03a0128p.06

7KH +RQRUDEOH 0\URQ + %ULJKW &LUFXLW -XGJH RI WKH 8QLWHG 6WDWHV
&RXUW RI $SSHDOV IRU WKH (LJKWK &LUFXLW 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
3(7(5 1 +(<'21DQG
+(15,(77$ +(<'21
3ODLQWLIIV$SSHOODQWV
Y
0(',$21( 2) 6287+($67
0,&+,*$1 ,1&
'HIHQGDQW$SSHOOHH
;!

1
1R
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW
IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW
1R²$QQD'LJJV7D\ORU'LVWULFW-XGJH
$UJXHG0DUFK
'HFLGHGDQG)LOHG$SULO
%HIRUH&2/(*,/0$1DQG%5,*+7&LUFXLW-XGJHV
BBBBBBBBBBBBBBBBB
&2816(/
$5*8('0DU\02WWR/$:2)),&(62)0$5<0
2772+DUSHU:RRGV0LFKLJDQIRU$SSHOODQWV'DOH5
+H\GRQHWDOY0HGLD2QH
RI6RXWKHDVW0LFK
1R
%XUPHLVWHU +$59(< .586( 3& 7UR\ 0LFKLJDQ IRU
$SSHOOHH21%5,()0DU\02WWR/$:2)),&(62)
0$5<02772+DUSHU:RRGV0LFKLJDQIRU$SSHOODQWV
'DOH 5 %XUPHLVWHU :LOOLDP 'DYLG $GDPV +$59(<
.586(3&7UR\0LFKLJDQIRU$SSHOOHH
BBBBBBBBBBBBBBBBB
23,1,21
BBBBBBBBBBBBBBBBB
0<521+%5,*+7&LUFXLW-XGJH3HWHUDQG+HQULHWWD
+H\GRQ WKH +H\GRQV DSSHDO WKH GLVWULFW FRXUW¶V
GHWHUPLQDWLRQ WKDW LW ODFNHG VXEMHFW PDWWHU MXULVGLFWLRQ WR
UHYLHZWKH+H\GRQV¶GHFODUDWRU\MXGJPHQWFRPSODLQWVHHNLQJ
DUXOLQJXQGHUWKH&DEOH&RPPXQLFDWLRQV3ROLF\$FW &DEOH
$FW 86&† D WKDWWKH&DEOH$FWGLGQRWSHUPLW
0HGLD2QHRI6RXWKHDVW0LFKLJDQ,QF 0HGLD2QH WRHQWHU
WKHLUIDUPODQGWRDFFHVVXWLOLW\SROHVZLWKRXWWKHLUFRQVHQW
:H $)),50 WKH GLVWULFW FRXUW¶V UXOLQJ EDVHG RQ ODFN RI
MXULVGLFWLRQ DQG 9$&$7( WKH SDUW RI WKH GLVWULFW FRXUW¶V
RSLQLRQDGGUHVVLQJWKHPHULWVRIWKHFDVH
,%$&.*5281'
,QWKH+H\GRQVSXUFKDVHGIDUPODQGLQ:DVKWHQDZ
&RXQW\0LFKLJDQ,QWKHVWKHODQGRZQHUVLQWKHDUHD
UHTXHVWHGWKDW'HWURLW(GLVRQSURYLGHWKHDUHDZLWKHOHFWULFLW\
'HWURLW (GLVRQ WKHQ HUHFWHG DQG PDLQWDLQHG XWLOLW\ SROHV
LQFOXGLQJ WZR SROHV RQ WKH +H\GRQV¶ SURSHUW\ 3ULRU WR
SXUFKDVLQJ WKH ODQG WKH +H\GRQV GLG QRW GLVFRYHU DQ\
UHFRUGHGHDVHPHQWVWRWKHLUSURSHUW\
2Q-DQXDU\0 '&RQWUDFWLQJ 0 ' HQWHUHG
WKH+H\GRQV¶SURSHUW\DORQJVLGH-R\5RDG0 'DFWLQJRQ
EHKDOIRI0HGLD2QHDWWHPSWHGWRVWULQJILEHURSWLFFDEOHRQ
'HWURLW(GLVRQ¶VXWLOLW\SROHV7KHXWLOLW\WUXFNEHFDPHVWXFN
LQWKH+H\GRQV¶ILHOG$VHFRQGWUXFNUHVFXHGWKHXWLOLW\WUXFN
IURPWKHILHOGSXOOLQJLWEDFNRQWKHURDG,QWKHSURFHVVRI
PRYLQJWKHXWLOLW\WUXFNWKH+H\GRQVDOOHJH WKDWWKHWUXFN

