK FRUSRUDWH
LQFRPH ORVVHV GHGXFWLRQV DQG FUHGLWV DUH DWWULEXWHG WR
LQGLYLGXDOVKDUHKROGHUVLQDPDQQHUDNLQWRWKHWD[WUHDWPHQW
RI SDUWQHUVKLSV 6HH ,5& †† %XIIHUG Y
&RPPLVVLRQHU 86 ,Q SUDFWLFDO
WHUPVWKLVPHDQVWKDWWKHFRUSRUDWLRQSD\VQRVWDWHRUIHGHUDO
LQFRPHWD[6HH,5&††2+,2 5(9 &2'( $11

-- 3 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
0HPEHUV RI WKH -DUVRQ IDPLO\ JURXS HQWHUHG LQWR D VLPLODU UHVWULFWLYH
DJUHHPHQW UHJDUGLQJ WKHLU * - VKDUHV RQ $SULO 7KLV DJUHHPHQW
ZDV DOVR LQ HIIHFW DV RI -XO\
† % %DQNV%DOGZLQ 5DWKHU WKH
6FRUSRUDWLRQSDVVHVLWVLQFRPHWKURXJKWRLWVVKDUHKROGHUV
ZKR UHSRUW WKHLU SUR UDWD VKDUHV RI WKDW LQFRPH RQ WKHLU
LQGLYLGXDOWD[UHWXUQV6HH,5&†* -PDLQWDLQHG
6 FRUSRUDWLRQ VWDWXV WKURXJK -XO\ DW ZKLFK WLPH
WKHUHZHUHQRSODQVWRFKDQJHLWV6FRUSRUDWLRQVWDWXV
$OVRLQWKHPHPEHUVRIWKH*URVV/LQQHPDQQIDPLO\
JURXSHQWHUHGLQWRDQDJUHHPHQWUHVWULFWLQJWKHWUDQVIHUDELOLW\
RI WKHLU * - VWRFN 7KLV UHVWULFWLYH DJUHHPHQW SHUPLWWHG
FHUWDLQWUDQVIHUVZLWKLQWKH*URVV/LQQHPDQQIDPLO\JURXS
EXWSURYLGHGWKDWLIRWKHUWUDQVIHUVZHUHDWWHPSWHGWKH* -
VWRFN ZRXOG EH SXUFKDVHG E\ WKH IDPLO\ JURXS DW ERRN
YDOXH0RUHLPSRUWDQWO\WKHDJUHHPHQWDOVRUHVWULFWHGDQ\
WUDQVIHUVWKDWZRXOGMHRSDUGL]H* -¶V6FRUSRUDWLRQVWDWXV
7KLVDJUHHPHQWZDVVWLOOLQHIIHFWDVRI-XO\
$WWKDWWLPH* -ZDVWKHWKLUGODUJHVWLQGHSHQGHQWERWWOHU
RI 3HSVL&ROD SURGXFWV * - KDG DQ H[FOXVLYH IUDQFKLVH
DJUHHPHQW WR GLVWULEXWH WKHVH SURGXFWV ZLWKLQ VHYHUDO
JHRJUDSKLFWHUULWRULHV7KHVHSURGXFWVLQFOXGLQJWKHEUDQG
QDPHV6HYHQ8S'U3HSSHUDQGILYHYDULDWLRQVRI3HSVL
&ROD ZHUH GLVWULEXWHG WR RYHU FXVWRPHUV LQFOXGLQJ
ZKROHVDOHDQGUHWDLORXWOHWV* -¶VRSHUDWLRQDOLQIUDVWUXFWXUH
LQFOXGHG SODQWV ZDUHKRXVHV RYHU YHKLFOHV DQG RYHU
VRIWGULQNYHQGLQJPDFKLQHV)URPWR
* -HQMR\HGVWHDG\LQFUHDVHVLQLWVRSHUDWLRQDOLQFRPHWRWDO
LQFRPHDQGGLVWULEXWLRQWRVKDUHKROGHUV,QDGGLWLRQ* -¶V
VKDUHKROGHUGLVWULEXWLRQVQHDUO\WRWDOHGWKHFRPSDQ\¶VHQWLUH
LQFRPHIRUHDFKRIWKHVH\HDUV
2Q -XO\ :DOWHU *URVV JDYH HDFK RI KLV WKUHH
FKLOGUHQVKDUHVRI* -VWRFNDQG3DWULFLD/LQQHPDQQ
JDYHHDFKRIKHUWZRFKLOGUHQVKDUHVRI* -VWRFN7KH
JLIWVWRHDFKFKLOGUHSUHVHQWHGOHVVWKDQRQHSHUFHQWRIWKH
FRUSRUDWLRQ¶VRXWVWDQGLQJVKDUHV:DOWHU*URVVDQGKLVZLIH
1RV *URVVHWDOY&RPPLVVLRQHU
DIIHFW DQ 6 FRUSRUDWLRQ¶V SURMHFWHG HDUQLQJV ZLWK DQ
XQGLVFRXQWHG FRUSRUDWH WD[ UDWH ZLWKRXW IDFWV RU
FLUFXPVWDQFHVVXIILFLHQWWRHVWDEOLVKWKHOLNHOLKRRGWKDWWKH
HOHFWLRQ ZRXOG EH ORVW´ -$ DW 7KH OHDG RSLQLRQ¶V
FRQFOXVLRQ WKDW ZLOOLQJ EX\HUV DQG ZLOOLQJ VHOOHUV PLJKW
FRQVLGHU WKDW * - ZRXOG ORVH LWV 6XEFKDSWHU 6 VWDWXV LV
FRQWUDU\WRWKHHYLGHQFH RI UHFRUGDWWKHWLPHWKHJLIWZDV
PDGH DQG UHIOHFWV LWV RZQ LQGHSHQGHQW RSLQLRQ RI ZKDW
ZLOOLQJ EX\HUV DQG VHOOHUV ZRXOG FRQVLGHU ZKHQ YDOXLQJ
* -¶VVWRFN
7KHOHDGRSLQLRQDOVRFULWLFL]HVWKH7D[&RXUW¶VGHFLVLRQ
UHJDUGLQJWD[DIIHFWLQJEHFDXVHSULRUGHFLVLRQVSHUPLWWHGWD[
DIIHFWLQJDQGEHFDXVHWKH,56DFFHSWHGSULRUUHWXUQVRIWKH
7D[SD\HUVZKLFKFRQWDLQHGYDOXDWLRQVWKDWZHUHWD[DIIHFWHG
7KHOHDGRSLQLRQUHOLHVRQ(:%OLVV&RY8QLWHG6WDWHV
)6XSS 1'2KLR DII¶G)G WK
&LU WR VXSSRUW LWV FRQFOXVLRQ WKDW WKH ,56 DFWHG
DUELWUDULO\LQUHIXVLQJWRDFFHSWWKHUHWXUQVDWLVVXH%OLVV
KRZHYHULVLQDSSRVLWH,Q%OLVVWKHGLVWULFWFRXUWKHOGWKDW
WKH³&RPPLVVLRQHULVZLWKRXWDXWKRULW\WRDFWUHWURDFWLYHO\LQ
DSDUWLFXODUFDVHZKHUHKLVRZQUHJXODWLRQVDUHEURDGHQRXJK
WR DOORZ WKH WD[SD\HU¶V PHWKRG DV RQH LQ DFFRUGDQFH ZLWK
JHQHUDOO\DFFHSWHGDFFRXQWLQJSULQFLSOHVRUEHVWDFFRXQWLQJ
SUDFWLFHVDQGRQHZKLFKZDVFRQVLVWHQWO\IROORZHG´)
6XSS DW )LUVW RI DOO DV QRWHG DERYH WKHUH ZDV
GLVDJUHHPHQWDPRQJWKHH[SHUWVDVWRZKHWKHUWD[DIIHFWLQJ
ZDVJHQHUDOO\ DFFHSWHG6HFRQG%OLVVLQYROYHGDQDSSHDO
IURPDGHFLVLRQRIWKH&RPPLVVLRQHUWRWKHGLVWULFWFRXUWQRW
DQDSSHDOIURPDGHFLVLRQRIWKH7D[&RXUW7KXVWKHGLVWULFW
FRXUW SUHVXPDEO\ KDG PRUH ODWLWXGH LQ UHYLHZLQJ WKH
&RPPLVVLRQHU¶VGHFLVLRQWRPDNHWKHGHWHUPLQDWLRQWKDWWKH
&RPPLVVLRQHUDFWHGDUELWUDULO\LQWKDWFDVH
0RVWVLJQLILFDQWO\KRZHYHUDVWKH&RPPLVVLRQHUSRLQWV
RXWWKH&RPPLVVLRQHULVQRWSUHFOXGHGIURPFRUUHFWLQJDQ
HUURU6HH6LUER+ROGLQJV,QFY&RPPLVVLRQHU)G
G&LU :DJQHUY8QLWHG6WDWHV)G
&W&O .HKD\DY8QLWHG6WDWHV)G
&W&O :DUGY&RPP¶U,QWHUQDO5HY

-- 4 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
UHYLHZ,GRQRWEHOLHYHWKDWWKH7D[&RXUWFOHDUO\HUUHGLQ
WKLVUHJDUG

7KH OHDG RSLQLRQ DSSHDUV WR HPSKDVL]H WKH DSSDUHQW
XQIDLUQHVVWR7D[SD\HUVLI* -¶VVWRFNLVQRWWD[DIIHFWHGDQG
DFFXVHVWKH,56DQGWKH7D[&RXUWRIEHLQJ³K\SRFULWLFDO´DQG
³DUELWUDU\´LQWKHLUYDOXDWLRQV8QIDLUQHVVKRZHYHULVQRWWKH
LVVXH DQG HYHQ LI LW ZDV WKH 7D[SD\HUV ZHUH QRW XQIDLUO\
WUHDWHG E\ QRW WD[ DIIHFWLQJ * -¶V VWRFN )LUVW WKH OHDG
RSLQLRQGLVDJUHHVZLWKWKH7D[&RXUW¶VILQGLQJWKDWWKH,56
SROLF\ PDQXDOV GR QRW HVWDEOLVK WKDW WD[ DIIHFWLQJ LV D
QHFHVVDU\SDUWRIYDOXLQJDQ6&RUSRUDWLRQ,GRQRWEHOLHYH
WKDW WKLV ILQGLQJ LV FOHDUO\ HUURQHRXV DQG LQ IDFW LV ZHOO
VXSSRUWHGLQWKHUHFRUG1RWRQO\GRWKHVWDWHPHQWVLQWKH
,56PDQXDOVIDLOWRDIILUPDWLYHO\DGYRFDWHWD[DIIHFWLQJIRUDOO
6 &RUSRUDWLRQ YDOXDWLRQ ERWK WKH JXLGH DQG KDQGERRN
SURYLGHWKDWDUHQRWWREHUHOLHGXSRQDVELQGLQJDXWKRULW\
WKXVHYHQLI7D[SD\HUVUHOLHGRQWKHVHPDWHULDOVWKHLUUHOLDQFH
ZDVQRWMXVWLILHG
0RUHRYHUIRFXVLQJVROHO\RQWKHSHUFHLYHGXQIDLUQHVVWR
WKH7D[SD\HUVLVLPSURSHUEHFDXVHWKHZLOOLQJEX\HUZLOOLQJ
VHOOHU UXOH GRHV QRW SHUPLW D GHWHUPLQDWLRQ RI IDLU PDUNHW
YDOXHEDVHGVROHO\RQWKHSULFHORZHULQJGHVLUHVRIWKHZLOOLQJ
EX\HU 6HH 0DQGHOEDXP Y &RPP¶U RI ,QWHUQDO 5HY
7&0 &&+ DII¶GZLWKRXWSXEOLVKHG
RSLQLRQ)G G&LU ³>L@JQRULQJWKHYLHZVRI
DZLOOLQJVHOOHULVFRQWUDU\WRWKHZLOOLQJEX\HUZLOOLQJVHOOHU
WHVW´ 7KXV GHWHUPLQLQJ IDLU PDUNHW YDOXH DOVR UHTXLUHV
FRQVLGHUDWLRQRIWKHVWDQGSRLQWRIWKHZLOOLQJVHOOHU
6HFRQGO\WKHOHDGRSLQLRQGLVFXVVHVWKHSRVVLELOLW\RI* -
ORVLQJ LWV 6XEFKDSWHU 6 VWDWXV FRQFOXGLQJ WKDW ³D ZLOOLQJ
EX\HUDQGVHOOHUDQWLFLSDWLQJWKHFRUSRUDWLRQ¶VIXWXUHHDUQLQJV
ZRXOGKDYHWRQRWHWKHIDFWWKDW* -¶V6FRUSRUDWLRQVWDWXV
ZDVQRWJXDUDQWHHG´7RWKHH[WHQWWKDWWKHOHDGRSLQLRQILQGV
WKDW* -¶V6XEFKDSWHU6VWDWXV³ZDVQRWJXDUDQWHHG´WKLV
FRQFOXVLRQ DSSHDUV WR FRQWUDGLFW WKH 7D[ &RXUW¶V IDFWXDO
ILQGLQJWKDW³>Z@HGRQRWKRZHYHUWKLQNLWLVUHDVRQDEOHWRWD[
1RV *URVVHWDOY&RPPLVVLRQHU
%DUEDUDHDFKUHSRUWHGRQHKDOIRIWKHDVVHUWHGYDOXHRIWKH
JLIWV WR WKHLUFKLOGUHQRQDWLPHO\ILOHG)RUP8QLWHG
6WDWHV*LIW DQG*HQHUDWLRQ6NLSSLQJ7UDQVIHU 7D[5HWXUQ
³)RUP´ 3DWULFLD/LQQHPDQQDQGKHUKXVEDQG&DOYLQ
GLGWKHVDPHZLWKUHVSHFWWRWKHJLIWVWRWKHLUFKLOGUHQ,Q
UHSRUWLQJWKHVHJLIWVURWKH,56WKH*URVVHVDQG/LQQHPDQQV
³7D[SD\HUV´ UHOLHG RQ DQ DSSUDLVDO UHSRUW SUHSDUHG E\
%XVLQHVV9DOXDWLRQV,QF7KLVUHSRUWGDWHG-XO\
YDOXHGWKH* -VWRFNDWSHUVKDUHDVRI0D\
%DVHGXSRQWKLVUHSRUWWKH*URVVHVUHSRUWHGDWRWDOJLIWYDOXH
RIDQGWKH/LQQHPDQQVUHSRUWHGDWRWDOYDOXHRI
8SRQ UHFHLYLQJ WKH UHSRUW RI WKHVH JLIWV WKH
&RPPLVVLRQHURI,QWHUQDO5HYHQXH ³&RPPLVVLRQHU´ LVVXHG
QRWLFHVRIGHILFLHQF\WR7D[SD\HUVEDVHGRQKLVYDOXDWLRQRI
WKH VWRFN DW D PXFK KLJKHU DPRXQW 7KH
&RPPLVVLRQHUODWHUDJUHHGWKDWWKHVKDUHVKDGDYDOXHRIQR
PRUHWKDQDVRIWKHJLIWGDWH7D[SD\HUVFKDOOHQJHG
WKH&RPPLVVLRQHU¶VGHWHUPLQDWLRQVLQWKH8QLWHG6WDWHV7D[
&RXUW
$WWULDOERWKSDUWLHVUHOLHGRQH[SHUWWHVWLPRQ\WRHVWDEOLVK
WKHYDOXHRIWKHVKDUHVRI* -VWRFN7D[SD\HUVUHOLHGXSRQ
WKH7HVWLPRQ\RI'DYLG20F&R\DQG&KDUOHV$:LOKRLWH
0F&R\DEXVLQHVVDSSUDLVHUSUHSDUHGDUHSRUWYDOXLQJWKH
FRPPRQ VKDUHV RI * - +H ZDV DFFHSWHG DV DQ H[SHUW
ZLWQHVVDQGKLVUHSRUWZDVDFFHSWHGLQWRHYLGHQFHDVGLUHFW
WHVWLPRQ\ 0F&R\ DOVR SUHSDUHG DQ DGGLWLRQDO UHSRUW
UHEXWWLQJWKHWHVWLPRQ\RIWKH&RPPLVVLRQHU¶VORQHH[SHUW
ZLWQHVV:LOKRLWHLVDQDSSUDLVHUDQGYDOXDWLRQH[SHUWZKR
SUHSDUHG D VHFRQG UHEXWWDO UHSRUW LQ UHVSRQVH WR WKH
&RPPLVVLRQHU¶VH[SHUW:LOKRLWHZDVDFFHSWHGDVDQH[SHUW
RQDSSUDLVDODQGYDOXDWLRQPHWKRGRORJ\DQGKLVUHSRUWZDV
DOVR DFFHSWHG LQWR HYLGHQFH DV KLV GLUHFW WHVWLPRQ\ 7KH
&RPPLVVLRQHUFDOOHG0XNHVK%DMDM3K'DVDQDSSUDLVDO
H[SHUW %DMDM SUHVHQWHG WZR UHSRUWV RQH YDOXLQJ PLQRULW\
LQWHUHVWV LQ * - DV RI WKH JLIW GDWH DQG RQH LQ UHEXWWDO WR
0F&R\¶VILUVWUHSRUW%DMDMZDVDFFHSWHGDVDQH[SHUWZLWQHVV
DQG KLV UHSRUWV ZHUH DFFHSWHG LQWR HYLGHQFH DV KLV GLUHFW
WHVWLPRQ\

