Court of Appeals for the Sixth Circuit
Document Info
DocketNumber: 99-3988
Filed Date: 11/30/2000
Status: Precedential
Modified Date: 9/22/2015
-
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 0(',&$/ 0878$/ 2) 2+,2 ; 3ODLQWLII$SSHOOHH 1RV Y ! '(1,6( '(6272 s26( '(6272 'HIHQGDQWV$SSHOODQWV 1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG 1Rn3DXO50DWLD&KLHI'LVWULFWsXGJH $UJXHG6HSWHPEHU 'HFLGHGDQG)LOHG1RYHPEHU %HIRUH0(55,77.(11(' RU@WKDWWKHH[HUFLVHRIMXULVGLFWLRQLQWKHFKRVHQIRUXPZLOO GH6RWRVGLVDJUHHGZLWK002jVDVVHVVPHQWRIWKHVLWXDWLRQ µPDNHOLWLJDWLRQVRJUDYHO\GLIILFXOWDQGLQFRQYHQLHQWWKDW>KH@ DQG UHIXVHG WR SD\ DUJXLQJ WKDW XQGHU WKH WHUPV RI WKH XQIDLUO\ LV DW D VHYHUH GLVDGYDQWDJH LQ FRPSDULVRQ WR KLV &HUWLILFDWH002ZDVQRWHQWLWOHGWRUHLPEXUVHPHQW$QG RSSRQHQWjl 3HD\ )G DW LQWHUQDO FLWDWLRQV HYHQLIWKH&HUWLILFDWHHQWLWOHG002WRUHFRYHUWKHPHGLFDO RPLWWHG(YHQ)RRWQRWHLQWKHFRXUWjVRSLQLRQUHFRJQL]HV H[SHQVHV WKH\ SURWHVWHG &DOLIRUQLDjV LQVXUDQFH ODZ WKDWmLWLVLQFRQYHQLHQWWRWKHGHIHQGDQWVlWRDSSHDULQ2KLR SURKLELWHGLWIURPREWDLQLQJDQ\UHFRYHU\%HOLHYLQJLWDQG $OORZLQJWKHDXWRPDWLFH[HUFLVHRISHUVRQDOMXULVGLFWLRQRYHU WKH GH6RWRV ZHUH DW DQ LPSDVVH 002 ILOHG VXLW LQ WKH RXWRIVWDWHGHIHQGDQWVEDVHGVROHO\RQZKHWKHUWKH\KDYHDQ\ 'LVWULFW &RXUW IRU WKH 1RUWKHUQ 'LVWULFW RI 2KLR 8SRQ FRQWDFWVZLWKWKH8QLWHG6WDWHVDEURJDWHVRXUGXW\WRLQTXLUH FRPSOHWLQJ GLVFRYHU\ ERWK SDUWLHV PRYHG IRU VXPPDU\ LQWR ZKHWKHU WKH LQFRQYHQLHQFH RI WKH IRUXP UHVXOWV LQ D MXGJPHQW$IWHUILQGLQJWKDWLWKDGMXULVGLFWLRQWKHGLVWULFW FRQVWLWXWLRQDOGHSULYDWLRQRIWKHLUULJKWV FRXUWDJUHHGZLWK002jVDVVHVVPHQWRIWKHPDWWHU,WUXOHG WKDW(5,6$FRPPRQODZHQWLWOHG002WRUHLPEXUVHPHQW ,WKHUHIRUHGLVDJUHHZLWKWKHFRXUWjVFRQFOXVLRQWKDWmRXU IRXQGWKDW2KLRODZUDWKHUWKDQ&DOLIRUQLDODZDSSOLHGWRWKH SUHYLRXV KROGLQJV LQ8QLWHG /LEHUW\ /LIH ,QVXUDQFH &R Y SODQ KHOG WKDW (5,6$ FRPPRQ ODZ UDWKHU WKDQ 2KLR ODZ 5\DQ)GWK&LUDQG+DLOHY+HQGHUVRQ 0HGLFDO0XWXDORI2KLR 1RV 1RV 0HGLFDO0XWXDORI2KLR YGH6RWRHWDO YGH6RWRHWDO BBBBBBBBBBBBBBBBBBBBB JRYHUQHGWKHLVVXHDQGGLUHFWHGWKHGH6RWRVWRSD\002 7KHGH6RWRVDSSHDOWKDWMXGJPHQW &21&855(1&( BBBBBBBBBBBBBBBBBBBBB %DVHGRQWKDWMXGJPHQW002PRYHGIRUDWWRUQH\VjIHHV SXUVXDQW WR 86& J 7KH GLVWULFW FRXUW 521$/' /(( *,/0$1 &LUFXLW sXGJH FRQFXUULQJ , DSSO\LQJWKHILYHSDUWWHVWVHWIRUWKLQ/DERUY.LQJ)G FRQFXULQWKHMXGJPHQWDQGLQWKHUHDVRQLQJRIWKHFRXUWRQ WK&LUGHWHUPLQHGWKDW002ZDVHQWLWOHGWR WKHPHULWVRIWKHFDVHEXWZULWHVHSDUDWHO\EHFDXVH,GLVDJUHH DWWRUQH\VjIHHVDQGDZDUGHGLWLQIHHVDQG ZLWK WKH FRXUWjV RSLQLRQ LQ 3DUW ,,$ UHJDUGLQJ (5,6$jV LQFRVWV7KHGH6RWRVDSSHDOWKDWMXGJPHQWDVZHOO QDWLRQZLGH VHUYLFH RI SURFHVV SURYLVLRQ 86& H7KHFRXUWLQHIIHFWKROGVWKDWWKHVWDWXWHFRQIHUV 7KHFRQVROLGDWHGDSSHDOVDUHQRZEHIRUHWKLVFRXUW XQIHWWHUHGSHUVRQDOMXULVGLFWLRQRYHUGHIHQGDQWVVXFKDVWKH GH6RWRVZLWKRXWUHJDUGWRmWUDGLWLRQDOQRWLRQVRIIDLUSOD\DQG ,,',6&866,21 VXEVWDQWLDOMXVWLFHl,QWHUQDWLRQDO6KRH&RY:DVKLQJWRQ 865DWKHU,EHOLHYHWKDWWKHWHVWIRU :HUHYLHZDGLVWULFWFRXUWjVJUDQWRIVXPPDU\MXGJPHQWGH SHUVRQDO MXULVGLFWLRQ DGRSWHG E\ WKH 