-- 1 of 5 --

1R +H\GRQHWDOY0HGLD2QH
RI6RXWKHDVW0LFK

NQRFNHG GRZQ WUHHV DQG EXVKHV OHDNHG WUDQVPLVVLRQ IOXLG
RQWRWKHVRLODQGOHIWWZRGHHSIXUURZVDFURVVWKHODQG7KH
+H\GRQV DVVHUW WKDW WKH\ KDG QR SULRU NQRZOHGJH RI WKLV
DFWLYLW\DQGGLGQRWJLYHSHUPLVVLRQIRU0HGLD2QHWRHQWHU
WKHLUODQG
7KH +H\GRQV ILOHG D FRPSODLQW LQ 0LFKLJDQ VWDWH FRXUW
DOOHJLQJFRPPRQODZWUHVSDVVFRPPRQODZQHJOLJHQFHDQG
VWDWXWRU\GDPDJHWRODQG$IWHU0HGLD2QHILOHGDQDQVZHU
WKH+H\GRQVDVNHG0HGLD2QHWRDGPLWWKDW'HWURLW(GLVRQ¶V
HDVHPHQWKDGQRWEHHQGHGLFDWHGRUVHWDVLGHIRUSXEOLFXVH
0HGLD2QHILOHGDUHVSRQVHUHIXVLQJWRDGPLWWRWKHVWDWHPHQW
,QVWHDG0HGLD2QHH[SODLQHGWKDWWKH&DEOH$FWSHUPLWWHGLW
WR XVH 'HWURLW (GLVRQ¶V XWLOLW\ SROHV 6HH 86&
† D
2Q 'HFHPEHUWKH+H\GRQVILOHGD0RWLRQIRU
6XPPDU\'LVSRVLWLRQLQVWDWHFRXUWWRHQMRLQ0HGLD2QHIURP
HQWHULQJWKHLUSURSHUW\7KH+H\GRQVDVVHUWHGWKDW0HGLD2QH
ZDVQRWDOORZHGWRXVHWKH&DEOH$FWWRSLJJ\EDFNRQ'HWURLW
(GLVRQ¶VHDVHPHQW0HGLD2QHUHVSRQGHGWKDW0XPDXJKY
'LDPRQG/DNH$UHD&DEOH79&R1:G 0LFK
&W$SS JDYHFDEOHWHOHYLVLRQIUDQFKLVHVLQ0LFKLJDQ
WKHULJKWWRSLJJ\EDFNRQDQ\HDVHPHQWREWDLQHGE\DXWLOLW\
FRPSDQ\ 7KH VWDWH FRXUW GHQLHG WKH +H\GRQV¶ PRWLRQ
FRQFOXGLQJ D IDFW TXHVWLRQ H[LVWHG UHJDUGLQJ WKH QDWXUH RI
'HWURLW(GLVRQ¶VHDVHPHQW
2Q 0DUFK WKH +H\GRQV ILOHG D GHFODUDWRU\
MXGJPHQWDFWLRQLQIHGHUDOFRXUWDVNLQJIRUDUXOLQJWKDWWKH
&DEOH$FWGLGQRWSHUPLW0HGLD2QHWRHQWHUWKH+H\GRQV¶
SURSHUW\ RU RWKHUZLVH DFFHVV 'HWURLW (GLVRQ¶V SROHV 7KH
+H\GRQVDOVRVRXJKWMXVWFRPSHQVDWLRQXQGHUWKH&DEOH$FW
DV ZHOO DV DQ RUGHU EDUULQJ 0HGLD2QH IURP HQWHULQJ WKHLU
SURSHUW\WRLQVWDOOFDEOHLQWKHIXWXUH
0HGLD2QHILOHGDPRWLRQWRGLVPLVVWKHIHGHUDODFWLRQRQ
$SULO DOOHJLQJ WKDW WKH GLVWULFW FRXUW ODFNHG
MXULVGLFWLRQ RYHU WKH +H\GRQV¶ FODLPV $IWHU KHDULQJ RUDO
