        5(&200(1'(' )25 )8//7(;7 38%/,&$7,21
             3XUVXDQW WR 6L[WK &LUFXLW 5XOH                     +DWFKHWWHWDOY8QLWHG6WDWHV                1R
     (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU
                 )LOH 1DPH DS
                                                              2SSHQKHLPHU'DYLG(QJOLVK&DUPDFN81,7('67$7(6
                                                              '(3$570(17 2) s867,&( $33(//$7( 6(&7,21
                                                              7$;',9,6,21:DVKLQJWRQ'&IRU$SSHOODQW5REHUW1
81,7('67$7(6&28572)$33($/6                                %DVVHO.(03./(,1803+5(<(1'(/0$1	0$<
               )257+(6,;7+&,5&8,7                          7UR\0LFKLJDQIRU$SSHOOHHV
                 BBBBBBBBBBBBBBBBB                                                  BBBBBBBBBBBBBBBBB
                                                                                        23,1,21
 (/%(57 / +$7&+(77DQG           ;                                                 BBBBBBBBBBBBBBBBB
 /$85(67,1( +$7&+(77              
                                                                  5*8<&2/(s5&LUFXLWsXGJH'HIHQGDQW$SSHOODQW
          3ODLQWLIIV$SSHOOHHV                              8QLWHG 6WDWHV DSSHDOV WKH MXGJPHQW HQWHUHG E\ WKH 8QLWHG
                                     1R
                                                             6WDWHV'LVWULFW&RXUWIRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQLQ
           Y                       !                         IDYRURI3ODLQWLIIV$SSHOOHHV(OEHUW/+DWFKHWWDQGKLVZLIH
                                                             /DXUHVWLQH+DWFKHWW,QDQDWWHPSWWRFROOHFWDSRUWLRQRIWKH
                                                             PRUHWKDQRZHGE\(OEHUWLQXQSDLG WD[HVWKH
 81,7(' 67$7(6 2) $0(5,&$ 
                                                              8QLWHG6WDWHVFRPPHQFHGDGPLQLVWUDWLYHOHY\SURFHHGLQJVE\
         'HIHQGDQW$SSHOODQW                                ILOLQJ OHYLHV DQG QRWLFHV RI VDOH IRU IRXU SDUFHOV RI UHDO
                                                             SURSHUW\DQGDOHY\IRUWKHVHL]XUHRIPRUWJDJHSD\PHQWVGXH
                                  1                           WR WKH +DWFKHWWV RQ D ILIWK SDUFHO  ,Q RUGHU WR VWRS WKH
      $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW            SURFHHGLQJV WKH +DWFKHWWV EURXJKW D ZURQJIXO OHY\ DFWLRQ
     IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW         DJDLQVW WKH 8QLWHG 6WDWHV FODLPLQJ WKDW WKH OHYLHV ZHUH
   1Rn'HQLVH3DJH+RRG'LVWULFWsXGJH             ZURQJIXO EHFDXVH WKH\ ZHUH DJDLQVW SURSHUWLHV KHOG E\ WKH
                                                              +DWFKHWWVDVWHQDQWVE\WKHHQWLUHW\7KHGLVWULFWFRXUWUHO\LQJ
                $UJXHG)HEUXDU\                     RQDGHFLVLRQRIWKLV&RXUW&UDIWY8QLWHG6WDWHV)G
                                                              WK&LUDJUHHGZLWKWKH+DWFKHWWVDQGIRXQGWKDW
             'HFLGHGDQG)LOHGsXQH                 WKHOHYLHVZHUHZURQJIXO7KH8QLWHG6WDWHVSULPDULO\DUJXHV
                                                              WKDWWKLV&RXUWjVGHFLVLRQLQ&UDIWZDVZURQJDVPDWWHURIODZ
   %HIRUH6,/(5'$8*+75(<DQG&2/(&LUFXLW               DQGWKDWWKHOHYLHVPD\DWWDFKWRSURSHUW\KHOGDVDWHQDQF\E\
                      sXGJHV                                 WKH HQWLUHW\  7KH 8QLWHG 6WDWHV DOVR DUJXHV WKDW WKH OHYLHV
                                                              ZHUH QRW ZURQJIXO XQGHU WKUHH RWKHU OHJDO WKHRULHV  D
                   BBBBBBBBBBBBBBBBB                          IUDXGXOHQW FRQYH\DQFH WKHRU\ LQ ZKLFK WKH *RYHUQPHQW
                                                              FODLPVWKDW(OEHUWXVHGKLVLQGLYLGXDOIXQGVWRSXUFKDVHDQG
                        &2816(/                               HQKDQFHSURSHUW\WKDWZDVWLWOHGDVDWHQDQF\E\WKHHQWLUHW\
                                                              DQRPLQHHWKHRU\LQZKLFKWKH*RYHUQPHQWFODLPVWKDW
$5*8('  sRDQ , 2SSHQKHLPHU 81,7(' 67$7(6             RWKHU LQGLYLGXDOV DUH KROGLQJ WKH HQWLUHWLHV SURSHUWLHV DV
'(3$570(17 2) s867,&( $33(//$7( 6(&7,21                  (OEHUWjVQRPLQHHVDQGDOLHQWUDFLQJWKHRU\LQZKLFKWKH
7$;',9,6,21:DVKLQJWRQ'&IRU$SSHOODQW5REHUW1     *RYHUQPHQWFODLPVWKDWVLQFHLWKDVDOLHQRQ(OEHUWjVPRQH\
%DVVHO.(03./(,1803+5(<(1'(/0$1	0$<                 LW LV HQWLWOHG WR SODFH D OLHQ RQ WKH SURSHUWLHV LPSURYHG RU
7UR\ 0LFKLJDQ IRU $SSHOOHHV  21 %5,()  sRDQ ,   SXUFKDVHGZLWKWKDWPRQH\
                             
1R               +DWFKHWWHWDOY8QLWHG6WDWHV                 +DWFKHWWHWDOY8QLWHG6WDWHV                1R

  $IWHUQRWLFHRIDSSHDOKDGEHHQILOHGDQGWKHFDVHKDGEHHQ           SURSHUWLHVDUHRZQHGMRLQWO\E\WKH+DWFKHWWVDVWHQDQWVE\WKH
VHWIRURUDODUJXPHQWWKH6XSUHPH&RXUWJUDQWHGFHUWLRUDULRQ          HQWLUHW\WKHLUSULPDU\UHVLGHQFHm:HVW+LFNRU\lDQG
&UDIWDQGDJUHHGZLWKWKH*RYHUQPHQWjVSRVLWLRQWKDWIHGHUDO             D SURSHUW\ RSHUDWHG DV D FDU ZDVK m6RXWK 6DJLQDZl
WD[OLHQVPD\DWWDFKWRSURSHUW\KHOGE\DGHOLQTXHQWWD[SD\HU          7ZR SURSHUWLHV DUH KHOG LQGLYLGXDOO\ E\ /DXUHVWLQH  D
DVDWHQDQF\E\WKHHQWLUHW\%HFDXVHWKH6XSUHPH&RXUWKDV            SURSHUW\RFFXSLHGE\(OEHUWjVPRWKHUm)UDQNOLQ%RXOHYDUGl