7HQWK DQG (OHYHQWK QRYR6HH'XJJLQVY6WHDNµ16KDNH,QF)G &LUFXLWVLVPRUHFRPSHOOLQJDQGVKRXOGDSSO\WRWKHFDVHDW WK&LU6XPPDU\MXGJPHQWLVDSSURSULDWHZKHQmWKH KDQG6HH3HD\Y%HOO6RXWK0HGLFDO$VVLVWDQFH3ODQ SOHDGLQJV GHSRVLWLRQV DQVZHUV WR LQWHUURJDWRULHV DQG )GWK&LUILQGLQJWKDWGXHSURFHVV DGPLVVLRQVRQILOHWRJHWKHUZLWKDIILGDYLWVLIDQ\VKRZWKDW UHTXLUHVDQLQTXLU\LQWRWKHIDLUQHVVRIUHTXLULQJDGHIHQGDQW WKHUHLVQRJHQXLQHLVVXHDVWRDQ\PDWHULDOIDFWDQGWKDWWKH LQDH(5,6$DFWLRQWRVXEPLWWRDUHPRWHIRUXP PRYLQJSDUW\LVHQWLWOHGWRDMXGJPHQWDVDPDWWHURIODZl UDWKHUWKDQVLPSO\DVNLQJZKHWKHUWKHGHIHQGDQWKDVPLQLPXP )HG5&LY3F FRQWDFWVZLWKWKH8QLWHG6WDWHV5HSXEOLFRI3DQDPDY%&&, $3HUVRQDOs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j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j&RPSHQVDWLRQ$SSHDOV%G&DO5SWU &DO&W$SSDSSO\LQJVHFWLRQLQWKHFRQWH[W 86&H7KDWVHFWLRQWKHFRXUWUXOHGDOWHUV RI D VHWWOHPHQW EHFDXVH RI WKH &DOLIRUQLD 6XSUHPH &RXUWjV WKHSHUVRQDOMXULVGLFWLRQFDOFXOXVHVWDEOLVKHGE\,QWHUQDWLRQDO KROGLQJWKDWmWKHSUDFWLFDOHIIHFWRILVWRUHGXFHWKH 6KRH&RY:DVKLQJWRQ865DWKHUWKDQ SODLQWLIIjVUHFRYHU\LQDQ\PHGLFDOPDOSUDFWLFHFDVHZKHUHWKH DVNLQJ ZKHWKHU WKH GHIHQGDQW KDV VXIILFLHQW PLQLPXP FROODWHUDOVRXUFHEHQHILWVDUHSD\DEOHUHJDUGOHVVRIZKHWKHU FRQWDFWVZLWKWKHIRUXPVWDWHIRUWKHH[HUFLVHRIMXULVGLFWLRQ WKH SODLQWLII REWDLQV UHFRYHU\ LQ WULDO RU RWKHUZLVHl ,Q WRFRPSRUWZLWKWUDGLWLRQDOQRWLRQVRIIDLUSOD\DQGVXEVWDQWLDO DSSO\LQJ VHFWLRQ EjV PDQGDWH WKDW m>Q@R VRXUFH RI MXVWLFHDVFRXUWVGRZKHQUHO\LQJRQDVWDWHjVORQJDUPVWDWXWH FROODWHUDOEHQHILWVVKDOOUHFRYHUDQ\DPRXQWDJDLQVWWKH WRHVWDEOLVKWHUULWRULDOMXULVGLFWLRQDFRXUWVKRXOGDVNZKHWKHU SODLQWLIIl ZH FRQFOXGH WKDW LW SURKLELWV 002 IURP WKH GHIHQGDQW KDV VXIILFLHQW PLQLPXP FRQWDFWV ZLWK WKH UHFRYHULQJPHGLFDOH[SHQVHVLWSDLGRQ0UVGH6RWRjVEHKDOI 8QLWHG6WDWHV%HFDXVHWKHGH6RWRVKDGVXIILFLHQWPLQLPXP 7KHGLVWULFWFRXUWHUUHGLQKROGLQJRWKHUZLVH FRQWDFWV ZLWK WKH 8QLWHG 6WDWHV WKH FRXUW FRQFOXGHG LWV H[HUFLVHRIMXULVGLFWLRQRYHUWKHPFRPSRUWHGZLWKWUDGLWLRQDO ,,,&21&/86,21 QRWLRQVRIIDLUSOD\DQGVXEVWDQWLDOMXVWLFH )RUWKHIRUHJRLQJUHDVRQVZHUHYHUVHWKHGLVWULFWFRXUWjV $FFRUGLQJWRWKHGH6RWRVWKHFRXUWjVGHFLVLRQWREDVHWKH MXGJPHQWVDQGUHPDQGZLWKLQVWUXFWLRQVIRUWKHGLVWULFWFRXUW SHUVRQDOMXULVGLFWLRQLQTXLU\RQQDWLRQDOFRQWDFWVUDWKHUWKDQ WRHQWHUVXPPDU\MXGJPHQWLQIDYRURIWKHGH6RWRV)XUWKHU WKHLU FRQWDFWV ZLWK WKH 6WDWH RI 2KLR YLRODWHG WKHLU )LIWK ZHYDFDWHWKHGLVWULFWFRXUWjVMXGJPHQWDZDUGLQJDWWRUQH\Vj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jLQVXUDQFHDQGLQFUHDVHWKH SUHPLXPV RI KHDOWK LQVXUDQFHLH VSUHDG ULVNV 7KLV :H DJUHH ,Q 8QLWHG /LEHUW\ ZH KHOG WKDW WKH QDWLRQDO FRQFOXVLRQLVVXSSRUWHGE\&DOLIRUQLDFRXUWVjDVVHVVPHQWRI VHUYLFH RI SURFHVV SURYLVLRQ FRQWDLQHG LQ DD RI WKH VHFWLRQjVHIIHFW$FFRUGLQJWR&DOLIRUQLDFRXUWVRQH 6HFXULWLHV ([FKDQJH $FW RI mFRQIHU>UHG@ SHUVRQDO SXUSRVHRIWKHVWDWXWHmLVWRVKLIWWKHFRVWRIVSHFLDOGDPDJHV MXULVGLFWLRQLQDQ\IHGHUDOGLVWULFWFRXUWRYHUDQ\GHIHQGDQW IRUPHGLFDOWUHDWPHQWIURPWKHPDOSUDFWLFHLQVXUDQFHFDUULHUV ZLWKPLQLPXPFRQWDFWVWRWKH8QLWHG6WDWHVl8QLWHG/LEHUW\ WR WKH SURYLGHUV RI PHGLFDO DQG KRVSLWDO LQVXUDQFHl )GDW:HEDVHGWKDWKROGLQJRQRXUUDWLRQDOHLQ &DOLIRUQLD3K\VLFLDQVj6HUYY6XSHULRU&RXUW&DO5SWU +DLOH,Q+DLOHZHREVHUYHGWKDWWKHPLQLPXPFRQWDFWVZLWK &DO&W$SSDFFRUG%UDPHY:RRG WKH IRUXP VWDWH DQDO\VLV FRQWUROV VWDWHVj H[WUDWHUULWRULDO 3G&DO6HFRQGLWLVDQLQWHJUDOSDUWRIWKH H[HUFLVHRIMXULVGLFWLRQLQRUGHUWRSURWHFWWKHGHIHQGDQWjVGXH SROLF\ UHODWLRQVKLS EHWZHHQ WKH LQVXUHU DQG WKH LQVXUHG SURFHVV ULJKWV %HFDXVH RI WKH QDWLRQDO VHUYLFH RI SURFHVV EHFDXVHLWOLNHWKH3HQQV\OYDQLDVWDWXWHmSURKLELWVSODQVIURP SURYLVLRQWKHGLVWULFWFRXUWjVH[HUFLVHRIMXULVGLFWLRQZDVQRW EHLQJVWUXFWXUHGLQDPDQQHUUHTXLULQJUHLPEXUVHPHQWLQWKH mµH[WUDWHUULWRULDOEXWUDWKHUQDWLRQZLGHlDQGWKHUHIRUHWKH HYHQW RI UHFRYHU\ IURP D WKLUG SDUW\ ,W UHTXLUHV SODQ mPLQLPXPFRQWDFWVDQDO\VLVDVDOLPLWDWLRQRQVWDWHH[WUD SURYLGHUVWRFDOFXODWHEHQHILWOHYHOVEDVHGRQH[SHFWHG WHUULWRULDOSRZHU>ZDV@VLPSO\LQDSSRVLWHl+DLOH)G OLDELOLW\FRQGLWLRQVWKDWGLIIHUIURPWKRVHLQ6WDWHVWKDWKDYH DW,QVWHDGLQVXFKFDVHVZHZRXOGDSSO\DPLQLPXP QRWHQDFWHGVLPLODUDQWLVXEURJDWLRQOHJLVODWLRQl)0& FRQWDFWVZLWKWKH8QLWHG6WDWHVDQDO\VLV6HH8QLWHG/LEHUW\ 86DW7KXVLWmFKDQJHVWKHEDUJDLQEHWZHHQLQVXUHUDQG )GDW2XUKROGLQJVLQ+DLOHDQG8QLWHG/LEHUW\ LQVXUHGl:DUG86DW$QGLQGRLQJVRLWGHILQHV DQGWKHUDWLRQDOHVXSSRUWLQJWKHPDSSO\HTXDOO\WR(5,6$jV WKHWHUPVRIWKHSDUWLHVjUHODWLRQVKLS6HH3LORW/LIH86 QDWLRQDOVHUYLFHRISURFHVVSURYLVLRQ6HH1*6$PHULFDQ DW )LQDOO\ VHFWLRQ LV OLPLWHG WR WKH LQVXUDQFH LQGXVWU\EHFDXVHDVWKH&DOLIRUQLD6XSUHPH&RXUWQRWHGLQ :HVWHUQ 6WHDPVKLS /LQHV ,QF WKH ODZ LV SDUW RI DQ $FW mFDOFXODWHG WR UHGXFH WKH FRVW RI LQVXUDQFH E\ OLPLWLQJ WKH 7KH UHOHYDQW SURYLVLRQ RI WKDW VWDWXWH UHDGV DPRXQW DQG WLPLQJ RI UHFRYHU\ LQ FDVHV RI SURIHVVLRQDO $Q\ VXLW WR HQIRUFH DQ\ OLDELOLW\ RU GXW\ FUHDWHG E\ WKLV FKDSWHU PD\ EH EURXJKW LQ DQ\ VXFK GLVWULFW RU LQ WKH GLVWULFW QHJOLJHQFHl :HVWHUQ 6WHDPVKLS /LQHV ,QF 3G DW ZKHUHLQ WKH GHIHQGDQW LV IRXQG RU LV DQ LQKDELWDQW RU WUDQVDFWV 7KHUHIRUHm>L@WGRHVQRWPHUHO\KDYHDQLPSDFWRQWKH EXVLQHVV DQG SURFHVV PD\ EH VHUYHG LQ DQ\ RWKHU GLVWULFW RI LQVXUDQFHLQGXVWU\LWLVDLPHGDWLWl)0&86DW ZKLFK WKH GHIHQGDQW LV DQ LQKDELWDQW RU ZKHUHYHU WKH GHIHQGDQW PD\ EH IRXQG 86& DD 0HGLFDO0XWXDORI2KLR 1RV 1RV 0HGLFDO0XWXDORI2KLR YGH6RWRHWDO YGH6RWRHWDO ,QF Y sHIIHUVRQ )G Q WK &LU FROODWHUDO EHQHILWV IURP LWV LQVXUDQFH FRPSDQ\ $QG VWDWLQJWKDWmWKHZHLJKWRI6L[WK&LUFXLWSUHFHGHQWVXSSRUWV VXEVHFWLRQESURKLELWVWKHVRXUFHRIWKRVHFROODWHUDOEHQHILWV DFFHSWDQFHRIWKHQDWLRQDOFRQWDFWVDSSURDFKlDQGWKHUHIRUH LQVXUDQFHFRPSDQLHVIURPUHFRYHULQJWKHEHQHILWVLWSURYLGHG ZH mZRXOG OLNHO\ KDYH WR ILQG SHUVRQDO MXULVGLFWLRQ LQ WKLV WKHSODLQWLIIRUVXEURJDWLQJWKHSODLQWLIIjVULJKWWRUHFRYHU%\ FDVH LI 1*6jV DFWLRQ WUXO\ ZHUH EURXJKW XQGHU (5,6$l SUHYHQWLQJ DQ\ VXFK UHFRYHU\ RU VXEURJDWLRQ WKH WHUPV RI &RQVHTXHQWO\ZHUHDIILUPRXUKROGLQJWKDW&RQJUHVVKDVWKH VHFWLRQ JRYHUQWKHUHODWLRQVKLSEHWZHHQWKHLQVXUHU SRZHUWRFRQIHUQDWLRQZLGHSHUVRQDOMXULVGLFWLRQDQGZHKROG DQGWKHLQVXUHG$VVXFKLWLVmVSHFLILFDOO\GLUHFWHGWRZDUG