-- 5 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
0F&R\¶V LQLWLDO UHSRUW XVHG WKUHH VHSDUDWH PHWKRGV WR GHWHUPLQH WKH
YDOXH RI WKH VWRFN VKDUHV WKH PDUNHW SULFH FRPSDULVRQ DSSURDFK WKH
GLVFRXQWHG IXWXUH IUHH FDVKIORZ PHWKRG DQG YDOXDWLRQ E\ FDSLWDOL]DWLRQ
RI HDUQLQJV +H GHWHUPLQHG D ZHLJKWHG DYHUDJH YDOXH RI WKH UHVXOWV RI
WKHVH WKUHH DSSURDFKHV DQG WKHQ DSSOLHG D GLVFRXQW IRU WKH ODFN RI
PDUNHWDELOLW\ HYHQWXDOO\ DUULYLQJ DW D YDOXH RI SHU VKDUH
8QGHU WKH GLVFRXQWHG IXWXUH IUHH FDVKIORZ PHWKRG 0F&R\
FRQVLGHUHG * - WR EH DQ DVVHW FDSDEOH RI SURGXFLQJ FDVK IORZV WR LWV
RZQHUV IRU DQ LQILQLWH QXPEHU RI SHULRGV +H WKHQ GHWHUPLQHG WKH SUHVHQW
YDOXH RI * -¶V VWRFN E\ K\SRWKHVL]LQJ WKH DPRXQW RI DYDLODEOH FDVK IRU
HDFK VXFK SHULRG GLVFRXQWLQJ HDFK DPRXQW WR UHIOHFW WKH GHOD\ LQ SD\PHQW
DQG WKH ULVN RI QRQSD\PHQW DQG WKHQ VXPPLQJ WKH UHVXOWV
7KHH[SHUWVRQHLWKHUVLGHGHWHUPLQHGWKHYDOXHRIWKH* -
VWRFNXVLQJ³LQFRPHDSSURDFKHV´LQZKLFKDFRPSDQ\¶VIDLU
PDUNHWYDOXHLVGHWHUPLQHGE\FDOFXODWLQJWKHSUHVHQWYDOXHRI
LWV SURMHFWHG IXWXUH LQFRPH 2QH DSSURDFK XVHG E\ ERWK
SDUWLHV ZDV WKH ³GLVFRXQWHG IXWXUH FDVK IORZ´ DSSURDFK
([SHUWVRQERWKVLGHVDOVRDJUHHGWKDWWKHYDOXHRIWKHVKDUHV
VKRXOGEHGLVFRXQWHGWRUHIOHFWWKHIDFWWKDWDVVKDUHVRID
FORVHO\KHOG6FRUSRUDWLRQWKH\DUHQRWUHDGLO\PDUNHWDEOH
%XW WZR EDVLF GLVDJUHHPHQWV GLVWLQJXLVKHG WKH H[SHUWV¶
FDOFXODWLRQVRIWKHYDOXHRI* -VWRFN
7KHILUVWGLVDJUHHPHQWZDVZKHWKHUXQGHUWKHGLVFRXQWHG
IXWXUH FDVK IORZ DSSURDFK WR UHGXFH WKH FRUSRUDWLRQ¶V
SURMHFWHGIXWXUHLQFRPHE\GHGXFWLQJK\SRWKHWLFDOFRUSRUDWH
LQFRPHWD[HVHYHQWKRXJKDVDQ6FRUSRUDWLRQ* -GLGQRW
SD\LQFRPHWD[HV7KLVSURFHVVLVNQRZQDV³WD[DIIHFWLQJ´
0F&R\WHVWLILHGWKDWLQYDULRXVSURIHVVLRQDODVVRFLDWLRQV
SXEOLVKHG VWDQGDUGV JRYHUQLQJ WKH FRQGXFW RI SURIHVVLRQDO
EXVLQHVV DSSUDLVHUV DQG WKDW SURIHVVLRQDO DSSUDLVHUV ZHUH
HWKLFDOO\ERXQGWRIROORZWKRVHVWDQGDUGVFLWLQJDSXEOLFDWLRQ
HQWLWOHG WKH 8QLIRUP 6WDQGDUGV RI 3URIHVVLRQDO $SSUDLVDO
3UDFWLFH ³863$3´ 7KLVGRFXPHQWUHTXLUHVDSSUDLVHUVWREH
DZDUH RI XQGHUVWDQG DQG FRUUHFWO\ HPSOR\ UHFRJQL]HG
PHWKRGV DQG WHFKQLTXHV QHFHVVDU\ WR SURGXFH D FUHGLEOH
DSSUDLVDO WKH³VWDQGDUGVUXOH´ 0F&R\WHVWLILHGWKDWLQRUGHU
WR FRPSO\ ZLWK WKH VWDQGDUGV UXOH DQG SURGXFH D FUHGLEOH
DSSUDLVDOLWZDVQHFHVVDU\IRUSURIHVVLRQDODSSUDLVHUVWR³WD[
DIIHFW´ WKH HDUQLQJV RI DQ 6 FRUSRUDWLRQ ,Q RUGHU WR ³WD[
1RV *URVVHWDOY&RPPLVVLRQHU
EHQHILW WKDW VKDUHKROGHUV H[SHFW IURP DQ 6 FRUSRUDWLRQ
HOHFWLRQLVDUHGXFWLRQLQWKHWRWDOWD[EXUGHQLPSRVHGRQWKH
HQWHUSULVH7KHRZQHUVH[SHFWWRVDYHPRQH\DQGZHVHHQR
UHDVRQZK\WKDWVDYLQJVRXJKWWREHLJQRUHGDVDPDWWHURI
FRXUVHLQYDOXLQJWKH6FRUSRUDWLRQ´ -$DW
&

$V QRWHG LQ WKH OHDG RSLQLRQ 'U %DMDM DQG 0F&R\
GLVDJUHHGRYHUZKHWKHUWD[DIIHFWLQJZDVDJHQHUDOO\DFFHSWHG
SUDFWLFHLQ,QGHHG0F&R\¶VWHVWLPRQ\ZKHQFDUHIXOO\
UHYLHZHGUHYHDOVWKDWHYHQKHZDVQRWFHUWDLQZKHWKHUWD[
DIIHFWLQJ ZDV JHQHUDOO\ DFFHSWHG DFNQRZOHGJHG VRPH
GLVDJUHHPHQWRQWKLVSRLQWDQGZDVHTXLYRFDORQZKHWKHUKH
ZRXOG FRQWLQXH WR WD[ DIIHFW 7KH OHDG RSLQLRQ KRZHYHU
ILQGVWKDWWKH7D[&RXUWFOHDUO\HUUHGLQLWVGHFLVLRQWRQRWWD[
DIIHFW* -¶VVWRFNEHFDXVHZLOOLQJEX\HUVDQGZLOOLQJVHOOHUV
ZRXOGKDYHWD[DIIHFWHGWKHVWRFNLQ:KLOH,GRQRW
QHFHVVDULO\GLVDJUHHZLWKIUDPLQJWKHLVVXHLQWKLVPDQQHU,
GRGLVDJUHHZLWKWKHZD\LQZKLFKWKHOHDGRSLQLRQDQDO\]HV
WKHLVVXH7KHOHDGRSLQLRQDFFXVHVWKH7D[&RXUWRIIRFXVLQJ
RQ ³LWV WKHRUHWLFDO EHOLHI WKDW WD[ DIIHFWLQJ ZDV QRW >@
DSSURSULDWH´ 7KH OHDG RSLQLRQ DOVR VWDWHV WKDW ³WKH WD[
FRXUW¶VMXGJPHQWZDVOHVVWKDQVRXQG´DQG³IOLHVLQWKHIDFH
RIWKHHYLGHQFHRQWKHUHFRUG´,UHDGWKHUHFRUGGLIIHUHQWO\
7KH 7D[ &RXUW ZDV IDFHG ZLWK WKH RSLQLRQV RI FRPSHWLQJ
YDOXDWLRQH[SHUWVDQGDFFHSWHGRQHRYHUWKHRWKHU:KLOHWKH
7D[&RXUWGLGQRWH[SOLFLWO\VWDWHWKDWLWIRXQG'U%DMDM¶V
YDOXDWLRQPRUH³FUHGLEOH´WKH7D[&RXUWFHUWDLQO\IRXQGDV
PXFKZKHQLWGHFOLQHGWRWD[DIIHFW* -¶VVWRFN0RUHRYHU
ZKLOHWKH7D[&RXUWGLGVWDWHWKDWLWGLGQRWEHOLHYHWKDWWD[
DIIHFWLQJZDV³DSSURSULDWHDVDPDWWHURIHFRQRPLFWKHRU\´
-$ DW WKLV VWDWHPHQW ZDV PDGH LQ WKH FRQWH[W RI
GHFLGLQJZKHWKHURUQRWWRWD[DIIHFWDQGUHIOHFWV WKH7D[
&RXUW¶V RSLQLRQ WKDW 0F&R\¶V YDOXDWLRQ LQFOXGLQJ WD[
DIIHFWLQJZDVQRWDSSURSULDWH*LYHQWKHGLVDJUHHPHQWRQWKH
SURSULHW\RIWD[DIIHFWLQJDQGDSSO\LQJWKHSURSHUVWDQGDUGRI

-- 6 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
YDOXLQJ FORVHO\ KHOG FRUSRUDWLRQV <RX QHHG RQO\ WR
DGMXVWWKHHDUQLQJVIURPWKHEXVLQHVVWRUHIOHFWHVWLPDWHG
FRUSRUDWHLQFRPHWD[HVWKDWZRXOGKDYHEHHQSD\DEOHKDG
WKH6XEFKDSWHU6HOHFWLRQQRWEHHQPDGH
7KHKDQGERRNSURYLGHVLQSDUW
,I\RXDUHFRPSDULQJD6XEFKDSWHU6&RUSRUDWLRQWRWKH
VWRFNRIVLPLODUILUPVWKDWDUHSXEOLFO\WUDGHG WKHQHW
LQFRPHRIWKHIRUPHUPXVWEHDGMXVWHGIRULQFRPHWD[HV
XVLQJWKDWFRUSRUDWHWD[UDWHVDSSOLFDEOHIRUHDFK\HDULQ
TXHVWLRQDQGFHUWDLQRWKHULWHPVVXFKDVVDODULHV7KHVH
DGMXVWPHQWV ZLOO DYRLG GLVWRUWLRQV ZKHQ DSSO\LQJ
LQGXVWU\UDWLRVVXFKDVSULFHWRHDUQLQJV

7KH7D[&RXUWIRXQGWKDWDSSO\LQJDFRUSRUDWHWD[UDWH
HIIHFWLYHO\QRWWD[DIIHFWLQJ* -¶VVWRFNZDVDSSURSULDWH
7KH7D[&RXUWGLVFXVVHGWKHFRPSHWLQJH[SHUW¶VRSLQLRQV
SD\LQJ SDUWLFXODU DWWHQWLRQ WR 7D[SD\HUV¶ H[SHUWV DQG
H[DPLQHGWKHLURSLQLRQVLQOLJKWRIWKHIDFWVRIWKHFDVH7KH
7D[ &RXUW ILUVW QRWHG WKDW WKH ,56 PDWHULDOV TXRWHG DERYH
³QHLWKHUUHTXLUHWD[DIIHFWLQJQRUOD\>@WKHEDVLVIRUDFODLPRI
GHWULPHQWDOUHOLDQFH´LQDVPXFKDV7D[SD\HUV³IDLOHGWRSURYH
WKDWWKH\UHOLHGRQ>WKH,56PDWHULDOV@LQDQ\ZD\´ -$DW
7KH 7D[ &RXUW DOVR UHMHFWHG WKH 7D[SD\HUV¶
MXVWLILFDWLRQIRUWD[DIIHFWLQJWKDWLWDGGUHVVHVWKHSRVVLELOLW\
WKDW DQ 6 FRUSRUDWLRQ PD\ GLVWULEXWH OHVV WKDQ DOO RI LWV
LQFRPH ZKLFK ZRXOG QRW EH VXIILFLHQW WR FRYHU WKH
VKDUHKROGHU¶VWD[REOLJDWLRQV7KH7D[&RXUWH[SODLQHGWKDW
³* -KDGDVWURQJJURZWKUHFRUGDQGDKLVWRU\RIPDNLQJ
FDVK GLVWULEXWLRQV WR VKDUHKROGHUV WKDW QHDUO\ HTXDOHG LWV
LQFRPH>DQG@LWZRXOGQRWEHUHDVRQDEOHWRDVVXPH* -
ZRXOG QRW FRQWLQXH WKLV SUDFWLFH´ -$ DW 7KH 7D[
&RXUW DOVR UHMHFWHG WKH DUJXPHQW WKDW * - PLJKW ORVH LWV
6XEFKDSWHU 6 VWDWXV DV D EDVLV IRU WD[ DIIHFWLQJ LWV VWRFN
EHFDXVHWKHUHZDVQRWVXIILFLHQWHYLGHQFHWKDW* -¶VVWDWXV
ZRXOGEHORVW2YHUDOOWKH7D[&RXUWZDVQRWFRQYLQFHGWKDW
WD[DIIHFWLQJZDVDQDSSURSULDWHYDOXDWLRQPHWKRGIRUYDOXLQJ
* -¶VVWRFN7KH7D[&RXUWH[SODLQHGWKDW³WKHSULQFLSOH
1RV *URVVHWDOY&RPPLVVLRQHU
DIIHFW´ * -¶V VWRFN 0F&R\ LQWURGXFHG D ILFWLWLRXV WD[
EXUGHQHTXDOWRDQDVVXPHGFRUSRUDWHWD[RIZKLFKKH
WKHQDSSOLHGWRUHGXFHWKHHVWLPDWHGIXWXUHLQFRPHRI* -
%RWK0F&R\DQG:LOKRLWHWHVWLILHGWKDWGHVSLWHVRPHJURZLQJ
FRQWURYHUV\VXUURXQGLQJWKHLVVXHXVHRIDWD[DIIHFW
ZDVWKHDFFHSWHGSUDFWLFHDWWKHWLPH7D[SD\HUVSHUIRUPHGWKH
WUDQVDFWLRQLQTXHVWLRQ
%DMDMDOVRUHOLHGRQWKHGLVFRXQWHGIUHHIORZFDVKPHWKRG
WRYDOXHWKH* -VWRFN%XWDOWKRXJKKHZDVLQIRUPHGRI
* -¶V6FRUSRUDWLRQVWDWXV%DMDMFRQFOXGHGWKDWXVLQJD
WD[UDWHZDVDSSURSULDWHWRGHWHUPLQHWKHIXWXUHHDUQLQJVRI
* - WKDW ZRXOG EH DYDLODEOH IRU GLVWULEXWLRQ 7KXV LQ
HVVHQFH%DMDMGLGQRWWD[DIIHFWWKHVWRFNDWDOO
7KHVHFRQGGLVDJUHHPHQWEHWZHHQWKHH[SHUWVGHDOWZLWKWKH
DPRXQW RI WKH ODFN RI PDUNHWDELOLW\ GLVFRXQW 0F&R\
H[DPLQHGVHYHUDOVWXGLHVGLVFXVVLQJWKHODFNRIPDUNHWDELOLW\
LQKHUHQWLQFORVHO\KHOGDQGUHVWULFWHGVHFXULWLHVVXFKDV* -
VWRFN+HWHVWLILHGWKDWKLVUHVHDUFKUHIOHFWHGWKDWDQDYHUDJH
ODFN RI PDUNHWDELOLW\ GLVFRXQW IRU VKDUHV WKDW ZRXOG
HYHQWXDOO\EHFRPHIUHHO\WUDGDEOHZDV³´DQGXOWLPDWHO\
IRXQG WKDW D GLVFRXQW UDWH RI ZDV UHTXLUHG WR IXOO\
FRPSHQVDWHDQRZQHUIRUWKHODFNRIPDUNHWDELOLW\RIWKRVH
VKDUHV2QEHKDOIRIWKH&RPPLVVLRQHU%DMDMDOVRUHYLHZHG
WKH FRPPRQO\ FLWHG SXEOLVKHG VWXGLHV H[DPLQLQJ ODFN RI
PDUNHWDELOLW\GLVFRXQWVGLYLGLQJWKHPLQWRWZRJURXSVWKRVH
WKDWDQDO\]HGVDOHVRIUHVWULFWHGVWRFNE\ILUPVWKDWDOVRKDG
SXEOLFO\ WUDGHG VKDUHV DQG WKRVH WKDW FRPSDUHG WKH VKDUH
SULFHV XVHG LQ VHYHUDO VXFFHVVIXO LQLWLDO SXEOLF RIIHULQJV
³,32´V $FFRUGLQJWR%DMDMWKHILUVWFDWHJRU\RIVWXGLHV
UHYHDOHGWKDWPHGLDQGLVFRXQWVUDQJHGIURP%XW
KHGHWHUPLQHGWKDWRQO\DERXWRIWKHVHGLVFRXQWV
FRXOG EH DWWULEXWHG WR D ODFN RI PDUNHWDELOLW\ %DMDM WKHQ
FRQFOXGHGWKDWWKHVWXGLHVUHJDUGLQJWKHVHFRQGFDWHJRU\RI
ILUPV ZDV QRW XVHIXO LQ HYDOXDWLQJ GLVFRXQW OHYHOV IRU WZR
UHDVRQV )LUVW KH LQGLFDWHG WKDW PDQ\ RI WKH SUH,32
WUDQVDFWLRQV GLG QRW RFFXU DW IDLU PDUNHW YDOXHV 6HFRQG
%DMDMVXUPLVHGWKDWUHIHUULQJRQO\WRGLVFRXQWVRIFRPSDQLHV
WKDWFRQGXFWHGVXFFHVVIXO,32VZRXOGFUHDWHDELDVHGVDPSOH