DQVZHUHGWKHTXHVWLRQRIZKHWKHUWKH*RYHUQPHQWPD\OHY\                DQG  D SURSHUW\ LQ %ORRPILHOG 7RZQVKLS  7KH ,56
DJDLQVW UHDO SURSHUW\ KHOG DV D WHQDQF\ E\ WKH HQWLUHW\ ZH   VFKHGXOHG D SXEOLF DXFWLRQ WR VHOO WKH UHDO SURSHUWLHV RQ
5(9(56(WKHGHFLVLRQRIWKHGLVWULFWFRXUWDQG5(0$1'                   1RYHPEHU
IRUHQWU\RIMXGJPHQWFRQVLVWHQWZLWKFXUUHQW6XSUHPH&RXUW
SUHFHGHQW)XUWKHUPRUHZH5(9(56(DQG5(0$1'WKH                        2QsDQXDU\WKH,56OHYLHGPRUWJDJHSD\PHQWV
GLVWULFWFRXUWjVUHIXVDOWRDOORZWKH*RYHUQPHQWWRDPHQGLWV           GXHWRWKH+DWFKHWWVIURPDSURSHUW\SUHYLRXVO\RZQHGE\WKH
FRPSODLQWDQGWRDVVHUWLWVFODLPRIIUDXGXOHQWFRQYH\DQFH             +DWFKHWWVDQGXVHGIRUKRUVHEUHHGLQJDQGHQWHUWDLQLQJFOLHQWV
ZH5(9(56(DQG5(0$1'WKHGLVWULFWFRXUWjVJUDQWRI                     m&\FORQHl7KH&\FORQHSURSHUW\ZDVVROGWRDKXVEDQG
VXPPDU\ MXGJPHQW IRU WKH +DWFKHWWV RQ WKH *RYHUQPHQWjV           DQGZLIH(UQHVWDQG+HUPHWKD%O\WKH$QQsDUUHWWLQ
QRPLQHHDQGOLHQWUDFLQJWKHRULHV                                      7KH +DWFKHWWV WRRN EDFN D PRUWJDJH RI  RQ WKH
                                                                        &\FORQHSURSHUW\WREHSDLGLQVHPLDQQXDOLQVWDOOPHQWVRI
                      ,%$&.*5281'                                    RQLQWHUHVWDQGSULQFLSDOEHJLQQLQJ)HEUXDU\
                                                                        DQGFRQWLQXLQJXQWLO$XJXVW
   7KLV FDVH EHJDQ PRUH WKDQ WZHQW\ILYH \HDUV DJR ZKHQ
(OEHUWDSURPLQHQW'HWURLWWULDODWWRUQH\GHFLGHGWRIRUHJR             $W WKH WLPH WKH ,56 LVVXHG WKH IRXU OHYLHV LQ  WKH
SD\PHQWRIIHGHUDODQGVWDWHLQFRPHWD[HV,Q(OEHUW             +DWFKHWWVKHOGWLWOHWRWKH:HVW+LFNRU\DQG6RXWK6DJLQDZ
ZDVFRQYLFWHGE\DMXU\RIIRXUPLVGHPHDQRUFRXQWVRIZLOOIXO           SURSHUWLHV DV WHQDQWV E\ WKH HQWLUHW\  /DXUHVWLQH KDV KHOG
IDLOXUH WR SD\ IHGHUDO LQFRPH WD[HV  8QLWHG 6WDWHV  Y       LQGLYLGXDOWLWOHWRWKH)UDQNOLQ%RXOHYDUGSURSHUW\VLQFH
+DWFKHWW  )G   WK &LU   +H ZDV          EXW LW ZDV KHOG E\ WKH +DWFKHWWV DV WHQDQWV E\ WKH HQWLUHW\
VHQWHQFHGWRWKUHHFRQVHFXWLYHRQH\HDUVHQWHQFHVSODFHGRQ            ZKHQWKHIHGHUDOWD[OLHQILUVWDWWDFKHGLQ7KH+DWFKHWWV
ILYH\HDUVjSUREDWLRQILQHGDQGRUGHUHGWRSD\mDOO           KHOGWKH&\FORQHSURSHUW\DVWHQDQWVE\WKHHQWLUHW\XQWLOLW
EDFNWD[HVlDVDFRQGLWLRQRISUREDWLRQ,G:HDIILUPHGWKDW         ZDVFRQYH\HGE\ZDUUDQW\GHHGWRWKHsDUUHWWVRQ$XJXVW
VHQWHQFHDQG(OEHUWVSHQWWKUHH\HDUVLQSULVRQ,GDW          
  7KH,QWHUQDO5HYHQXH6HUYLFHm,56lPDGHDQDVVHVVPHQW                 2Q 1RYHPEHU   WKH +DWFKHWWV FRPPHQFHG D
RQ 2FWREHU   WKDW +DWFKHWW RZHG PRUH WKDQ           ZURQJIXO OHY\ DFWLRQ LQ WKH GLVWULFW FRXUW SXUVXDQW WR 
PLOOLRQLQIHGHUDOLQFRPHWD[HVDQGSHQDOWLHVIRUWKHWD[\HDUV         86&WRHQMRLQWKHWD[VDOHRIWKHIRXUSDUFHOV
WR$VRI0DUFK(OEHUWjVWD[OLDELOLWLHV           RIUHDOHVWDWHDQGWKHVHL]XUHRIWKHPRUWJDJHSD\PHQWVGXH
WRWDOHGPRUHWKDQPLOOLRQ                                         7KH GLVWULFW FRXUW HQWHUHG WZR VWLSXODWHG RUGHUV RQ
                                                                        'HFHPEHUDQGsXQHHQMRLQLQJWKH,56IURP
   ,QDQDWWHPSWWRFROOHFWWKHGHOLQTXHQWWD[HVWKH,56OHYLHG        FRQGXFWLQJ WKH SXEOLF DXFWLRQ RU OHY\LQJ RQ WKH SHQGLQJ
DJDLQVWIRXUSDUFHOVRIUHDOHVWDWHRZQHGE\WKH+DWFKHWWVDQG          PRUWJDJH SD\PHQWV XQWLO WKH SURSULHW\ RI WKH OHYLHV ZDV
RQHVHULHVRIPRUWJDJHSD\PHQWVRZHGWRWKH+DWFKHWWVRQD              GHWHUPLQHG2QsXQH0DJLVWUDWHsXGJH'RQDOG$
ILIWK SDUFHO SXUVXDQW WR  86&     7KH        6FKHHULVVXHGWZRRUGHUVFRQVLVWHQWZLWKKLVEHQFKUXOLQJV
+DWFKHWWVUHFHLYHGD7D[/HY\GDWHG2FWREHUDQG               DQ RUGHU JUDQWLQJ WKH +DWFKHWWVj 3HWLWLRQ WR 4XDVK WKH
IRXU1RWLFHVRI6HL]XUHGDWHG2FWREHU7ZRRIWKH
1R               +DWFKHWWHWDOY8QLWHG6WDWHV                  +DWFKHWWHWDOY8QLWHG6WDWHV                 1R

*RYHUQPHQWjVUHTXHVWIRUDQXPEHURIGRFXPHQWVIURP                 RI WKH QRQPRYLQJ SDUW\  0DWVXVKLWD (OHF ,QGXV &R Y
WRWKHSUHVHQWDQGDQRUGHUJUDQWLQJWKH*RYHUQPHQWjV               =HQLWK 5DGLR &RUS  86     7KH
PRWLRQWRDPHQGLWVDQVZHUWRWKH+DWFKHWWVjFRPSODLQWDQG               QRQPRYLQJSDUW\PXVWVHWIRUWKVSHFLILFIDFWVVKRZLQJWKDW
DVVHUWIUDXGXOHQWFRQYH\DQFHDVDQDIILUPDWLYHGHIHQVH7KH             WKHUHLVDJHQXLQHLVVXHIRU WULDO$JHQXLQHLVVXHIRUWULDO
GLVWULFWFRXUWLVVXHGD0HPRUDQGXP2SLQLRQDQG2UGHURQ                  H[LVWVmLIWKHHYLGHQFHLVVXFKWKDWDUHDVRQDEOHMXU\FRXOG
)HEUXDU\UHYHUVLQJWKHWZRRUGHUVRIWKHPDJLVWUDWH            UHWXUQ D YHUGLFW IRU WKH QRQPRYLQJ SDUW\l  $QGHUVRQ Y
MXGJH                                                                  /LEHUW\/REE\,QF86
  2Q0DUFKWKHGLVWULFWFRXUWHQWHUHGDMXGJPHQW                         %$SSOLFDELOLW\RI8QLWHG6WDWHVY&UDIW
GHFLGLQJWKHFURVVPRWLRQVIRUVXPPDU\MXGJPHQWILOHGE\WKH
+DWFKHWWV DQG WKH *RYHUQPHQW  7KH FRXUW JUDQWHG WKH                2Q0DUFKWKLV&RXUWLVVXHGDQRSLQLRQRQWKH
+DWFKHWWVj VXPPDU\ MXGJPHQW PRWLRQ DQG GHQLHG WKH                  DSSHDO IURP LWV UHPDQG RI &UDIW , DQG DJDLQ KHOG WKDW WKH
*RYHUQPHQWjV PRWLRQ ZLWK UHVSHFW WR WKH :HVW +LFNRU\             *RYHUQPHQWZDVXQDEOHWROHY\SURSHUW\KHOGDVDWHQDQF\E\
)UDQNOLQ%RXOHYDUG6RXWK6DJLQDZDQG&\FORQHSURSHUWLHV               WKH HQWLUHW\  &UDIW Y 8QLWHG 6WDWHV  )G  
WKH FRXUW JUDQWHG WKH *RYHUQPHQWjV VXPPDU\ MXGJPHQW                m&UDIW,,l+RZHYHULQWKH6XSUHPH&RXUWJUDQWHG
