Gonzalez v. Moffitt

United States Bankruptcy Appellate Panel of The Sixth Circuit

Gonzalez v. Moffitt

Opinion

(/(&7521,&&,7$7,21 )('$SS3 WK&LU )LOH1DPH ES

%$1.5837&<$33(//$7(3$1(/2)7+(6,;7+&,5&8,7

,QUH  &+$5/(6(02)),77

'HEWRU BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

526('(/,$*21=$/(=

3ODLQWLII$SSHOOHH

Y 1R

&+$5/(6(02)),77

'HIHQGDQW$SSHOODQW

BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

$SSHDOIURPWKH8QLWHG6WDWHV%DQNUXSWF\&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLR:HVWHUQ'LYLVLRQDW7ROHGR 1R $GY3URF 

$UJXHG sXO\ 

'HFLGHGDQG)LOHG 6HSWHPEHU

%HIRUH $8*%52:1DQG5+2'(6%DQNUXSWF\$SSHOODWH3DQHOsXGJHV

BBBBBBBBBBBBBBBBBBBB

&2816(/

$5*8('   :LOOLDP / 6ZRSH 5$1'< / 5((9(6 &2 /3$ )LQGOD\ 2KLR IRU $SSHOODQW/RXLV<RSSROR6+,1'/(51())+2/0(6 6&+/$*(7(57ROHGR2KLR IRU$SSHOOHH21%5,() :LOOLDP/6ZRSH5$1'</5((9(6&2/3$)LQGOD\ 2KLR IRU $SSHOODQW  /RXLV <RSSROR 6+,1'/(5 1()) +2/0(6  6&+/$*(7(5 7ROHGR2KLRIRU$SSHOOHH BBBBBBBBBBBBBBBBBBBB

23,1,21 BBBBBBBBBBBBBBBBBBBB

s9,1&(17$8*s5%DQNUXSWF\$SSHOODWH3DQHOsXGJH7KH%DQNUXSWF\&RXUW JDYH SUHFOXVLYH HIIHFW WR D 'LVWULFW &RXUW MXU\ YHUGLFW LQ IDYRU RI 3ODLQWLII 5RVH 'HOLD *RQ]DOH]LQWKHDPRXQWRIRQKHUFODLPWKDWWKH'HEWRULQWHQWLRQDOO\FDXVHGKHU VHULRXVHPRWLRQDOGLVWUHVVWKHUHIRUHILQGLQJWKDWWKHMXGJPHQWGHEWZDVQRQGLVFKDUJHDEOH XQGHU86&† D  :H$)),50

, ,668(6 21 $33($/ 7KHILUVWLVVXHLVZKHWKHUWKH%DQNUXSWF\&RXUWFRUUHFWO\DSSOLHGWKHSULQFLSOHRI SUHFOXVLRQVSHFLILFDOO\FROODWHUDOHVWRSSHOWRWKH'LVWULFW&RXUWMXU\YHUGLFWUHODWLYHWRERWK WKHZLOOIXODQGPDOLFLRXVHOHPHQWVRI† D   7KHVHFRQGLVVXHLVZKHWKHUWKHUHLVVXIILFLHQWHYLGHQFHWRVXSSRUWWKHILQGLQJVWKDW WKH'HEWRUDFWHGZLOOIXOO\DQGPDOLFLRXVO\WRZDUGV*RQ]DOH]

,,s85,6',&7,21$1'67$1'$5'2)5(9,(: 7KH%DQNUXSWF\&RXUWjVRUGHUJUDQWLQJVXPPDU\MXGJPHQWLQIDYRURI*RQ]DOH]LQ WKHDGYHUVDU\SURFHHGLQJLVILQDODQGDSSHDODEOHE\ULJKWXQGHU86&† D   %HOIDQFHY%XVKH\ ,QUH%XVKH\ %5   %$3WK&LU   $QRUGHUJUDQWLQJVXPPDU\MXGJPHQWLVDFRQFOXVLRQRIODZDQGLVUHYLHZHGGH QRYR,G$SSOLFDELOLW\RIWKHSULQFLSOHRISUHFOXVLRQLVDOVRUHYLHZHGGHQRYR0DUNRZLW] Y&DPSEHOO ,QUH0DUNRZLW]  )G WK&LU 'HQRYRPHDQVWKDWWKH DSSHOODWHFRXUWGHWHUPLQHVWKHODZLQGHSHQGHQWO\RIWKHWULDOFRXUWjVGHWHUPLQDWLRQ,QUH %XVKH\%5DW  FLWLQJ5D]DYLY&RPPjU)G WK&LU  