+H\GRQHWDOY0HGLD2QH
RI6RXWKHDVW0LFK
1R
7KH RUGHU VWDWHG WKH FDVH ZDV DGPLQLVWUDWLYHO\ FORVHG DQG WKH
RUGHU ZRXOG KDYH QR FODLP RU LVVXH SUHFOXVLRQ HIIHFW DQG ³>L@I WKH
IHGHUDO DSSHDOV UHVXOW LQ D GHWHUPLQDWLRQ RQ WKH PHULWV WKDW 'HIHQGDQW LV
SULYLOHJHG XQGHU WKH &DEOH &RPPXQLFDWLRQV 3ROLF\ $FW RI WR XWLOL]H
WKH 'HWURLW (GLVRQ SROHV LQ TXHVWLRQ LQ WKLV OLWLJDWLRQ WKLV GHWHUPLQDWLRQ
VKDOO EDU WKH LQVWDQW FODLPV XQGHU WKH GRFWULQH RI LVVXH DQG FODLP
SUHFOXVLRQ´ -$ DW
DUJXPHQWVWKHGLVWULFWFRXUWGLVPLVVHGWKH+H\GRQV¶FODLPV
IRUODFNRIVXEMHFWPDWWHUMXULVGLFWLRQEHFDXVHWKHSDUWLHVDUH
ERWKUHVLGHQWVRI0LFKLJDQWKHFRQWURYHUV\DGGUHVVHVPDWWHUV
RIVWDWHODZWUHVSDVVDQGWKH&DEOH$FWGRHVQRWSURYLGHWKH
+H\GRQVZLWKDSULYDWHFDXVHRIDFWLRQ7KHGLVWULFWFRXUW
HQWHUHGDZULWWHQRUGHURQ6HSWHPEHU
%HWZHHQWKHKHDULQJDQGHQWHULQJWKHZULWWHQRUGHULQWKH
IHGHUDOFDVHWKH+H\GRQVILOHGDPRWLRQWRGLVPLVVWKHVWDWH
FRXUW DFWLRQ $Q RUGHU HQWHUHG RQ 6HSWHPEHU
GLVPLVVHGWKHVWDWHFRXUWFODLPV
7KH+H\GRQVVRXJKWUHFRQVLGHUDWLRQRIWKH6HSWHPEHU
IHGHUDORUGHU7KHGLVWULFWFRXUWGHQLHGWKH+H\GRQV¶
PRWLRQIRUUHFRQVLGHUDWLRQ7KH+H\GRQVWLPHO\DSSHDO
,,',6&866,21
:HUHYLHZGHQRYRWKHGLVWULFWFRXUW¶VGLVPLVVDORIDFDVH
EDVHGRQODFNRIVXEMHFWPDWWHUMXULVGLFWLRQ6HH6DOWVPDQY
8QLWHG6WDWHV)G WK&LU
'LYHUVLW\ GRHV QRW H[LVW LQ WKLV FDVH DV WKH +H\GRQV DUH
FLWL]HQV RI 0LFKLJDQ DQG 0HGLD2QH LV D 0LFKLJDQ
FRUSRUDWLRQ7KXVIRUMXULVGLFWLRQWRH[LVWWKHFODLPPXVW
³DULVH>@XQGHUWKH&RQVWLWXWLRQODZVRUWUHDWLHVRIWKH8QLWHG
6WDWHV´86&†:KHWKHUDFODLPDULVHVXQGHU
IHGHUDOODZPXVWEHGHWHUPLQHGE\WKHDSSOLFDWLRQRIWKHZHOO
SOHDGHGFRPSODLQWUXOH6HH0HUUHOO'RZ3KDUPDFHXWLFDOV
,QFY7KRPSVRQ86 VHHDOVR0XVVRQ
7KHDWULFDO,QFY)HG([SUHVV&RUS)G