WKDWLWFRQIHUUHGVXFKMXULVGLFWLRQXQGHUHRQWKH >WKH LQVXUDQFH@ LQGXVWU\l 3LORW /LIH 86 DW GLVWULFWFRXUWZKHUHWKHSODQLVDGPLQLVWHUHG 6XSUHPH&RXUWSUHFHGHQWVXSSRUWVRXUYLHZ,Q)0&WKH 6XSUHPH &RXUW KHOG WKDW D FRPPRQ VHQVH UHDGLQJ RI D ,Q VR KROGLQJ ZH UHMHFW WKH GH6RWRVj DVVHUWLRQ WKDW WKH 3HQQV\OYDQLDDQWLVXEURJDWLRQVWDWXWHZLWKODQJXDJHVLPLODU 6XSUHPH&RXUWjVODQJXDJHLQ,QVXUDQFH&RUSRI,UHODQGY WRWKDWRIVHFWLRQLQGLFDWHGWKDWWKHVWDWXWHUHJXODWHG &RPSDJQLH GHV %DX[LWHV GH *XLQHH 86 LQVXUDQFHm7KHUHLVQRGLVSXWHWKDWWKH3HQQV\OYDQLDODZ LQYDOLGDWHV WKH UDWLRQDOH IRU XSKROGLQJ QDWLRQZLGH IDOOVZLWKLQ(5,6$jVLQVXUDQFHVDYLQJFODXVH6HFWLRQ MXULVGLFWLRQSURYLVLRQV,Q,QVXUDQFH&RUSRI,UHODQGWKH GLUHFWO\ FRQWUROV WKH WHUPV RI LQVXUDQFH FRQWUDFWV E\ &RXUWUHMHFWHGWKHQRWLRQWKDWSHUVRQDOMXULVGLFWLRQLVEDVHGRQ LQYDOLGDWLQJDQ\VXEURJDWLRQSURYLVLRQVWKH\FRQWDLQ,W IHGHUDOLVP FRQFHUQV VWDWLQJ WKH mSHUVRQDO MXULVGLFWLRQ GRHVQRWPHUHO\KDYHDQLPSDFWRQWKHLQVXUDQFHLQGXVWU\LW UHTXLUHPHQW UHFRJQL]HV DQG SURWHFWV DQ LQGLYLGXDO OLEHUW\ LVDLPHGDWLWl)0&86DW LQWHUHVW,WUHSUHVHQWVDUHVWULFWLRQRQMXGLFLDOSRZHUQRWDVD PDWWHURIVRYHUHLJQW\EXWDVDPDWWHURILQGLYLGXDOOLEHUW\l 2XUDQDO\VLVRIWKH0F&DUUDQ)HUJXVRQ$FWFULWHULDYHULILHV ,GDW&RQWUDU\WRWKHGH6RWRVjDVVHUWLRQRXUGHFLVLRQLQ RXUFRPPRQVHQVHUHDGLQJRIVHFWLRQ7RPHHWWKH +DLOHLVFRQVLVWHQWZLWKWKH&RXUWjVVWDWHPHQWLQ,QVXUDQFH HVWDEOLVKHG FULWHULD IRU LQWHUSUHWLQJ WKH SKUDVH mEXVLQHVV RI &RUSRI,UHODQG,Q+DLOHZHUHFRJQL]HGWKDWWKHSHUVRQDO LQVXUDQFHl XQGHU WKH 0F&DUUDQ)HUJXVRQ $FW D ODZ PXVW MXULVGLFWLRQUHTXLUHPHQWUHVWULFWVMXGLFLDOSRZHUDVDPDWWHURI KDYH WKH HIIHFW RI WUDQVIHUULQJ RU VSUHDGLQJ D LQGLYLGXDOOLEHUW\WKHLQGLYLGXDOjVGXHSURFHVVULJKWQRWWREH SROLF\KROGHUj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jV WRUW UHFRYHU\ ZLWK UHVSHFW WR ZRUNHUVj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jV 86&DXQOHVVZHDQVZHUWKHVHFRQGTXHVWLRQLQ VWDWHPHQWVLQ,QVXUDQFH&RUSRI,UHODQGLVVXSSRUWHGE\LWV WKH DIILUPDWLYH 7KH VHFRQG TXHVWLRQ ZH PXVW DQVZHU LV PRUH UHFHQW H[SODQDWLRQ RI WKH &ODXVHjV HIIHFW m7KH 'XH ZKHWKHU WKH VWDWH ODZ mUHJXODWHV LQVXUDQFHl 6HH LG DW 3URFHVV&ODXVHSURWHFWVDQLQGLYLGXDOjVOLEHUW\LQWHUHVWLQQRW E$ ,I VHFWLRQ UHJXODWHV LQVXUDQFH LW EHLQJVXEMHFWWRWKHELQGLQJMXGJPHQWVRIDIRUXPZLWKZKLFK ZRXOGEHmVDYHGlIURPSUHHPSWLRQ6HHLG7KLUGWKRXJKLW KH KDV HVWDEOLVKHG QR PHDQLQJIXO µFRQWDFWV WLHV RU ZRXOGEHVDYHGIURPSUHHPSWLRQVHFWLRQZRXOGQRW UHODWLRQVjl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j 1DWjO 3HQVLRQ )XQG Y (OLWUH (UHFWRUV ,QF )G VWDWH ODZV 6HH )0& 86 DW 7KH SDUWLHV GR QRW WK &LU DSSO\LQJ D QDWLRQDO FRQWDFWV WHVW EDVHG RQ GLVSXWHWKDWVHFWLRQUHODWHVWRHPSOR\HHEHQHILWSODQV HjV QDWLRQZLGH VHUYLFH RI SURFHVV SURYLVLRQ ,Q UH )HG )RXQWDLQ ,QF )G WK &LU XSKROGLQJ )HG 5 DQGWKHUHIRUHLVSRWHQWLDOO\SUHHPSWHG1RUGRWKH\GLVSXWH %DQNU 3 GjV QDWLRQDO VHUYLFH RI SURFHVV SURYLVLRQ %HOODLUH *HQ WKDW WKH EHQHILW SODQ LV DQ LQVXUHG SODQ DQG WKHUHIRUH QRW +RVS Y %OXH &URVV %OXH 6KLHOG )G WK &LU SURWHFWHGIURPVWDWHODZE\(5,6$jVmGHHPHUFODXVHl