,,,)$&76 7KHIROORZLQJIDFWVDUHWDNHQIURPWKH8QLWHG6WDWHV&RXUWRI$SSHDOVIRUWKH6L[WK &LUFXLWDIILUPLQJWKH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH1RUWKHUQ'LVWULFWRI2KLRjV m'LVWULFW &RXUWl MXGJPHQWLQIDYRURI*RQ]DOH]  >7KH'HEWRU@DQG*RQ]DOH]PDUULHGLQ >7KH'HEWRU@DGPLWVKH KDGDWOHDVWWKUHHH[WUDPDULWDODIIDLUVVSDQQLQJIURPWKHODWH VXQWLOWKHLU GLYRUFHLQ +HWHVWLILHGWKDWKHXVHGDFRQGRPGXULQJKLVLQWHUFRXUVH XQWLODSSUR[LPDWHO\ $WWKLVWLPHKHVWRSSHGXVLQJDFRQGRPUHJXODUO\ GXULQJKLVDIIDLUZLWK/DXUD$[HZKRPKHODWHUPDUULHG'XULQJWKLVSHULRG >WKH'HEWRU@FRQWLQXHGWRHQJDJHLQVH[XDODFWLYLW\ZLWK*RQ]DOH]

7KURXJKRXW WKH ODVW \HDUV RI WKHLU PDUULDJH *RQ]DOH] UHSHDWHGO\ TXHVWLRQHG>WKH'HEWRU@DVWRZKHWKHUKHZDVKDYLQJDIIDLUVEXWKHDOZD\V GHQLHGKDYLQJDQ\DIIDLUV,Q0DUFK *RQ]DOH]QRWLFHGZDUWVLQ>WKH 'HEWRU@jVJHQLWDODUHD*RQ]DOH]TXHVWLRQHG>WKH'HEWRU@DERXWWKHJHQLWDO ZDUWVEXWKHFRQYLQFHGKHULWZDVPHUHO\DmZLQWHUUDVKl6DWLVILHGE\KLV DQVZHU*RQ]DOH]HQJDJHGLQXQSURWHFWHGVH[ZLWK>WKH'HEWRU@/DWHUWKDW \HDU>WKH'HEWRU@ILOHGIRUGLYRUFH

$IWHU*RQ]DOH]GLVFRYHUHG>WKH'HEWRU@jVQXPHURXVDIIDLUVVKHZHQW WR D GRFWRU WR GHWHUPLQH LI VKH VXIIHUHG IURP DQ\ VH[XDOO\ WUDQVPLWWHG GLVHDVHV7KHUHVXOWVVKRZHGWKDW*RQ]DOH]VXIIHUHGIURPKXPDQSDSLOORPD YLUXVRU+39FRPPRQO\UHIHUUHGWRDVJHQLWDOZDUWV$SHUVRQFDQRQO\ FRQWUDFW+39WKURXJKVH[XDOLQWHUFRXUVH*RQ]DOH]WHVWLILHGWKDWVKHQHYHU KDGVH[XDOLQWHUFRXUVHZLWKDQ\RQHH[FHSW>WKH'HEWRU@ *RQ]DOH]Y0RIILWW1R  :/ WK&LU$SULO  ,Q)HEUXDU\ *RQ]DOH]LQLWLDWHGDQDFWLRQDJDLQVWWKH'HEWRULQ'LVWULFW&RXUW *RQ]DOH]j'LVWULFW&RXUWFRPSODLQWLQFOXGHGDFRXQWVRXQGLQJLQLQWHQWLRQDODQGRUQHJOLJHQW LQIOLFWLRQRIHPRWLRQDOGLVWUHVV$WULDOFRPPHQFHGRQ$XJXVW DQGWKHMXU\UHWXUQHG D XQDQLPRXV YHUGLFW LQ IDYRU RI *RQ]DOH]  7KH MXU\ IRXQG WKDW *RQ]DOH] SURYHG E\ D SUHSRQGHUDQFHRIWKHHYLGHQFHWKDWWKH'HEWRUmLQWHQWLRQDOO\RUUHFNOHVVO\ ZLWKFRQVFLRXV GLVUHJDUG FDXVHGVHULRXVHPRWLRQDOGLVWUHVVlWR*RQ]DOH]DQGWKDWKHUSURYHQGDPDJHV WKHUHIRUZHUH7KH'HEWRUDSSHDOHGWKLVGHFLVLRQWRWKH6L[WK&LUFXLW