-- 2 of 5 --

1R +H\GRQHWDOY0HGLD2QH
RI6RXWKHDVW0LFK

WK &LU 7KH +H\GRQV¶ FRPSODLQW PXVW VWDWH WKH
H[LVWHQFHRIDIHGHUDOTXHVWLRQ³XQDLGHGE\DQ\WKLQJDOOHJHG
LQDQWLFLSDWLRQRUDYRLGDQFHRIGHIHQVHVZKLFKLWLVWKRXJKW
WKHGHIHQGDQWPD\LQWHUSRVH´7D\ORUY$QGHUVRQ86

$VSUHYLRXVO\VWDWHGWKH+H\GRQV¶FRPSODLQWUHTXHVWHGD
GHFODUDWRU\MXGJPHQWXQGHU86&†DQGDOOHJHG
GDPDJH WR ODQG XQGHU WKH &DEOH $FW 7KXV LQ WKLV FDVH
MXULVGLFWLRQPXVWUHVWHLWKHURQWKH'HFODUDWRU\-XGJPHQW$FW
RU WKH &DEOH $FW :H FRQFOXGH WKDW QHLWKHU VXSSRUWV
MXULVGLFWLRQLQWKLVFDVH
$'HFODUDWRU\-XGJPHQW$FW
7KH+H\GRQVDVVHUWWKDWIHGHUDOTXHVWLRQMXULVGLFWLRQH[LVWV
EDVHGRQWKH'HFODUDWRU\-XGJPHQW$FWVLQFHWKH\VRXJKWD
³GHFODUDWRU\MXGJPHQWDGGUHVVLQJWKHSDUWLHV¶ULJKWVDQGOHJDO
UHODWLRQVKLS´E\LQWHUSUHWLQJWKH&DEOH$FW $SSHOODQW¶V%U
DW :HGLVDJUHH
:HEHJLQZLWKWKHODQJXDJHRIWKH'HFODUDWRU\-XGJPHQW
$FW
D ,Q D FDVH RI DFWXDO FRQWURYHUV\ ZLWKLQ LWV
MXULVGLFWLRQDQ\FRXUWRIWKH8QLWHG6WDWHVXSRQWKH
ILOLQJRIDQDSSURSULDWHSOHDGLQJPD\GHFODUHWKHULJKWV
DQGRWKHUOHJDOUHODWLRQVRIDQ\LQWHUHVWHGSDUW\VHHNLQJ
VXFKGHFODUDWLRQZKHWKHURUQRWIXUWKHUUHOLHILVRUFRXOG
EHVRXJKW$Q\VXFKGHFODUDWLRQVKDOOKDYHWKHIRUFHDQG
HIIHFW RI D ILQDO MXGJPHQW RU GHFUHH DQG VKDOO EH
UHYLHZDEOHDVVXFK
86&†
7KH 'HFODUDWRU\ -XGJPHQW $FW GRHV QRW FUHDWH DQ
LQGHSHQGHQWEDVLVIRUIHGHUDOVXEMHFWPDWWHUMXULVGLFWLRQ6HH
6NHOO\2LO&RY3KLOOLSV3HWUROHXP&R86
$HWQD/LIH,QV&RY+DZRUWK86
H[SODLQLQJ WKDW WKH 'HFODUDWRU\ -XGJPHQW $FW LV
+H\GRQHWDOY0HGLD2QH
RI6RXWKHDVW0LFK
1R
SURFHGXUDO RQO\ 7KH $FW RQO\ SURYLGHV FRXUWV ZLWK