-- 7 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
WKDWFRXOGDUWLILFLDOO\LQIODWHWKHGLVFRXQWUDWH,QWKHHQG
%DMDMUHOLHGXSRQKLVRZQVWXG\LQZKLFKKHFRQGXFWHGDQ
HPSLULFDO DQDO\VLV RI PDUNHWDELOLW\ GLVFRXQWV FRQVLGHULQJ
VXFK IDFWRUV DV * -¶V JHQHURXV GLYLGHQG SROLF\ DQG LWV
UHVWULFWLYH WUDQVIHU DJUHHPHQWV WKH ODWWHU RI ZKLFK KH
FRQVLGHUHG WR EH D JUHDWHU PDUNHWDELOLW\ UHVWULFWLRQ 7KLV
VWXG\FRQVLGHUHGWUDQVDFWLRQVWKDWWRRNSODFHIURP
WKURXJKRIZKLFKWRRNSODFHEHIRUH-XO\
DQGRIZKLFKWRRNSODFHDIWHUWKDWGDWH+HFRQFOXGHGWKDW
WKHKLJKHVWSUHGLFWHGGLVFRXQWIRU* -ZDV%DVHG
RQ WKLV VWXG\ DV ZHOO DV WKH RWKHU VWXGLHV UHOLHG XSRQ E\
0F&R\ %DMDM GHWHUPLQHG WKDW WKH ODFN RI PDUNHWDELOLW\
GLVFRXQW IRU * - VKDUHV VKRXOG EH %XW ZKHQ
FRQVLGHULQJ RWKHU IDFWRUV XQLTXH WR * - VXFK DV WKH
UHVWULFWLYHDJUHHPHQWVDQGWKHIDFWWKDWWKHFRUSRUDWLRQSDLG
RXWPRVWRILWVHDUQLQJVWRLWVVKDUHKROGHUVKHFDPHWRDILQDO
ILJXUHRIDODFNRIPDUNHWDELOLW\GLVFRXQW
7D[SD\HUV ILOHG D PRWLRQ LQ OLPLQH WR H[FOXGH %DMDM¶V
WHVWLPRQ\ UHJDUGLQJ ERWK WD[ DIIHFWLQJ DQG WKH ODFN RI
PDUNHWDELOLW\ GLVFRXQW DV EHLQJ EDVHG XSRQ XQSURYHQ
PHWKRGRORJ\ 7KH WD[ FRXUW GHQLHG WKHVH PRWLRQV DQG
DGPLWWHG%DMDM¶VWHVWLPRQ\DQGUHSRUWVLQWRHYLGHQFH$IWHU
KHDULQJ HYLGHQFH SUHVHQWHG E\ WKH H[SHUWV WKH WD[ FRXUW
GHWHUPLQHGWKDWWKH* -VWRFNVKRXOGEHGLVFRXQWHGXVLQJD
WD[DIIHFWRIDQGWKDWWKHODFNRIPDUNHWDELOLW\GLVFRXQW
VKRXOGEH8VLQJWKHVHILJXUHVWKHWD[FRXUWXOWLPDWHO\
GHWHUPLQHGWKDWWKH* -VWRFNVKRXOGEHYDOXHGDWDUDWHRI
SHUVKDUH7D[SD\HUVQRZDSSHDOIURPWKLVRUGHU
6SHFLILFDOO\ WKH\ FRQWHVW WKH DGPLVVLELOLW\ RI H[SHUW
WHVWLPRQ\E\WKH,56¶H[SHUWZLWQHVVEDVHGXSRQPHWKRGV
ZKLFK WD[SD\HUV FODLP ZHUH VFLHQWLILFDOO\ XQUHOLDEOH DQG
WKHYDOLGLW\RIWKHFRXUW¶VYDOXDWLRQ
,$'0,66,%,/,7<2)(9,'(1&(
2Q DSSHDO 7D[SD\HUV DOOHJH WKDW WKH WD[ FRXUW GLG QRW
IROORZ SURSHU SURFHGXUHV LQ DGPLWWLQJ FHUWDLQ DVSHFWV RI
%DMDM¶VWHVWLPRQ\RQEHKDOIRIWKH&RPPLVVLRQHU)RUWKH
1RV *URVVHWDOY&RPPLVVLRQHU
DQDO\VLV´(EEHQY&RPP¶URI,QWHUQDO5HY)G
WK&LU
%

'U %DMDM RSLQHG WKDW WD[ DIIHFWLQJ * -¶V HDUQLQJV ZDV
LQDSSURSULDWHEHFDXVH* -GRHVQRWSD\FRUSRUDWHWD[HVDQG
JLYHQ WKLV FORVHO\ KHOG VWDWXV DQG UHVWULFWLRQ RQ VWRFN
WUDQVIHUVWKHUHZDVQRUHDVRQWREHOLHYHWKDW* -ZRXOGQRW
FRQWLQXHDVDQ6&RUSRUDWLRQ'U%DMDMDOVRUHDVRQHGWKDW
EDVHGRQ* -¶VSDVWSUDFWLFHRIGLVWULEXWLQJQHDUO\DOORILWV
LQFRPHWRLWVVKDUHKROGHUVD]HURSHUFHQWFRUSRUDWHWD[UDWH
ZDV DSSURSULDWH WR PDNH LQ GHWHUPLQLQJ * -¶V FRUSRUDWH
HDUQLQJV DYDLODEOH IRU GLVWULEXWLRQ 0RUHRYHU 'U %DMDM
HPSKDVL]HG WKDW EHFDXVH DQ 6 &RUSRUDWLRQ UHFHLYHV D WD[
EHQHILW QR FRUSRUDWH WD[HV VXFK D EHQHILW VKRXOG QRW EH
LJQRUHGLQYDOXLQJ* -¶VVWRFN
0F&R\RQWKHRWKHUKDQGRSLQHGWKDWDSSO\LQJDILFWLWLRXV
WD[ UDWH WR UHGXFH * -¶V HDUQLQJV ZDV DSSURSULDWH
0F&R\WHVWLILHGWKDWWD[DIIHFWLQJLVDQDFFHSWHGSUDFWLFHLQ
YDOXDWLRQ RI DQ 6 &RUSRUDWLRQ 0F&R\ H[SODLQHG WKDW WKH
WUDGHRIIVVKDUHKROGHUVLQFXUDV DUHVXOWRIEHLQJSDUWRIDQ
6&RUSRUDWLRQPXVWEHDFFRXQWHGIRUZKLFKLVDFFRPSOLVKHG
E\WD[DIIHFWLQJ0F&R\LQGLFDWHGWKDWLIDQ6&RUSRUDWLRQ
GLVWULEXWHVOHVVWKDQDOORILWVLQFRPHWRLWVVKDUHKROGHUVWKH
GLVWULEXWLRQV PLJKW QRW FRYHU WKH VKDUHKROGHUV¶ WD[
REOLJDWLRQV7KXVWD[DIIHFWLQJRIIVHWVWKDWSRWHQWLDOEXUGHQ
0F&R\DOVRFLWHGWRWZRLQWHUQDOGRFXPHQWVRIWKH,QWHUQDO
5HYHQXH 6HUYLFH WKDW DSSDUHQWO\ VD\V WD[ DIIHFWLQJ DQ
6&RUSRUDWLRQ¶VHDUQLQJVIRUYDOXDWLRQDYDOXDWLRQJXLGHIRU
LQFRPH HVWDWH DQG JLIW WD[HV WKH JXLGH DQ H[DPLQDWLRQ
WHFKQLTXHKDQGERRNIRUHVWDWHWD[H[DPLQHUV WKHKDQGERRN
FROOHFWLYHO\WKH,56PDWHULDOV 7KHJXLGHVWDWHVLQSDUW
>6@FRUSRUDWLRQVDUHWUHDWHGVLPLODUWRSDUWQHUVKLSVIRU
WD[SXUSRVHV6&RUSRUDWLRQVOHQGWKHPVHOYHVUHDGLO\WR
YDOXDWLRQ DSSURDFKHV FRPSDUDEOH WR WKRVH XVHG LQ

-- 8 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
:KHUH DV KHUH WKH JLIW LV VWRFN LWV YDOXH IRU JLIW WD[
SXUSRVHVLVWKHIDLUPDUNHWYDOXHRIWKHVWRFNRQWKHGDWHRI
WKHWUDQVIHUDQG>D@OOUHOHYDQWIDFWVDQGHOHPHQWVRIYDOXHDV
RI WKH WLPH RI WKH JLIW VKDOO EH FRQVLGHUHG &)5
† )RUSXEOLFO\WUDGHGVWRFNYDOXDWLRQFDQ
JHQHUDOO\EHEDVHGRQPDUNHWVHOOLQJSULFHV6HH&)5
† E )RUFORVHO\KHOGFRUSRUDWLRQVVXFKDV
* -IRUZKLFKWKHUHLVQRSXEOLFWUDGLQJPDUNHWYDOXDWLRQRI
VWRFNLVWKHUHIRUHEDVHGRQRIDYDULHW\RIIDFWRUV
5HYHQXH 5XOLQJ RXWOLQHV WKH JHQHUDO DSSURDFK
PHWKRGVDQGIDFWRUVWREHFRQVLGHUHGLQYDOXLQJWKHVKDUHVRI
VWRFN RI FORVHO\ KHOG FRUSRUDWLRQV IRU HVWDWH DQG JLIW WD[
SXUSRVHVVWDWLQJ
$ GHWHUPLQDWLRQ RI IDLU PDUNHW YDOXH EHLQJ D
TXHVWLRQRIIDFWZLOOGHSHQGXSRQWKHFLUFXPVWDQFHVLQ
HDFK FDVH 1R IRUPXOD FDQ EH GHYLVHG WKDW ZLOO EH
JHQHUDOO\ DSSOLFDEOH WR WKH PXOWLWXGH RI GLIIHUHQW
YDOXDWLRQLVVXHVDULVLQJLQHVWDWHDQGJLIWWD[FDVHV$
VRXQGYDOXDWLRQZLOOEHEDVHGXSRQDOOWKHUHOHYDQWIDFWV
EXWWKHHOHPHQWVRIFRPPRQVHQVHLQIRUPHGMXGJPHQW
DQG UHDVRQDEOHQHVV PXVW HQWHU LQWR WKH SURFHVV RI
ZHLJKLQJ WKRVH IDFWV DQG GHWHUPLQLQJ WKHLU DJJUHJDWH
VLJQLILFDQFH
5HY5XO&%
9DOXLQJ FORVHO\ KHOG VWRFN LQFRUSRUDWHV D QXPEHU RI
DOWHUQDWLYH PHWKRGV RI YDOXDWLRQ DQG WKH DSSHOODWH FRXUWV
KDYHDIIRUGHGWKHWD[FRXUWEURDGGLVFUHWLRQLQGHWHUPLQLQJ
ZKDW PHWKRG RI YDOXDWLRQ PRVW IDLUO\ UHSUHVHQWV WKH IDLU
PDUNHWYDOXHRIWKHVWRFNLQOLJKWRIWKHIDFWVSUHVHQWHGDW
WULDO6HH3DOPHUY&RPP¶URI,QWHUQDO5HY)G
WK&LU 0RUHRYHU³FRPSOH[IDFWXDOLQTXLULHVVXFK
DVYDOXDWLRQUHTXLUHWKHWULDOMXGJHWRHYDOXDWHDQXPEHURI
IDFWVZKHWKHUDQH[SHUWDSSUDLVHU VH[SHULHQFHDQGWHVWLPRQ\
HQWLWOHKLVRSLQLRQWRPRUHRUOHVVZHLJKWZKHWKHUDQDOOHJHG
FRPSDUDEOH VDOH IDLUO\ DSSUR[LPDWHV WKH VXEMHFW SURSHUW\ V
PDUNHW YDOXH DQG WKH RYHUDOO FRJHQF\ RI HDFK H[SHUW V
1RV *URVVHWDOY&RPPLVVLRQHU
7R WKLV HQG WKH &RXUW IRXQG WKDW ³NQRZOHGJH´ DV XVHG LQ 5XOH
PHDQV ³PRUH WKDQ VXEMHFWLYH EHOLHI RU XQVXSSRUWHG VSHFXODWLRQ´ DQG WKH
WHUP ³DSSOLHV WR DQ\ ERG\ RI NQRZQ IDFWV RU WR DQ\ ERG\ RI LGHDV LQIHUUHG
IURP VXFK IDFWV RU DFFHSWHG DV WUXWK RQ JRRG JURXQGV´ 'DXEHUW Y
0HUULOO 'RZ 3KDUPDFHXWLFDOV ,QF 86
IROORZLQJUHDVRQVZHKROGWKDWWKHWD[FRXUWGLGQRWDEXVHLWV
GLVFUHWLRQLQDGPLWWLQJWKLVWHVWLPRQ\
$
7KHWD[FRXUW¶VGHFLVLRQZKHWKHUWRDGPLWH[SHUWWHVWLPRQ\
DV ZHOO DV LWV GHFLVLRQV UHJDUGLQJ KRZ WR GHWHUPLQH WKH
UHOLDELOLW\ RI WKDW WHVWLPRQ\ DUH UHYLHZHG IRU DQ DEXVH RI
GLVFUHWLRQ6HH.XPKR7LUH&RY&DUPLFKDHO86

%
)HGHUDO5XOHRI(YLGHQFHJRYHUQVWKHDGPLVVLELOLW\RI
H[SHUW WHVWLPRQ\ 7KDW 5XOH SURYLGHV WKDW ³>L@I VFLHQWLILF
WHFKQLFDORURWKHUVSHFLDOL]HGNQRZOHGJHZLOODVVLVWWKHWULHU
RIIDFWWRXQGHUVWDQGWKHHYLGHQFHRUWRGHWHUPLQHDIDFWLQ
LVVXHDZLWQHVVTXDOLILHGDVDQH[SHUWE\NQRZOHGJHVNLOO
H[SHULHQFHWUDLQLQJRUHGXFDWLRQPD\WHVWLI\WKHUHWRLQWKH
IRUP RIDQRSLQLRQRURWKHUZLVH´)(' 5 (9,' ,Q
'DXEHUWY0HUULOO'RZ3KDUPDFHXWLFDOV,QF86
WKH6XSUHPH&RXUWKHOGWKDW5XOHDORQJZLWK
5XOH D UHOHYDQFH FRQIHUVXSRQWULDOMXGJHVDVSHFLDO
REOLJDWLRQWRHQVXUH³WKDWDQH[SHUW¶VWHVWLPRQ\ERWKUHVWVRQ
D UHOLDEOH IRXQGDWLRQ DQG LV UHOHYDQW WR WKH WDVN DW KDQG
3HUWLQHQWHYLGHQFHEDVHGRQVFLHQWLILFDOO\YDOLGSULQFLSOHVZLOO
VDWLVI\WKRVHGHPDQGV´
7KH 'DXEHUW &RXUW DOVR VXJJHVWHG VHYHUDO FULWHULD WKDW
PLJKWDVVLVWWULDOFRXUWVLQPDNLQJDSUHOLPLQDU\HYDOXDWLRQRI
H[SHUWWHVWLPRQ\EHIRUHDGPLWWLQJLW ZKHWKHUDWKHRU\RU
WHFKQLTXHKDVEHHQRUFDQEHWHVWHG ZKHWKHUWKHWHFKQLTXH
KDVEHHQVXEMHFWHGWRSHHUUHYLHZDQGSXEOLFDWLRQ WKH
NQRZQ RU SRWHQWLDO UDWH RI HUURU DQG ZKHWKHU WKH