 7KH UHOHYDQW MXU\ LQWHUURJDWRU\ ZDV DV IROORZV

'R \RX ILQG WKDW WKH 3ODLQWLII KDV SURYHG E\ D SUHSRQGHUDQFH RI WKH HYLGHQFH WKDW 'HIHQGDQW LQWHQWLRQDOO\ RU UHFNOHVVO\ ZLWK FRQVFLRXV GLVUHJDUG FDXVHG VHULRXV HPRWLRQDO GLVWUHVV WR 3ODLQWLII"



7KH'HEWRUVXEVHTXHQWO\ILOHGKLV&KDSWHUEDQNUXSWF\SHWLWLRQLQWKH8QLWHG6WDWHV %DQNUXSWF\&RXUWIRUWKH1RUWKHUQ'LVWULFWRI2KLR %DQNUXSWF\&RXUW RQ6HSWHPEHU    *RQ]DOH] WKHUHDIWHU ILOHG KHU FRPSODLQW WR GHWHUPLQH GLVFKDUJHDELOLW\ XQGHU  86&† D   m%DQNUXSWF\$GYHUVDU\3URFHHGLQJl  2Q$SULO WKH6L[WK&LUFXLWHQWHUHGDSHUFXULDPRSLQLRQDIILUPLQJWKH'LVWULFW &RXUW6SHFLILFDOO\WKH6L[WK&LUFXLWDIILUPHGWKHDZDUGRIFRPSHQVDWRU\ GDPDJHV IRU WKH LQWHQWLRQDO LQIOLFWLRQ RI HPRWLRQDO GLVWUHVV  7KH 6L[WK &LUFXLW DOVR GHWHUPLQHGWKDWWKHYHUGLFWZDVQRWKLJKO\H[FHVVLYH7KH6L[WK&LUFXLWVWDWHG WKDWWKH'HEWRUjVFRQGXFWZDVmH[WUHPHDQGRXWUDJHRXVlDQGWKHUHIRUHWKHHYLGHQFHZDV mVXIILFLHQW WR VXSSRUW *RQ]DOH]j FODLP IRU UHFNOHVV RU LQWHQWLRQDO LQIOLFWLRQ RI HPRWLRQDO GLVWUHVVl  *RQ]DOH] Y 0RIILWW   :/  DW   7KH 6L[WK &LUFXLW IRXQG WKDW *RQ]DOH]FRXOGPDLQWDLQLQGHSHQGHQWFODLPVIRUERWKQHJOLJHQFHDQGDQLQWHQWLRQDOWRUW EDVHGRQWKHVDPHFRQGXFW/DVWO\WKH6L[WK&LUFXLWIRXQGQRSODLQHUURUZLWKUHJDUGWRWKH MXU\LQVWUXFWLRQV 7KH SDUWLHV WKHQ ILOHG FURVVPRWLRQV IRU VXPPDU\ MXGJPHQW LQ WKH %DQNUXSWF\ $GYHUVDU\3URFHHGLQJ*RQ]DOH]DVVHUWHGWKDWWKH'HEWRUZDVFROODWHUDOO\HVWRSSHGIURP GHQ\LQJWKHQRQGLVFKDUJHDELOLW\RIWKHMXGJPHQWXQGHU† D  *RQ]DOH] DOVRFRQWHQGHGWKDWWKHMXU\ILQGLQJVLQWKH'LVWULFW&RXUWDFWLRQZHUHVXIILFLHQWWRFRQVWLWXWH DZLOOIXODQGPDOLFLRXVDFWXQGHU† D   7KH%DQNUXSWF\&RXUWIRXQGWKDWWKH'LVWULFW&RXUWMXU\PDGHDVSHFLILFILQGLQJWKDW WKH'HEWRUDFWHGLQWHQWLRQDOO\DQGWKDWWKHILQGLQJVKRXOGEHJLYHQSUHFOXVLYHHIIHFW7KH %DQNUXSWF\&RXUWDOVRIRXQGWKDWWKH'LVWULFW&RXUWMXU\GHFLGHGWKDWWKH'HEWRUDFWHGDW DPLQLPXPZLWKFRQVFLRXVGLVUHJDUGLQFDXVLQJHPRWLRQDOGLVWUHVVWR*RQ]DOH]WKDWWKLV ZDVHTXLYDOHQWWRDILQGLQJRIPDOLFHDQGWKDWWKHILQGLQJVKRXOGEHJLYHQSUHFOXVLYHHIIHFW ,QDGGLWLRQWKH%DQNUXSWF\&RXUWIRXQGDVDPDWWHURIODZDQGEDVHGRQWKHHYLGHQFH EHIRUHLWWKDWWKH'HEWRUjVFRQGXFWZDVZLOOIXODQGPDOLFLRXVIRUSXUSRVHVRI† D  