KROGLQJ WKDW H FRQIHUV QDWLRQDO MXULVGLFWLRQ RYHU DQ\RQH KDYLQJ VXIILFLHQW PLQLPXP FRQWDFWV ZLWK WKH 8QLWHG 6WDWHV ,8( $)/ 7KXVWKHRQO\TXHVWLRQZHPXVWDQVZHULVZKHWKHUVHFWLRQ &,2 3HQVLRQ )XQG Y +HUUPDQQ )G G &LU mUHJXODWHVLQVXUDQFHl3HU6XSUHPH&RXUWJXLGDQFH XSKROGLQJ 86& GjV QDWLRQDO VHUYLFH RI SURFHVV SURYLVLRQ DV FRQIHUULQJ QDWLRQZLGH MXULVGLFWLRQ DVWDWHODZUHJXODWHVLQVXUDQFHLIDFRPPRQVHQVHPHDQLQJRI 7KH 7HQWK DQG (OHYHQWK &LUFXLWV KRZHYHU KDYH UHFHQWO\ UHMHFWHG WKLV WKH ODQJXDJH RI WKH VWDWXWH LQGLFDWHV WKDW LW LV mVSHFLILFDOO\ YLHZ 6HH 3HD\ )G DW UHMHFWLQJ WKH DUJXPHQW WKDW GLUHFWHGWRZDUG>WKHLQVXUDQFH@LQGXVWU\l3LORW/LIH,QV&R H FRQIHUV QDWLRQZLGH MXULVGLFWLRQ %&&, +ROGLQJV )G Y'HGHDYX[86VHHDOVR8180/LIH DW %RWK RI WKHVH FDVHV DUH EDVHG RQ WKH EHOLHI WKDW WKH QDWLRQDO ,QV RI $PHULFD Y :DUG 86 7KDW FRQWDFWV WHVW IDLOV WR SURWHFW WKH LQGLYLGXDO OLEHUW\ LQWHUHVW LQ TXHVWLRQ UHDGLQJ VKRXOG EH mYHULILHGl E\ GHWHUPLQLQJ ZKHWKHU RU WR (YHQ LI ZH ZHUH WR DJUHH ZLWK WKH 7HQWK DQG (OHYHQWK &LUFXLWV ZH ZRXOG ILQG MXULVGLFWLRQ KHUH 7KH (5,6$ VWDWXWH JLYHV QRWLFH WKDW VXLWV PD\ EH ZKDW H[WHQW WKH ODZ PHHWV WKH HVWDEOLVKHG FULWHULD IRU EURXJKW LQ WKH GLVWULFW ZKHUH WKH (5,6$ SODQ LV DGPLQLVWHUHG 7KHUH LV LQWHUSUHWLQJ WKH SKUDVH mEXVLQHVV RI LQVXUDQFHl XQGHU WKH QRWKLQJ IXQGDPHQWDOO\ XQIDLU LQ SHUPLWWLQJ WKH SODQ ZKLFK LV DGPLQLVWHUHG 0F&DUUDQ)HUJXVRQ$FW6HH:DUG86DW:H OLNH D WUXVW WR EULQJ VXLWV ZKHUH LW LV ORFDWHG :KLOH LW LV LQFRQYHQLHQW WR EHOLHYHVHFWLRQVDWLVILHVERWKWHVWV WKH GHIHQGDQWV LW LV FRQYHQLHQW WR WKH SODQ UHGXFLQJ LWV FRVWV WR WKH EHQHILW RI DOO SODQ EHQHILFLDULHV &RQJUHVV KDV EDODQFHG WKH SODQjV LQWHUHVW ([HUFLVLQJRXUFRPPRQVHQVHZHEHOLHYHDUHDGLQJRIWKH DQG SHUPLWWHG VXLW ZKHUH WKH SODQ LV ORFDWHG 7KLV GRHV QRW VHHP WR XV 86 VWDWLQJWKDW GXH SURFHVV XQUHDVRQDEOH RU XQIDLU DQG PHHWV WKH VWDQGDUGV VHW IRUWK LQ %XUJHU .LQJ VHFWLRQLQGLFDWHVWKDWLWUHJXODWHVLQVXUDQFH6XEVHFWLRQD LV VDWLVILHG ZKHQ WKH mGHIHQGDQWjV FRQQHFWLRQ ZLWK WKH IRUXP VWDWH &RUS Y 5XG]HZLF] DOORZV D KHDOWK FDUH SURYLGHU EHLQJ VXHG IRU SURIHVVLRQDO QHJOLJHQFHWRLQWURGXFHHYLGHQFHWKDWWKHSODLQWLIIREWDLQHG >LV@ VXFK WKDW KH VKRXOG UHDVRQDEO\ DQWLFLSDWH EHLQJ KDOHG LQWR FRXUW WKHUHl FLWDWLRQV RPLWWHG 0HGLFDO0XWXDORI2KLR 1RV 1RV 0HGLFDO0XWXDORI2KLR YGH6RWRHWDO YGH6RWRHWDO 7KH GH6RWRV GR QRW GLVSXWH WKDW WKH\ UHVLGH ZLWKLQ WKH &LYLO&RGHVHFWLRQLQDQHIIRUWWROLPLWWKHOLDELOLW\RI 8QLWHG6WDWHVDQGWKXVKDYHPHDQLQJIXOWLHVZLWKWKHIRUXP KHDOWKFDUHSURYLGHUVWKHUHE\DOOHYLDWLQJWKHEXUGHQRQWKHLU UHQGHULQJ WKH MXGJPHQW $FFRUGLQJO\ WKH GLVWULFW FRXUWjV LQVXUDQFHFRPSDQLHV6HH:HVWHUQ6WHDPVKLS/LQHV,QFY H[HUFLVHRIMXULVGLFWLRQZDVSURSHU 6DQ3HGUR3HQLQVXOD+RVS3G&DO $VWKH&DOLIRUQLD6XSUHPH&RXUWQRWHG %7KH3ODQ ,QWKHYLHZRIWKH/HJLVODWXUHµWKHULVLQJFRVWVRIPHGLFDO 2QWKHPHULWVWKHGLVWULFWFRXUWUHO\LQJRQ(5,6$FRPPRQ PDOSUDFWLFHLQVXUDQFHZDVLPSRVLQJVHULRXVSUREOHPVIRU ODZUXOHGWKDWRQFHWKHGH6RWRVVHWWOHGZLWKWKH5HJHQWVWKH\ WKHKHDOWKFDUHV\VWHPLQ&DOLIRUQLDWKUHDWHQLQJWRFXUWDLO