PRWLRQDQGGHQLHGWKH+DWFKHWWVjPRWLRQZLWKUHVSHFWWRWKH              FHUWLRUDULRQ&UDIW,,DQGUHYHUVHGWKHGHFLVLRQRIWKLV&RXUW
%ORRPILHOG7RZQVKLSSURSHUW\,QLWVGHFLVLRQWRJUDQWWKH              7KH6XSUHPH&RXUWKHOGWKDWSURSHUW\WLWOHGDVDWHQDQF\E\
+DWFKHWWVVXPPDU\MXGJPHQWWKHGLVWULFWFRXUWUHOLHGRQRXU             WKHHQWLUHW\FRXOGEHOHYLHGE\WKH*RYHUQPHQW8QLWHG6WDWHV
GHFLVLRQ LQ &UDIW Y 8QLWHG 6WDWHV  )G  WK &LU     Y&UDIW6&Wm&UDIWl
 m&UDIW ,l DQG KHOG WKDW WKH *RYHUQPHQW ZDV QRW
HQWLWOHG WR OHY\ SURSHUW\ KHOG LQ WHQDQFLHV E\ WKH HQWLUHW\      6DQGUD&UDIWZDVWKHZLIHRIDGHOLQTXHQWWD[SD\HU'RQ
7KLVWLPHO\DSSHDOIROORZHGRQsXQH                             DQGVKHDQGKHUKXVEDQGRZQHGSURSHUW\DVWHQDQWVE\WKH
                                                                         HQWLUHW\XQGHU0LFKLJDQODZ&UDIW,)GDW,Q
                       ,,',6&866,21                                    WKH ,56 ILOHG D QRWLFH RI IHGHUDO WD[ OLHQ XQGHU 
                                                                         86&RQDOORI'RQjVSURSHUW\LQFOXGLQJWKH
                    $6WDQGDUGRI5HYLHZ                               HQWLUHWLHVSURSHUW\GXHWRDOLDELOLW\RILQXQSDLG
                                                                         WD[HV,G$IWHUWKHOLHQZDVILOHGWKH&UDIWVWUDQVIHUUHGWKH
   7KLV&RXUWUHYLHZVWKHGLVWULFWFRXUWjVVXPPDU\MXGJPHQW              HQWLUHWLHVSURSHUW\WR6DQGUDE\ZD\RIDTXLWFODLPGHHGLQ
GHFLVLRQGHQRYR6HH:DWNLQVY%DWWOH&UHHN)G            H[FKDQJHIRU,G:KHQ6DQGUDDWWHPSWHGWRVHOOWKH
WK&LU6XPPDU\MXGJPHQWVKRXOGEHJUDQWHG                 SURSHUW\LQWKHIHGHUDOOLHQZDVGLVFRYHUHG,GDW
ZKHQmWKHSOHDGLQJVGHSRVLWLRQVDQVZHUVWRLQWHUURJDWRULHV            7KH,56DJUHHGWRUHOHDVHWKHOLHQRQWKHSURSHUW\DQGDOORZ
DQG DGPLVVLRQV RQ ILOH WRJHWKHU ZLWK WKH DIILGDYLWV LI DQ\    WKHVDOHWRJRIRUZDUGFRQGLWLRQHGRQ6DQGUDjVSODFLQJKDOI
VKRZWKDWWKHUHLVQRJHQXLQHLVVXHDVWRDQ\PDWHULDOIDFWDQG          WKHSURFHHGVRIWKHVDOHLQWRDQHVFURZDFFRXQWXQWLODFRXUW
WKDWWKHPRYLQJSDUW\LVHQWLWOHGWRDMXGJPHQWDVDPDWWHURI           GHFLGHGWKHQDWXUHDQGH[WHQWRIWKH*RYHUQPHQWjVLQWHUHVWLQ
ODZl  )(' 5 &,9 3 F  6XPPDU\ MXGJPHQW LV                 WKHSURSHUW\,G,Q6DQGUDEURXJKWDQDFWLRQLQWKH
DSSURSULDWHLIDSDUW\ZKRKDVWKHEXUGHQRISURRIDWWULDOIDLOV        GLVWULFWFRXUWWRTXLHWWLWOHWRWKHSURFHHGVEHLQJKHOGLQWKH
WRPDNHDVKRZLQJVXIILFLHQWWRHVWDEOLVKWKHH[LVWHQFHRIDQ            HVFURZDFFRXQW,G
HOHPHQW WKDW LV HVVHQWLDO WR WKDW SDUW\jV FDVH  6HH &HORWH[
&RUS Y&DWUHWW86,QGHFLGLQJD                 ,QWKHGLVWULFWFRXUWWKH*RYHUQPHQWPDLQWDLQHGWKDWWKH
PRWLRQ IRU VXPPDU\ MXGJPHQW WKH FRXUW PXVW YLHZ WKH             OLHQDWWDFKHGWRWKHSURSHUW\GHVSLWHWKHIDFWWKDWWKH&UDIWV
IDFWXDOHYLGHQFHDQGGUDZDOOUHDVRQDEOHLQIHUHQFHVLQIDYRU             KHOG LW DV WHQDQWV E\ WKH HQWLUHW\  ,G  7KH GLVWULFW FRXUW
1R               +DWFKHWWHWDOY8QLWHG6WDWHV                   +DWFKHWWHWDOY8QLWHG6WDWHV                 1R

UHMHFWHGWKDWDUJXPHQWDQGLQVWHDGKHOGWKDWWKHWHQDQF\E\WKH          WKH HQWLUHW\ KDV QR VHSDUDWH LQWHUHVW LQ HQWLUHWLHV SURSHUW\@
HQWLUHW\ ZDV WHUPLQDWHG ZKHQ WKH &UDIWV H[HFXWHG WKH              HDFKWHQDQWSRVVHVVHVLQGLYLGXDOULJKWVLQWKHHVWDWHVXIILFLHQW
TXLWFODLPGHHG,G7KHFRXUWFRQFOXGHGWKDWHDFKVSRXVH               WRFRQVWLWXWHµSURSHUW\jRUµULJKWVWRSURSHUW\jIRUWKHSXUSRVHV
PRPHQWDULO\KHOGDRQHKDOILQWHUHVWLQWKHSURSHUW\DQGWKDW            RI WKH OLHQ    l  ,G DW   7KH &RXUW H[DPLQHG WKH
WKHWD[OLHQDWWDFKHGWR'RQjVLQWHUHVWIRUWKDWEULHIPRPHQW           LQGLYLGXDOULJKWVFUHDWHGXQGHU0LFKLJDQODZZLWKUHVSHFWWR
,G                                                                      HQWLUHWLHVSURSHUW\DQGFRQFOXGHGWKDWWKRVHULJKWVLQFOXGHG
   2QDSSHDOZHUHMHFWHGWKHQRWLRQWKDW'RQKHOGDWUDQVLWRU\              >7@KHULJKWWRXVHWKHSURSHUW\WKHULJKWWRH[FOXGHWKLUG
RQHKDOI LQWHUHVW LQ WKH SURSHUW\ ZKHQ WKH SURSHUW\ ZDV              SDUWLHVIURPLWWKHULJKWWRDVKDUHRILQFRPHSURGXFHG
FRQYH\HGWR6DQGUD5HO\LQJSULQFLSDOO\RQRXUGHFLVLRQVLQ                 IURPLWWKHULJKWRIVXUYLYRUVKLSWKHULJKWWREHFRPHD
&ROHY&DUGR]D)GWK&LUDQG8QLWHG                    WHQDQWLQFRPPRQZLWKHTXDOVKDUHVXSRQGLYRUFHWKH
6WDWHVY&HUWDLQ5HDO3URSHUW\/RFDWHGDW/HUR\/DQH                  ULJKWWRVHOOWKHSURSHUW\ZLWKWKHUHVSRQGHQWjVFRQVHQW
)GWK&LUZHKHOGWKDWXQGHU0LFKLJDQ                    DQG WR UHFHLYH KDOI WKH SURFHHGV IURP VXFK D VDOH WKH
ODZ D VSRXVH GRHV QRW SRVVHVV D VHSDUDWH LQWHUHVW LQ WKH          ULJKWWRSODFHDQHQFXPEUDQFHRQWKHSURSHUW\ZLWKWKH
HQWLUHWLHVSURSHUW\DQGWKHUHIRUHWKHWD[OLHQFRXOGQRWDWWDFK             UHVSRQGHQWjVFRQVHQWDQGWKHULJKWWREORFNUHVSRQGHQW
WR WKH HQWLUHWLHV SURSHUW\  ,G DW   2Q UHPDQG WKH       IURPVHOOLQJRUHQFXPEHULQJWKHSURSHUW\XQLODWHUDOO\
GLVWULFWFRXUWFRQGXFWHGDEHQFKWULDODQGKHOGWKDW'RQKDG
FRPPLWWHGIUDXGE\PDNLQJVHYHUDOPRUWJDJHSD\PHQWVRQWKH               ,G DW   7KH &RXUW DOVR QRWHG WKDW WKH PRVW HVVHQWLDO
SURSHUW\ZKLOHFODLPLQJWREHLQVROYHQW&UDIW,,)GDW          SURSHUW\ULJKWVJUDQWHGE\0LFKLJDQWKHULJKWVWRXVHWKH
%RWKSDUWLHVDSSHDOHGWKHGHFLVLRQZLWKWKH*RYHUQPHQW            SURSHUW\WRUHFHLYHLQFRPHSURGXFHGE\LWDQGWRH[FOXGH
DJDLQFODLPLQJWKDWLWVOLHQDWWDFKHGWRWKHWD[SD\HUjVLQWHUHVW         RWKHUVIURPLWDORQHFRQVWLWXWHGULJKWVVXIILFLHQWWRVXEMHFW
LQWKHHQWLUHWLHVSURSHUW\DQGWKHFDVHZDVKHDUGE\WKLV&RXUW         DGHOLQTXHQWWD[SD\HUjVLQWHUHVWLQDQHQWLUHWLHVSURSHUW\WRD
IRUDVHFRQGWLPH$SSO\LQJWKHGRFWULQHVRIWKHODZRIWKH             IHGHUDOWD[OLHQ,GDW