,9',6&866,21 7KH'HEWRUDUJXHVWKDWWKH'LVWULFW&RXUWMXU\YHUGLFWVKRXOGQRWEHJLYHQSUHFOXVLYH HIIHFWEHFDXVHWKHLQWHUURJDWRULHVZHUHZULWWHQLQWKHGLVMXQFWLYH$VVXFKWKH'HEWRU FRQWHQGVWKHMXU\FRXOGKDYHIRXQGWKDWWKH'HEWRUjVFRQGXFWZDVQRWZLOOIXODQGZDV PHUHO\UHFNOHVV7KH'HEWRUIXUWKHUFRQWHQGVWKDWXQGHU.DZDDXKDXY*HLJHU86



6&W    †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

0XUUD\Y:LOFR[ ,QUH:LOFR[  %5 %DQNU1'2KLR   FLWLQJ &DVKHOPDUD9LOODV/WG3DUWQHUVKLSY'L%HQHGHWWR1(G 2KLR&W$SS    7KH6L[WK&LUFXLWKDVDGGUHVVHGDIHGHUDOUXOHRILVVXHSUHFOXVLRQUHTXLULQJmWKDWWKH SUHFLVHLVVXHLQWKHODWWHUSURFHHGLQJVKDYHEHHQUDLVHGLQWKHSULRUSURFHHGLQJWKDWWKH LVVXHZDVDFWXDOO\OLWLJDWHGDQGWKDWWKHGHWHUPLQDWLRQZDVQHFHVVDU\WRWKHRXWFRPHl 6SLOPDQY+DUOH\)G WK&LU  RYHUUXOHGRQRWKHUJURXQGV%D\ $UHD)DFWRUVY&DOYHUW ,QUH&DOYHUW )G  WK&LU   7KDW FRXUW REVHUYHGWKDWPXWXDOLW\RISDUWLHVmLVQRORQJHUQHFHVVDU\LQVRPHFLUFXPVWDQFHVl,G$ VSOLWLQDXWKRULW\H[LVWVDVWRZKHWKHUWRDSSO\IHGHUDOLVVXHSUHFOXVLRQODZRUVWDWHLVVXH SUHFOXVLRQODZWRDSULRUIHGHUDOMXGJPHQWEDVHGXSRQGLYHUVLW\

 7KH 6L[WK &LUFXLW KDV VWDWHG D SUHIHUHQFH IRU WKH XVH RI WKH WHUP mLVVXH SUHFOXVLRQl LQVWHDG RI WKH WHUP mFROODWHUDO

HVWRSSHOl +H\OLJHU Y 6WDWH 8QLY DQG &RPPXQLW\ &ROOHJH 6\V RI 7HQQHVVHH  ) G    WK &LU    6HH

DOVR %DUQHV Y 0F'RZHOO  )G   Q  WK &LU   

 7KH PDMRULW\ RI WKH GHFLVLRQV DW WKH FLUFXLW OHYHO DJUHH WKDW WKH IHGHUDO ODZ RI LVVXH SUHFOXVLRQ DSSOLHV WR VXEVHTXHQW IHGHUDO FDXVHV RI DFWLRQ 6HHsRKQVRQ Y 6&$ 'LVSRVDO 6HUYV RI 1HZ (QJODQG  )G   VW &LU   .HUQ Y .HWWLQJHU  )G   G &LU   6KRXS Y %HOO +RZHOO &R  )G   WK &LU   5HLPHU Y 6PLWK  )G   Q WK &LU   +DYRFR RI $PHULFD /WG Y )UHHPDQ $WNLQV &ROHPDQ /WG