GLVFUHWLRQWRIDVKLRQDUHPHG\6HH3XEOLF6HUY&RPP¶QY
:\FRII&R86 7KXVEHIRUHLQYRNLQJ
WKH$FWWKHFRXUWPXVWKDYHMXULVGLFWLRQDOUHDG\6HH.LQJY
6ORDQH )G WK &LU $ SODLQWLII FDQQRW
FLUFXPYHQW WKH ZHOOSOHDGHG FRPSODLQW UXOH E\ VHHNLQJ D
GHFODUDWRU\MXGJPHQWWKDWDIHGHUDOODZLVXQFRQVWLWXWLRQDORU
LQDSSOLFDEOHLIWKHFRPSODLQWLWVHOIZRXOGQRWRWKHUZLVHVWDWH
DIHGHUDOTXHVWLRQ6HH6NHOO\2LO&R86DW
%DVHG RQ ZHOOVHWWOHG ODZ WKH +H\GRQV FDQQRW XVH WKH
'HFODUDWRU\ -XGJPHQW $FW WR VHUYH DV D EDVLV IRU IHGHUDO
VXEMHFWPDWWHUMXULVGLFWLRQ
%&DEOH&RPPXQLFDWLRQV3ROLF\$FW
:HQH[WFRQVLGHUWKH+H\GRQV¶FODLPVWKDWWKH&DEOH$FW
FUHDWHV IHGHUDO VXEMHFW PDWWHU MXULVGLFWLRQ 7KH +H\GRQV
DWWHPSWWRPDNHWZRDUJXPHQWV)LUVWWKH+H\GRQVUHO\RQ
0HGLD2QH¶VGHIHQVHXQGHUWKH&DEOH&RPPXQLFDWLRQV3ROLF\
$FW+RZHYHUWKLVGHIHQVHGRHVQRWFUHDWHIHGHUDOTXHVWLRQ
MXULVGLFWLRQIRUWKH+H\GRQV6HH3XEOLF6HUY&RPP¶Q
86DW ³>,@WLVWKHFKDUDFWHURIWKHWKUHDWHQHGDFWLRQDQG
QRW RI WKH GHIHQVH ZKLFK ZLOO GHWHUPLQH ZKHWKHU WKHUH LV
IHGHUDOTXHVWLRQMXULVGLFWLRQLQWKH'LVWULFW&RXUW´ ,QWKLV
LQVWDQFHWKHQDWXUHRIWKHXQGHUO\LQJFODLPLVRQHRIVWDWHODZ
WUHVSDVV7KHIHGHUDOLVVXHRQO\DULVHVLQDQWLFLSDWLRQRID
GHIHQVHE\ 0HGLD2QHQDPHO\WKDWWKH&DEOH$FWJLYHVLW
DFFHVVWRWKH'HWURLW(GLVRQSROHVRQWKH+H\GRQV¶SURSHUW\
7KXVWKHSURYLVLRQRIWKH&DEOH$FWFLWHGE\WKH+H\GRQV
ZKLFKPD\DIIRUG0HGLD2QHDGHIHQVHWRDVWDWHODZWUHVSDVV
DFWLRQGRHVQRWFUHDWHIHGHUDOMXULVGLFWLRQ
6HFRQGWKH&DEOH$FWGRHVQRWSURYLGHDSULYDWHFDXVHRI
DFWLRQ WR D SULYDWH ODQGRZQHU WR H[FOXGH D FDEOH FRPSDQ\

