In re: Hilburn's v.
In re: Hilburn's v.
Opinion
(/(&7521,&&,7$7,21 )('$SS 3 WK&LU )LOH1DPH E S
%$1.5837&<$33(//$7(3$1(/2)7+(6,;7+&,5&8,7
,QUH (**/(6721:25.6/28'63($.(5&2
'HEWRU BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
81,7('67$7(675867((
$SSHOODQW
Y 1R
(**/(6721:25.6/28'63($.(5&2
$SSHOOHH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
,QUH +,/%851j63$,17$1'%2'<6+23,1&
'HEWRU BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
81,7('67$7(675867((
$SSHOODQW
Y 1R
+,/%851j63$,17$1'%2'<6+23,1&
$SSHOOHH BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
$SSHDOIURPWKH8QLWHG6WDWHV%DQNUXSWF\&RXUW IRUWKH:HVWHUQ'LVWULFWRI7HQQHVVHH:HVWHUQ'LYLVLRQDW0HPSKLV 1RV
$UJXHG DQG6XEPLWWHG sXO\
'HFLGHGDQG)LOHG 2FWREHU %HIRUH $8*025*(167(51&/$55(1DQG5+2'(6 %DQNUXSWF\$SSHOODWH3DQHOsXGJHV
BBBBBBBBBBBBBBBBBBBB
&2816(/
$5*8(' 6HDQ0+D\QHV2)),&(2)7+(8675867((0HPSKLV7HQQHVVHHIRU $SSHOODQW1RUPDQ3+DJHPH\HU0HPSKLV7HQQHVVHHIRU6HOI21%5,() 6HDQ0 +D\QHV2)),&(2)7+(8675867((0HPSKLV7HQQHVVHHIRU$SSHOODQW1RUPDQ 3+DJHPH\HU0HPSKLV7HQQHVVHHIRU6HOI $8*%sGHOLYHUHGWKHRSLQLRQRIWKHFRXUWLQZKLFK 5+2'(6%sMRLQHG 025*(167(51&/$55(1%s S GHOLYHUHGDVHSDUDWHGLVVHQWLQJRSLQLRQ
BBBBBBBBBBBBBBBBBBBB
23,1,21 BBBBBBBBBBBBBBBBBBBB
s 9,1&(17 $8* s5 %DQNUXSWF\ $SSHOODWH 3DQHO sXGJH ,Q WKHVH WZR FRQVROLGDWHGDSSHDOVWKHEDQNUXSWF\FRXUWDOORZHGFRPSHQVDWLRQWRWKHFKDSWHUGHEWRUVj DWWRUQH\VIURPHDFKEDQNUXSWF\HVWDWH:H$)),50
, ,668( 21 $33($/ 7KH LVVXH LQ WKLV FDVH LV SXUHO\ D PDWWHU RI VWDWXWRU\ LQWHUSUHWDWLRQ :KHWKHU D FKDSWHUGHEWRUjVDWWRUQH\FDQEHDZDUGHGIHHVIURPWKHHVWDWHXQGHU86&
,,s85,6',&7,21$1'67$1'$5'2)5(9,(: 7KHEDQNUXSWF\FRXUW VRUGHULQWKH(JJOHVWRQFDVHLVDQDZDUGRILQWHULPDWWRUQH\ IHHV$VVXFKLWLVDQLQWHUORFXWRU\RUGHU6HH5RGHULFNY/HY\ ,QUH5RGHULFN7LPEHU &R %5 %$3 WK&LU 6HHDOVR7KH*HRUJH:RUWKLQJWRQ&R )G WK&LU ,QWHUORFXWRU\DSSHDOVFDQRQO\EHKHDUGZLWKOHDYHRIWKH3DQHO86& E ,QUH5RGHULFN7LPEHU&R%5DW,IDQRUGHULVLQWHUORFXWRU\DQGQRPRWLRQIRU OHDYHWRDSSHDOKDVEHHQILOHGWKHSDQHOPD\FRQVLGHUDWLPHO\QRWLFHRIDSSHDOWREHD