-- 9 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
WHFKQLTXH KDV EHHQ DFFHSWHG E\ WKH ³UHOHYDQW VFLHQWLILF
FRPPXQLW\´ RU ³KDV EHHQ DEOH WR DWWUDFW RQO\ PLQLPDO
VXSSRUWZLWKLQWKHFRPPXQLW\´'DXEHUW86DW
6XEVHTXHQWGHFLVLRQVKDYHIXUWKHUUHILQHGWKHUHTXLUHPHQWVRI
'DXEHUW 7KH 6XSUHPH &RXUW KDV H[WHQGHG 'DXEHUW WR
LQFOXGH DQ\ WHVWLPRQ\ EDVHG RQ ³WHFKQLFDO´ DQG ³RWKHU
VSHFLDOL]HGNQRZOHGJH´6HH.XPKR7LUH&R/WG86
DW :H KDYH SUHYLRXVO\ KHOG WKDW WKH PDQGDWHV RI
'DXEHUWDQG.XPKR7LUHDOVRDSSO\WRGHFLVLRQVRIWKH8QLWHG
6WDWHV7D[&RXUW6HH&RQWLY&RPPLVVLRQHU)G
WK&LU
7KH&RXUWKDVVWRSSHGVKRUWRIWXUQLQJWKH'DXEHUWWHVWLQWR
DVWUDLJKWMDFNHW5DWKHULWKDVLQVLVWHGWKDWWULDOFRXUWVPXVW
HQMR\³WKHVDPHNLQGRIODWLWXGHLQGHFLGLQJKRZWRWHVWDQ
H[SHUW¶V UHOLDELOLW\ DQG WR GHFLGH ZKHWKHU RU ZKHQ VSHFLDO
EULHILQJ RU RWKHU SURFHHGLQJV DUH QHHGHG WR LQYHVWLJDWH
UHOLDELOLW\DVLWHQMR\VZKHQLWGHFLGHVZKHWKHURUQRWWKDW
H[SHUW¶V UHOHYDQW WHVWLPRQ\ LV UHOLDEOH´ .XPKR 7LUH &R
/WG 86 DW 7KXV WKRXJK KHOSIXO WKH 'DXEHUW
IDFWRUVDUHQRWGLVSRVLWLYHLQHYHU\FDVH,QVWHDGWKH6XSUHPH
&RXUW KDV LQVWUXFWHG WULDO FRXUWV WR FRQVLGHU WKH VSHFLILF
IDFWRUV LGHQWLILHG LQ 'DXEHUW ZKHUH WKH\ DUH UHDVRQDEOH
PHDVXUHVRIWKHUHOLDELOLW\RIH[SHUWWHVWLPRQ\)XUWKHUPRUH
³>Z@KHWKHU 'DXEHUW¶V VSHFLILF IDFWRUV DUH RU DUH QRW
UHDVRQDEOH PHDVXUHV RI UHOLDELOLW\ LQ D SDUWLFXODU FDVH LV D
PDWWHU WKDW WKH ODZ JUDQWV WKH WULDO MXGJH EURDG ODWLWXGH WR
GHWHUPLQH´ ,G DW 1RQHWKHOHVV WKLV FDOO IRU EURDG
GLVFUHWLRQFDQQRWEHLQWHUSUHWHGDVDQLQYLWDWLRQIRUWKHWULDO
MXGJH³WRDGRSWDQH[FHVVLYHOHYHORIJHQHUDOLW\LQKLVJDWH
NHHSLQJLQTXLU\´6HH%ODFNY)RRG/LRQ)G
WK &LU :LWK WKLV DGPRQLWLRQ LQ PLQG ZH QRZ
FRQVLGHUWKHWD[FRXUW¶VEDVLVIRUDFFHSWLQJ%DMDM¶VWHVWLPRQ\
LQWKHLQVWDQWFDVH
7HVWLPRQ\5HJDUGLQJ7D[$IIHFWLQJ* -¶V(DUQLQJV
7KHWD[FRXUWDFNQRZOHGJHGWKDW%DMDM¶VWHVWLPRQ\ZDVRI
D³WHFKQLFDOQDWXUH´DQGWKHUHIRUHGHWHUPLQHGWKDW'DXEHUW
DSSOLHGLQWKHLQVWDQWFDVH%XW7D[SD\HUVFRQWHQGWKDWWKH
1RV *URVVHWDOY&RPPLVVLRQHU
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
&21&855,1*,13$57',66(17,1*,13$57
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
&2+16HQLRU'LVWULFW-XGJH
,,QWURGXFWLRQ
,FRQFXUZLWK3DUWV,,,$DQG,,%RIWKHOHDGRSLQLRQ
+RZHYHUEHFDXVH,EHOLHYHWKDWWKH7D[&RXUWGLGQRWFOHDUO\
HUULQFRQFOXGLQJWKDWLWZDVDSSURSULDWHQRWWRWD[DIIHFWWKH
VWRFNLQRUGHUWRGHWHUPLQHLWVIDLUPDUNHWYDOXH,UHVSHFWLYHO\
GLVDJUHHZLWK3DUW,,%DQGWKHUHIRUHILQGWKDWWKHGHFLVLRQ
RIWKH7D[&RXUWPXVWEHDIILUPHGRQWKLVJURXQG
,,$QDO\VLV
$
7D[SD\HUVHVVHQWLDOO\DUJXHWKDWWKHYDOXDWLRQVSUHVHQWHGE\
WKHLUH[SHUWVDUHPRUHFUHGLEOHWKDQ'U%DMDM¶VYDOXDWLRQDQG
WKH7D[&RXUWHUUHGLQDFFHSWLQJ'U%DMDM¶VYDOXDWLRQ7KLV
DSSHDOUHDOO\SUHVHQWVDEDWWOHRIWKHH[SHUWVRQWKHTXHVWLRQ
RI KRZ WKH VWRFN RI D FORVHO\ KHOG 6 &RUSRUDWLRQ VXFK DV
* -VKRXOGEHYDOXHG
6HFWLRQRIWKH,QWHUQDO5HYHQXH&RGHLPSRVHVDJLIW
WD[RQWKHWUDQVIHURISURSHUW\E\JLIWGXULQJ>WKH@FDOHQGDU
\HDU E\ DQ\ LQGLYLGXDO 86& † D
6HFWLRQ D DGGUHVVHVWKHYDOXDWLRQRIJLIWVVWDWLQJ>L@I
WKHJLIWLVPDGHLQSURSHUW\WKHYDOXHWKHUHRIDWWKHGDWHRIWKH
JLIWVKDOOEHFRQVLGHUHGWKHDPRXQWRIWKHJLIW86&
† D ,Q LQWHUSUHWLQJ WKLV SURYLVLRQ VHFWLRQ
RIWKH7UHDVXU\5HJXODWLRQVRQJLIWWD[SURYLGHV
>W@KHYDOXHRIWKHSURSHUW\LVWKHSULFHDWZKLFKVXFKSURSHUW\
ZRXOGFKDQJHKDQGVEHWZHHQDZLOOLQJEX\HUDQGDZLOOLQJ
VHOOHUQHLWKHUEHLQJXQGHUDQ\FRPSXOVLRQWREX\RUWRVHOO
DQG ERWK KDYLQJ UHDVRQDEOH NQRZOHGJH RI UHOHYDQW IDFWV
&)5† 7KLVLVNQRZQDVWKHZLOOLQJ
EX\HUZLOOLQJVHOOHUUXOH

-- 10 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
,,,
,QFRQVLGHULQJWKHSDUWLHV¶DUJXPHQWVRQDSSHDO,ZRXOG
ILQGWKDWWKHUHFRUGGRHVQRWVXSSRUWWKHWD[FRXUW¶VXOWLPDWH
YDOXDWLRQRI* -VWRFNDWSHUVKDUH7KHWD[FRXUW
GHULYHGWKLVILJXUHE\FRQVLGHULQJPXOWLSOHIDFWRUVRQO\WZR
RIZKLFK7D[SD\HUVFRQWHVWHGLQWKLVFDVHWD[DIIHFWLQJDQG
WKHODFNRIPDUNHWDELOLW\GLVFRXQW'HVSLWHWKHILQGLQJWKDW
WKHWHVWLPRQ\RIWKH&RPPLVVLRQHU¶VH[SHUWZDVDGPLVVLEOH
ZLWK UHVSHFW WR ERWK RI WKHVH IDFWRUV WKLV WHVWLPRQ\ ZDV
LQVXIILFLHQW WR VXSSRUW WKH FRXUW¶V YDOXDWLRQ GHFLVLRQ
$OWKRXJK,ZRXOGFRQFOXGHWKDWWKHWD[FRXUW¶VGHFLVLRQWR
DSSO\DODFNRIPDUNHWDELOLW\GLVFRXQWZDVVXSSRUWHGE\
IDFWVRQWKHUHFRUG,DOVRDPRIWKHEHOLHIWKDWWKHFRXUW¶V
GHFLVLRQ WR WD[ DIIHFW WKH VWRFN E\ GLG QRW DFFXUDWHO\
UHIOHFW WKH IDLU PDUNHW YDOXH RI * - VWRFN DV GHWHUPLQHG
XQGHUWKHZLOOLQJEX\HUZLOOLQJVHOOHUVWDQGDUG,QVWHDGRI
UHO\LQJ XSRQ UHDOZRUOG HYLGHQFH WKH FRXUW UHYHUWHG WR LWV
RZQ SHUFHSWLRQ RI WKH SURSHU DSSURDFK WR WD[ DIIHFWLQJ
WKHUHE\ GHYLDWLQJ IURP WKH WLPHVHQVLWLYH ZLOOLQJ
EX\HUZLOOLQJVHOOHUVWDQGDUG,WKHUHIRUHZRXOGKROGWKDWWR
WKHH[WHQWLWZDVEDVHGXSRQWKHXVHRIDWD[DIIHFWWKH
FRXUW¶VXOWLPDWHYDOXDWLRQRIZDVFOHDUO\HUURQHRXV
+RZHYHUDVH[SODLQHGLQ-XGJH&RKQ¶VRSLQLRQQHLWKHUKH
QRU -XGJH 'DXJKWUH\ EHOLHYH WKDW WKH WD[ FRXUW HUUHG LQ
XWLOL]LQJWKHWD[DIIHFWLQRUGHUWRGHWHUPLQHWKHVWRFN¶V
YDOXDWLRQ
&21&/86,21
)RU WKH DIRUHPHQWLRQHG UHDVRQV , ZRXOG UHYHUVH WKH
YDOXDWLRQGHFLVLRQRIWKHWD[FRXUWDQGUHPDQGIRUUHYDOXDWLRQ
LQDPDQQHUQRWLQFRQVLVWHQWZLWKP\RSLQLRQKRZHYHU-XGJH
&RKQ¶VRSLQLRQFRQVWLWXWHVWKHKROGLQJRIWKHFRXUWLQWKLV
FDVHWKDWLVWKDWWKHWD[FRXUW¶VGHFLVLRQLV$)),50('
1RV *URVVHWDOY&RPPLVVLRQHU
FRXUWDEXVHGLWVGLVFUHWLRQE\WHUPLQDWLQJLWVUHOLDELOLW\UHYLHZ
RI WKH H[SHUW¶V WHVWLPRQ\ UHJDUGLQJ WD[ DIIHFWLQJ XSRQ
GHWHUPLQLQJ WKDW KLV PHWKRGRORJ\ ZDV DSSURSULDWH %DMDM
WHVWLILHG WKDW XQGHU WKH GLVFRXQWHG FDVK IORZ PHWKRG
FRQVLGHULQJDK\SRWKHWLFDOFRUSRUDWHWD[UDWHRIZRXOGEH
LPSURSHU7KXVKHWHVWLILHGWKDWKLVYDOXDWLRQRIWKH* -
VWRFN ZDV EDVHG XSRQ XVH RI WKH GLVFRXQWHG FDVK IORZ
DSSURDFKZLWKDWD[DIIHFW
7KH WD[ FRXUW IRXQG WKDW ZKHQ SURSHUO\ DSSOLHG WKH
GLVFRXQWHGFDVKIORZPHWKRGZKLFKZDVXVHGE\ERWKSDUWLHV
LVDUHOLDEOHWRROIRUILQDQFLDODQDO\VLV1RWLQJWKDW³YDOXHLV
DTXHVWLRQRIIDFW´WKHFRXUW IRXQG WKDWWKH³GLIIHUHQFHLQ
RSLQLRQVDVWRYDOXHUHDFKHGE\WKHWZRH[SHUWZLWQHVVHVDW
OHDVWWRWKHH[WHQWLWLVDWWULEXWDEOHWRWKHGLVFRXQWHGFDVKIORZ
DSSURDFK LV H[FOXVLYHO\ WKH UHVXOW RI GLIIHUHQFHV EHWZHHQ
WKHP DV WR WKH YDOXHV RI FHUWDLQ YDULDEOHV´ -$ DW
7KXVWKHFRXUWFRQFOXGHGWKDW%DMDMXVHGWKHVDPHGLVFRXQWHG
FDVK IORZ PHWKRGRORJ\ DV 7D[SD\HUV¶ H[SHUWV DQG KLV
GHFLVLRQ QRW WR WD[ DIIHFW * -¶V HDUQLQJV ZDV ³QRW D
GLIIHUHQFH DV WR PHWKRGRORJ\´ -$ DW 7KH FRXUW
GHWHUPLQHG WKDW D FKDOOHQJH WR %DMDM¶V DSSURDFK WR WD[
DIIHFWLQJZDV³QRQVHQVLFDO´DQGGHFOLQHGWRDSSO\DQ\RIWKH
RWKHU IDFWRUV VXJJHVWHG LQ 'DXEHUW LQFOXGLQJ GHWHUPLQLQJ
ZKHWKHU %DMDM¶V PHWKRG KDG QRW EHHQ VXEMHFWHG WR SHHU
UHYLHZ -$DW
:H GLVDJUHH ZLWK WKH WD[ FRXUW¶V FKDUDFWHUL]DWLRQ RI WKH
UHVSHFWLYH H[SHUWV¶ DSSURDFKHV WR WD[ DIIHFWLQJ DV D PHUH
GLIIHUHQFH LQ YDULDEOHV 7KHUH ZDV QR VSHFWUXP RI WD[
SHUFHQWDJHV IURP ZKLFK WKH FRXUW FRXOG KDYH VHOHFWHG
5DWKHUWKHFKRLFHZDVHLWKHUDFRUSRUDWHWD[UDWHRIRUD
UDWHRIWKHODWWHUPHDQLQJQRWD[DIIHFWDWDOO%XWZKLOH
WKHWD[FRXUW¶VDQDO\VLVZDVUDWKHUFXUVRU\ZHGRQRWEHOLHYH
WKDWIXUWKHUHYDOXDWLRQZDVQHFHVVDU\XQGHUWKHFLUFXPVWDQFHV
7D[SD\HUVDUJXHWKDW%DMDM¶VXVHRIWKHGLVFRXQWHGFDVKIORZ
DQDO\VLVZLWKRXWWD[DIIHFWLQJLVQRWVXSSRUWHGE\WHVWLQJSHHU
UHYLHZSXEOLFDWLRQRUDFFHSWDQFHE\WKHUHOHYDQWVFLHQWLILF
FRPPXQLW\7RDODUJHH[WHQW7D[SD\HUV¶FODLPWKDW%DMDM¶V
WHVWLPRQ\ZDVLQDGPLVVLEOHKLQJHVXSRQWKHFRUUHFWQHVVRI

-- 11 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
WKHLUDVVHUWLRQVWKDWWD[DIIHFWLQJZDVDJHQHUDOO\DFFHSWHG
SUDFWLFHXQGHUWKHGLVFRXQWHGFDVKIORZPHWKRGDVRI-XO\
,QWKLVUHVSHFWZHEHOLHYHWKDW7D[SD\HUV¶'DXEHUW
FODLPLVPLVJXLGHGIRUWKH\DUHDWWDFNLQJWKHFRUUHFWQHVVRI
WKDWXOWLPDWHYDOXDWLRQPRUHWKDQWKHUHOLDELOLW\RIWKHH[SHUW¶V
PHWKRGVLQGHULYLQJWKHYDOXHRIWKHVKDUHVRIVWRFN7KH
HYLGHQFHRQWKHUHFRUGVXJJHVWHGWKDWDVRIWKHUHZDVD
JURZLQJGLVSXWHDVWRWKHYDOLGLW\RIWD[DIIHFWLQJWKHHDUQLQJV
RIFORVHO\KHOGFRUSRUDWLRQV,QIDFWRQHRI7D[SD\HUV¶RZQ
H[SHUWVLQGLFDWHGWKDWLIFKDUJHGZLWKWKHWDVNRIYDOXLQJWKH
VDPHVWRFNWRGD\KHZRXOGKDYHWRJLYHIXUWKHUFRQVLGHUDWLRQ
WRZKHWKHUKHZRXOGWD[DIIHFWWKH* -VWRFN7KXVZHGR
QRWEHOLHYHWKDWXVLQJDWD[DIIHFWLQFDOFXODWLQJWKHYDOXH
RI VWRFN XQGHU D GLVFRXQWHG FDVK IORZ PHWKRGRORJ\ LV
VFLHQWLILFDOO\ XQUHOLDEOH )RU WKH VDPH UHDVRQV ZH DUH
XQGHWHUUHGE\7D[SD\HUV¶FODLPWKDWWKHXVHRIDWD[DIIHFW
KDVQRWEHHQSXEOLVKHGRUVXEPLWWHGIRUSHHUUHYLHZ$VWKH
&RXUW UHFRJQL]HG LQ 'DXEHUW ³LQ VRPH LQVWDQFHV
ZHOOJURXQGHG EXW LQQRYDWLYH WKHRULHV ZLOO QRW KDYH EHHQ
SXEOLVKHG 6RPH SURSRVLWLRQV PRUHRYHU DUH WRR
SDUWLFXODUWRRQHZRURIWRROLPLWHGLQWHUHVWWREHSXEOLVKHG´
'DXEHUW 86 DW FLWDWLRQ RPLWWHG ³7KH IDFW RI
SXEOLFDWLRQ RUODFNWKHUHRI LQDSHHUUHYLHZHGMRXUQDOWKXV
ZLOOEHDUHOHYDQWWKRXJKQRWGLVSRVLWLYHFRQVLGHUDWLRQLQ
DVVHVVLQJWKHVFLHQWLILFYDOLGLW\RIDSDUWLFXODUWHFKQLTXHRU
PHWKRGRORJ\RQZKLFKDQRSLQLRQLVSUHPLVHG´,G
$OWKRXJKZHFRXOGLPDJLQHFKDOOHQJHVWR%DMDM¶VVXLWDELOLW\
WRGHOLYHUWHVWLPRQ\RQZKDWWD[DIIHFWLQJDSSURDFKEX\HUV
DQGVHOOHUVZRXOGKDYHXWLOL]HGLQ7D[SD\HUVGRQRW
DVVHUW WKRVH FODLPV KHUH 7KXV ZH EHOLHYH WKDW IXUWKHU
DSSOLFDWLRQRIWKH'DXEHUWWHVWZDVXQQHFHVVDU\DVWR%DMDM¶V
WHVWLPRQ\ UHJDUGLQJ WD[ DIIHFWLQJ DQG WKH FRXUW SURSHUO\
DGPLWWHG%DMDM¶VH[SHUWWHVWLPRQ\RQWKLVLVVXH:HQRWH
KRZHYHUWKDWWKLVILQGLQJRIDGPLVVLELOLW\EHDUVQRUHODWLRQWR
WKHZHLJKWWREHJLYHQWKLVHYLGHQFHLQGHWHUPLQLQJWKHYDOXH
RIWKHVKDUHVRI* -VWRFN
1RV *URVVHWDOY&RPPLVVLRQHU
DSSURSULDWHEHFDXVHWKH\GHPRQVWUDWHGPRUHDFFXUDWHO\WKDQ
WKH IODZHG HDUOLHU VWXGLHV ZKDW ZLOOLQJ EX\HUV DQG ZLOOLQJ
VHOOHUVZHUHDFWXDOO\GRLQJLQ2QDSSHDO7D[SD\HUV
FRQWHQGWKDWHYHQLIWKHSULRUVWXGLHVZHUHLQGHHGIODZHGWKDW
ZLOOLQJ EX\HUV DQG VHOOHUV VWLOO UHOLHG XSRQ WKHP DQG WKH\
FRXOGQRWKDYHUHOLHGRQ%DMDM¶VILJXUHVEHFDXVHWKH\GLGQRW
H[LVW DV RI -XO\ %XW 7D[SD\HUV IDLO WR QRWH WKDW
%DMDMUHSHDWHGKLVDQDO\VLVXVLQJRQO\SUHYDOXDWLRQGDWHGDWD
7KLV UHDQDO\VLV UHVXOWHG LQ DQ HYHQ VPDOOHU ODFN RI
PDUNHWDELOLW\GLVFRXQWZKLFKZRXOGKDYHEHHQOHVVIDYRUDEOH
WR7D[SD\HUV)XUWKHUPRUH7D[SD\HUVGRQRWUHFRQFLOHWKHLU
SRVLWLRQZLWKWKLV&RXUW¶VDFNQRZOHGJPHQWWKDWVXEVHTXHQW
HYHQWV PD\ EH FRQVLGHUHG LI WKH\ FRXOG EH UHDVRQDEO\
FRQWHPSODWHG RQ WKH YDOXDWLRQ GDWH 6HH 0RUULV Y
&RPPLVVLRQHU)GDW
$GPLWWHGO\WKHUHLVDIDLUDPRXQWRIFRQIOLFWLQJHYLGHQFH
RQWKLVLVVXH%XWZHQRWHWKDWWKHWD[FRXUW¶VGHWHUPLQDWLRQ
KLQJHGLQODUJHSDUWXSRQWKHFUHGHQFHLWJDYHWRWKHWHVWLPRQ\
RIWKHUHVSHFWLYHZLWQHVVHV,QGHHGWKHFRXUWLQGLFDWHGWKDW
LWIRXQG%DMDM¶VWHVWLPRQ\UHJDUGLQJWKHODFNRIPDUNHWDELOLW\
GLVFRXQW ³WKRURXJK DQG PRUH SHUVXDVLYH´ WKDQ 0F&R\¶V
-$DW $VWKH(LJKWK&LUFXLWUHFRJQL]HGWKHWD[FRXUW
³GRHVQRWKDYHWRDFFHSWμLQWRWRLQSDUW¶RUDWDOO´RSLQLRQV
RI YDOXH SURYLGHG E\ H[SHUWV´ (VWDWH RI )RUG Y
&RPPLVVLRQHU )G WK &LU TXRWLQJ
3DOPHU Y &RPPLVVLRQHU )G WK &LU
7KLVKROGLQJUHLWHUDWHVWKHIDFWWKDWWKHWD[FRXUWLVLQ
WKHEHVWSRVLWLRQWRPDNHIDFWXDOGHWHUPLQDWLRQVDVWRWKHIDLU
PDUNHWYDOXHRIVWRFNV:HFDQQRWFRQFOXGHWKDWWKHWD[FRXUW
HUUHGLQILQGLQJWKDW%DMDM¶VLQGLFDWHGZKDWDZLOOLQJEX\HU
DQGVHOOHUZRXOGKDYHFRQWHPSODWHGRQ-XO\$VLGH
IURPTXHVWLRQLQJWKHDGPLVVLELOLW\RIWKLVWHVWLPRQ\DFODLP
ZKLFKZHKDYHDOUHDG\UHMHFWHG7D[SD\HUVKDYHGRQHQRWKLQJ
WRVKRZWKDW%DMDM¶VRSLQLRQDVWRWKHDPRXQWRIWKHODFNRI
PDUNHWDELOLW\GLVFRXQWZDVLQHUURU,QWKLVUHJDUGZHILQG
WKDWWKHWD[FRXUW¶VDSSOLFDWLRQRIDODFNRIPDUNHWDELOLW\
GLVFRXQWZDVQRWFOHDUO\HUURQHRXV