-- 3 of 5 --

1R +H\GRQHWDOY0HGLD2QH
RI6RXWKHDVW0LFK

7KH +H\GRQV KDYH FRQFHGHG WKDW WKH &DEOH $FW GRHV QRW DIIRUG
WKHP D SULYDWH ULJKW WR VXH IRU GDPDJHV $SSHOODQW¶V %U DW Q
7KH SXUSRVHV RI WKH &DEOH $FW DUH WR
HVWDEOLVK D QDWLRQDO SROLF\ FRQFHUQLQJ FDEOH
FRPPXQLFDWLRQV
HVWDEOLVK IUDQFKLVH SURFHGXUHV DQG VWDQGDUGV ZKLFK
HQFRXUDJH WKH JURZWK DQG GHYHORSPHQW RI FDEOH V\VWHPV
DQG ZKLFK DVVXUH WKDW FDEOH V\VWHPV DUH UHVSRQVLYH WR WKH
QHHGV DQG LQWHUHVWV RI WKH ORFDO FRPPXQLW\
HVWDEOLVK JXLGHOLQHV IRU WKH H[HUFLVH RI )HGHUDO
6WDWH DQG ORFDO DXWKRULW\ ZLWK UHVSHFW WR WKH UHJXODWLRQ RI
FDEOH V\VWHPV
DVVXUH WKDW FDEOH FRPPXQLFDWLRQV SURYLGH DQG DUH
HQFRXUDJHG WR SURYLGH WKH ZLGHVW SRVVLEOH GLYHUVLW\ RI
LQIRUPDWLRQ VRXUFHV DQG VHUYLFHV WR WKH SXEOLF
HVWDEOLVK DQ RUGHUO\ SURFHVV IRU IUDQFKLVH UHQHZDO
ZKLFK SURWHFWV FDEOH RSHUDWRUV DJDLQVW XQIDLU GHQLDOV RI
UHQHZDO ZKHUH WKH RSHUDWRU V SDVW SHUIRUPDQFH DQG SURSRVDO
IRU IXWXUH SHUIRUPDQFH PHHW WKH VWDQGDUGV HVWDEOLVKHG E\
WKLV VXEFKDSWHU DQG
SURPRWH FRPSHWLWLRQ LQ FDEOH FRPPXQLFDWLRQV DQG
PLQLPL]H XQQHFHVVDU\ UHJXODWLRQ WKDW ZRXOG LPSRVH DQ
XQGXH HFRQRPLF EXUGHQ RQ FDEOH V\VWHPV
86& †
IURP LWV ODQG &RQJUHVV SDVVHG WKH &DEOH $FW DV D
FRPSURPLVH EDODQFLQJ ³WKH SXEOLF¶V ULJKW WR IUHH IORZLQJ
LQIRUPDWLRQ WKH ORFDO JRYHUQPHQW¶V LQWHUHVW LQ IUDQFKLVLQJ
DQGUHJXODWLQJFDEOHRSHUDWRUVWKHFDEOHLQGXVWU\¶VGHVLUHIRU
JURZWKDQGVWDELOLW\DQGWKHSRWHQWLDORIVDWHOOLWHWHOHYLVLRQWR
RIIHUYDOXDEOHFRPSHWLWLRQ´&HQWHO&DEOH7HOHYLVLRQ&RY
$GPLUDO¶V &RYH $VVRFV )G WK &LU
7KHPDLQSXUSRVHRIWKH&DEOH$FWZDVWKHGHVLUHWR
³HVWDEOLVK IUDQFKLVH SURFHGXUHV DQG VWDQGDUGV ZKLFK
HQFRXUDJHWKHJURZWKDQGGHYHORSPHQWRIFDEOHV\VWHPV´
86&†
7KH+H\GRQVDVVHUWWKDWWKHIHGHUDOTXHVWLRQDWLVVXHLVWKH
LQWHUSUHWDWLRQRIWKH&DEOH$FWQDPHO\³ZKHWKHULWSHUPLWVD
+H\GRQHWDOY0HGLD2QH
RI6RXWKHDVW0LFK
1R
6HFWLRQ D VWDWHV
D $XWKRULW\ WR DZDUG IUDQFKLVHV SXEOLF ULJKWVRIZD\ DQG
HDVHPHQWV HTXDO DFFHVV WR VHUYLFH WLPH IRU SURYLVLRQ RI
VHUYLFH DVVXUDQFHV