FDVH DQG WKH ODZ RI WKH FLUFXLW ZH KHOG WKDW WKH SDQHOjV
GHFLVLRQLQ&UDIW,PXVWVWDQGDQGWKDWWKHIHGHUDOWD[OLHQGLG            (PSKDVL]LQJWKDWWKHmLQWHUSUHWDWLRQRI86&LV
QRWDWWDFKWRWKHHQWLUHWLHVSURSHUW\,GDW                      D IHGHUDO TXHVWLRQl WKH 6XSUHPH &RXUW UHDVRQHG WKDW mLI
                                                                         QHLWKHU>WKHKXVEDQGQRUWKHZLIH@KDGDSURSHUW\LQWHUHVWLQ
   7KH 6XSUHPH &RXUW JUDQWHG FHUWLRUDUL WR mFRQVLGHU WKH          WKHHQWLUHWLHVSURSHUW\ZKRGLG"7KLVUHVXOWQRWRQO\VHHPV
*RYHUQPHQWjVFODLPWKDWUHVSRQGHQWjVKXVEDQGKDGDVHSDUDWH              DEVXUGEXWZRXOGDOVRDOORZVSRXVHVWRVKLHOGWKHLUSURSHUW\
LQWHUHVWLQWKHHQWLUHWLHVSURSHUW\WRZKLFKWKHIHGHUDOWD[OLHQ        IURPIHGHUDOWD[DWLRQE\FODVVLI\LQJLWDVHQWLUHWLHVSURSHUW\
DWWDFKHGl  &UDIW  6 &W DW   ,Q D VL[ WR WKUHH   IDFLOLWDWLQJ DEXVH RI WKH IHGHUDO WD[ V\VWHPl  ,G DW 
GHFLVLRQ WKH 6XSUHPH &RXUW UHYHUVHG DQG UHPDQGHG WKH             
GHFLVLRQRIWKLV&RXUW7KH6XSUHPH&RXUWEHJDQLWVDQDO\VLV
E\ XVLQJ WKH FRPPRQ LGLRP RI D mEXQGOH RI VWLFNVl WR              :LWKWKLVGHFLVLRQWKH6XSUHPH&RXUWXQHTXLYRFDOO\VWDWHG
GHVFULEHSURSHUW\LQWHUHVWV,G,WGHVFULEHGWKHUHODWLRQVKLS         WKDWWKHODQJXDJHLQDOORZLQJWKH*RYHUQPHQWWRSODFH
EHWZHHQVWDWHDQGIHGHUDOODZLQWKHIROORZLQJWHUPVm6WDWH             DOLHQXSRQmDOOSURSHUW\DQGULJKWVWRSURSHUW\ZKHWKHUUHDO
ODZGHWHUPLQHVRQO\ZKLFKVWLFNVDUHLQDSHUVRQjVEXQGOH               RUSHUVRQDOlLQFOXGHGWKHULJKWWRSODFHIHGHUDOWD[OLHQVRQ
:KHWKHUWKRVHVWLFNVTXDOLI\DVµSURSHUW\jIRUSXUSRVHVRIWKH           SURSHUWLHVKHOGDVWHQDQFLHVE\WKHHQWLUHW\)XUWKHUPRUHWKH
IHGHUDOWD[OLHQVWDWXWHLVDTXHVWLRQRIIHGHUDOODZl,G7KH        LQFOXVLRQ RI HQWLUHWLHV SURSHUW\ LQ WKH GHILQLWLRQ RI mDOO
&RXUWKHOGWKDWmGHVSLWHWKH>VWDWHODZILFWLRQWKDWDWHQDQWE\         SURSHUW\ DQG ULJKWV WR SURSHUW\l LQ   LV GLUHFWO\
                                                                         DSSOLFDEOHWRDZKLFKDOORZVIRUWKH*RYHUQPHQWWR
1R                +DWFKHWWHWDOY8QLWHG6WDWHV                 +DWFKHWWHWDOY8QLWHG6WDWHV                 1R

FROOHFWXQSDLGWD[HVE\DGPLQLVWUDWLYHOHY\RImDOOSURSHUW\                DSSOLFDEOHWRDSDUWLFXODUFDVHGRHVQRWWXUQRQmZKHWKHU
DQG ULJKWV WR SURSHUW\    EHORQJLQJ WR VXFK SHUVRQ RU RQ     >OLWLJDQWV@DFWXDOO\UHOLHGRQ>DQ@ROGUXOH>RU@KRZWKH\
ZKLFKWKHUHLVDOLHQl7KHVFRSHRIWKHIHGHUDOWD[OLHQ           ZRXOGVXIIHUIURPUHWURDFWLYHDSSOLFDWLRQlRIDQHZRQH
DQGWKHVFRSHRIWKHOHY\DUHLGHQWLFDODQGLQWHUHVWVVXEMHFWWR
D IHGHUDO OLHQ DUH DOVR VXEMHFW WR DQ DGPLQLVWUDWLYH OHY\       ,G DW  Q TXRWLQJ sDPHV % %HDP 'LVWLOOLQJ &R Y
$FFRUGLQJO\ WKH *RYHUQPHQW LQ WKLV FDVH LV DEOH WR OHY\         *HRUJLD866RXWHUsVHHDOVR,Q
DJDLQVWDQGVHL]HWKH:HVW+LFNRU\)UDQNOLQ5RDGDQG6RXWK              UH)HGHUDWHG'HSjW6WRUHV,QF)GWK&LU
6DJLQDZ SURSHUWLHV DV ZHOO DV WKH &\FORQH PRUWJDJH                UHFRJQL]LQJWKDW&KHYURQ2LOKDVEHHQRYHUUXOHGE\
SD\PHQWVDOOKHOGE\WKH+DWFKHWWVDVWHQDQWVE\WKHHQWLUHW\           +DUSHU7KH&RXUWLQ+DUSHUKHOG
   &5HWURDFWLYH$SSOLFDWLRQRI8QLWHG6WDWHVY&UDIW                    :KHQ WKLV &RXUW DSSOLHV D UXOH RI IHGHUDO ODZ WR WKH
                                                                            SDUWLHVEHIRUHLWWKDWUXOHLVWKHFRQWUROOLQJLQWHUSUHWDWLRQ
  7KH +DWFKHWWV DUJXH WKDW HYHQ LI &UDIW LV DSSOLFDEOH LW         RIIHGHUDOODZDQGPXVWEHJLYHQIXOOUHWURDFWLYHHIIHFWLQ
VKRXOG QRW EH DSSOLHG UHWURDFWLYHO\  $V VXSSRUW IRU WKLV          DOOFDVHVVWLOORSHQRQGLUHFWUHYLHZDQGDVWRDOOHYHQWV
DUJXPHQWWKH+DWFKHWWVRIIHU&KHYURQ2LO&RY+XVRQ                 UHJDUGOHVVRIZKHWKHUVXFKHYHQWVSUHGDWHRUSRVWGDWHRXU
86ZKLFKDQQRXQFHGWKDWDWKUHHSURQJEDODQFLQJ                DQQRXQFHPHQWRIWKHUXOH
WHVWVKRXOGEHXVHGLQGHFLGLQJZKHWKHUDQHZSULQFLSOHRIODZ
VKRXOG EH DSSOLHG UHWURDFWLYHO\  7KH +DWFKHWWV DUJXH WKDW        86DWVHHDOVR8QLWHG6WDWHVY5HDO3URS/RFDWHG
XQGHUWKH&KHYURQ2LOEDODQFLQJWHVWUHWURDFWLYHDSSOLFDWLRQ             DW'U\FUHHN5G*UDQYLOOH2K)G
RI &UDIW ZRXOG KDYH mIDUUHDFKLQJ XQWRZDUG HIIHFWV XSRQ             WK &LU  QRWLQJ WKDW +DUSHU PDQGDWHV WKH
PDQ\ LQFOXGLQJ WD[ SURIHVVLRQDOV DQG WKH WLWOH LQGXVWU\l         DSSOLFDWLRQRIDQHZ6XSUHPH&RXUWFDVHGHFLGHGZKLOHWKH
$GGLWLRQDOO\ FLWLQJ WR RQH RI WKH GLVVHQWV LQ &UDIW WKH        SUHVHQWFDVHZDVRQGLUHFWDSSHDO0RUHRYHUWKH&RXUWLQ
+DWFKHWWVDUJXHWKDWWKHUHKDVEHHQDJHQHUDOUHOLDQFHLQWKLV            +DUSHU LQYRNHG WKH 6XSUHPDF\ &ODXVH DQG UHMHFWHG
FRXQWU\ LQFOXGLQJ ZLWKLQ WKH ,56 RQ WKH IDFW WKDW WKH          9LUJLQLDjVDUJXPHQWWKDWVWDWHVKDYHWKHDELOLW\WROLPLWWKH
*RYHUQPHQW LV XQDEOH WR OHY\ DJDLQVW SURSHUW\ KHOG DV D          UHWURDFWLYH RSHUDWLRQ RI IHGHUDO ODZ   86 DW 
WHQDQF\ E\ WKH HQWLUHW\  7KHVH DUJXPHQWV DUH EDVHG RQ DQ       m:KDWHYHU IUHHGRP VWDWH FRXUWV PD\ HQMR\ WR OLPLW WKH
LQFRUUHFWXQGHUVWDQGLQJRIFXUUHQW6XSUHPH&RXUWSUHFHGHQW               UHWURDFWLYH RSHUDWLRQ RI WKHLU RZQ LQWHUSUHWDWLRQV RI VWDWH
                                                                          ODZ>@    FDQQRW H[WHQG WR WKHLU LQWHUSUHWDWLRQV RI IHGHUDO
  ,Q+DUSHUY9LUJLQLD'HSDUWPHQWRI7D[DWLRQ86               ODZlFLWDWLRQVRPLWWHGVHHDOVR'U\HY8QLWHG6WDWHV
WKH6XSUHPH&RXUWKHOGWKDWLWVGHFLVLRQLQ'DYLVY              86m>)@HGHUDOQRWVWDWH>ODZ@FRQWURO>V@WKH
0LFKLJDQ 'HSDUWPHQW RI 7UHDVXU\  86                XOWLPDWHLVVXHZKHWKHUDWD[SD\HUKDVDEHQHILFLDOLQWHUHVWLQ