-- 12 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
2Q FURVVH[DPLQDWLRQ KRZHYHU 0F&R\ DGPLWWHG WKDW WKH UHVWULFWLYH
DJUHHPHQWV EHWZHHQ WKH IDPLO\ JURXSV GLG QRW FRQWDLQ DQ\ OLPLWDWLRQ
UHTXLULQJ EDODQFHG RZQHUVKLS 5DWKHU WKH *URVV/LQQHPDQQ DQG -DUVRQ
IDPLO\ JURXSV HDFK KDG WKHLU RZQ DJUHHPHQWV UHVWULFWLQJ WKH WUDQVIHU RI
VWRFN RXWVLGH RI WKH UHVSHFWLYH IDPLO\ JURXSV $OWKRXJK IXQFWLRQDOO\ WKH
IRUFH RI ERWK DJUHHPHQWV ZRXOG PDLQWDLQ WKH VWDWXV TXR RI HDFK IDPLO\
JURXS RZQLQJ RI WKH RXWVWDQGLQJ VKDUHV RI * - VWRFN WKH\ GLG QRW
H[SOLFLWO\ UHTXLUH WKDW WKH EDODQFH EH PDLQWDLQHG
VXFK WKDW WKH WZR IDPLO\ JURXSV FRXOG PDLQWDLQ HTXDO
RZQHUVKLS
7D[SD\HUV FODLP WKDW LQ DUULYLQJ DW WKH ODFN RI
PDUNHWDELOLW\ILJXUH0F&R\UHOLHGSDUWO\XSRQVWXGLHVWKDW
KDYHEHHQJHQHUDOO\DFFHSWHGE\WKHDSSUDLVDOSURIHVVLRQDQG
SDUWO\XSRQDQLQWXLWLYHDQGQHFHVVDULO\VXEMHFWLYHZHLJKWLQJ
RI FRPSDQ\VSHFLILF IDFWV RQH RI ZKLFK ZDV WKDW WKH
UHVWULFWLYH DJUHHPHQWV VLJQHG E\ WKH PDMRULW\ VKDUHKROGHUV
UHTXLUHGEDODQFHGRZQHUVKLSRI* -VWRFNEHWZHHQWKHWZR
IDPLO\JURXSV%XW0F&R\DFNQRZOHGJHGWKDWKHKDGQRW
DFWXDOO\ UHDG PDQ\ RI WKH VWXGLHV XSRQ ZKLFK KH UHOLHG LQ
FRPLQJXSZLWKWKHWKLUW\WRILJXUH5DWKHUKHPHUHO\
UHOLHGXSRQVXPPDULHVRIWKRVHVWXGLHV0F&R\DOVRDGPLWWHG
WKDWWKHVWXGLHVVKRZHGDZLGHUDQJHRIGLVFRXQWVDQGWKDW
VHYHUDO RI WKHP VKRZHG FRUUHODWLRQV EHWZHHQ FHUWDLQ
FKDUDFWHULVWLFVRIWKHILUPVVXFKDVTXDQWLW\RIVDOHVDQGWKH
DPRXQWRIWKHODFNRIPDUNHWDELOLW\GLVFRXQW
,Q KLV DQDO\VLV %DMDM DQDO\]HG WKH VDPH FRPPRQO\
SXEOLVKHG VWXGLHV RI ODFN RI PDUNHWDELOLW\ GLVFRXQWV WKDW
0F&R\ FLWHG %XW %DMDM QRWHG VRPH SUREOHPV ZLWK WKHVH
VWXGLHV+HWKHUHIRUHFRQGXFWHGKLVRZQLQGHSHQGHQWDQDO\VLV
DQGUDWKHUWKDQVLPSO\DSSO\LQJWKHDYHUDJHGLVFRXQWVOLVWHG
LQWKRVHVWXGLHVDQDO\]HG* -VSHFLILFDOO\WRGHWHUPLQHWKH
SURSHUODFNRIPDUNHWDELOLW\GLVFRXQW$OWKRXJKRIWKH
VDPSOH WUDQVDFWLRQV XVHG LQ WKH VWXG\ RFFXUUHG DIWHU WKH
YDOXDWLRQGDWH%DMDMFRQFOXGHGWKDWXVLQJSRVWGDWDZDV
DSSURSULDWH EHFDXVH WKHUH LV QR UHDVRQ WR EHOLHYH WKDW WKH
XQGHUO\LQJHFRQRPLFVZRXOGKDYHFKDQJHGDIWHUWKHYDOXDWLRQ
GDWH7KHWD[FRXUWIRXQGWKDWUHOLDQFHRQVXFKILJXUHVZDV
1RV *URVVHWDOY&RPPLVVLRQHU
7KH WD[ FRXUW KHOG
,Q OLJKW RI WKH 6L[WK &LUFXLW¶V RSLQLRQ LQ 0RUULV Y
&RPPLVVLRQHU ZH EHOLHYH WKDW WKH UXOH DJDLQVW
7HVWLPRQ\ 5HJDUGLQJ WKH /DFN RI 0DUNHWDELOLW\
'LVFRXQW
7D[SD\HUV DOVR FRQWHVW WKH DGPLVVLELOLW\ RI %DMDM¶V
WHVWLPRQ\LQGLFDWLQJWKDWWKHODFNRIPDUNHWDELOLW\GLVFRXQW
VKRXOGEH7D[SD\HUVFKDOOHQJHWKHUHOLDELOLW\RIZKDW
WKH\WHUPWKH³QRYHO´PHWKRGRORJ\%DMDMXVHGLQFDOFXODWLQJ
WKLVILJXUHDQGWKHWD[FRXUW¶VIDLOXUHWRIXOO\DQDO\]HWKHVH
PHWKRGV XVLQJ WKH 'DXEHUW IDFWRUV :H GLVDJUHH ZLWK
7D[SD\HUV¶ DUJXPHQWV DQG LQVWHDG ILQG WKDW WKH WD[ FRXUW
FRUUHFWO\FRQVLGHUHGVWDWLVWLFVUHOHYDQWWRZKDWDUHDVRQDEOH
EX\HUDQGVHOOHUZRXOGKDYHFRQVLGHUHGDVRIWKHYDOXDWLRQ
GDWH%DMDM¶VWHVWLPRQ\ZDVEDVHGXSRQKLVRZQHPSLULFDO
DQDO\VLVZKLFKLQFOXGHGDVDPSOHRIWUDQVDFWLRQVRI
ZKLFK ZHUH DQQRXQFHG VXEVHTXHQW WR WKH GDWH RQ ZKLFK
7D[SD\HUVPDGHWKHWUDQVDFWLRQDWLVVXH,QWKHLUPRWLRQLQ
OLPLQH 7D[SD\HUV FODLPHG WKDW WKH GDWD XVHG E\ %DMDM ZDV
XQDYDLODEOHDVRIWKHYDOXDWLRQGDWHDQGWKDWDZLOOLQJEX\HU
DQGVHOOHUFRXOGWKHUHIRUHQRWKDYHUHOLHGXSRQVXFKGDWDLQ
QHJRWLDWLQJDVDOHSULFHIRU* -VWRFN7KHWD[FRXUWUHMHFWHG
WKLV FKDOOHQJH ILQGLQJ WKDW LW LV QRW LPSURSHU WR FRQVLGHU
VXEVHTXHQWHYHQWVWKDWPD\VKHGOLJKWXSRQWKHFLUFXPVWDQFHV
WKDWH[LVWHGDVRIWKHYDOXDWLRQGDWH:HKDYHSUHYLRXVO\KHOG
WKDW³VXEVHTXHQWHYHQWVPD\RQO\EHFRQVLGHUHGLIWKH\ZHUH
UHDVRQDEO\NQRZQRQWKHGDWHRIYDOXDWLRQDQGDOVRWKDWVXFK
FRXOGEHUHDVRQDEO\FRQWHPSODWHGRQWKDWGDWH´0RUULVY
&RPPLVVLRQHU)G WK&LU FLWLQJ
(VWDWHRI-HSKVRQY&RPPLVVLRQHU7&
TXRWLQJ &RX]HQV Y &RPPLVVLRQHU %7$
,Q0RUULVZHKHOGWKDWWKHWD[FRXUWGLGQRWDEXVH
LWVGLVFUHWLRQLQUHIXVLQJWRSHUPLWLQWURGXFWLRQRIHYLGHQFH
FRQFHUQLQJWKHVWDWHRIGHYHORSPHQWRQGHFHGHQW¶VSURSHUW\
HLJKW \HDUV DIWHU WKH YDOXDWLRQ GDWH 7KH WD[ FRXUW KDV
LQWHUSUHWHGRXUKROGLQJDVDUXOHRIUHOHYDQFH6HH(VWDWHRI
*LOIRUGY&RPPLVVLRQHU7& 7KXVWKH

-- 13 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
DGPLVVLRQ RI VXEVHTXHQW HYHQWV LV D UXOH RI UHOHYDQFH
5XOH )HGHUDO 5XOHV RI (YLGHQFH DSSOLFDEOH LQ WKLV
&RXUW SXUVXDQW WR 5XOH 7D[ &RXUW 5XOHV RI
3UDFWLFH DQG 3URFHGXUH DQG VHFWLRQ GHILQHV
UHOHYDQW HYLGHQFH DV ³HYLGHQFH KDYLQJ DQ\ WHQGHQF\ WR
PDNH WKH H[LVWHQFH RI DQ\ >IDFW@ WKDW LV RI FRQVHTXHQFH
WR WKH GHWHUPLQDWLRQ RI WKH DFWLRQ PRUH RU OHVV SUREDEOH
WKDQ LW ZRXOG EH ZLWKRXW WKH HYLGHQFH´
(VWDWH RI *LOIRUG 7& FLWDWLRQ RPLWWHG
WD[FRXUWKDVFRQVLGHUHGUHOHYDQWVXEVHTXHQWHYHQWVWKDWWRRN
SODFHOHVVWKDQRQH\HDUIURPWKHYDOXDWLRQGDWHGXHWRLWV
UHOHYDQFH6HHLG,QDVPXFKDVWKHSRVWYDOXDWLRQGDWH
WUDQVDFWLRQV XVHG LQ %DMDM¶V VWXG\ FRXOG KDYH EHHQ
DQWLFLSDWHGWKHLULQFOXVLRQLQKLVHPSLULFDODQDO\VLVGRHVQRW
LPSHGH WKH DGPLVVLELOLW\ RI KLV WHVWLPRQ\ RQ WKLV LVVXH
)XUWKHUPRUH WKH UHFRUG LQGLFDWHV WKDW %DMDM UHSHDWHG KLV
DQDO\VLVXVLQJRQO\SUHYDOXDWLRQGDWHGDWD7KLVUHDQDO\VLV
UHVXOWHGLQDQHYHQVPDOOHUODFNRIPDUNHWDELOLW\ GLVFRXQW
ZKLFKZRXOGKDYHEHHQOHVVIDYRUDEOHWR7D[SD\HUV%DVHG
XSRQ WKHVH IDFWV ZH GR QRW EHOLHYH WKDW %DMDM¶V RSLQLRQ
UHJDUGLQJWKHODFNRIPDUNHWDELOLW\GLVFRXQWZDVEDVHGXSRQ
XQVRXQGRULUUHOHYDQWDQDO\VLVRUGDWD:HWKHUHIRUHKROGWKDW
WKH WD[ FRXUW GLG QRW DEXVH LWV GLVFUHWLRQ LQ DGPLWWLQJ WKLV
WHVWLPRQ\
,,9$/8$7,212)7+(*,)76
7D[SD\HUV DOVR FRQWHQG RQ DSSHDO WKDW HYHQ LI %DMDM¶V
WHVWLPRQ\ZDVDGPLVVLEOHWKHWD[FRXUW¶VXOWLPDWHYDOXDWLRQ
GHFLVLRQZDVFOHDUO\HUURQHRXV7KHLUDUJXPHQWLVEDVHGXSRQ
DFKDOOHQJHWRWKHXVHRIDWD[DIIHFWDQGWKHXVHRID
ODFNRIPDUNHWDELOLW\GLVFRXQW$OWKRXJKDPDMRULW\RIWKH
IDFWRUVWKHWD[FRXUWXVHGLQFDOFXODWLQJWKHYDOXDWLRQDPRXQW
ZHUH SURSHU , WDNH LVVXH ZLWK WKH FRXUW¶V XVH RI D WD[
DIIHFW DQG ZRXOG WKHUHIRUH KROG WKDW WR WKH H[WHQW WKH
YDOXDWLRQ ZDV EDVHG XSRQ WKH XVH RI D WD[ DIIHFW WKH
FRXUW¶V XOWLPDWH ILQGLQJ WKDW WKH * - VWRFN ZDV ZRUWK
SHUVKDUHZDVFOHDUO\HUURQHRXV+RZHYHU-XGJH
'DXJKWUH\DQG-XGJH&RKQGLVDJUHHZLWKPHRQWKLVSRLQWVR
1RV *URVVHWDOY&RPPLVVLRQHU
, PXVW UHFRJQL]H WKDW ZH DUH PHUHO\ GHWHUPLQLQJ WKRVH
IDFWRUVWKDWK\SRWKHWLFDOSDUWLHVWRDVDOHRI* -VWRFNZRXOG
KDYHFRQVLGHUHGDVRIWKHJLIWGDWH,QWKLVUHJDUG,EHOLHYH
WKDWSDVWSUDFWLFHVZKLFKWKH,56KDGQRWGHHPHGWRFUHDWHD
GHILFLHQF\ DUH GHPRQVWUDWLYH RI WKH LGHD WKDW VXFK
K\SRWKHWLFDODFWRUVZRXOGKDYHFRQVLGHUHGWD[DIIHFWLQJ* -
VWRFN 7KLV IDFW LQ FRQMXQFWLRQ ZLWK WKH WHVWLPRQ\ RI WKH
H[SHUWVLQIRUPVP\FRQFOXVLRQWKDWWKHFRXUW¶VGHFLVLRQWRXVH
D WD[ DIIHFW LQ GHULYLQJ WKH YDOXH RI * - VWRFN ZDV
LPSODXVLEOH
/DFNRI0DUNHWDELOLW\'LVFRXQW
:LWK UHVSHFW WR WKH ODFN RI PDUNHWDELOLW\ GLVFRXQW
7D[SD\HUVFRQWHQGWKDWWKHFRXUWHUUHGLQXVLQJSRVWYDOXDWLRQ
GDWHVWDWLVWLFVWKDWDUHDVRQDEOHEX\HULQFRXOGQRWKDYH
UHOLHGXSRQ:HGLVDJUHHDQGLQVWHDGILQGWKDWWKHWD[FRXUW
FRUUHFWO\FRQVLGHUHGVWDWLVWLFVUHOHYDQWWRZKDWDUHDVRQDEOH
EX\HUDQGVHOOHUZRXOGKDYHGRQHLQ
$WWULDOERWKVHWVRIH[SHUWVDJUHHGWKDWEHFDXVHWKHVKDUHV
RIDFORVHO\KHOG6FRUSRUDWLRQVXFKDV* -DUHQRWUHDGLO\
PDUNHWDEOH7D[SD\HUVZHUHHQWLWOHGWRDODFNRIPDUNHWDELOLW\
GLVFRXQW 7D[SD\HU¶V H[SHUW 0F&R\ FLWHG WKH ODFN RI
PDUNHWDELOLW\GLVFRXQWVOLVWHGLQWKUHHLQGHSHQGHQWVWXGLHV
8VLQJWKHDYHUDJHRIWKHODFNRIPDUNHWDELOLW\GLVFRXQWVLQWKH
WKUHH VWXGLHV KH DVVHUWHG WKDW WKH ³PLQLPXP´ ODFN RI
PDUNHWDELOLW\ GLVFRXQW IRU YDOXDWLQJ * - VWRFN ZDV WR
+HDOVROLVWHGZKDWKHFDOOHG³ULVNSUHPLXPV´DQG³ULVN
UHGXFWLRQV´WKDWZHUHSDUWLFXODUWR* -VWRFNWRDFFRXQWIRU
WKLVILJXUH2QHRIWKHVH³ULVNSUHPLXPV´ZDVWKHIDFWWKDW
XQGHU WKH VKDUHKROGHUV¶ UHVWULFWLYH DJUHHPHQW D * -
VKDUHKROGHUFRXOGVHOOKLVVWRFNWRVRPHRQHRXWVLGHRIWKH
IDPLO\JURXSVRQO\LIKHJRWVRPHRQHIURPWKHRWKHUIDPLO\
JURXSWRRIIHUWKHVDPHQXPEHURIVKDUHVWRWKHRXWVLGHEX\HU