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

$ .DZDDXKDXLQVWUXFWVWKDWIRUDGHEWWREHQRQGLVFKDUJHDEOHXQGHU† D  WKH GHEWRUPXVWKDYHLQWHQGHGQRWRQO\KLVFRQGXFWEXWDOVRWKHFRQVHTXHQFHVRIKLVFRQGXFW ,QWHUSUHWLQJ.DZDDXKDXDQGORRNLQJWRWKH5HVWDWHPHQWIRUJXLGDQFHWKH6L[WK&LUFXLWKDV KHOGWKDWDZLOOIXODQGPDOLFLRXVLQMXU\DVGHILQHGXQGHU† D  LVRQHZKHUHWKHGHEWRU mGHVLUHVWRFDXVHFRQVHTXHQFHVRIKLVDFWRUEHOLHYHVWKDWWKHFRQVHTXHQFHVDUH VXEVWDQWLDOO\ FHUWDLQ WR UHVXOW IURP LWl  ,Q UH 0DUNRZLW]   )G DW  TXRWLQJ 5HVWDWHPHQW 6HFRQG RI7RUWV†$DW   7KH(LJKWK&LUFXLWWKH)LIWK&LUFXLW DQGWKH1LQWK&LUFXLW%DQNUXSWF\$SSHOODWH3DQHOKDYHDOVRHPEUDFHGWKHmVXEVWDQWLDOO\ FHUWDLQlVWDQGDUG6HH.DZDDXKDX)G 0LOOHUYs3$EUDPV,QF ,QUH0LOOHU 

 )G   WK &LU   (PSLUH )LUH DQG 0DULQH ,QV &R Y s 7UDQVSRUW ,QF  )G     Q WK &LU    7KH (LJKWK &LUFXLW KDV FRQVLVWHQWO\ KHOG WKDW LQ D IHGHUDO FDXVH RI DFWLRQ VWDWH ODZ JRYHUQV WKH LVVXHSUHFOXVLYH

/DQH Y 6XOOLYDQ  )G    WK &LU    6HH DOVR 3DUGR Y 2OVRQ HIIHFW RI D SULRU IHGHUDO MXGJPHQW

6RQV ,QF  )G   WK &LU     7KH 6L[WK &LUFXLW ZKHQ IDFHG ZLWK GHWHUPLQLQJ WKH LVVXHSUHFOXVLYH HIIHFW RI D SULRU IHGHUDO FRXUW MXGJPHQW KDV

IROORZHG WKH PDMRULW\ UXOH DQG DSSOLHG IHGHUDO ODZ $00 s*= 5HVRXUFHV ,QF Y 6KHOE\ ,QV &R  )G  WK &LU   DSSO\LQJ IHGHUDO ODZ RI LVVXH SUHFOXVLRQ WR D IHGHUDO GLYHUVLW\ MXGJPHQW LQ VXEVHTXHQW IHGHUDO GLYHUVLW\ DFWLRQ VHH DOVR 0RQLFD Y 6LPSVRQ ,Q UH 6LPSVRQ   %5    %DQNU :' 7HQQ  DSSO\LQJ IHGHUDO ODZ WR GHWHUPLQH LVVXHSUHFOXVLYH HIIHFW RI EDQNUXSWF\ FRXUWjV GHIDXOW MXGJPHQW ,Q UH 'RZQV  %5   %DQNU 1' 2KLR   IHGHUDO ODZ RI LVVXH SUHFOXVLRQ DSSOLHG WR GHWHUPLQH SUHFOXVLYH HIIHFW RI MXGJPHQW HQWHUHG LQ WUXVWHHjV DGYHUVDU\ SURFHHGLQJ RQ WUXVWHHjV VXEVHTXHQW REMHFWLRQ WR FODLP  $FFRUGLQJ WR WKH 6L[WK &LUFXLW >R@QH RI WKH VWURQJHVW SROLFLHV D FRXUW FDQ KDYH LV WKDW RI GHWHUPLQLQJ WKH VFRSH RI LWV RZQ MXGJPHQWV ,W ZRXOG EH GHVWUXFWLYH WR WKH EDVLF SULQFLSOHV RI WKH )HGHUDO 5XOHV RI &LYLO 3URFHGXUH WR VD\ WKDW WKH HIIHFW RI D MXGJPHQW RI D IHGHUDO FRXUW ZDV JRYHUQHG E\ WKH ODZ RI WKH VWDWH ZKHUH WKH FRXUW VLWV VLPSO\ EHFDXVH WKH VRXUFH RI IHGHUDO MXULVGLFWLRQ LV GLYHUVLW\ s=* 5HVRXUFHV  )G DW  TXRWLQJ .HUQ Y .HWWLQJHU  )G   QG &LU   