ZHUHREOLJDWHGWRUHLPEXUVH002IRUWKHPHGLFDOH[SHQVHV WKHDYDLODELOLW\RIPHGLFDOFDUHLQVRPHSDUWVRIWKHVWDWH LWSDLGRQ0UVGH6RWRjVEHKDOI7KHGH6RWRVDUJXHWKDWWKH DQGFUHDWLQJWKHYHU\UHDOSRVVLELOLW\WKDWPDQ\GRFWRUV GLVWULFWFRXUWjVDQDO\VLVLVIODZHG7KH\UHDGWKH&HUWLILFDWH ZRXOGSUDFWLFHZLWKRXWLQVXUDQFHOHDYLQJSDWLHQWVZKR DVUHTXLULQJWKHPWRUHLPEXUVH002IRUPHGLFDOH[SHQVHVLW PLJKW EH LQMXUHG E\ VXFK GRFWRUV ZLWK WKH SURVSHFW RI SD\VRQ0UVGH6RWRjVEHKDOIRQO\DIWHUWKH\UHFHLYHDQDZDUG XQFROOHFWLEOHMXGJPHQWVj7KHFRQWLQXLQJDYDLODELOLW\ IRUWKRVHH[SHQVHV$QGWKH\FRQFOXGHEHFDXVHLQWKLVFDVH RI DGHTXDWH PHGLFDO FDUH GHSHQGV GLUHFWO\ RQ WKH WKH\ UHFHLYHG QR VXFK DZDUG DV WKH VHWWOHPHQW DJUHHPHQW DYDLODELOLW\ RI DGHTXDWH LQVXUDQFH FRYHUDJH ZKLFK LQ H[SOLFLWO\H[FOXGHGPHGLFDOH[SHQVHV002FDQQRWUHFRYHU WXUQ RSHUDWHV DV D IXQFWLRQ RI FRVWV DVVRFLDWHG ZLWK WKHPHGLFDOH[SHQVHVLWSDLGRQ0UVGH6RWRjVEHKDOI PHGLFDOPDOSUDFWLFHOLWLJDWLRQ$FFRUGLQJO\0,&5$ LQFOXGHVDYDULHW\SURYLVLRQVDOORIZKLFKDUHFDOFXODWHG 7KHGH6RWRVFDQQRWSUHYDLORQWKLVDUJXPHQWEHFDXVHWKH\ WRUHGXFHWKHFRVWRILQVXUDQFHE\OLPLWLQJWKHDPRXQW GLG QRW LQ IDFW H[FOXGH PHGLFDO H[SHQVHV IURP WKHLU DQG WLPLQJ RI UHFRYHU\ LQ FDVHV RI SURIHVVLRQDO VHWWOHPHQW5DWKHUWKDQVLPSO\VWDWLQJWKDWWKHDZDUGGRHVQRW QHJOLJHQFH LQFOXGHPHGLFDOH[SHQVHVWKHVHWWOHPHQWVWDWHVWKDWWKHDZDUG FRQVWLWXWHVmGDPDJHVRQDFFRXQWRISHUVRQDOLQMXU\ZLWKLQWKH ,G LQWHUQDO FLWDWLRQV RPLWWHG %HFDXVH WKH IDFWRUV PHDQLQJRI6HFWLRQDRIWKH,QWHUQDO5HYHQXH&RGHl HQXPHUDWHGLQVHFWLRQRIWKH5HVWDWHPHQWSRLQWWRZDUG 7KDW VWDWHPHQW VLPSO\ GRHV QRW JHW WKH MRE GRQH 7KH DSSO\LQJ&DOLIRUQLDODZDQGEHFDXVHWKHSULQFLSOHVXQGHUO\LQJ 6XSUHPH&RXUWKDVVWDWHGLQGLFWDWKDWmPHGLFDOH[SHQVHVIRU WKRVHIDFWRUVVXJJHVWWKDW&DOLIRUQLDVKRXOGDSSO\ZHILQG LQMXULHVDULVLQJRXWRI>DQ@DFFLGHQWFOHDUO\FRQVWLWXWHGDPDJHV WKDW&DOLIRUQLDODZDSSOLHVWRWKH&HUWLILFDWH UHFHLYHG µRQ DFFRXQW RI SHUVRQDO LQMXU\jl DV GHILQHG E\ D&RPPLVVLRQHUY6FKOHLHU86 :KHWKHU(5,6$3UHHPSWV6HFWLRQ (YHQLI&DOLIRUQLDODZDSSOLHV002DUJXHVDRI 002 DUJXHV WKDW WKH GH6RWRV ZDLYHG WKLV DUJXPHQW EHFDXVH WKH\ (5,6$SUHHPSWV&DOLIRUQLD&LYLO&RGHVHFWLRQ7KH GLG QRW UDLVH LW LQ WKH GLVWULFW FRXUW 002 LV PLVWDNHQ 7KH GH6RWRV GLVWULFWFRXUWDJUHHGILQGLQJLQDIRRWQRWHWKDWWKHVHFWLRQ DUJXHG LQ WKHLU 6XSSOHPHQWDO %ULHI LQ 6XSSRUW RI 6XPPDU\ sXGJPHQW WKDW ZDVSRWHQWLDOO\SUHHPSWHGE\DEHFDXVHLWUHODWHVWR WKH\ GLG QRW UHFRYHU DQ\ PHGLFDO H[SHQVHV XQGHU WKH VHWWOHPHQW DQG DQHPSOR\HHEHQHILWSODQDQGLWZDVQRWVDYHGE\EjV WKHUHIRUH 002 LV QRW HQWLWOHG WR EH UHLPEXUVHG IRU WKH PHGLFDO H[SHQVHV VDYLQJVFODXVHEHFDXVHLWGRHVQRWmUHJXODWHLQVXUDQFHl 7KRXJK WKH DUJXPHQW LV FRQWDLQHG LQ D ODUJHU VHFWLRQ GLVFXVVLQJ ZK\ WKH LQLWLDO GHIDXOW MXGJPHQW LV QRW UHOHYDQW WR WKH RXWFRPH RI WKHLU FDVH ZH EHOLHYH LW LV VXIILFLHQW WR ILQG WKDW WKH GH6RWRV UDLVHG WKH LVVXH LQ WKH :HGLVDJUHHZLWKWKHGLVWULFWFRXUWjVFRQFOXVLRQWKDW(5,6$ GLVWULFW FRXUW SUHHPSWV VHFWLRQ ,Q GHWHUPLQLQJ ZKHWKHU (5,6$ 0HGLFDO0XWXDORI2KLR 1RV 1RV 0HGLFDO0XWXDORI2KLR YGH6RWRHWDO YGH6RWRHWDO ,GDW%DVHGXSRQWKHIDFWRUVHQXPHUDWHGLQVHFWLRQ 6HFWLRQ D