-- 14 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
UHJXODWLRQ LQ (: %OLVV WKDW VSHFLILFDOO\ DSSURYHV WD[
DIIHFWLQJWKHDJHQF\¶VUHJXODWLRQVDUHEURDGHQRXJKWRSHUPLW
WKHSUDFWLFHDQGGHILQLWHO\GRQRWEDQLWRXWULJKW6HH5HY
5XOLQJ VXJJHVWLQJ UHOLDQFH XSRQ D ZLGH YDULHW\ RI
IDFWRUVLQDSSUDLVLQJWKHYDOXHRIFORVHO\KHOGFRUSRUDWLRQV
0RUHRYHUDV,KDYHDOUHDG\GLVFXVVHGWKHDJHQF\¶VLQWHUQDO
GLUHFWLYHVVHHPWRSHUPLWWKHSUDFWLFHRIWD[DIIHFWLQJ
7D[SD\HUVDOVRFRQWHQGWKDWWKH&RPPLVVLRQHUVKRXOGQRW
KDYHGLVFUHWLRQWRWUHDWWD[SD\HUVLQDPDQLIHVWO\XQIDLUDQG
LQHTXLWDEOHPDQQHUHVSHFLDOO\JLYHQWKHIDFWWKDWWKH,56KDV
QRWDGRSWHGXQLIRUPUXOHVRUUHJXODWLRQVEDQQLQJWD[DIIHFWLQJ
6FRUSRUDWLRQV7D[SD\HUVFLWH5LJKWHUY8QLWHG6WDWHV
)G &W&O ZKLFKVWDQGVIRUWKHSURSRVLWLRQ
WKDWWKH,56VKRXOGQRWWUHDWSDUWLHVZKRDUHVLPLODUO\VLWXDWHG
LQ D GLIIHUHQW PDQQHU ,Q WKDW FDVH WKH FRXUW KHOG WKDW LQ
GHWHUPLQLQJWKHYDOXHRIFHUWDLQVWRFNKHOGE\DQHVWDWHWKH
,56¶VYDOXDWLRQVRI³RWKHUHVWDWHVLQYROYLQJWKHVDPHVWRFN´
ZHUHSUREDWLYHIRUYDOXDWLRQRIWKHWD[SD\HU¶VHVWDWH5LJKWHU
)GDW,QWKHLQVWDQWFDVHZHDUHQRWFRQIURQWHG
ZLWKWZRGLIIHUHQWSDUWLHVEXWUDWKHUWKHVDPHSDUWLHV%XWZH
DUHGHDOLQJZLWKWZRGLIIHUHQWWD[UHWXUQVERWKRIZKLFKWD[
DIIHFWHG* -VWRFNEXWRQO\RQHRIZKLFKZDVDSSURYHGE\
WKH &RPPLVVLRQHU 7KXV , GR QRW EHOLHYH WKDW WKLV FDVH
SUHVHQWVDVLWXDWLRQVRGLIIHUHQWIURP5LJKWHUDVWRUHTXLUHD
GLIIHUHQWUHVXOW7KH&RPPLVVLRQHUDUJXHVWKDWQRJHQHUDO
UXOHRIODZH[LVWVWKDWFRXOGSHUPLWDWD[SD\HUWRDYRLGSD\LQJ
D WD[ ULJKWIXOO\ GXH E\ VKRZLQJ WKDW KH KDG HVFDSHG KLV
REOLJDWLRQLQWKHSDVW7KLVPXFKLVWUXHEXWDSULQFLSOHRI
ODZ GRHV UHTXLUH WKDW WKH ,56 HVWDEOLVK SUDFWLFHV DQG
SURFHGXUHVWKDWDUHFRQVLVWHQWDQGSUHGLFWDEOHQRWVXEMHFWWR
WKH ZKLP RI WKH &RPPLVVLRQHU 6HH (VWDWH RI %ULJKW Y
8QLWHG6WDWHV)G WK&LU UHMHFWLQJ
WKHSURSRVHGSUDFWLFHRIIDPLO\DWWULEXWLRQEDVHGXSRQ³WKH
LPSRUWDQW SROLF\ WKDW WKH ODZ VKRXOG EH VWDEOH DQG
SUHGLFWDEOH´ DQG QRWLQJ WKDW VXFK D SROLF\ ³LV HVSHFLDOO\
LPSRUWDQW LQ WKH WD[ ODZV EHFDXVH WKHUH LV ZLGHVSUHDG
UHOLDQFH E\ WD[SD\HUV XSRQ HVWDEOLVKHG WD[ SULQFLSOHV LQ
SODQQLQJWKHLUDIIDLUV´ FLWLQJ(VWDWHRI+DWWLH/0F1DU\Y
&RPPLVVLRQHURI,QWHUQDO5HYHQXH7&
1RV *URVVHWDOY&RPPLVVLRQHU
WKDWRXUPDMRULW\KROGLQJLVWKDWWKHWD[FRXUW¶VXVHRIWKH
WD[DIIHFWZDVSURSHU
$
7KH SDUWLHV GLVSXWH WKH SURSHU VWDQGDUG RI UHYLHZ WR EH
XWLOL]HGE\WKLV&RXUW*HQHUDOO\ZHUHYLHZWKHWD[FRXUW¶V
ILQGLQJVRIIDFWIRUFOHDUHUURUDQGLWVDSSOLFDWLRQRIODZGH
QRYR6HH)ULHGPDQY&RPPLVVLRQHU)G WK
&LU (NPDQY&RPPLVVLRQHU)G WK
&LU 7KH &RPPLVVLRQHU FRQWHQGV WKDW WKH
GHWHUPLQDWLRQ RI ³IDLU PDUNHW YDOXH´ RI * - VWRFN LV D
TXHVWLRQ RI IDFW DQG WKH WD[ FRXUW¶V GHWHUPLQDWLRQ PD\ EH
UHYHUVHG RQO\ LI LW LV FOHDUO\ HUURQHRXV 6HH (VWDWH RI
1HZKRXVHY&RPPLVVLRQHU7& $NHUV
Y&RPPLVVLRQHU)G WK&LU ERWK
KROGLQJWKDWGHWHUPLQLQJWKHYDOXHRIDJLIWLVDQLVVXHRIIDFW
DQGWKHWD[FRXUW¶VIDFWXDOILQGLQJVDVWRIDLUPDUNHWYDOXH
PD\ EH UHYHUVHG RQO\ LI WKH GHWHUPLQDWLRQ LV FOHDUO\
HUURQHRXV <HWWKHTXHVWLRQRIZKHWKHUWKHWD[FRXUWXVHG
WKHFRUUHFWVWDQGDUGWRGHWHUPLQHWKHIDLUPDUNHWYDOXHLVD
OHJDOLVVXH6HH3RZHUVY&RPPLVVLRQHU86
5D]DYLY&RPPLVVLRQHU)G WK&LU
KROGLQJWKDWWKHGHWHUPLQDWLRQRIZKHWKHUWKHWD[FRXUW
XVHGWKHFRUUHFWVWDQGDUGWRPHDVXUH³IDLUUHQWDOYDOXH´LVD
OHJDO LVVXH 5XHKOPDQQ Y &RPPLVVLRQHU )G
WK&LU KROGLQJWKDWWKHFULWHULRQWREHDSSOLHG
LQGHWHUPLQLQJYDOXHLVDPDWWHURIODZ ,WLVXQGLVSXWHGWKDW
IRUIHGHUDOJLIWWD[SXUSRVHVWKHIDLUPDUNHWYDOXHLVWKHSULFH
DW ZKLFK WKH VWRFN ZRXOG FKDQJH KDQGV EHWZHHQ D ZLOOLQJ
EX\HU DQG D ZLOOLQJ VHOOHU QHLWKHU EHLQJ XQGHU DQ\
FRPSXOVLRQ WR EX\ RU VHOO DQG ERWK KDYLQJ UHDVRQDEOH
NQRZOHGJHRIUHOHYDQWIDFWV6HH8QLWHG6WDWHVY&DUWZULJKW
86 +H\HQY8QLWHG6WDWHV)G
WK&LU ,5&†7KLVOHJDOVWDQGDUGKDV
FRPH WR EH NQRZQ DV WKH ³ZLOOLQJ EX\HUZLOOLQJ VHOOHU´
VWDQGDUG,QWKHFDVHDWEDUWKHWD[FRXUWFOHDUO\FLWHGWKH
FRUUHFW OHJDO VWDQGDUG WKH ZLOOLQJ EX\HUZLOOLQJ VHOOHU
VWDQGDUG ZKLFK ZDV WKH VDPH VWDQGDUG DGYRFDWHG E\
7D[SD\HUV%XW7D[SD\HUVDOOHJHWKDWWKHFRXUWGHYLDWHGIURP

-- 15 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
WKLV VWDQGDUG E\ QRW ³WD[ DIIHFWLQJ´ WKH * - VWRFN DQG E\
FRQVLGHULQJSRVWYDOXDWLRQGDWHGDWD7KH\WKHUHIRUHDUJXH
WKDWWKHSURSHUVWDQGDUGRIUHYLHZLVGHQRYREHFDXVHWKHLVVXH
LVDPL[HGTXHVWLRQRIODZDQGIDFW6HH5D]DYL)GDW

:HILQGWKDWWKLVGLVSXWHLVQRWRYHUWKHSURSHUFULWHULDWREH
XVHGLQGHWHUPLQLQJIDLUPDUNHWYDOXHEXWUDWKHURYHUZKHWKHU
WKRVHFULWHULDZHUHSURSHUO\DSSOLHG(VVHQWLDOO\7D[SD\HUV
DUH PHUHO\ DUJXLQJ WKDW WKH WD[ FRXUW HUUHG LQ LWV ILQDO
YDOXDWLRQE\IDLOLQJWRWD[DIIHFW* -¶VVWRFNDQGE\ILQGLQJ
WKDWWKHODFNRIPDUNHWDELOLW\GLVFRXQWVKRXOGEH7KHVH
FRQWHQWLRQVGRQRWFKDOOHQJHWKHDFWXDOVWDQGDUGUDWKHUWKH\
UHIOHFWDGLIIHUHQFHLQRSLQLRQDVWRWKHPHWKRGRORJLHVXVHG
WR DUULYH DW WKH YDOXDWLRQ DPRXQW ³7KH FKRLFH RI WKH
DSSURSULDWHYDOXDWLRQPHWKRGRORJ\IRUDSDUWLFXODUVWRFNLVLQ
LWVHOIDTXHVWLRQRIIDFW´(VWDWHRI1HZKRXVH7&DW
FLWLQJ2 0DOOH\Y$PHV)G WK&LU
5LVV Y &RPPLVVLRQHU 7& DII¶G VXE
QRP&RPPLVVLRQHUY7UDQVSRUW0IJ (TXLSPHQW&R
)G WK &LU DII¶G FDXVH UHPDQGHG )G
WK&LU 7KXVZHZLOOUHYLHZWKHWD[FRXUW¶V
YDOXDWLRQGHFLVLRQRQO\IRUFOHDUHUURU
$ ILQGLQJ LV FOHDUO\ HUURQHRXV ZKHQ DOWKRXJK WKHUH LV
HYLGHQFHWRVXSSRUWLWDUHYLHZRIWKHHQWLUHUHFRUGOHDYHVWKH
UHYLHZLQJFRXUWZLWKWKHGHILQLWHDQGILUPFRQYLFWLRQWKDWD
PLVWDNHKDVEHHQPDGH6HH&RPPLVVLRQHUY'XEHUVWHLQ
86 )DXOFRQHUY&RPPLVVLRQHU
)G WK &LU 7KLV VWDQGDUG RI UHYLHZ
UHTXLUHV WKDW ZH DFFRUG JUHDW GHIHUHQFH WR WKH YDOXHV
HVWDEOLVKHGE\WKHWD[FRXUWEXWLWGRHVQRWUHQGHUXVDPHUH
UXEEHU VWDPS 6HH 0LDPL 9DOOH\ %URDG &RUS Y
&RPPLVVLRQHU)G WK&LU 7KLV&RXUW
FDQRQO\RYHUWXUQWKHWD[FRXUW¶VGHFLVLRQLILWLV³OHIWZLWKD
GHILQLWH DQG ILUP FRQYLFWLRQ WKDW D PLVWDNH KDV EHHQ
FRPPLWWHG´$QGHUVRQY%HVVHPHU&LW\86
TXRWLQJ8QLWHG6WDWHVY8QLWHG6WDWHV*\SVXP&R
86 :KHQ UHYLHZLQJ IRU FOHDU
HUURUWKHFRXUWFDQQRWVXEVWLWXWHLWVMXGJPHQWIRUWKDWRIWKH
1RV *URVVHWDOY&RPPLVVLRQHU
DSSURYHGWD[HVSDLGE\7D[SD\HUVEDVHGRQJLIWVRI* -
VWRFNVYDOXHGDWSHUVKDUHDVXPGHWHUPLQHGE\WD[
DIIHFWLQJ * - VWRFN 7D[SD\HUV DVVHUW WKDW WKH
&RPPLVVLRQHU¶V UHYLHZ DQG DSSURYDO RI WKHVH SUHYLRXV
UHWXUQVHQWLWOHVWKHPWRUHO\XSRQWD[DIIHFWLQJDWDODWHUGDWH
FODLPLQJ WKDW WKH &RPPLVVLRQHU VRPHKRZ DFWHG
³UHWURDFWLYHO\´ WR WKHLU GHWULPHQW ,Q VXSSRUW RI WKLV
SURSRVLWLRQWKH\FLWH(:%OLVV&RY8QLWHG6WDWHV)
6XSS 1'2KLR DII¶G)G WK&LU
LQZKLFKWKHFRXUWKHOGWKDWWKH&RPPLVVLRQHUFDQQRW
DFWUHWURDFWLYHO\LQDSDUWLFXODUFDVHZKHUHKLVRZQUHJXODWLRQV
DUH³EURDGHQRXJKWRDOORZDWD[SD\HU¶V PHWKRGDVRQHLQ
DFFRUGDQFHZLWKJHQHUDOO\DFFHSWHGDFFRXQWLQJSULQFLSOHVRU
EHVW DFFRXQWLQJ SUDFWLFHV DQG RQH ZKLFK ZDV FRQVLVWHQWO\
IROORZHG´,GDW,Q%OLVVWKHFRXUWVWDWHG
>LIDWD[SD\HU¶V@PHWKRGRIYDOXLQJLWVLQYHQWRU\RIZRUN
LQSURFHVVLVVXEVWDQWLDOO\LQDFFRUGZLWKWKHUHJXODWLRQV
JUHDW ZHLJKW PXVW EH JLYHQ WR LWV ORQJ UHFRUG RI
FRQVLVWHQW DSSOLFDWLRQ RI WKH VDPH PHWKRG 7KH
*RYHUQPHQW¶VPRVWYLJRURXVREMHFWLRQWRWKHWD[SD\HU¶V
PHWKRG RI YDOXLQJ LWV LQYHQWRU\ LV WR WKH ODWWHU¶V
DOORZDQFHRIDQRUPDOPDUJLQRISURILW7KH*RYHUQPHQW
DVVHUWVWKDWWKHDOORZDQFHRIDQRUPDOSURILWLQHYDOXDWLQJ
LQYHQWRULHV LV QRW UHFRJQL]HG E\ WKH $PHULFDQ
$FFRXQWDQWV $VVRFLDWLRQ RU E\ WKH &KDUWHUHG
$FFRXQWDQWVRI(QJODQGZDV:DOHV6XFKDQDOORZDQFH
KRZHYHULVUHFRJQL]HGE\WKH&RPPLVVLRQHURI,QWHUQDO
5HYHQXHLQ5HJXODWLRQ & DVEHLQJDSSOLFDEOHWR
UHWDLO PHUFKDQWV DQG DOVR KDV WKH DSSURYDO RI WKH
$PHULFDQ,QVWLWXWHRI&HUWLILHG3XEOLF$FFRXQWDQWV
,GDW HPSKDVLVDGGHG ,DFNQRZOHGJHWKDWWKHIDFWV
RIWKHLQVWDQWFDVHGRQRWUHIOHFWQXPHURXVUHWXUQVXVLQJWD[
DIIHFWLQJ1RQHWKHOHVV,EHOLHYHWKDWJLYHQWKHDPRXQWRI
WLPHVLQFHWKHWD[UHWXUQVWKH&RPPLVVLRQHU¶VGHFLVLRQ
QRWWRDOORZWD[DIIHFWLQJLQWKHUHWXUQVDWLVVXHLQWKLVFDVH
EULQJV7D[SD\HUVZLWKLQWKHDHJLVRI(:%OLVV)XUWKHUPRUH
DOWKRXJK LQ WKH LQVWDQW FDVH WKH &RPPLVVLRQHU KDG QRW
DGRSWHGDVSHFLILFUHJXODWLRQRUSROLF\ VXFKDVWKHDOORZDQFH