DSSOLHG UHWURDFWLYHO\ WR UHWLUHG IHGHUDO HPSOR\HHV VHHNLQJ          DQ\ SURSHUW\ VXEMHFW WR OHY\ IRU XQSDLG IHGHUDO WD[HVl
UHIXQGVIRUWD[HVLPSRVHGRQWKHLUIHGHUDOUHWLUHPHQWEHQHILWV            8QLWHG 6WDWHV Y 5RGJHUV  86   
E\ WKH VWDWH RI 9LUJLQLD   86 DW   7KH &RXUW      KROGLQJWKDWWKH6XSUHPDF\&ODXVHDOORZVWKH*RYHUQPHQW
DEDQGRQHG WKH EDODQFLQJ WHVW DUWLFXODWHG LQ &KHYURQ 2LO           WRmVZHHSDVLGHVWDWHFUHDWHGH[HPSWLRQVlWRWKHFROOHFWLRQRI
GHYHORSLQJ D QHZ VWDQGDUG IRU GHWHUPLQLQJ UHWURDFWLYLW\ LQ         IHGHUDOWD[HVDQGDSSO\IHGHUDOODZ
FLYLOFDVHV
                                                                            7KH6XSUHPH&RXUWGHWDLOHGWKHSURFHVVIRUFRQVLGHUDWLRQ
  >2@XUGHFLVLRQWRGD\PDNHVLWFOHDUWKDWmWKH&KHYURQ2LO               RIUHWURDFWLYLW\LQ5H\QROGVYLOOH&DVNHW&RY+\GH86
  WHVWFDQQRWGHWHUPLQHWKHFKRLFHRIODZE\UHO\LQJRQWKH               VWDWLQJWKDW
  HTXLWLHVRIWKHSDUWLFXODUFDVHlDQGWKDWWKHIHGHUDOODZ
1R                +DWFKHWWHWDOY8QLWHG6WDWHV                 +DWFKHWWHWDOY8QLWHG6WDWHV                 1R

  >:@KHQ  WKH &RXUW GHFLGHV D FDVH DQG DSSOLHV WKH             DVVHUWWKDWWKH*RYHUQPHQWPD\OHY\PHUHO\RQ(OEHUWjVmULJKW
  QHZOHJDOUXOHRIWKDWFDVHWRWKHSDUWLHVEHIRUHLWWKHQ             RIXVHDQGULJKWRIH[FOXVLRQVXEMHFWWRKLVZLIHjVULJKWRIXVH
  LWDQGRWKHUFRXUWVPXVWWUHDWWKDWVDPHQHZOHJDO                 DQGH[FOXVLRQl7KHVHDUJXPHQWVDUHZKROO\ZLWKRXWPHULW
  UXOH DV mUHWURDFWLYHl DSSO\LQJ LW IRU H[DPSOH WR DOO
  SHQGLQJ FDVHV ZKHWKHU RU QRW WKRVH FDVHV LQYROYH                   )LUVW WKH PDMRULW\ LQ &UDIW VSHFLILFDOO\ UHMHFWHG WKH
  SUHGHFLVLRQHYHQWV                                                      DUJXPHQW DGYDQFHG LQ WKH GLVVHQWV E\ sXVWLFHV 6FDOLD DQG
                                                                           7KRPDVWKDWmWKHFRQFOXVLRQWKDWWKHKXVEDQGSRVVHVVHGDQ
86DW                                                         LQWHUHVWLQWKHHQWLUHWLHVSURSHUW\WRZKLFKWKHIHGHUDOWD[OLHQ
                                                                           FRXOGDWWDFKLVLQFRQIOLFWZLWKWKHUXOHVRIWD[OLHQVUHODWLQJ
   $SSO\LQJ 5H\QROGVYLOOH &DVNHW ZH ILQG WKDW ILUVW &UDIW         WR SDUWQHUVKLS SURSHUW\l  &UDIW  6 &W DW   7KH
DQQRXQFHVDQHZUXOHRIIHGHUDOODZ6HYHUDOIHGHUDODQGVWDWH            &RXUWVWDWHGWKDWm>W@KHUHLVKRZHYHUDGLIIHUHQFHEHWZHHQ
FRXUWVLQFOXGLQJRXU&RXUWDVZHOODVWKH,56KDGDVVXPHG               WKHWUHDWPHQWRIHQWLUHWLHVSURSHUW\DQGSDUWQHUVKLSDVVHWVl
WKDWHQWLUHWLHVSURSHUW\ZDVH[FOXGHGIURPWKHGHILQLWLRQRI               ,G$FFRUGLQJO\WKH+DWFKHWWVjDWWHPSWWRHTXDWHHQWLUHWLHV
mDOO SURSHUW\ DQG ULJKWV WR SURSHUW\l DV GHILQHG E\ WKH WD[      SURSHUW\WRSDUWQHUVKLSDVVHWVLVDQDUJXPHQWWKDWDOUHDG\ZDV
FRGH 6HH HJ &UDIW  6 &W DW  7KRPDV s      FRQVLGHUHGDQGUHMHFWHGE\WKH6XSUHPH&RXUW
GLVVHQWLQJOLVWLQJFDVHV7KHUHIRUHWKHUHVXOWLQ&UDIWLV
WKDW D QHZ UXOH RI IHGHUDO ODZ ZDV DQQRXQFHG  $OVR WKH          6HFRQGDSSO\LQJ&UDIWWRWKLVFDVHOHDGVWRWKHUXOHWKDW
&RXUW DSSOLHG WKH UXOH LQ&UDIW WR WKH SDUWLHV EHIRUH LW  ,Q   SXUVXDQWWRWKH*RYHUQPHQWPD\OHY\XSRQSURSHUW\
KROGLQJWKDWWKH*RYHUQPHQWZDVDXWKRUL]HGWRDWWDFKOLHQVWR              KHOGE\DGHOLQTXHQWWD[SD\HUDVDWHQDQF\E\WKHHQWLUHW\
HQWLUHWLHVSURSHUW\WKH&RXUWUHPDQGHGWKHGHFLVLRQLQ&UDIW              6HFWLRQEVSHFLILFDOO\VWDWHVWKDW
WR WKLV &RXUW WR GHWHUPLQH WKH H[DFW YDOXDWLRQ RI WKH
WD[SD\HUjVLQWHUHVWLQWKHHQWLUHWLHVSURSHUW\DQGWKHDPRXQW                E6HL]XUHDQGVDOHRISURSHUW\7KHWHUPmOHY\lDVXVHG
RZLQJWRWKH*RYHUQPHQW,GDW6HFRQGWKHSUHVHQW                  LQWKLVWLWOHLQFOXGHVWKHSRZHURIGLVWUDLQWDQGVHL]XUHE\
FDVHZDVSHQGLQJRQGLUHFWUHYLHZZKHQWKH6XSUHPH&RXUWjV                   DQ\PHDQV([FHSWDVRWKHUZLVHSURYLGHGLQVXEVHFWLRQ
GHFLVLRQLQ&UDIWZDVUHQGHUHG,QGHHGWKH*RYHUQPHQWjV                    HDOHY\VKDOOH[WHQGRQO\WRSURSHUW\SRVVHVVHGDQG
SULPDU\DUJXPHQWWRWKLV&RXUWRQDSSHDOGHSHQGHGRQWKH                     REOLJDWLRQVH[LVWLQJDWWKHWLPHWKHUHRI,QDQ\FDVHLQ
RXWFRPHRI&UDIW,,ZKLFKZDVSHQGLQJUHYLHZLQRXU&RXUW                   ZKLFKWKH6HFUHWDU\PD\OHY\XSRQSURSHUW\RUULJKWVWR
DW WKH WLPH WKH *RYHUQPHQWjV DSSHDO ZDV ILOHG DQG DQ\              SURSHUW\KHPD\VHL]HDQGVHOOVXFKSURSHUW\RUULJKWVWR
VXEVHTXHQWUHYLHZE\WKH6XSUHPH&RXUW$FFRUGLQJO\&UDIW                  SURSHUW\ ZKHWKHU UHDO RU SHUVRQDO WDQJLEOH RU
DSSOLHVUHWURDFWLYHO\WRWKLVFDVH                                          LQWDQJLEOH
'5LJKWRIWKH*RYHUQPHQWWR6HOOWKH/HYLHG3URSHUW\                    HPSKDVLVDGGHG)XUWKHUPRUHOVWDWHVWKDWm>I@RU
                                                                           SURFHHGLQJVDSSOLFDEOHWRVDOHRIVHL]HGSURSHUW\VHHVHFWLRQ
   7KH +DWFKHWWV DUJXH LQ WKH DOWHUQDWLYH WKDW HYHQ LI WKH       l7LWOH86&FVWDWHVWKDWm>L@IDQ\
*RYHUQPHQW PD\ OHY\ WKH HQWLUHWLHV SURSHUW\ WKH UHVXOW LQ         SURSHUW\ OLDEOH WR OHY\ LV QRW GLYLVLEOH VR DV WR HQDEOH WKH
&UDIWGRHVQRWFRPSHOWKH*RYHUQPHQWWRVHOOWKHSURSHUW\                 6HFUHWDU\E\VDOHRIDSDUWWKHUHRIWRUDLVHWKHZKROHDPRXQW
7KH\EULHIO\DQDORJL]HWKHLUVLWXDWLRQWRWKDWRIDSDUWQHUVKLS           RI WD[ DQG H[SHQVHV WKH ZKROH RI VXFK SURSHUW\ VKDOO EH
VWDWLQJ WKDW mZKLOH WKH *RYHUQPHQWjV OLHQ FDQ DWWDFK WR DQ        VROGlHPSKDVLVDGGHG
LQGLYLGXDOSDUWQHUjVLQWHUHVWLQDSDUWQHUVKLSLWGRHVQRWDWWDFK
WR WKH SDUWQHUVKLS DVVHWV DQG WKH *RYHUQPHQW FDQQRW VHOO            7KHODQJXDJHRIWKHVWDWXWHVLVFOHDU7KHSRZHUWROHY\