GRHV QRW H[SOLFLWO\ H[FOXGH DOO WKHGLVWULFWFRXUWGHWHUPLQHGWKDW2KLRODZDSSOLHGWRWKHSODQ PHGLFDOH[SHQVHVDQGWKHGH6RWRVKDYHQRWSRLQWHGWRDQ\ ,Q DSSO\LQJ WKHVH IDFWRUV WKH GLVWULFW FRXUW DVVXPHG WKH DXWKRULW\WRVXSSRUWWKHLUSRVLWLRQ7KHUHIRUHZHFDQQRWVD\ UHOHYDQWFRQWUDFWZDVEHWZHHQ002DQGsDQLN 'XQQ,WLV WKDW WKH GH6RWRV ZHUH QRW UHTXLUHG WR UHLPEXUVH 002 QRW7KHFRQWUDFWEHWZHHQ002DQGsDQLN 'XQQGRHVQRW EHFDXVHWKHVHWWOHPHQWH[FOXGHGPHGLFDOH[SHQVHV JRYHUQ WKH UHODWLRQVKLS EHWZHHQ 0UV GH6RWR DQG 002 ,QGHHGWKDWFRQWUDFWZLWKRXWPRUHGRHVQRWHVWDEOLVKDQ\ &&DOLIRUQLD&LYLO&RGH6HFWLRQ VLJQLILFDQWOHJDOUHODWLRQVKLSEHWZHHQ0UVGH6RWRDQG002 ,W LV WKH &HUWLILFDWH WKDW JRYHUQV WKH SDUWLHVj UHODWLRQVKLS (YHQ LI WKDW LV WKH FDVH WKH GH6RWRV DUJXH WKH\ DUH QRW 7KHUHIRUHLWLVWKHUHOHYDQWFRQWUDFW REOLJDWHGWRUHLPEXUVH002EHFDXVH&DOLIRUQLDODZJRYHUQV WKH &HUWLILFDWH DQG VHFWLRQ E RI &DOLIRUQLDjV &LYLO $SSO\LQJ WKH 5HVWDWHPHQW WHVWV WR WKDW &HUWLILFDWH ZH &RGHSURKLELWV002IURPUHFRYHULQJWKHPHGLFDOH[SHQVHV FRQFOXGHWKDW&DOLIRUQLDODZDSSOLHV7KHIDFWRUVLQVHFWLRQ IURP WKH GH6RWRV 7KH GLVWULFW FRXUW GLVDJUHHG ZLWK WKH SRLQWWRZDUG&DOLIRUQLDODZ7KHSODFHRIFRQWUDFWLQJ GH6RWRVjILUVWSURSRVLWLRQWKDW&DOLIRUQLDODZJRYHUQVWKLV EHWZHHQWKHSDUWLHVZDV&DOLIRUQLD7KHSODFHRIFRQWUDFWLQJ FDVHKROGLQJLQVWHDGWKDW2KLRODZDSSOLHGEXWEHFDXVH2KLR LV ZKHUH WKH mODVW DFW QHFHVVDU\ WR JLYH WKH FRQWUDFW GLGQRWKDYHDQDQWLVXEURJDWLRQVWDWXWH(5,6$FRPPRQODZ ELQGLQJHIIHFWlRFFXUUHG,GDWFPWH,QWKLVFDVH WKDW ZRXOG EH 0UV GH6RWR VLJQLQJ WKH &HUWLILFDWH 7KHUH DSSHDUVWREHQRGLVSXWHWKDW0UVGH6RWRVLJQHGWKHSODQLQ 6HFWLRQ D LQ FRQMXQFWLRQ ZLWK D ZRXOG H[FOXGH VRPH &DOLIRUQLD 6LPLODUO\ ZHUH DQ\ QHJRWLDWLRQ WR WDNH SODFH PHGLFDO H[SHQVHV 6HFWLRQ D H[FOXGHV IURP LWV GHILQLWLRQ RI DPRXQWV EHWZHHQWKHSDUWLHVLWZRXOGKDYHWDNHQSODFHLQ&DOLIRUQLD RI GDPDJHV UHFHLYHG RQ DFFRXQW RI SHUVRQDO LQMXU\ DPRXQWV mDWWULEXWDEOH 7KHSODFHRISHUIRUPDQFHZKHUH002SURYLGHGEHQHILWVWR WR DQG QRW LQ H[FHVV RI GHGXFWLRQV DOORZHG XQGHU VHFWLRQ UHODWLQJ 0UV GH6RWRZDV &DOLIRUQLD 7KH VXEMHFW PDWWHU RI WKH WR PHGLFDO HWF H[SHQVHV IRU DQ\ SULRU WD[DEOH \HDUl 86& D 6HFWLRQ GHGXFWLRQV UHODWH WR mH[SHQVHV SDLG GXULQJ WKH FRQWUDFW0UVGH6RWRjVPHGLFDOH[SHQVHVZDVLQFXUUHGLQ WD[DEOH \HDU l QRW FRPSHQVDWHG IRU E\ LQVXUDQFH RU RWKHUZLVH DW ,G &DOLIRUQLD$QGZKLOH002LVDQ2KLRFRUSRUDWLRQ0UV D HPSKDVLV DGGHG 002 SDLG 0UV GH6RWRjV PHGLFDO H[SHQVHV GH6RWRLVDUHVLGHQWRI&DOLIRUQLD WKHUHIRUH DjV H[FOXVLRQ GRHV QRW DSSO\ WR WKHLU PHGLFDO H[SHQVHV ,QDGGLWLRQWRWKHVHIDFWRUV&DOLIRUQLDKDVDVWURQJSROLF\ 6HFWLRQ SURYLGHV LQWHUHVWLQLWVODZDSSO\LQJ&DOLIRUQLDHQDFWHGWKH0HGLFDO D ,Q WKH HYHQW WKH GHIHQGDQW VR HOHFWV LQ DQ DFWLRQ IRU SHUVRQDO ,QMXU\&RPSHQVDWLRQ5HIRUP$FW&DO6WDW6HFRQG([ LQMXU\ DJDLQVW D KHDOWK FDUH SURYLGHU EDVHG XSRQ SURIHVVLRQDO QHJOLJHQFH KH PD\ LQWURGXFH HYLGHQFH RI DQ\ DPRXQW SD\DEOH DV 6HVVFKVDWFRGLILHGLQSDUWLQ D EHQHILW WR WKH SODLQWLII DV D UHVXOW RI WKH SHUVRQDO LQMXU\ SXUVXDQW WR DQ\ KHDOWK VLFNQHVV RU LQFRPHGLVDELOLW\ LQVXUDQFH DFFLGHQW LQVXUDQFH WKDW