,W LV QRW FOHDU ZKHWKHU WKH IHH DSSOLFDWLRQ LQ WKH +LOEXUQ FDVH LV DQ LQWHULP RU ILQDO IHH DSSOLFDWLRQ
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jVGHWHUPLQDWLRQ)LUVW8QLRQ0RUWJDJH &RUS Y (XEDQNV ,Q UH (XEDQNV %5 %$3 WK &LU FLWDWLRQ RPLWWHG
,,,)$&76 7KH (JJOHVWRQ FDVH LQYROYHV D VLQJOH IHH DSSOLFDWLRQ IRU DWWRUQH\V *RWWHQ DQG %DWHPDQLQWKHDPRXQWVRIDQGUHVSHFWLYHO\7KHEXONRIWKHOHJDO ZRUNGRQHLQYROYHGGHIHQGLQJDFUHGLWRU VPRWLRQWRGLVPLVVWKHEDQNUXSWF\FDVH7KH +LOEXUQFDVHLQYROYHVDIHHDSSOLFDWLRQIRUDWWRUQH\+DJHPH\HULQWKHDPRXQWRI 7KHOHJDOVHUYLFHVUHQGHUHGE\DWWRUQH\+DJHPH\HULQFOXGHGSUHSDUDWLRQRIWKHVFKHGXOHV DQGVWDWHPHQWRIILQDQFLDODIIDLUVDQGDWWHQGDQFHDWWKHILUVWPHHWLQJRIFUHGLWRUV 7KH8QLWHG6WDWHV7UXVWHHREMHFWHGWRERWKIHHDSSOLFDWLRQV7KHEDQNUXSWF\FRXUW GHQLHGWKHREMHFWLRQVIRXQGWKDWWKHVHUYLFHVRIWKHGHEWRUVjDWWRUQH\VZHUHQHFHVVDU\WR WKHDGPLQLVWUDWLRQRIWKHWZRHVWDWHVDQGDZDUGHGWKHIHHV7LPHO\DSSHDOVIROORZHG
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mDWWRUQH\lVKRXOGDSSHDULQERWK D DQG D $ RU LQQHLWKHU7KHVHWZRGUDIWLQJHUURUVUHQGHUWKHVWDWXWHDPELJXRXV,GDW6HHDOVR ,QUH&HQWXU\&OHDQLQJ6HUYV,QF )GDW7KXVZLWKUHJDUGWR WKH LVVXH EHIRUH WKH SDQHO WKH VWDWXWH GRHV QRW KDYH D SODLQ PHDQLQJ ,Q WKHVH FLUFXPVWDQFHVLWEHFRPHVRXUUHVSRQVLELOLW\WRGHWHUPLQHZKHWKHU&RQJUHVVLQWHQGHGE\ WKH DPHQGPHQWVWRSURKLELWFRPSHQVDWLRQWRFKDSWHUGHEWRUVjDWWRUQH\V)RUWKH IROORZLQJUHDVRQVWKH3DQHOFRQFOXGHVWKDW&RQJUHVVGLGQRWKDYHVXFKDQLQWHQW )LUVWSULRUWR LWZDVWKHSUDFWLFHWRDOORZFRPSHQVDWLRQRIDGHEWRU VDWWRUQH\ IURPWKHHVWDWH6XUSULVLQJO\WKHUHLVQRH[SHFWHGOHJLVODWLYHKLVWRU\GLVFXVVLQJVXFKD VLJQLILFDQWDOWHUDWLRQRIDQH[LVWLQJVWDWXWRU\VFKHPH,QUH&HQWXU\&OHDQLQJ6HUYV,QF )G FLWLQJ'HZVQXSY7LPP86 6&W