WKRVHSDUWQHUVKLSDVVHWVl&LWLQJWR'U\HWKH+DWFKHWWVDOVR             LQFOXGHV WKH SRZHU WR VHL]H DQG VHOO WKHVH SURSHUWLHV DV
1R               +DWFKHWWHWDOY8QLWHG6WDWHV               +DWFKHWWHWDOY8QLWHG6WDWHV                  1R

SUHVFULEHG E\    SURSHUW\ WKDW FDQQRW EH GLYLGHG LQ     GRHVQRWUHTXLUHDQ\MXGLFLDOLQWHUYHQWLRQDQGLWLVXSWRWKH
RUGHUWRVDWLVI\WKHZKROHRIWD[HVDQGH[SHQVHVVKDOOEHVROG          WD[SD\HU    WR JR WR FRXUW LI KH FODLPV WKDW WKH DVVHVVHG
LQLWVHQWLUHW\&UDIWDOORZVWKH*RYHUQPHQWWROHY\XSRQWKH          DPRXQWLVQRWOHJDOO\RZLQJl,GDW7KHDFWLRQLQ
:HVW +LFNRU\ )UDQNOLQ %RXOHYDUG DQG 6RXWK 6DJLQDZ               WKLV FDVH LV DQ DGPLQLVWUDWLYH OHY\ SXUVXDQW WR   DQG
SURSHUWLHVKHOGE\WKH+DWFKHWWVDVWHQDQWVE\WKHHQWLUHW\,Q        WKHUHIRUH 5RGJHUV KDV DEVROXWHO\ QR DSSOLFDWLRQ KHUH
WKHWD[DEOHYDOXHRIWKHVHSURSHUWLHVZDVHVWLPDWHGDV            $FFRUGLQJO\XQGHU&UDIWWKH*RYHUQPHQWLVDEOHWRVHOOWKH
IROORZV  :HVW +LFNRU\ DW   )UDQNOLQ              +DWFKHWWVj HQWLUHWLHV SURSHUWLHV DQG FROOHFW WKH PRUWJDJH
%RXOHYDUG DW  DQG  6RXWK 6DJLQDZ DW          SD\PHQWV
(OEHUWjVRXWVWDQGLQJWD[LQGHEWHGQHVVLQH[FHVVRI
IDU H[FHHGV WKH YDOXH RI KLV LQWHUHVWV LQ WKH HQWLUHWLHV               (7KH*RYHUQPHQWjV$OWHUQDWLYH7KHRULHV
SURSHUWLHV$FFRUGLQJO\WKH*RYHUQPHQWLVHQWLWOHGWRVHOO
WKH ZKROH RI WKH SURSHUWLHV DQG FROOHFW D SRUWLRQ RI WKH        7KH *RYHUQPHQW DUJXHV WKDW WKH GLVWULFW FRXUW HUUHG LQ
SURFHHGVSXUVXDQWWRF                                       UHIXVLQJ WR DOORZ LW WR SUHVHQW WKUHH DOWHUQDWLYH WKHRULHV RI
                                                                        GHIHQVH WR WKH +DWFKHWWVj ZURQJIXO OHY\ DFWLRQ  7KH
   7KH+DWFKHWWVUHO\LQJRQWKH6XSUHPH&RXUWjVGHFLVLRQLQ            *RYHUQPHQW DUJXHV WKDW LI WKHUH LV VXIILFLHQW HYLGHQFH WR
5RGJHUVDOVRDUJXHWKDWHYHQLIWKH*RYHUQPHQWLVHQWLWOHGWR          VXSSRUWWKHVHWKUHHWKHRULHVLWZRXOGEHDOORZHGWRUHWDLQD
VHOOWKHHQWLUHWLHVSURSHUW\ZHVKRXOGUHPDQGWKHFDVHWRWKH          KLJKHU SHUFHQWDJH RI WKH SURFHHGV IURP WKH VDOH RI WKH
GLVWULFWFRXUWIRUFRQVLGHUDWLRQE\WKDWFRXUWRIZKHWKHUWKH           HQWLUHWLHVSURSHUW\
VDOHVKRXOGEHDOORZHGWRJRIRUZDUG7KH+DWFKHWWVjUHOLDQFH
RQ5RGJHUVLVPLVSODFHG7KH&RXUWLQ5RGJHUVGHFLGHGWKDW             )UDXGXOHQWFRQYH\DQFHWKHRU\
D7H[DVKRPHVWHDGODZGLGQRWSUHYHQWWKH*RYHUQPHQWIURP
IRUFLQJWKHVDOHRIDIDPLO\KRXVHWRVDWLVI\WD[LQGHEWHGQHVV            ,QSXUVXDQWWR)HGHUDO5XOHRI&LYLO3URFHGXUHD
 86 DW   7KH *RYHUQPHQW FKRVH WR SXUVXH WKH          WKH*RYHUQPHQWILOHGDPRWLRQWRDPHQGLWVDQVZHUWRWKH
WD[SD\HULQ5RGJHUVXQGHU86&ZKLFK                +DWFKHWWVj ZURQJIXO OHY\ FRPSODLQW LQ RUGHU WR DVVHUW WKH
DXWKRUL]HVWKH*RYHUQPHQWWRSXUVXHDWD[SD\HUE\ILOLQJD              DIILUPDWLYHGHIHQVHRIIUDXGXOHQWFRQYH\DQFH8QGHUWKLV
FLYLODFWLRQLQDGLVWULFWFRXUWIRUWKHSD\PHQWRIGHOLQTXHQW          WKHRU\WKH*RYHUQPHQWDUJXHGWKDW(OEHUWZKLOHLQVROYHQW
WD[HV  ,Q D SURFHHGLQJ XQGHU   WKH GLVWULFW FRXUW      XVHGKLVLQGLYLGXDOIXQGVWRSXUFKDVHDQGHQKDQFHSURSHUW\
DGMXGLFDWHV DOO WKH PDWWHUV LQYROYHG PDNHV D ILQDO              WKDWKHSODFHGLQHQWLUHWLHVRZQHUVKLSLQRUGHUWRSUHYHQWKLV
GHWHUPLQDWLRQRIWKHFODLPVDQGGHFUHHVDVDOHRIWKHSURSHUW\         FUHGLWRUV IURP DWWDFKLQJ LW  $ PDJLVWUDWH MXGJH LVVXHG DQ
LI WKH *RYHUQPHQWjV FODLP LV HVWDEOLVKHG    F  ,Q   RUGHUJUDQWLQJWKH*RYHUQPHQWjVPRWLRQWRDPHQGLWVDQVZHU
H[SODLQLQJWKDWDFRXUWLQDSURFHHGLQJLVFKDUJHGZLWK          +RZHYHULQD)HEUXDU\0HPRUDQGXPDQG2SLQLRQ
H[HUFLVLQJLWVGLVFUHWLRQUHJDUGLQJWKHVDOHRIOHYLHGSURSHUW\        WKHGLVWULFWFRXUWUHYHUVHGWKHRUGHURIWKHPDJLVWUDWHMXGJH
WKH &RXUW LQ 5RGJHUV KHOG WKDW VHYHUDO IDFWRUV VKRXOG EH       DQGUHIXVHGWRDOORZWKH*RYHUQPHQWWRSUHVHQWLWVWKHRU\RI
FRQVLGHUHG E\ WKH GLVWULFW FRXUW LQ GHFLGLQJ ZKHWKHU WR         IUDXGXOHQWFRQYH\DQFH7KHGLVWULFWFRXUWDOVRUXOHGRQWKH
DXWKRUL]HWKHIRUFHGVDOH86DW                         +DWFKHWWVj0RWLRQWR6WULNH)UDXGXOHQW&RQYH\DQFH'HIHQVH
                                                                        DQGIRU6XPPDU\sXGJPHQWDQGJUDQWHGWKH0RWLRQWR6WULNH
  $VWKH&RXUWH[SODLQHGLQ5RGJHUVDSURFHHGLQJLV             DQGWKH0RWLRQIRU6XPPDU\sXGJPHQWDVWRWKHIUDXGXOHQW
ZKROO\GLIIHUHQWIURPDQmDGPLQLVWUDWLYHOHY\XQGHU86&           FRQYH\DQFHLVVXH7KHFRXUWGLVFXVVHGWKUHHUHDVRQVIRULWV
l86DW$QDFWLRQXQGHUWKH&RXUW           KROGLQJ  WKH *RYHUQPHQW ODFNHG VWDQGLQJ WR EULQJ WKH
QRWHG LV mXQOLNH WKH SURFHGXUH GHVFULEHG LQ   >DQG@     WKHRU\  LQWURGXFWLRQ RI WKH WKHRU\ ZDV EDUUHG E\ UHV
1R               +DWFKHWWHWDOY8QLWHG6WDWHV                +DWFKHWWHWDOY8QLWHG6WDWHV               1R

MXGLFDWD DQG  LQWURGXFWLRQ RI WKH WKHRU\ ZDV EDUUHG E\        6HFWLRQRIWKH%DQNUXSWF\&RGHSURYLGHV
ODFKHV
                                                                           D7KHWUXVWHHPD\DYRLGDQ\WUDQVIHURIDQLQWHUHVWRI
   :HUHYLHZDGHQLDORIDPRWLRQWRDPHQGWKHSOHDGLQJVIRU               WKHGHEWRULQSURSHUW\RUDQ\REOLJDWLRQLQFXUUHGE\WKH
DEXVHRIGLVFUHWLRQ)LVKHUY5REHUWV)G              GHEWRUWKDWZDVPDGHRULQFXUUHGRQRUZLWKLQRQH\HDU
WK&LU/5/3URSVY3RUWDJH0HWUR+RXV$XWK               EHIRUHWKHGDWHRIWKHILOLQJRIWKHSHWLWLRQLIWKHGHEWRU
)GWK&LU+RZHYHULIWKHFRXUWGHQLHV             YROXQWDULO\RULQYROXQWDULO\
WKHPRWLRQRQJURXQGVWKDWWKHPRWLRQZRXOGEHIXWLOHWKH                 $PDGHVXFKWUDQVIHURULQFXUUHGVXFKREOLJDWLRQZLWK
GHQLDO LV UHYLHZHG GH QRYR  3DUU\ Y 0RKDZN 0RWRUV RI           DFWXDO LQWHQW WR KLQGHU GHOD\ RU GHIUDXG DQ\ HQWLW\ WR