 3RVW*HLJHU FRXUWV DUH VSOLW DV WR ZKHWKHU mZLOOIXO DQG PDOLFLRXV LQMXU\l LV D XQLWDU\ VWDQGDUG RU D GXDO VWDQGDUG UHTXLULQJ SURRI RI ERWK D ZLOOIXO LQMXU\ DQG D PDOLFLRXV LQMXU\ &RPSDUH )LVFKHU Y 6FDUERURXJK ,Q UH 6FDUERURXJK   )G   WK &LU  KROGLQJ ZLOOIXO DQG PDOLFLRXV WR EH D GXDO VWDQGDUG ZLWK 0LOOHU  )G   DQG %DOGZLQ  %5  ERWK DGRSWLQJ WKH XQLWDU\ VWDQGDUG  ,W LV XQQHFHVVDU\ IRU WKLV 3DQHO WR DGGUHVV WKLV VSOLW EXW



)G  WK&LU  %DOGZLQY.LOSDWULFN ,QUH%DOGZLQ %5 %$3 WK&LU  IROORZLQJ,QUH0DUNRZLW]DQG,QUH0LOOHU  7KH'LVWULFW&RXUWVLWWLQJLQGLYHUVLW\DSSOLHG2KLRODZWRGHWHUPLQHWKH'HEWRUjV OLDELOLW\WR*RQ]DOH]8QGHU2KLRODZm>R@QHZKRE\H[WUHPHDQGRXWUDJHRXVFRQGXFW LQWHQWLRQDOO\RUUHFNOHVVO\FDXVHVVHYHUHHPRWLRQDOGLVWUHVVWRDQRWKHULVVXEMHFWWROLDELOLW\ IRUVXFKHPRWLRQDOGLVWUHVVDQGLIERGLO\KDUPWRWKHRWKHUUHVXOWVIURPLWIRUVXFKERGLO\ KDUPl<HDJHUY/RFDO8QLRQ7HDPVWHUV&KDXIIHXUV:DUHKRXVHPHQ +HOSHUVRI $PHULFD  1(G   2KLR    TXRWLQJ 5HVWDWHPHQW 6HFRQG  RI 7RUWV †     $FFRUGLQJO\IRXUHOHPHQWVPXVWEHPHWWRVXVWDLQDFODLPIRULQWHQWLRQDO LQIOLFWLRQRIVHULRXVHPRWLRQDOGLVWUHVV   WKDW WKH DFWRU HLWKHU LQWHQGHG WR FDXVH HPRWLRQDO GLVWUHVV RU NQHZ RU VKRXOG KDYH NQRZQ WKDW DFWLRQV WDNHQ ZRXOG UHVXOW LQ VHULRXV HPRWLRQDO GLVWUHVVWRWKHSODLQWLII WKDWWKHDFWRUjVFRQGXFWZDVVRH[WUHPHDQGRXWUDJHRXVDVWRJRmEH\RQG DOOSRVVLEOHERXQGVRIGHFHQF\lDQGZDVVXFKWKDWLWFDQEHFRQVLGHUHGDV mXWWHUO\LQWROHUDEOHLQDFLYLOL]HGFRPPXQLW\ l WKDWWKHDFWRUjVDFWLRQVZHUHWKHSUR[LPDWHFDXVHRISODLQWLIIjVSV\FKLF LQMXU\ DQG WKDWWKHPHQWDODQJXLVKVXIIHUHGE\SODLQWLIILVVHULRXVDQGRIDQDWXUHWKDW mQRUHDVRQDEOHPDQFRXOGEHH[SHFWHGWRHQGXUHLWl  3ORWQHUY6ZDQWRQ/RFDO%GRI(GXF)6XSSG 1'2KLR  FLWLQJ $VKFURIWY0RXQW6LQDL0HG&WU1(G 2KLR&W$SS   8QGHU2KLRODZWKHWHUPUHFNOHVVLVXVHGLQWHUFKDQJHDEO\ZLWKWKHWHUPVZLOOIXODQG ZDQWRQ7KRPSVRQY0F1HLOO 1(GDWQ$WWKHYHU\OHDVWWKH'LVWULFW &RXUWMXU\IRXQGWKDWWKH'HEWRUmUHFNOHVVO\ ZLWKFRQVFLRXVGLVUHJDUG FDXVHGVHULRXV HPRWLRQDO GLVWUHVVl WR *RQ]DOH]  *RQ]DOH] Y 0RIILWW sXGJPHQW RI WKH 8QLWHG 6WDWHV 'LVWULFW&RXUW1RUWKHUQ'LVWULFWRI2KLR(DVWHUQ'LYLVLRQ&DVH1R &9 $XJXVW  DWSDJH7KHLQFOXVLRQRIWKHSKUDVHmZLWKFRQVFLRXVGLVUHJDUGlE\WKH'LVWULFW &RXUW MXGJH LQWR WKH MXU\ LQWHUURJDWRU\ LQVXUHV WKDW WKH MXU\ PXVW KDYH IRXQG WKDW WKH 'HEWRU VLQWHQWUHDFKHGWKHOHYHORILQWHQWUHTXLUHGE\WKH6L[WK&LUFXLWLQ,QUH0DUNRZLW] DQG WKH 6XSUHPH &RXUW LQ .DZDDXKDX IRU WKH GHEW WR EH QRQGLVFKDUJHDEOH  7KLV FRQFOXVLRQLVVXSSRUWHGE\WKH6L[WK&LUFXLWjVDIILUPDQFHLQWKLVFDVHRIWKH'LVWULFW&RXUW V DZDUGIRUWKHmLQWHQWLRQDOLQIOLFWLRQRIHPRWLRQDOGLVWUHVVl*RQ]DOH]Y0RIILWW