6HHDOVR,QUH0LOOHU%5DW FLWLQJ&ROOLHURQ%DQNUXSWF\ /DZUHQFH3 .LQJHGWKHG 6HFRQG D SODXVLEOH H[SODQDWLRQ H[LVWV IRU WKH GHOHWLRQ RI WKHVH IHZ ZRUGV $V H[SODLQHGZLWKJUHDWGHWDLOE\WKH1LQWK&LUFXLWLQ,QUH&HQWXU\&OHDQLQJ6HUYLFHV,QF WKHVH GHOHWHG ZRUGV GLUHFWO\ SUHFHGHG RWKHU OHQJWK\ SURSRVHG ODQJXDJH ZKLFK ZDV FRQVLGHUHGEXWXOWLPDWHO\ZDVQHYHUDGRSWHGE\&RQJUHVV )GDW7KXV WKHGHOHWLRQKDVEHHQGHVFULEHGE\WKH1LQWK&LUFXLWDVDQmXQLQWHQGHGVOLSRIWKHSHQl ,GDW 7KLUGDPHQGHG D FUHDWHVDQLQFRQVLVWHQF\EHWZHHQLWDQG86& 6HFWLRQ DOORZV D GHEWRU V DWWRUQH\ WR EH SDLG IURP D UHWDLQHU IRU VHUYLFHV WR EH UHQGHUHGlLHSRVWSHWLWLRQVXEMHFWWRXOWLPDWHFRXUWUHYLHZ,IWKHUHWDLQHULVFRQVLGHUHG WREHSDUWRIWKHHVWDWHWKHQLWFRXOGQRWEHVRDSSOLHGWRSRVWSHWLWLRQIHHVLI D LV UHDGDVSUHFOXGLQJVXFKDSSOLFDWLRQ,QUH0LOOHU%5DW )RXUWKDFNQRZOHGJLQJWKDWLWLVQRWWKHIXQFWLRQRIWKHMXGLFLDU\WROHJLVODWHSROLF\LQ FRQWUDYHQWLRQRIDVWDWXWHZLWKDSODLQPHDQLQJ+DUWIRUG8QGHUZULWHUV,QV&RY8QLRQ 3ODQWHUV%DQN1$6&W ZHQRWHWKDWSROLF\FRQVLGHUDWLRQV ZHLJKLQIDYRURIDOORZLQJDGHEWRU VDWWRUQH\WREHFRPSHQVDWHGIURPWKHHVWDWH)LUVW GHEWRUVj DWWRUQH\V SHUIRUP QXPHURXV SRVWSHWLWLRQ VHUYLFHV WKDW DUH QHFHVVDU\ WR WKH DGPLQLVWUDWLRQRIDQHVWDWH,QUH&HQWXU\&OHDQLQJ6HUYV,QF )GDW,QGHHG LQWKHVHFDVHVWKHEDQNUXSWF\MXGJHVSHFLILFDOO\IRXQGWKDWWKHVHUYLFHVRIWKHGHEWRUVj DWWRUQH\VZHUHQHFHVVDU\WRWKHDGPLQLVWUDWLRQRIWKHHVWDWHVDQG8QLWHG6WDWHV7UXVWHH KDVQRWFKDOOHQJHGWKRVHILQGLQJV6XFKVHUYLFHVVKRXOGEHFRPSHQVDWHGLIIRUQRRWKHU UHDVRQWKDQWRDGYDQFHWKHSURSHUIXQFWLRQLQJRIWKHEDQNUXSWF\SURFHVV2WKHUZLVH GHEWRUVjDWWRUQH\VZLOOHLWKHUSHUIRUPQHFHVVDU\VHUYLFHVRQDSURERQREDVLVRUHOVHEH GLVFRXUDJHG IURP SHUIRUPLQJ VXFK VHUYLFHV IRU IHDU WKDW WKHLU VHUYLFHV ZLOO QRW EH FRPSHQVDWHG 6HFRQGLIWKHGHEWRULVDGHIXQFWFRUSRUDWLRQLWZLOOKDYHQRSRVWSHWLWLRQHDUQLQJV ZLWKZKLFKWRSD\LWVDWWRUQH\,GDWIQ7KLUGSURKLELWLQJGHEWRUV DWWRUQH\VIURP EHLQJSDLGIURPWKHHVWDWHPD\HQFRXUDJHGHEWRUV DWWRUQH\VWRRYHUFKDUJHWKHLUXSIURQW IHHVWRLQVXUHIXOOSD\PHQW)RXUWKZKHUHWKHEHQHILWVWRWKHHVWDWHDUHWKHVDPHLW PDNHVQRVHQVHWRWUHDWSHUIRUPDQFHVRIVXFKEHQHILWVE\GHEWRUV DWWRUQH\VGLIIHUHQWO\
WKDQSHUIRUPDQFHVE\RWKHUUHWDLQHGSURIHVVLRQDOV,QUH$PHV'HSDUWPHQW6WRUHV,QF )GDW 7KH WZR FLUFXLW FRXUW GHFLVLRQV ZKLFK KDYH GHQLHG FRPSHQVDWLRQ WR GHEWRUV