$Q\ IUDQFKLVH VKDOO EH FRQVWUXHG WR DXWKRUL]H WKH
FRQVWUXFWLRQ RI D FDEOH V\VWHP RYHU SXEOLF ULJKWVRIZD\
DQG WKURXJK HDVHPHQWV ZKLFK LV ZLWKLQ WKH DUHD WR EH
VHUYHG E\ WKH FDEOH V\VWHP DQG ZKLFK KDYH EHHQ GHGLFDWHG
IRU FRPSDWLEOH XVHV H[FHSW WKDW LQ XVLQJ VXFK HDVHPHQWV WKH
FDEOH RSHUDWRU VKDOO HQVXUH±
$ WKDW WKH VDIHW\ IXQFWLRQLQJ DQG DSSHDUDQFH RI
WKH SURSHUW\ DQG WKH FRQYHQLHQFH DQG VDIHW\ RI RWKHU
SHUVRQV QRW EH DGYHUVHO\ DIIHFWHG E\ WKH LQVWDOODWLRQ RU
FRQVWUXFWLRQ RI IDFLOLWLHV QHFHVVDU\ IRU D FDEOH V\VWHP
% WKDW WKH FRVW RI WKH LQVWDOODWLRQ FRQVWUXFWLRQ
RSHUDWLRQ RU UHPRYDO RI VXFK IDFLOLWLHV EH ERUQH E\ WKH
FDEOH RSHUDWRU RU VXEVFULEHU RU D FRPELQDWLRQ RI ERWK
DQG
& WKDW WKH RZQHU RI WKH SURSHUW\ EH MXVWO\
FRPSHQVDWHG E\ WKH FDEOH RSHUDWRU IRU DQ\ GDPDJHV
FDXVHG E\ WKH LQVWDOODWLRQ FRQVWUXFWLRQ RSHUDWLRQ RU
UHPRYDO RI VXFK IDFLOLWLHV E\ WKH FDEOH RSHUDWRU
86& †
IUDQFKLVHG FDEOH FRPSDQ\ WR DFFHVV D XWLOLW\ HDVHPHQW RQ
SULYDWHSURSHUW\WKDWKDGQRWEHHQGHGLFDWHGIRUSXEOLFXVH´
$SSHOODQW¶V%UDW 7KH+H\GRQV GRQRWSRLQWWRDQ\
SURYLVLRQRIWKH&DEOH$FWWKDWH[SUHVVO\SURYLGHVWKHPZLWK
D ULJKW WR SXUVXH WKHLU FODLPV LQ IHGHUDO FRXUW 6HFWLRQ
D LQFHUWDLQLQVWDQFHVGRHVSURYLGHDSULYDWHFDXVHRI
DFWLRQEXWRQO\IRUFDEOHIUDQFKLVHVDQGWKHFRQVXPLQJSXEOLF
LQWKHLQVWDOODWLRQDQGH[SDQVLRQRIFDEOHIDFLOLWLHV6HH
86&† D
7KH FDVHV ZKLFK KDYH LQWHUSUHWHG WKLV SURYLVLRQ RI WKH
&DEOH$FWKDYHEHHQEURXJKWE\FDEOHFRPSDQLHVWRHQIRUFH
WKHLUULJKWVXQGHUWKHSURYLVLRQ6HH&HQWXU\6RXWKZHVW&DEOH
7HOHYLVLRQ,QFY&,,)$VVRF)G WK&LU
GHQ\LQJ FDEOH RSHUDWRU¶V ULJKW WR SUHYHQW RZQHU RI