VLQFH WKH EDQNUXSWF\ FRXUW GLVFXVVHG WKH HOHPHQWV VHSDUDWHO\ VR GR ZH

  :/DW  HPSKDVLVDGGHG )XUWKHUPRUHDVH[SODLQHGE\WKH6L[WK&LUFXLW LQWKLVFDVHUHFNOHVVEHKDYLRULVFRQGXFWWKDWmFUHDWHVDQXQUHDVRQDEOHULVNRISK\VLFDO KDUPWRDQRWKHUEXWDOVRWKDWVXFKULVNLVVXEVWDQWLDOO\JUHDWHUWKDQWKDWZKLFKLVQHFHVVDU\ WRPDNHKLVFRQGXFWQHJOLJHQWl,GDW  TXRWLQJ7KRPSVRQY0F1HLOO 1(GDW HPSKDVLVDGGHGE\6L[WK&LUFXLW 7KHGHILQLWLRQRIUHFNOHVVXQGHU2KLRODZDVZHOODV WKHILUVWSURQJRI2KLRjVWHVWIRULQWHQWLRQDOLQIOLFWLRQRIHPRWLRQDOGLVWUHVVLVQHDUO\LGHQWLFDO WRWKHOHYHORILQWHQWUHTXLUHGE\WKH6L[WK&LUFXLWLQ,QUH0DUNRZLW]7KXVWKH%DQNUXSWF\ &RXUW FRUUHFWO\ JDYH SUHFOXVLYH HIIHFW WR WKH 'LVWULFW &RXUW RUGHU UHODWLYH WR WKH ZLOOIXO FRPSRQHQWRI† D   % 7KH'HEWRUDOVRFRQWHQGVWKDWEHFDXVHWKH'LVWULFW&RXUWGLGQRWDZDUGSXQLWLYH GDPDJHVDILQGLQJRIDFWXDOPDOLFHZDVQRWPDGHDQGWKHUHIRUHWKDWWKHmPDOLFLRXVl UHTXLUHPHQWRI†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† D   7KH'HEWRUDOVRSRLQWV WRWKH6L[WK&LUFXLWjVVWDWHPHQWWKDWm*RQ]DOH]GRHVQRW GLVSXWHWKHDEVHQFHRIDILQGLQJRIDFWXDOPDOLFHl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jVFRQGXFW