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sXO\ GLVFXVVLQJ 86& D $ DQG D $ L :HILQGERWKFDVHVLQVWUXFWLYHEXWGLVWLQJXLVKDEOH EHFDXVHWKH6XSUHPH&RXUWDQGWKH6L[WK&LUFXLWUHVSHFWLYHO\DGGUHVVHGVWDWXWHVZKLFK ZHUHFOHDUDQGXQDPELJXRXV+DUWIRUG8QGHUZULWHUV6&WDW mVWDWXWHDSSHDUV TXLWHSODLQl ,QUH3DOPHU:/ DW WKHPHDQLQJRImWKHVHVHFWLRQV>DUH@ FOHDUDQGXQDPELJXRXVl ,QDGGLWLRQWKH6L[WK&LUFXLWKDVJLYHQDQLQGLFDWLRQWKDWLWZRXOGFRPSHQVDWHD GHEWRU VDWWRUQH\IURPWKHHVWDWH,Q,QUH7KH*HRUJH:RUWKLQJWRQ&RWKH6L[WK&LUFXLW KHOG WKDW DQ RIILFLDO FUHGLWRUV FRPPLWWHH LV HQWLWOHG WR UHLPEXUVHPHQW RI DGPLQLVWUDWLYH H[SHQVHVIURPWKHFKDSWHU GHEWRU VHVWDWHHYHQWKRXJK E GLGQRWH[SUHVVO\ SURYLGHIRUVXFK )G,QPDNLQJLWVGHFLVLRQWKH6L[WK&LUFXLWUHFRJQL]HGWKDW ORJLFDQGHTXLW\DVZHOODVSROLF\FRQVLGHUDWLRQVDUHIDFWRUVWKDWPD\EHFRQVLGHUHG ZKHQLQWHUSUHWLQJWKH&RGH,GDW6HHDOVR,GDW sRQHVs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
9&21&/86,21 7KH3DQHOFRQFOXGHVWKDWLQWKH DPHQGPHQWVWR86& D &RQJUHVV GLGQRWLQWHQGWRGHQ\FRPSHQVDWLRQWRFKDSWHUGHEWRUVjDWWRUQH\VIRUVHUYLFHVQHFHVVDU\ WRWKHDGPLQLVWUDWLRQRIWKHHVWDWH$FFRUGLQJO\WKHRUGHUVRIWKHEDQNUXSWF\FRXUWDUH $)),50('
BBBBBBBBBBBBBBBBBBBB
',66(17 BBBBBBBBBBBBBBBBBBBB
3$7 ( 025*(167(51&/$55(1 %DQNUXSWF\ $SSHOODWH 3DQHO sXGJH GLVVHQWLQJ,UHVSHFWIXOO\GLVVHQWIURPWKH3DQHOjVGHFLVLRQIRUWKHUHDVRQVVWDWHGE\sXGJH 7KRPDVLQ,QUH&HQWXU\&OHDQLQJ6HUYV,QF )G WK&LU 7KRPDVs GLVVHQWLQJ $VsXGJH7KRPDVVXPPDUL]HG m7KHPDMRULW\PD\ZHOOKDYHLGHQWLILHGWKH EHVWSROLF\IRUFRPSHQVDWLQJGHEWRUVjDWWRUQH\VLQ&KDSWHUFDVHVEXWLWLVQRWWKHSROLF\ FKRLFHWKDW&RQJUHVVPDGH>%@RWKWKHSODLQODQJXDJHRIWKHVWDWXWHDQGLWVOHJLVODWLYH KLVWRU\OHDYHQRGRXEWWKDW&RQJUHVVPHDQWZKDWLWVDLGlZKHQLWGHOHWHGWKHVWDWXWRU\ ODQJXDJHDXWKRUL]LQJSD\PHQWWRGHEWRUVjFRXQVHOIURPWKH&KDSWHUHVWDWH,GDW $FFRUGLQJO\,ZRXOGUHYHUVHWKHGHFLVLRQRIWKHEDQNUXSWF\FRXUWEDVHGRQsXGJH7KRPDVj UHDVRQLQJDQGILQGWKDWGHEWRUVjFRXQVHOPD\QRWEHDZDUGHGFRPSHQVDWLRQIURPWKHVH HVWDWHV
Reference
- Status
- Published