0LFK,QF)GWK&LU/5/3URSV                ZKLFKWKHGHEWRUZDVRUEHFDPHRQRUDIWHUWKHGDWHWKDW
)GDWVHHDOVR'XEXFY*UHHQ2DN7RZQVKLS                VXFKWUDQVIHUZDVPDGHRUVXFKREOLJDWLRQZDVLQFXUUHG
)GWK&LU%HFDXVHWKHGLVWULFWFRXUWjV            LQGHEWHG
GLVSRVLWLRQ RI WKLV LVVXH LV HTXLYDOHQW WR D GHQLDO EDVHG RQ
IXWLOLW\ZHUHYLHZWKHGHFLVLRQGHQRYR:HGLVDJUHHZLWKDOO           86&   D   7KRXJK WKH WUXVWHH KDV WKH
WKUHHRIWKHUHDVRQVVHWIRUWKE\WKHGLVWULFWFRXUWDQGUHPDQG          H[FOXVLYHULJKWWREULQJDQDFWLRQIRUIUDXGXOHQWFRQYH\DQFH
ZLWKLQVWUXFWLRQVWRJUDQWWKH*RYHUQPHQWjVPRWLRQWRDPHQG              GXULQJ WKH SHQGHQF\ RI WKH EDQNUXSWF\ SURFHHGLQJV WKH
LWVDQVZHU                                                              %DQNUXSWF\ &RGH GRHV QRW H[WLQJXLVK WKH ULJKW RI WKH
                                                                         *RYHUQPHQW WR EULQJ D VWDWH ODZ DFWLRQ IRU IUDXGXOHQW
D6WDQGLQJ                                                             FRQYH\DQFH DIWHU WKH GHEWRU UHFHLYHV D GLVFKDUJH LQ
                                                                         EDQNUXSWF\,Q+DYOLNWKH6HYHQWK&LUFXLWKHOGWKDWWKHULJKW
   7KH GLVWULFW FRXUW UHO\LQJ LQ SDUW RQ 1DWjO 7D[ &UHGLW      WRUHFRXSDIUDXGXOHQWFRQYH\DQFHLVH[FOXVLYHWRWKHWUXVWHH
3DUWQHUV/3Y+DYOLN)GWK&LU           DQGVSHFLILFDOO\QRWHGWKDWWKLVULJKWRQO\DWWDFKHGmRQFH D
KHOG WKDW WKH *RYHUQPHQW ODFNHG VWDQGLQJ WR DVVHUW WKH           EDQNUXSWF\LVXQGHUZD\l)GDW7KHFRXUWVDLG
IUDXGXOHQW FRQYH\DQFH GHIHQVH  7KH FRXUW KHOG WKDW WKH          QRWKLQJDERXWWKHULJKWRILQGLYLGXDOFUHGLWRUVWRSXUVXHVWDWH
EDQNUXSWF\ WUXVWHH DSSRLQWHG LQ 6HSWHPEHU  KDG WKH         ODZ FODLPV IRU IUDXGXOHQW FRQYH\DQFH RQFH WKH EDQNUXSWF\
H[FOXVLYH DXWKRULW\ WR SXUVXH D FODLP RI IUDXGXOHQW               ZDVGLVFKDUJHG,Q.OLQJPDQY/HYLQVRQ)G
FRQYH\DQFHXQGHU86&RIWKH%DQNUXSWF\                WK&LUWKHFRXUWKHOGWKDWEDQNUXSWF\SURFHHGLQJV
&RGH:HGLVDJUHH                                                      RQO\ KDYH WKH HIIHFW RI LPSRVLQJ D WHPSRUDU\ VWD\ RI D
                                                                         IUDXGXOHQWFRQYH\DQFHDFWLRQE\WKH*RYHUQPHQW7KHFRXUW
  ,Q 6HSWHPEHU  WKH EDQNUXSWF\ WUXVWHH ILOHG D              LQ .OLQJPDQ KHOG WKDW RQFH WKH EDQNUXSWF\ FRXUW LVVXHG
FRPSODLQWDJDLQVW(OEHUWEDVHGXSRQDWKHRU\RIIUDXGXOHQW               ILQGLQJVRQWKHPDWWHUWKH*RYHUQPHQWFRXOGSURFHHGRQD
FRQYH\DQFH+RZHYHURQ)HEUXDU\WKHWUXVWHHILOHG            VWDWHODZIUDXGXOHQWFRQYH\DQFHDFWLRQLQWKHGLVWULFWFRXUW
DPRWLRQWRDEDQGRQLWVIUDXGXOHQWFRQYH\DQFHDFWLRQDIWHU               6HHDOVR1DWjO$P,QV&RY5XSSHUW/DQGVFDSLQJ&R,QF
GHWHUPLQLQJWKDWWKHOLHQVILOHGLQIDYRURIWKH,56DQGWKH             )GWK&LUQRWLQJWKDWDQLQGLYLGXDO
6WDWH RI 0LFKLJDQ H[FHHGHG WKH +DWFKHWWjV HTXLW\ LQ WKH          FUHGLWRUFDQSXUVXHIUDXGXOHQWFRQYH\DQFHFODLPVRQO\DIWHU
SURSHUWLHVDWLVVXH7KHWUXVWHHGHWHUPLQHGWKDWEHFDXVHQR             VXFKDFODLPKDVEHHQDEDQGRQHGE\WKHWUXVWHH.DWK\%
IXQGVZRXOGEHDYDLODEOHIURPWKHOLTXLGDWLRQRISURSHUWLHV              (QWHU,QFY8QLWHG6WDWHV)GWK&LU
IRU XQVHFXUHG FUHGLWRUV KH VKRXOG DEDQGRQ WKH FODLP  ,Q       KROGLQJWKDWRQFHWKHEDQNUXSWF\SURFHHGLQJVDUHRYHU
0DUFKWKHWUXVWHHjVIUDXGXOHQWFRQYH\DQFHDFWLRQZDV               WKH,56LVDEOHWRSXUVXHDFROOHFWLRQDFWLRQEHFDXVHVXFKDQ
RIILFLDOO\ DEDQGRQHG DQG WKH PDWWHU ZDV VHWWOHG LQ WKH           DFWLRQZRXOGQRWLQWHUIHUHZLWKULJKWVRIRWKHUFUHGLWRUV)HG
%DQNUXSWF\&RXUWLQ$SULO
1R               +DWFKHWWHWDOY8QLWHG6WDWHV                +DWFKHWWHWDOY8QLWHG6WDWHV                1R

'HSRVLW,QV&RUSY'DYLV)GWK&LU                HQIRUFLQJLWVULJKWVl*XDU7UXVW&RY8QLWHG6WDWHV
m2QFHDEDQNUXSWF\FDVHKDVEHHQFORVHGFUHGLWRUV                86QRWLQJWKHFRQWLQXLQJYLWDOLW\RIWKH
KDYLQJXQDYRLGHGOLHQVRQIUDXGXOHQWO\FRQYH\HGSURSHUW\FDQ             UXOHWKDWWKHVRYHUHLJQLVH[HPSWIURPLWVRZQODFKHV8QLWHG
SXUVXHWKHLUVWDWHODZUHPHGLHVLQGHSHQGHQWO\RIWKHWUXVWHHLQ          6WDWHVY3HRSOHV+RXVHKROG)XUQLVKLQJ,QF)G
EDQNUXSWF\l $FFRUGLQJO\ EHFDXVH WKH EDQNUXSWF\                   WK&LUm7KHDQFLHQWUXOHµWKDWWKHVRYHUHLJQ
SURFHHGLQJVDUHRYHUWKH*RYHUQPHQWKDVVWDQGLQJWRDVVHUW              LVH[HPSWIURPWKHFRQVHTXHQFHVRILWVODFKHVDQGIURPWKH
LWVIUDXGXOHQWFRQYH\DQFHWKHRU\                                      RSHUDWLRQRIVWDWXWHVRIOLPLWDWLRQVjKDVHQMR\HGFRQWLQXLQJ
                                                                         YLWDOLW\ IRU FHQWXULHVl FLWDWLRQ RPLWWHG 8QLWHG Y
E5HVMXGLFDWD                                                         :HLQWUDXE)GWK&LUm7KHSULQFLSOH
                                                                         >WKDWWKH*RYHUQPHQWLVH[HPSWIRUWKHFRQVHTXHQFHVRILWV
   7KH GLVWULFW FRXUW DOVR KHOG WKDW WKH *RYHUQPHQWjV             RZQODFKHV@LVZHOOHVWDEOLVKHGLQWKLVFRXQWU\l+RZHYHU
IUDXGXOHQWFRQYH\DQFHFODLPZDVEDUUHGE\WKHGRFWULQHRIUHV            WKH*RYHUQPHQWPD\EHVXEMHFWWRODFKHVLQFHUWDLQW\SHVRI
MXGLFDWD:LWKDFXUVRU\H[SODQDWLRQWKHGLVWULFWFRXUWKHOG           DFWLRQ  6HH 6(5  )G DW   7KH FRXUW LQ 6(5
WKDW WKH %DQNUXSWF\ &RXUWjV DSSURYDO RI D VHWWOHPHQW              PHUHO\ KHOG WKDW WKH GRFWULQH RI ODFKHV PD\ EH DSSOLFDEOH
UHJDUGLQJWKHIUDXGXOHQWFRQYH\DQFHLVVXHEDUVDQ\IXUWKHU               DJDLQVWWKH*RYHUQPHQWLQWKHOLPLWHGH[FHSWLRQRIFRQWUDFW