-- 16 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
,I\RXDUHFRPSDULQJD6XEFKDSWHU6FRUSRUDWLRQWRWKH
VWRFN RIVLPLODUILUPVWKDWDUHSXEOLFO\WUDGHGWKHQHW
LQFRPHRIWKHIRUPHUPXVWEHDGMXVWHGIRULQFRPHWD[HV
XVLQJWKHFRUSRUDWHWD[UDWHVDSSOLFDEOHIRUHDFK\HDULQ
TXHVWLRQDQGFHUWDLQRWKHULWHPVVXFKDVVDODULHV7KHVH
DGMXVWPHQWV ZLOO DYRLG GLVWRUWLRQV ZKHQ DSSO\LQJ
LQGXVWU\UDWLRVVXFKDVSULFHWRHDUQLQJV
-$DW ,QUHEXWWDOWKH&RPPLVVLRQHUDUJXHVWKDWWKHVH
GRFXPHQWV ZHUH LQWHQGHG IRU LQWHUQDO ,56 XVH RQO\ 7KLV
PXFKLVHYLGHQWLQWKHH[SUHVVODQJXDJHLQFOXGHGRQWKHFRYHU
RI,569DOXDWLRQ*XLGHZKLFKZDUQV³7KLVPDWHULDOZDV
GHVLJQHGVSHFLILFDOO\E\WKH,56IRUWUDLQLQJSXUSRVHVRQO\
8QGHUQRFLUFXPVWDQFHVVKRXOGWKHFRQWHQWVEHXVHGRUFLWHG
DV DXWKRULW\ IRU VHWWLQJ RU VXVWDLQLQJ D WHFKQLFDO SRVLWLRQ´
-$ DW ,QGHHG 7D[SD\HUV¶ RZQ H[SHUW 0F&R\
DFNQRZOHGJHGWKDWWKHVHGRFXPHQWVZHUHLQWHQGHGVROHO\IRU
WKH XVH RI ,56 HPSOR\HHV %XW 0F&R\ UHVSRQGHG WR WKLV
DUJXPHQWE\DVVHUWLQJWKDWLWZDVLUUHOHYDQWEHFDXVHLQWKHUHDO
ZRUOGSURIHVVLRQDOVVWLOOUHOLHGRQWKHPDQXDOVDQGWKHUHIRUH
WKHLU FOLHQWV GLG WRR 7KH WD[ FRXUW GHWHUPLQHG WKDW
7D[SD\HU¶VGLGQRWVKRZWKDWWKH\KDGDFWXDOO\UHOLHGRQWKHVH
LQWHUQDOJXLGHOLQHVDQGWKHUHIRUHIDLOHGWRVKRZWKHW\SHRI
GHWULPHQWDO UHOLDQFH WKDW ZRXOG MXVWLI\ HVWRSSLQJ WKH
&RPPLVVLRQHU IURP GLVUHJDUGLQJ WKH WD[ DIIHFWLQJ
PHWKRGRORJ\%XW,GRQRWEHOLHYHWKDW7D[SD\HUVPXVWVKRZ
WKDWWKH\DFWXDOO\UHOLHGRQWKHVHPDWHULDOVLQSUHSDULQJWKHLU
WD[UHWXUQV5DWKHUWKHSULQFLSOHVVWDWHGLQWKHVHPDWHULDOV
EHDUHYLGHQWLDU\ZHLJKWLQVXSSRUWRIWKHQRWLRQWKDWDZLOOLQJ
EX\HU DQG VHOOHU ZRXOG KDYH XVHG WKH VDPH WD[ DIIHFWLQJ
DSSURDFKHVVWDWHGWKHUHLQLQYDOXDWLQJVKDUHVRI* -VWRFN
$OWKRXJK,GRQRWDJUHHZLWK7D[SD\HUV¶FRQWHQWLRQWKDWWKH
,56LVVRPHKRZHVWRSSHGIURPQRZGLVFODLPLQJWD[DIIHFWLQJ
DV D UHFRJQL]HG SUDFWLFH , UHFRJQL]H WKDW WKHVH GRFXPHQWV
UHIOHFWDFHUWDLQDFFHSWDQFHRIWD[DIIHFWLQJDVDYDOLGPHWKRG
RIYDOXDWLRQ
7KHQRWLRQWKDWZLOOLQJEX\HUVDQGVHOOHUVZRXOGKDYHXVHG
WD[DIIHFWLQJXQGHUWKHGLVFRXQWHGFDVKIORZPHWKRGRORJ\LV
IXUWKHU VXSSRUWHG E\ WKH IDFW WKDW WKH ,56 KDG SUHYLRXVO\
1RV *URVVHWDOY&RPPLVVLRQHU
7D[ &RXUW 5XOH D SURYLGHV WKDW ³>W@KH EXUGHQ RI SURRI VKDOO EH
XSRQ WKH SHWLWLRQHU H[FHSW DV RWKHUZLVH SURYLGHG E\ VWDWXWH RU GHWHUPLQHG
E\ WKH &RXUW DQG H[FHSW WKDW LQ UHVSHFW RI DQ\ QHZ PDWWHU LQFUHDVHV LQ
GHILFLHQF\ DQG DIILUPDWLYH GHIHQVHV SOHDGHG LQ WKH DQVZHU LW VKDOO EH
XSRQ WKH UHVSRQGHQW´ 7; &7 5 D ,5& † VHH DOVR
)ULHGPDQ Y &RPPLVVLRQHU )G WK &LU
WD[FRXUWEXWUDWKHUPXVWXSKROGWKHWD[FRXUW¶VDFFRXQWRIWKH
HYLGHQFHLILWLVSODXVLEOHLQOLJKWRIWKHUHFRUGYLHZHGLQLWV
HQWLUHW\,GDW³:KHUHWKHUHDUHWZRSHUPLVVLEOHYLHZV
RIWKHHYLGHQFHWKHIDFWILQGHU¶VFKRLFHEHWZHHQWKHPFDQQRW
EH FOHDUO\ HUURQHRXV´ ,G 7KXV ZKHUH WKH WD[ FRXUW¶V
ILQGLQJVRIIDFWUHVWXSRQFUHGLELOLW\GHWHUPLQDWLRQVWKHIDFW
ILQGHU¶VFKRLFHPXVWEHDFFRUGHGPRUHGHIHUHQFH0RUHRYHU
WKH &RPPLVVLRQHU¶V GHWHUPLQDWLRQ RI D WD[ GHILFLHQF\ LV
SUHVXPSWLYHO\ FRUUHFW DQG WKH WD[SD\HU KDV WKH EXUGHQ RI
SURYLQJWKDWWKHGHWHUPLQDWLRQLVHUURQHRXVRUDUELWUDU\6HH
.HDUQVY&RPPLVVLRQHU)G WK&LU
FLWLQJ8QLWHG6WDWHVY-DQLV86 VHH
DOVR7; &7 5 D
%
7KH,QWHUQDO5HYHQXH&RGHLPSRVHVDWD[RQWKHWUDQVIHURI
SURSHUW\E\JLIW7KHYDOXDWLRQRIDJLIWRIVWRFNLVWKHIDLU
PDUNHW YDOXH RQ WKH GDWH WKH JLIW ZDV PDGH 6HH ,5&
† D )DLUPDUNHWYDOXHKDVEHHQGHILQHGDVWKH
³SULFHDWZKLFKWKHSURSHUW\ZRXOGFKDQJHKDQGVEHWZHHQD
ZLOOLQJEX\HUDQGDZLOOLQJVHOOHUQHLWKHUEHLQJXQGHUDQ\
FRPSXOVLRQ WR EX\ RU VHOO DQG ERWK KDYLQJ UHDVRQDEOH
NQRZOHGJHRIWKHUHOHYDQWIDFWV´7UHDV5HJ†
VHH DOVR 8QLWHG 6WDWHV Y &DUWZULJKW 86
FI5D]DYL)G DW GHILQLQJWKHWHUP³IDLU
UHQWDOYDOXH´LQDVLPLODUIDVKLRQDQGE\UHIHUHQFHWRWKHWHUP
³IDLUPDUNHWYDOXH´
0RUHRYHU WKH ,56¶V SXEOLVKHG UHJXODWLRQV LQGLFDWH WKDW
³GHWHUPLQDWLRQRIIDLUPDUNHWYDOXHEHLQJDTXHVWLRQRIIDFW
ZLOOGHSHQGXSRQWKHFLUFXPVWDQFHVLQHDFKFDVH>DQGD@
VRXQG HYDOXDWLRQ >UHTXLUHV@ FRPPRQ VHQVH LQIRUPHG

-- 17 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
MXGJPHQWDQGUHDVRQDEOHQHVV´5HY5XO†
&%PRGLILHGE\5HY5XO&%
6HFWLRQRI5HYHQXH5XOLQJSURYLGHV
,WLVDGYLVDEOHWRHPSKDVL]HWKDWLQWKHYDOXDWLRQRIWKH
VWRFN RI FORVHO\ KHOG FRUSRUDWLRQV RU WKH VWRFN RI
FRUSRUDWLRQVZKHUHPDUNHWTXRWDWLRQVDUHHLWKHUODFNLQJ
RU WRR VFDUFH WR EH UHFRJQL]HG DOO DYDLODEOH ILQDQFLDO
GDWD DV ZHOO DV DOO UHOHYDQW IDFWRUV DIIHFWLQJ WKH IDLU
PDUNHW YDOXH VKRXOG EH FRQVLGHUHG 7KH IROORZLQJ
IDFWRUVDOWKRXJKQRWDOOLQFOXVLYHDUHIXQGDPHQWDODQG
UHTXLUHFDUHIXODQDO\VLVLQHDFKFDVH
D 7KHQDWXUHRIWKHEXVLQHVVDQGWKHKLVWRU\RIWKH
HQWHUSULVHIURPLWVLQFHSWLRQ
E 7KH HFRQRPLF RXWORRN LQ JHQHUDO DQG WKH
FRQGLWLRQ DQG RXWORRN RI WKH VSHFLILF LQGXVWU\ LQ
SDUWLFXODU
F 7KH ERRN YDOXH RI WKH VWRFN DQG WKH ILQDQFLDO
FRQGLWLRQRIWKHEXVLQHVV
G 7KHHDUQLQJFDSDFLW\RIWKHFRPSDQ\
H 7KHGLYLGHQGSD\LQJFDSDFLW\
I :KHWKHU RU QRW WKH HQWHUSULVH KDV JRRGZLOO RU
RWKHULQWDQJLEOHYDOXH
J 6DOHVRIWKHVWRFNDQGWKHVL]HRIWKHEORFNRI
VWRFNWREHYDOXHG
K 7KH PDUNHW SULFH RI VWRFNV RI FRUSRUDWLRQV
HQJDJHG LQ WKH VDPH RU D VLPLODU OLQH RI EXVLQHVV
KDYLQJWKHLUVWRFNVDFWLYHO\WUDGHGLQDIUHHDQGRSHQ
PDUNHWHLWKHURQDQH[FKDQJHRURYHUWKHFRXQWHU
5HY5XO†&%
$IWHUKHDULQJWKHHYLGHQFHRQWKHVHLVVXHVWKHWD[FRXUW
IRXQGWKDWWKHIDLUPDUNHWYDOXHRIDVKDUHRI* -VWRFNRQ
-XO\ZDV,QVRKROGLQJWKHFRXUWQRWHG
WKDWYDOXDWLRQLVDQLVVXHRIIDFWRQZKLFK7D[SD\HUV¶EHDUHG
WKHEXUGHQRISURRI7D[SD\HUVFRQWHQGWKDWWKHWD[FRXUWORVW
VLJKWRIWKHZLOOLQJEX\HUDQGZLOOLQJVHOOHUVWDQGDUG7KH\
DVVHUWWKDWWKHWD[FRXUWPDGHQRDWWHPSWWRGLVFXVVRUDQDO\]H
DQ\ RI WKH UHOHYDQW IDFWV ZKLFK D K\SRWKHWLFDO EX\HU RI D
1RV *URVVHWDOY&RPPLVVLRQHU
,Q DGGLWLRQ WKHVH FDVHV QRWHG WKH LPSUHFLVH QDWXUH RI YDOXLQJ VXFK
VWRFNV
:H UHFRJQL]H WKDW WKH YDOXDWLRQ SURFHVV LV QRW DQ H[DFW
VFLHQFH >6@LQFH WKLV XQZHOFRPHG RQXV KDV EHHQ SODFHG RQ
WKLV &RXUW ZH KDYH LQ WKH H[HUFLVH RI RXU μ6RORPRQOLNH
ZLVGRP¶ DUULYHG DW RXU GHWHUPLQDWLRQ RI IDLU PDUNHW YDOXH
DV UHIOHFWHG LQ RXU XOWLPDWH ILQGLQJ RI IDFW E\ ZHLJKLQJ DOO RI WKH
IDFWV DQG FLUFXPVWDQFHV FRQWDLQHG LQ WKH HQWLUH UHFRUG
(VWDWH RI +DOO Y &RPPLVVLRQHU 7&0 &&+
FLWDWLRQ RPLWWHG
2QFH DJDLQ ZH DUH DVNHG WR GHWHUPLQH WKH YDOXH RI VKDUHV RI
VWRFN LQ D FORVHO\KHOG FRUSRUDWLRQ D VFLHQFH ZKLFK WR XVH
:LQVWRQ &KXUFKLOO V ZRUGV XVXDOO\ UHVXOWV LQ D ³JURVV WHUPLQDO
ORJLFDO LQH[DFWLWXGH´ 'HWHUPLQDWLRQV RI YDOXH RI FORVHO\ KHOG
VWRFN LQYROYH D PHOGLQJ RI QXPHURXV REMHFWLYH FULWHULD SULRU
KXPDQ H[SHULHQFH DQG SHUVRQDO MXGJPHQW
0DULV Y &RPPLVVLRQHU 7&0
HYHU\FLUFXPVWDQFHLQERWKRIWKHVHFDVHVWKHWD[FRXUWGLG
XVHDIWHUWD[HDUQLQJVLQYDOXLQJWKHVWRFNRI6FRUSRUDWLRQV
%XWSHUKDSV7D[SD\HUVPRVWSHUVXDVLYHDUJXPHQWLVWKDWWKH
,56LWVHOIKDVLPSOLFLWO\HQGRUVHGWKHSROLF\RIWD[DIIHFWLQJ
LQYDOXDWLQJVWRFNRI6FRUSRUDWLRQV,QVXSSRUWRIWKLVFODLP
7D[SD\HUV SRLQW WR WZR LQWHUQDO ,56 GRFXPHQWV ZKLFK
PHQWLRQPDNLQJDGMXVWPHQWVIRUWD[HVRI6FRUSRUDWLRQV7KH
,56 9DOXDWLRQ *XLGH IRU ,QFRPH (VWDWH DQG *LIW 7D[HV
9DOXDWLRQ7UDLQLQJIRU$SSHDOV2IILFHUVVWDWHVDWSDJHV
6 FRUSRUDWLRQV OHQG WKHPVHOYHV UHDGLO\ WR YDOXDWLRQ
DSSURDFKHVFRPSDUDEOHWRWKRVHXVHGLQYDOXLQJFORVHO\
KHOG FRUSRUDWLRQV <RX QHHG RQO\ DGMXVW WKH HDUQLQJV
IURPWKHEXVLQHVVWRUHIOHFWHVWLPDWHGFRUSRUDWHLQFRPH
WD[HVWKDWZRXOGKDYHEHHQSD\DEOHKDGWKH6XEFKDSWHU
6HOHFWLRQQRWEHHQPDGH
-$DW ,QDGGLWLRQWKH,56([DPLQDWLRQ7HFKQLTXH
+DQGERRNSURYLGHV