-- 4 of 5 --

1R +H\GRQHWDOY0HGLD2QH
RI6RXWKHDVW0LFK

DSDUWPHQWFRPSOH[HVIURPWHUPLQDWLQJFDEOHVHUYLFH 7&,RI
1',QFY6FKULRFN+ROGLQJ&R)G WK
&LU KROGLQJQRGHGLFDWHGHDVHPHQWH[LVWHGWRDOORZ
FDEOH FRPSDQ\ VWDWXWRU\ DXWKRULW\ WR SLJJ\EDFN RQ EXULHG
GLVWULEXWLRQOLQHV &DEOH+ROGLQJVRI*D,QFY0F1HLO5HDO
(VWDWH )XQG 9, /WG )G WK &LU
LQWHUSUHWLQJ&DEOH$FWZKHUHFDEOHFRPSDQ\EURXJKWDFWLRQ
WRFRPSHODFFHVVWRLQWHULRUVRIDSDUWPHQWFRPSOH[HV 7KXV
WKHVHFDVHVXQGHU† D GRQRWVXSSRUWWKH+H\GRQV¶
ULJKWWRVXH0HGLD2QHLQIHGHUDOFRXUW
7KH6XSUHPH&RXUWKDVUHFRJQL]HGLQFHUWDLQLQVWDQFHVD
FDVH PD\ ³μDULVH XQGHU¶ WKH ODZV RI WKH 8QLWHG 6WDWHV LI D
ZHOOSOHDGHG FRPSODLQW HVWDEOLVKHG WKDW LWV ULJKW WR UHOLHI
XQGHUVWDWHODZUHTXLUHVUHVROXWLRQRIDVXEVWDQWLDOTXHVWLRQRI
IHGHUDOODZLQGLVSXWHEHWZHHQWKHSDUWLHV´)UDQFKLVH7D[
%GY&RQVWU/DERUHUV9DFDWLRQ7UXVW)XQG86
+RZHYHU WKH &RXUW OLPLWHG WKH DSSOLFDWLRQ RI
)UDQFKLVH7D[%RDUGLQ0HUUHOO'RZ3KDUPDFHXWLFDOV,QF
Y 7KRPSVRQ 86 DW 0HUUHOO 'RZ VDLG WKDW
&RQJUHVV¶VIDLOXUHWRVHWRXWDSULYDWHUHPHG\IRUYLRODWLRQVRI
WKHIHGHUDOVWDWXWHDWLVVXHZDV³WDQWDPRXQWWRDFRQJUHVVLRQDO
FRQFOXVLRQ WKDW WKH SUHVHQFH RI D FODLPHG YLRODWLRQ RI WKH
VWDWXWHDVDQHOHPHQWRIDVWDWHFDXVHRIDFWLRQLVLQVXIILFLHQWO\
μVXEVWDQWLDO¶ WR FRQIHU IHGHUDOTXHVWLRQ MXULVGLFWLRQ´
86DW
7KHIHGHUDOTXHVWLRQKHUHLVLQVXEVWDQWLDO7KH+H\GRQV¶
PDLQ FRPSODLQW LV IRU VWDWH ODZ WUHVSDVV 2QO\ DIWHU
0HGLD2QHDVVHUWHGDIHGHUDOGHIHQVHGLGWKH+H\GRQVDWWHPSW
WR SXUVXH WKH VDPH DFWLRQV LQ IHGHUDO FRXUW %HFDXVH WKH
&DEOH$FWGRHVQRWSURYLGHWKH+H\GRQVZLWKDSULYDWHFDXVH
RIDFWLRQQRIHGHUDOTXHVWLRQMXULVGLFWLRQH[LVWV
+H\GRQHWDOY0HGLD2QH
RI6RXWKHDVW0LFK
1R
%RWK SDUWLHV DOVR DUJXH WKH FDVH EDVHG RQ ULSHQHVV DQG PRRWQHVV
6LQFH ZH KDYH FRQFOXGHG WKLV FRXUW ODFNV VXEMHFW PDWWHU MXULVGLFWLRQ ZH
QHHG QRW GHFLGH WKH LVVXHV RI ZKHWKHU WKH +H\GRQV FODLPV DUH ULSH RU
PRRW
,,,&21&/86,21
:H$)),50WKHGLVWULFWFRXUW¶VGLVPLVVDORIWKH+H\GRQV¶
FODLPVEDVHGRQODFNRIVXEMHFWPDWWHUMXULVGLFWLRQ:LWKRXW
MXULVGLFWLRQRYHUWKHDFWLRQWKHGLVWULFWFRXUWVKRXOGQRWKDYH
UXOHGRQWKHPHULWVRIWKH+H\GRQV¶FODLPV$FFRUGLQJO\ZH
9$&$7(WKHSDUWRIWKHGLVWULFWFRXUW¶VUXOLQJDGGUHVVLQJWKH
PHULWVRIWKH+H\GRQV¶FODLPV

-- 5 of 5 --