OLWLJDWLRQRQWKHPDWWHU:HGLVDJUHH$FODLPLQDVHFRQG             FDVHV VD\LQJ QRWKLQJ UHJDUGLQJ DQ\ RWKHU W\SH RI DFWLRQ
DFWLRQLVEDUUHGXQGHUWKHGRFWULQHUHVMXGLFDWDLIWKHILUVW       LQYROYLQJWKH*RYHUQPHQW,GDW$FFRUGLQJO\WKHUHLVQR
DFWLRQ UHVXOWHG LQ D ILQDO MXGJPHQW RQ WKH PHULWV  ERWK    SUHFHGHQWKROGLQJWKDWWKH*RYHUQPHQWLVVXEMHFWWRLWVRZQ
DFWLRQV DUH EHWZHHQ WKH VDPH SDUWLHV  WKH LVVXH LQ WKH     ODFKHVLQWD[FROOHFWLRQDFWLRQV
VHFRQGDFWLRQVKRXOGKDYHEHHQOLWLJDWHGLQWKHILUVWDFWLRQ
DQG  WKH FODLP LV LGHQWLFDO LQ ERWK DFWLRQV  :LONLQV Y      8QGHU   D IUDXGXOHQW FRQYH\DQFH DFWLRQ PXVW EH
sDNHZD\)GWK&LU7KHDFWLRQDW               FRPPHQFHG ZLWKLQ WZR \HDUV RI WKH DSSRLQWPHQW RI WKH
LVVXH KHUH GRHV QRW HYHQ PHHW WKH ILUVW UHTXLUHPHQW RI WKH     &KDSWHU  WUXVWHH  %HFDXVH WKH EDQNUXSWF\ WUXVWHH ZDV
GRFWULQHRIUHVMXGLFDWD7KHEDQNUXSWF\WUXVWHHDEDQGRQHG              DSSRLQWHGRQ6HSWHPEHUWKHFRXUWUHDVRQHGWKDWWKH
DQ\ DFWLRQ WR UHFRYHU WKH SURSHUWLHV EDVHG RQ D WKHRU\ RI      *RYHUQPHQWjV IUDXGXOHQW FRQYH\DQFH DFWLRQ LV XQWLPHO\
IUDXGXOHQW FRQYH\DQFH  $FFRUGLQJO\ WKHUH ZDV QR ILQDO           +RZHYHUWKHVWDWXWHRIOLPLWDWLRQVLQDSSOLHVRQO\WR
MXGJPHQW RQ WKH PHULWV UHJDUGLQJ WKH LVVXH RI IUDXGXOHQW         DFWLRQVE\WUXVWHHV6HH:HLQWUDXE)GDWm:KLOH
FRQYH\DQFHDQGWKHGRFWULQHRIUHVMXGLFDWDGRHVQRWDSSO\              WKHJHQHUDOUXOHLVWKDWWKHVRYHUHLJQLVH[HPSWIURPWKH
                                                                         RSHUDWLRQ RI VWDWXWHV RI OLPLWDWLRQV DQ H[FHSWLRQ WR WKDW
F/DFKHV                                                               JHQHUDO UXOH H[LVWV ZKHQ WKH VRYHUHLJQ WKURXJK WKH
                                                                         OHJLVODWXUH H[SUHVVO\ LPSRVHV D OLPLWDWLRQ SHULRG XSRQ
   )LQDOO\ WKH GLVWULFW FRXUW KHOG WKDW WKH *RYHUQPHQWjV         LWVHOIl$VZHKDYHGLVFXVVHGWKLVVWDWHODZDFWLRQE\WKH
IUDXGXOHQWFRQYH\DQFHGHIHQVHZDVEDUUHGE\ODFKHV,QLWV              *RYHUQPHQWIRUIUDXGXOHQWFRQYH\DQFHFRPPHQFHGDIWHUWKH
VXPPDU\GLVSRVLWLRQRIWKHLVVXHWKHGLVWULFWFRXUWUHOLHGRQ           GLVFKDUJHRIWKHEDQNUXSWF\DQGKDVQRWKLQJWRGRZLWKWKH
6(5sREVIRU3URJUHVV,QFY8QLWHG6WDWHV)G             ULJKWVRIWKHWUXVWHH$FFRUGLQJO\WKHVWDWXWHRIOLPLWDWLRQVHW
)HG&LUDQG86&7KLVUHOLDQFH              IRUWKLQLVLUUHOHYDQWWRWKH*RYHUQPHQWjVDFWLRQDQGWKH
ZDVPLVSODFHG,WLVZHOOHVWDEOLVKHGWKDWWKH*RYHUQPHQW               JHQHUDOUXOHWKDWWKH*RYHUQPHQWLVH[HPSWIURPWKHGRFWULQH
JHQHUDOO\LVH[HPSWIURPWKHFRQVHTXHQFHVRILWVODFKHV6HH            RIODFKHVDSSOLHVLQWKHLQVWDQWFDVH
8QLWHG6WDWHVY6XPPHUOLQ86m,WLV
ZHOO VHWWOHG WKDW WKH 8QLWHG 6WDWHV LV QRW ERXQG E\ VWDWH
VWDWXWHV RI OLPLWDWLRQRUVXEMHFWWRWKHGHIHQVHRIODFKHVLQ
1R              +DWFKHWWHWDOY8QLWHG6WDWHV            +DWFKHWWHWDOY8QLWHG6WDWHV          1R

   )XUWKHUPRUH ZH UHYHUVH WKH GLVWULFW FRXUWjV GHFLVLRQ WR                      ,,,&21&/86,21
JUDQWWKH+DWFKHWWjV0RWLRQWR6WULNH)UDXGXOHQW&RQYH\DQFH
'HIHQVH:HUHYLHZWKHJUDQWRIDPRWLRQWRVWULNHDSOHDGLQJ          )RUWKHUHDVRQVVWDWHGZH5(9(56(WKHGHFLVLRQRIWKH
IRUDEXVHRIGLVFUHWLRQ6HHHJ)LVKHU)GDW      GLVWULFW FRXUW JUDQWLQJ $SSHOOHHVj PRWLRQ IRU VXPPDU\
WK&LU/5/3URS)GDW)RUWKHUHDVRQV        MXGJPHQW DQG 5(0$1' WR WKH GLVWULFW FRXUW IRU IXUWKHU
VWDWHG DERYH ZH ILQG WKDW WKH GLVWULFW FRXUW DEXVHG LWV    SURFHHGLQJVLQDFFRUGDQFHZLWKWKLVRSLQLRQ)XUWKHUPRUH
GLVFUHWLRQLQJUDQWLQJWKH+DWFKHWWjVPRWLRQWRVWULNH            ZH5(9(56(DQG5(0$1'WKHGLVWULFWFRXUWjVGHQLDORI
                                                                     WKH*RYHUQPHQWjV0RWLRQWR$PHQGLWVDQVZHUWRLQFOXGHD
1RPLQHHDQGOLHQWUDFLQJWKHRULHV                                IUDXGXOHQW FRQYH\DQFH GHIHQVH DQG ZH 5(9(56( DQG
                                                                     5(0$1'WKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\MXGJPHQWIRU
   7KH*RYHUQPHQWDOVRZDQWHGWRDUJXHDWWKHWULDOOHYHOWKDW       WKH+DWFKHWWVRQWKH*RYHUQPHQWjVQRPLQHHDQGOLHQWUDFLQJ
LWVOHYLHVZHUHSURSHUXQGHUERWKDQRPLQHHWKHRU\DQGDOLHQ        WKHRULHV
WUDFLQJWKHRU\DQGVRXJKWWRLQWURGXFHHYLGHQFHLQVXSSRUWRI
WKHVHWKHRULHV8QGHUWKHQRPLQHHWKHRU\WKH*RYHUQPHQW
DUJXHVWKDWRWKHULQGLYLGXDOVDUHKROGLQJWKUHHSURSHUWLHVDQG
ULJKWVWRWKHPRUWJDJHSD\PHQWVDVQRPLQHHVRI(OEHUW7KH
*RYHUQPHQW DUJXHV WKDW (OEHUW VKLHOGHG WKH SURSHUWLHV DQG
SD\PHQWVIURPKLVWD[OLDELOLWLHVZLWKWKHVHWLWOHDUUDQJHPHQWV
8QGHU WKH OLHQ WUDFLQJ WKHRU\ WKH *RYHUQPHQW DUJXHV WKDW
VLQFHLWKDGDOLHQRQ(OEHUWjVPRQH\LWLVHQWLWOHGWRSODFHD
OLHQRQWKHSURSHUWLHVLPSURYHGRUSXUFKDVHGZLWKWKDWPRQH\

   ,QD0DUFK2UGHU'HQ\LQJ'HIHQGDQWVj0RWLRQ
IRU5HFXVDODQG*UDQWLQJLQ3DUWDQG'HQ\LQJLQ3DUW&URVV
0RWLRQV IRU 6XPPDU\ sXGJPHQW +DWFKHWWV Y ,QWHUQDO
5HYHQXH6HUY)6XSSG('0LFKWKH
GLVWULFWFRXUWUXOHGWKDWWKH*RYHUQPHQWjVQRPLQHHDQGOLHQ
WUDFLQJ WKHRULHV ZHUH XQSHUVXDVLYH  7KH FRXUW EDVHG LWV
GHFLVLRQRQWKHIDFWWKDWXQGHU&UDIW,ZHKHOGWKDWWD[SD\HUV
GLGQRWKROGDQ\VHSDUDWHLQWHUHVWLQSURSHUW\KHOGDVDWHQDQF\
E\WKHHQWLUHW\WRZKLFKDOLHQFDQDWWDFK
  7KLV&RXUWUHYLHZVWKHGLVWULFWFRXUWjVVXPPDU\MXGJPHQW
GHFLVLRQGHQRYR6HH:DWNLQV)GDW,QOLJKWRI
WKH 6XSUHPH &RXUW GHFLVLRQ LQ &UDIW ERWK WKHRULHV DUH
UHOHYDQW LQ GHWHUPLQLQJ WKH *RYHUQPHQWjV LQWHUHVW LQ WKH
HQWLUHWLHV SURSHUWLHV DQG PRUWJDJH SD\PHQWV DW LVVXH
$FFRUGLQJO\ WKH *RYHUQPHQW LV HQWLWOHG WR SUHVHQW LWV
QRPLQHH DQG OLHQ WUDFLQJ WKHRULHV RQ UHPDQG LQ RUGHU WR
GHWHUPLQHWKHH[DFWYDOXHRIWKH*RYHUQPHQWjVLQWHUHVWV