-- 18 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
7D[SD\HUV DOVR FRQWHQGHG WKDW WD[ DIIHFWLQJ ZDV QHFHVVDU\ WR
FRPSHQVDWH IRU WKH GLVDGYDQWDJHV * - IDFHG DV DQ 6 FRUSRUDWLRQ LQ
UDLVLQJ FDSLWDO %XW WKH FRXUW GLVPLVVHG WKLV FRQFHUQ ILQGLQJ WKDW LW ZDV
QRW D SURSHU MXVWLILFDWLRQ IRU WD[ DIIHFWLQJ LQDVPXFK DV WKLV GLVDGYDQWDJH
LV PRUH DSSURSULDWHO\ DGGUHVVHG LQ GHWHUPLQLQJ WKH DSSURSULDWH ³FRVW RI
FDSLWDO´ 7D[SD\HUV KDYH QRW DWWDFNHG WKLV UDWLRQDOH RQ DSSHDO
HDUQLQJV DQG ZRXOG KDYH WR QRWH WKH IDFW WKDW * -¶V
6FRUSRUDWLRQVWDWXVZDVQRWJXDUDQWHHG
$VLGH IURP LWV DWWHPSW WR GLVWLQJXLVK WKH SDUWLFXODU
FKDUDFWHULVWLFVRI* -WKHWD[FRXUW¶VRSLQLRQIRFXVHGRQLWV
WKHRUHWLFDO EHOLHI WKDW WD[ DIIHFWLQJ ZDV QRW DQ DSSURSULDWH
VXEVWLWXWHIRUFHUWDLQ³GLIILFXOWWRTXDQWLI\GLVDGYDQWDJHV´RI
6FRUSRUDWLRQVWDWXV7KHFRXUWEHOLHYHGWKDWWKHSULQFLSOH
EHQHILWWKDWVKDUHKROGHUVRIDQ6FRUSRUDWLRQH[SHFWHGZDV
UHGXFHGWD[HVDQGLWVDZ³QRUHDVRQZK\WKDWVDYLQJVRXJKWWR
EHLJQRUHGLQYDOXDWLQJDQ6FRUSRUDWLRQ´ -$DW
&I,QUH5DGLRORJ\$VVRFV,QF/LWLJ$G
'HO&K KROGLQJWKDWLJQRULQJWD[HVDOWRJHWKHULV
WKHRQO\ZD\WKDWWKHGLVFRXQWHGFDVKIORZDQDO\VLVFDQUHIOHFW
DFFXUDWHO\ WKH YDOXH RI D FRPSDQ\¶V FDVK IORZV WR LWV
LQYHVWRUV , UHFRJQL]H WKDW LQ PDNLQJ WKLV IDFWXDO
GHWHUPLQDWLRQWKHWD[FRXUWLVQRWERXQGE\WKHRSLQLRQRI
DQ\H[SHUWZLWQHVVDQGPD\DFFHSWRUUHMHFWWKDWWHVWLPRQ\LQ
WKHH[HUFLVHRILWVVRXQGMXGJPHQW6HH+HOYHULQDY1DW¶O
*URFHU\&R86 %XW,EHOLHYHWKDWLQ
WKHLQVWDQWFDVHWKHWD[FRXUW¶VMXGJPHQWZDVOHVVWKDQVRXQG
LQPDQ\UHVSHFWVIRULWIOLHVLQWKHIDFHRIWKHHYLGHQFHRQWKH
UHFRUG
2Q DSSHDO 7D[SD\HUV DVVHUW WKDW WD[ DIIHFWLQJ ZDV DQ
DFFHSWHGSUDFWLFHEHFDXVHLWKDGEHHQ³VSHFLILFDOO\DSSURYHG´
E\WKHWD[FRXUWFLWLQJ0DULVY&RPPLVVLRQHU7&0
&&+ DQG+DOOY&RPPLVVLRQHU7&0
&&+ $OWKRXJKQRWVSHFLILFDOO\KROGLQJ
WKDWWD[DIIHFWLQJZDVDQDFFHSWDEOHDSSURDFKWRYDOXDWLRQLQ
1RV *URVVHWDOY&RPPLVVLRQHU
7KH RSLQLRQ H[SUHVVHG LQ WKLV VHFWLRQ ,,% LV VROHO\ WKDW RI -XGJH
&OD\ DQG QRW WKH RSLQLRQ RI WKH PDMRULW\
PLQRULW\LQWHUHVWLQ* -VWRFNZRXOGEHOHJDOO\SUHVXPHGWR
NQRZ DQG DFW XSRQ ZLWK UHVSHFW WR WZR NH\ YDULDEOHVWKH
GHFLVLRQZKHWKHUWRWD[DIIHFW* -¶VHDUQLQJVDQGWKHH[WHQW
RIWKHODFNRIPDUNHWDELOLW\GLVFRXQW
7D[$IIHFWLQJ
7D[SD\HUVFRQWHQGWKDWDZLOOLQJEX\HULQZRXOGKDYH
WD[DIIHFWHGWKHVWRFNE\LQGHWHUPLQLQJDSXUFKDVHSULFH
7KHLUPDLQDUJXPHQWLQVXSSRUWRIWKLVFRQWHQWLRQLVWKDWD
K\SRWKHWLFDO ZLOOLQJ EX\HU LQ ZRXOG EH SUHVXPHG WR
NQRZWKDWWD[DIIHFWLQJHDUQLQJVZDVWKHJHQHUDOO\DFFHSWHG
SUDFWLFH RI WKH EXVLQHVV DSSUDLVDO FRPPXQLW\ LQ YDOXLQJ D
PLQRULW\LQWHUHVWLQ6FRUSRUDWLRQV7KH&RPPLVVLRQHUDUJXHV
WKDW WD[ DIIHFWLQJ ZDV QRW D JHQHUDOO\ DFFHSWHG EXVLQHVV
SUDFWLFH DW WKH WLPH $W WULDO ERWK SDUWLHV SUHVHQWHG
FRQIOLFWLQJHYLGHQFHRQWKLVLVVXH%DMDMWHVWLILHGWRWKDWLW
ZRXOG EH XQUHDVRQDEOH WR VXEWUDFW K\SRWKHWLFDO FRUSRUDWH
LQFRPHWD[HVIURP* -¶VSURMHFWHGIXWXUHLQFRPHEHFDXVH
WKHFRUSRUDWLRQGLGQRWLQIDFWSD\DQ\WD[HV%XW7D[SD\HUV
ODUJHO\GLVFUHGLWHG%DMDM¶VWHVWLPRQ\E\SRLQWLQJRXWWKDWE\
KLVRZQDGPLVVLRQKHKDGQRILUVWKDQGNQRZOHGJHRIZKDW
ZLOOLQJEX\HUVGLGLQ,QIDFW%DMDMWHVWLILHGWKDWKHKDG
QR ILUVW KDQG NQRZOHGJH DV WR ZKDW WKH DFFHSWHG SUDFWLFH
DPRQJ WD[ DSSUDLVHUV ZDV LQ UHJDUGLQJ WD[ DIIHFWLQJ
6FRUSRUDWLRQVWRFN&RQYHUVHO\ERWK0F&R\DQG:LOKRLWH
WHVWLILHG RQ EHKDOI RI 7D[SD\HUV WKDW WD[ DIIHFWLQJ ZDV WKH
DSSURDFK JHQHUDOO\ IROORZHG LQ E\ WKH DSSUDLVDO
FRPPXQLW\ LQ HYDOXDWLQJ 6 FRUSRUDWLRQV 2Q FURVV
H[DPLQDWLRQ 0F&R\ GLG DGPLW WKDW WKHUH ZDV D JURZLQJ
FRQWURYHUV\LQDVWRWKHSURSULHW\RIWKHWD[DIIHFWLQJ
0F&R\DOVRDJUHHGWKDWWKHPDWWHUZDVVWLOOEHLQJGHEDWHGDV
RIWKHWLPHRIWULDODQGWKDWLIKHKDGWRYDOXHVWRFNRIWKH
* - FRUSRUDWLRQ DV RI WKDW WLPH KH ZRXOG JLYH IXUWKHU
FRQVLGHUDWLRQ DV ZKHWKHU KH ZRXOG XVH WKH WD[ DIIHFWLQJ
PHWKRG%XWDV 7D[SD\HUVQRWHWKHIDFWWKDWWKHUHZDVD

-- 19 of 20 --

*URVVHWDOY&RPPLVVLRQHU 1RV
JURZLQJFRQWURYHUV\RQWKHLVVXHGRHVQRWQHFHVVDULO\PHDQ
WKDW WKH PHWKRG ZDV QRW JHQHUDOO\ UHOLHG XSRQ LQ
0F&R\ DYHUUHG WKDW GHVSLWH D VSULQNOLQJ RI DUWLFOHV
TXHVWLRQLQJWD[DIIHFWLQJLWZDVWKHUHFRJQL]HGSUDFWLFHIRU
DSSUDLVLQJ6FRUSRUDWLRQVDWWKHWLPH,QIDFW0F&R\WHVWLILHG
WKDW DOWKRXJK WKHUH PD\ KDYH EHHQ RWKHU DSSURDFKHV WR
DSSUDLVLQJWKHVWRFNRI6FRUSRUDWLRQVDOOWKDWKHKDGVHHQ
KDGWD[DIIHFWHG
7D[SD\HUV DWWHPSWHG WR MXVWLI\ XVH RI WD[ DIIHFWLQJ E\
DUJXLQJWKDWDOWKRXJKDQ6FRUSRUDWLRQGRHVQRWKDYHWRSD\
SURSHUW\ WD[HV WKHUH DUH FRVWV RU WUDGHRIIV LQ HOHFWLQJ
6 FRUSRUDWLRQ VWDWXV ZKLFK WD[ DIIHFWLQJ LV LQWHQGHG WR
DGGUHVV%XWWKHFRXUWIRXQGWKDWDVD³WKHRUHWLFDOPDWWHU´DQG
³DV D PDWWHU RI HFRQRPLF WKHRU\´ WKDW WD[ DIIHFWLQJ ZDV
LQDSSURSULDWHWRRIIVHWWKHVHFRQFHUQV,QDGGLWLRQWKHFRXUW
IRXQG DQG WKH &RPPLVVLRQHU QRZ DUJXHV WKDW GHVSLWH
7D[SD\HUV¶FRQWHQWLRQWKDWWD[DIIHFWLQJZDVWKHUHFRJQL]HG
SUDFWLFHLWZRXOGEHLPSUXGHQWWRWD[DIIHFWWKHVWRFNRIDQ
6FRUSRUDWLRQDEVHQWWKHH[LVWHQFHRIFLUFXPVWDQFHVLQGLFDWLQJ
WKDWWKHVHWUDGHRIIVZHUHDWSOD\ZLWKUHVSHFWWR* -2QHRI
WKHVH WUDGHRIIV ZDV WKDW 6 FRUSRUDWLRQV VDFULILFH JURZWK
RSSRUWXQLWLHVDQGFDSLWDODSSUHFLDWLRQLQH[FKDQJHIRUFXUUHQW
LQFRPH 7KURXJK WKH H[SHUW WHVWLPRQ\ RI 0F&R\ DQG
:LOKRLWH 7D[SD\HUV DOVR FODLPHG WKDW 6 FRUSRUDWLRQ
VKDUHKROGHUV ZHUH DW ULVN WKDW WKH FRUSRUDWLRQ PLJKW QRW
GLVWULEXWHHQRXJKRILWVLQFRPHWRWKURXJKGLYLGHQGVWRFRYHU
WKH VKDUHKROGHUV¶ WD[ REOLJDWLRQV 7KH\ DUJXHG WKDW WD[
DIIHFWLQJ LV DSSURSULDWH EHFDXVH DQ 6 FRUSRUDWLRQ LV
³FRPPLWWHG´ WR GLVWULEXWLQJ HQRXJK LQFRPH WR LWV
VKDUHKROGHUVWRFRYHUWKHLUWD[OLDELOLWLHVDQGWKLV³LPEHGGHG
FRVW´PXVWEHUHFRJQL]HG7KHWD[FRXUWUHMHFWHGWKHQRWLRQ
WKDWWD[DIIHFWLQJZDVQHFHVVDU\WRRIIVHWWKHSRVVLELOLW\WKDW
* - PLJKW QRW GLVWULEXWH HQRXJK LQFRPH WR FRYHU LWV
VKDUHKROGHUOLDELOLWLHV7KHFRXUWQRWHGWKDWWKHHYLGHQFHRQ
WKH UHFRUG LQGLFDWHG WKDW * - GLVWULEXWHV QHDUO\ DOO RI LWV
LQFRPHWRWKHVKDUHKROGHUVDQGIRXQGWKDWWKLVIDFWFRPELQHG
ZLWK* -¶VVWURQJJURZWKUHFRUGPDGHLWXQOLNHO\WKDWWKH
FRUSRUDWLRQZRXOGEHXQDEOHWRGLVWULEXWHVXIILFLHQWLQFRPHWR
FRYHUVKDUHKROGHUWD[OLDELOLWLHV%XWLQIDFW0F&R\WHVWLILHG
1RV *URVVHWDOY&RPPLVVLRQHU
DQG %DMDM VHHPHG WR DJUHH WKDW LQ * - KDG OLPLWHG
JURZWKRSSRUWXQLWLHVIRUWKHQH[WVHYHUDO\HDUV -$DW
$EVHQWDVWURQJSURMHFWHGJURZWKSDWWHUQWKHIDFWWKDW
D FRUSRUDWLRQ GLVWULEXWHV QHDUO\ DOO RI LWV LQFRPH WR WKH
VKDUHKROGHUV GRHV QRW JXDUDQWHH WKDW LW ZLOO GLVWULEXWH
GLYLGHQGVVXIILFLHQWWRFRYHUDOOWD[OLDELOLWLHVZKLOHOHDYLQJ
DGHVLUDEOHQHWSURILW
0F&R\DOVRLQGLFDWHGWKDWWD[DIIHFWLQJZDVQHFHVVDU\LQ
RUGHUWRSURWHFWDJDLQVWWKHGDQJHUWKDWDQ6FRUSRUDWLRQPLJKW
ORVHLWV³6´VWDWXV%XWWKHWD[FRXUWIRXQGWKDWLWZDVLOORJLFDO
WR WD[ DIIHFW DQ 6 FRUSRUDWLRQ¶V LQFRPH ZLWKRXW IDFWV RU
FLUFXPVWDQFHV WKDW HVWDEOLVKHG WKH OLNHOLKRRG WKDW LWV
6FRUSRUDWLRQVWDWXVZRXOGEHORVW,QVXSSRUWRIWKLVILQGLQJ
WKHFRXUWQRWHGWKDW* -¶VPDMRULW\VKDUHKROGHUVKDGDOUHDG\
VLJQHG UHVWULFWLYH DJUHHPHQWV WKDW ZRXOG SUHHPSW DQ\
WUDQVIHUVWKDWZRXOGMHRSDUGL]H* -¶V6FRUSRUDWLRQVWDWXV
DQG WKDW WKHUH ZDV QR LQGLFDWLRQ LQ WKH UHFRUG WKDW WKH\
SODQQHGWRWHUPLQDWHWKLVSUDFWLFH%XWWKHVHDJUHHPHQWVZHUH
RQO\GHVLJQHGWRSURWHFWWKH6FRUSRUDWLRQVWDWXVZKLFKWKH
FRUSRUDWLRQHQWHUHGLQWRE\ZULWWHQDJUHHPHQWIRUDWOHDVWWHQ
\HDUV7KHUHVWULFWLYHDJUHHPHQWVJRYHUQHGRQO\WKHWUDQVIHU
RI VWRFN $OWKRXJK WKH\ ZHUH GHVLJQHG WR SURWHFW WKH
6FRUSRUDWLRQVWDWXVWKDWVWDWXVFRXOGKDYHEHHQVKHGDEVHQW
DWUDQVIHURIVKDUHV7KXVWKHUHVWULFWLYHDJUHHPHQWVZHUHQRW
WKHILQDODXWKRULW\$OWKRXJKWKHUHLVQRLQGLFDWLRQWKDW* -
VRXJKWWRLPPHGLDWHO\VKHGLWV6FRUSRUDWLRQVWDWXVWKHSHULRG
RIDJUHHPHQWZDVWRH[SLUHVRRQDIWHUWKHWUDQVDFWLRQVDWLVVXH
WRRNSODFH(YHQLI* -¶VVKDUHKROGHUVKDGQRLPPHGLDWH
SODQVWRDOWHUWKHFRPSDQ\¶V6FRUSRUDWLRQVWDWXVWKHUHZDV
QRJXDUDQWHHWKDWWKHFRPSDQ\ZRXOGUHWDLQWKLVVWDWXVIRUD
VLJQLILFDQWWLPHEH\RQGWKHWUDQVDFWLRQGDWHDWLVVXHLQWKLV
FDVH,WLVWKLVSURVSHFWLYHSHULRGZKLFKFRQFHUQVEX\HUVDQG
VHOOHUVRIVWRFNLQVRIDUDVHYHQWVRFFXUULQJGXULQJWKDWWLPH
SHULRGKDYHDEHDULQJRQWKHFXUUHQWVDOHSULFH7KHUHIRUHD
ZLOOLQJEX\HUDQGVHOOHUDQWLFLSDWLQJWKHFRUSRUDWLRQ¶VIXWXUH

-- 20 of 20 --

Poursuivez vos recherches dans ChatGPT ou Claude

Connectez Omnilex pour rechercher dans le corpus juridique depuis votre assistant IA.