SURYLGHV KHDOWK EHQHILWV RU LQFRPHGLVDELOLW\ FRYHUDJH DQG DQ\ FRQWUDFW RU DJUHHPHQW RI 002 DOVR FRQWHQGV WKDW WKH UHOHYDQW FRQWUDFW LV EHWZHHQ LWVHOI DQG DQ\ JURXS RUJDQL]DWLRQ SDUWQHUVKLS RU FRUSRUDWLRQ WR SURYLGH sDQLN 'XQQ :H VWURQJO\ GRXEW KRZHYHU WKDW LI 0UV GH6RWR KDG SD\ IRU RU UHLPEXUVH WKH FRVW RI PHGLFDO KRVSLWDO GHQWDO RU HOHFWHG QRW WR EHFRPH D SDUWLFLSDQW LQ WKH SODQ ZDV LQMXUHG DQG EURXJKW RWKHU KHDOWK FDUH VHUYLFHV VXLW DJDLQVW 002 FODLPLQJ WKDW VKH ZDV HQWLWOHG WR WKH EHQHILWV RI WKH E 1R VRXUFH RI FROODWHUDO EHQHILWV LQWURGXFHG LQ VXEVHFWLRQ D SODQ EHFDXVH VKH LV DQ HPSOR\HH RI sDQLN 'XQQ DQG LW KDV D FRQWUDFW VKDOO UHFRYHU DQ\ DPRXQW DJDLQVW WKH SODLQWLII QRU VKDOO LW EH ZLWK 002 002 ZRXOG EH DUJXLQJ WKDW WKH UHOHYDQW FRQWUDFW LQ VXEURJDWHG WR WKH ULJKWV RI WKH SODLQWLII DJDLQVW WKH GHIHQGDQW UHVROYLQJ WKH PDWWHU LV WKH DJUHHPHQW EHWZHHQ LWVHOI DQG sDQLN 'XQQ & $/ ,9 & & 2'( 0HGLFDO0XWXDORI2KLR 1RV 1RV 0HGLFDO0XWXDORI2KLR YGH6RWRHWDO YGH6RWRHWDO JRYHUQHGWKHFDVH7KXVEHIRUHZHFDQUHDFKWKHTXHVWLRQRI &RQIOLFWVRI/DZl%LFNHO)GDWLQSDUWLFXODUVHFWLRQ WKHHIIHFWRIVHFWLRQRQ002jVULJKWWRUHFRYHUZH 7KDWVHFWLRQSURYLGHV PXVWGHWHUPLQHZKHWKHU&DOLIRUQLDRU2KLRODZDSSOLHVDQG ZKHWKHU(5,6$SUHHPSWVWKDWODZ 7KHULJKWVDQGGXWLHVRIWKHSDUWLHVZLWKUHVSHFWWRDQ LVVXHLQDFRQWUDFWDUHGHWHUPLQHGE\WKHORFDOODZRIWKH :KLFK6WDWHVj/DZ$SSOLHV VWDWH ZKLFK ZLWK UHVSHFW WR WKDW LVVXH KDV WKH PRVW VLJQLILFDQWUHODWLRQVKLSWRWKHWUDQVDFWLRQDQGWKHSDUWLHV ,QGHWHUPLQLQJZKLFKVWDWHVjODZDSSOLHVRXUDQDO\VLVLV XQGHUWKHSULQFLSOHVVWDWHGLQ JRYHUQHGE\WKHFKRLFHRIODZSULQFLSOHVGHULYHGIURPIHGHUDO FRPPRQ ODZ 6HH %URWKHUKRRG RI /RFRPRWLYH (QJjUV Y ,QWKHDEVHQFHRIDQHIIHFWLYHFKRLFHRIODZE\WKH 6SULQJILHOG 7HUPLQDO 5\ &R )G G &LU SDUWLHV WKH FRQWDFWV WR EH WDNHQ LQWR DFFRXQW LQ VHHDOVR%LFNHOY.RUHDQ$LU/LQHV&R)G DSSO\LQJWKHSULQFLSOHVRIWRGHWHUPLQHWKHDSSOLFDEOH WK&LUYDFDWHGLQSDUWE\%LFNHOY.RUHDQ$LU/LQHV ODZWRDQLVVXHLQFOXGH &R )G WK &LU (QWHUSULVH *URXS 3ODQQLQJ,QFY)DOED1R:/DW DWKHSODFHRIFRQWUDFWLQJ WK&LU EWKHSODFHRIQHJRWLDWLRQRIWKHFRQWUDFW FWKHSODFHRISHUIRUPDQFH m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j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j ODZ DSSOLHV WKHSDUWLFXODULVVXH GWKHSURWHFWLRQRIMXVWLILHGH[SHFWDWLRQV HWKH EDVLFSROLFLHVXQGHUO\LQJWKHSDUWLFXODUILHOGRI 7KH 7HQWK &LUFXLW KDV UHFHQWO\ DSSOLHG WKH IRUXP VWDWHjV FKRLFH RI ODZ GRFWULQH LQ DQDO\]LQJ ZKLFK VWDWHVj VXEVWDQWLYH ODZ DSSOLHG LQ DQ ODZ (5,6$ DFWLRQ 6HH 'DQJY 8180 /LIH ,QV &R RI $PHULFD )G IFHUWDLQW\SUHGLFWDELOLW\DQGXQLIRUPLW\RIUHVXOWDQG WK &LU 8QGHU WKH 7HQWK &LUFXLWjV UXOH ZH ZRXOG JHDVHLQWKHGHWHUPLQDWLRQDQGDSSOLFDWLRQRIWKHODZ DSSO\ 2KLR FKRLFH RI ODZ GRFWULQH DV 2KLR LV WKH IRUXP VWDWH 6XFK DQ DQDO\VLV ZRXOG UHDFK WKH VDPH UHVXOW ZH UHDFK XVLQJ IHGHUDO FRPPRQ ODZ WREHDSSOLHG SULQFLSOHV EHFDXVH 2KLR KDV DGRSWHG WKH 5HVWDWHPHQWjV FKRLFH RI ODZ SULQFLSOHV DV ZHOO 6HH ,QWHUQDWLRQDO ,QV &R Y 6WRQHZDOO ,QV &R )G WK &LU
Copyright © 2024 by eLaws. All rights reserved.