 7KH UHDVRQ IRU WKLV LV QRW DSSDUHQW IURP WKH UHFRUG

 DV mµH[WUHPH DQG RXWUDJHRXVj DQG WKHUHIRUH VXIILFLHQW WR VXSSRUW *RQ]DOH]j FODLP IRU LQWHQWLRQDOLQIOLFWLRQRIHPRWLRQDOGLVWUHVVl,GDW  TXRWHVLQRULJLQDO  8QGHU† D  DSHUVRQLVGHHPHGWRKDYHDFWHGPDOLFLRXVO\ZKHQWKDWSHUVRQ DFWVLQFRQVFLRXVGLVUHJDUGRIKLVGXWLHVRUZLWKRXWMXVWFDXVHRUH[FXVH6HH,QUH:LOFR[  %5DW  FLWDWLRQVRPLWWHG $WDPLQLPXPWKH'LVWULFW&RXUWMXU\GHWHUPLQHGWKDW WKH 'HEWRU DFWHG ZLWK mFRQVFLRXV GLVUHJDUGl LQ FDXVLQJ VHULRXV HPRWLRQDO GLVWUHVV WR *RQ]DOH]7KHVHVWDQGDUGVDUHQHDUO\LGHQWLFDO7KXVWKH%DQNUXSWF\&RXUWFRUUHFWO\ JDYHSUHFOXVLYHHIIHFWWRWKH'LVWULFW&RXUWRUGHUUHODWLYHWRWKHPDOLFLRXVFRPSRQHQWRI † D   ,QYLHZRIWKHDERYHLWLVQRWQHFHVVDU\IRUWKLVSDQHOWRDGGUHVVWKHVHFRQGLVVXH UDLVHG E\ WKH 'HEWRU FRQFHUQLQJ WKH EDQNUXSWF\ FRXUWjV LQGHSHQGHQW ILQGLQJV WKDW WKH † D  HOHPHQWVZHUHHVWDEOLVKHG1RQHWKHOHVVZHWDNHQRWHRIWKH6L[WK&LUFXLWjV GHVFULSWLRQLQWKLVFDVH 7KHUHFRUGFRQWDLQVDPSOHHYLGHQFHWKDW>WKH'HEWRU@DGPLWWHG WRKDYLQJXQSURWHFWHGVH[ZLWK*RQ]DOH]DQGRWKHUVNQHZWKHULVNVRIWUDQVPLWWLQJVH[XDOO\ WUDQVPLWWHGGLVHDVHVDQGOLHGWR*RQ]DOH]DERXWKDYLQJH[WUDPDULWDODIIDLUVDQGDERXW KDYLQJJHQLWDOZDUWV*RQ]DOH] :/DW  7KH 'HEWRUjV EHKDYLRU LV mVRFLDOO\ UHSUHKHQVLEOHl DQG WKH GHEW LV mQRW ZRUWK\ RI GLVFKDUJHl,QUH:LOFR[ %5DWQ FLWLQJ,QUH.UDXWKHLPHU%5 %DQNU 6'1<      5HJDUGOHVV RI WKH QDPH RI WKH XQGHUO\LQJ DVVRFLDWHG WRUW OLWLJDWHGLQWKH'LVWULFW&RXUWDFWLRQWKHFRQGXFWRIWKH'HEWRULQGLFDWHVQRRWKHUFRQFOXVLRQ EXWWKDWWKH'HEWRULQWHQGHGWRFDXVHKDUPWR*RQ]DOH]RUWKDWKDUPZDVVXEVWDQWLDOO\ FHUWDLQ WR UHVXOW LH ZLOOIXOO\  DQG WKDW KH DFWHG LQ FRQVFLRXV GLVUHJDUG RI KLV GXW\ WR *RQ]DOH]KLVZLIH LHPDOLFLRXVO\ 

9&21&/86,21 7KHRUGHURIWKH%DQNUXSWF\&RXUWLV$)),50('

 

Reference

Status
Published