Schoenlein v. Schoenlein

United States Bankruptcy Appellate Panel of The Sixth Circuit

Schoenlein v. Schoenlein

Opinion

(/(&7521,&&,7$7,21 )('$SS$ WK&LU )LOH1DPH ED

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

,QUH  0$5,(&6&+2(1/(,1 'HEWRU BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

'$1,(/s6&+2(1/(,1

3ODLQWLII$SSHOOHH

Y 1R

237,2121(0257*$*(&25325$7,21

'HIHQGDQW$SSHOODQW BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB

$SSHDOIURPWKH8QLWHG6WDWHV%DQNUXSWF\&RXUW IRUWKH6RXWKHUQ'LVWULFWRI2KLR(DVWHUQ'LYLVLRQDW&ROXPEXV &DVH1R $GYHUVDU\1R 

'DWH6XEPLWWHGRQ%ULHIV 0D\

'HFLGHGDQG)LOHG sXO\

%HIRUH %52:1&22.DQG+2:$5'%DQNUXSWF\$SSHOODWH3DQHOsXGJHV

BBBBBBBBBBBBBBBBBBBB

&2816(/

21 %5,()   'DYLG $ )UHHEXUJ 0F)$''(1  $662&,$7(6 &OHYHODQG 2KLR IRU $SSHOODQW0LFKDHO7*XQQHU+LOOLDUG2KLRIRU$SSHOOHH

1 BBBBBBBBBBBBBBBBBBBB

$0(1'('23,1,21 ********************

:,//,$0+286721%52:1%DQNUXSWF\$SSHOODWH3DQHOsXGJH2SWLRQ2QH 0RUWJDJH&RUSRUDWLRQ m2SWLRQ2QHl DSSHDOVWKHRUGHURIWKHEDQNUXSWF\FRXUWJUDQWLQJ D GHIDXOW MXGJPHQW WR 'DQLHO s 6FKRHQOHLQ m$SSHOOHHl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jV RUGHU JUDQWLQJWKH$SSHOOHHjVPRWLRQIRUDGHIDXOWMXGJPHQWDQG5(0$1'WKHSURFHHGLQJ

,,668(621$33($/

7KHLVVXHVRQDSSHDODUHZKHWKHUWKHEDQNUXSWF\FRXUWDEXVHGLWVGLVFUHWLRQLQ JUDQWLQJDGHIDXOWMXGJPHQWDQGZKHWKHUWKHEDQNUXSWF\FRXUWSURSHUO\FRQFOXGHGWKDW VHUYLFHRISURFHVVZDVSURSHUSXUVXDQWWR)HGHUDO5XOHRI%DQNUXSWF\3URFHGXUH $OWKRXJK QRW UDLVHG E\ WKH SDUWLHV WKH 3DQHO VXD VSRQWH DOVR TXHVWLRQV ZKHWKHU WKH EDQNUXSWF\ FRXUW KDG FRUH MXULVGLFWLRQ RYHU WKHVH SDUWLHV DQG WKLV SURFHHGLQJ  %1

 %\ VHSDUDWH 2UGHU ZH KDYH YDFDWHG RXU RULJLQDO 2SLQLRQ ZKLFK ZDV ILOHG RQ sXQH   LQ UHVSRQVH WR WKH $SSHOOHHjV 0RWLRQ IRU 5HFRQVLGHUDWLRQ 7KDW 0RWLRQ SRLQWHG WR DQ HUURU E\ WKLV 3DQHOjV UHIHUHQFH WR WKH UHFRUG RI WKH XQGHUO\LQJ PRWLRQ IRU GHIDXOW 7KDW 2SLQLRQjV FRQFOXVLRQ GLG QRW UHO\ KRZHYHU XSRQ WKH PLVVWDWHPHQW FRQFHUQLQJ WKH PRWLRQ IRU GHIDXOW DQG WKH RULJLQDO 2SLQLRQjV FRQFOXVLRQ LV XQFKDQJHG

2 7HOHFRPP,QFY/RPD] ,QUH%17HOHFRPP,QF %5 %$3WK&LU   DEVHQWFRQVHQWLIWKHSURFHHGLQJLVQRWFRUHWKHEDQNUXSWF\FRXUWLVGHSULYHGmRI VXEMHFWPDWWHUMXULVGLFWLRQWRHQWHUDILQDORUGHURIGHIDXOWl 

,,s85,6',&7,21$1'67$1'$5'2)5(9,(: 7KH%DQNUXSWF\$SSHOODWH3DQHORIWKH6L[WK&LUFXLWKDVMXULVGLFWLRQWRGHFLGHWKLV DSSHDO$ILQDORUGHURIDEDQNUXSWF\FRXUWPD\EHDSSHDOHGE\ULJKWXQGHU86& † D  )RUSXUSRVHVRIDSSHDODQRUGHULVILQDOLILWmHQGVWKHOLWLJDWLRQRQWKHPHULWV DQGOHDYHVQRWKLQJIRUWKHFRXUWWRGREXWH[HFXWHWKHMXGJPHQWl0LGODQG$VSKDOW&RUS Y8QLWHG6WDWHV 86   6&W      FLWDWLRQVRPLWWHG $Q RUGHUJUDQWLQJDPRWLRQIRUDGHIDXOWMXGJPHQWLVDILQDORUGHU6HHHJ0DF3KHUVRQY sRKQVRQ ,QUH0DF3KHUVRQ %5 %$3VW&LU  GHIDXOWMXGJPHQW LVDILQDORUGHU VHHDOVR%DYHO\Y3RZHOO ,QUH%DVNHWW  %5 %$3WK &LU   GHQ\LQJDPRWLRQWRVHWDVLGHDGHIDXOWMXGJPHQWLVDILQDORUGHU  $SSHOODWHUHYLHZRIWKHJUDQWLQJRIGHIDXOWMXGJPHQWVDQGWKHUHIXVDOWRVHWDVLGH VXFKMXGJPHQWVLVXQGHUWKHDEXVHRIGLVFUHWLRQVWDQGDUG,QUH%DVNHWW %5DW 2XUUHYLHZRIWKHEDQNUXSWF\FRXUWjVMXULVGLFWLRQDTXHVWLRQRIODZLVDGHQRYRUHYLHZ

,,,)$&76

7KH$SSHOOHHZKRZDVQRWDGHEWRULQWKHEDQNUXSWF\FDVHILOHGDFRPSODLQWLQKLV ZLIHjVEDQNUXSWF\FDVHRQsXO\FKDOOHQJLQJVHYHUDOFUHGLWRUVjFODLPVDJDLQVWKLP LQFOXGLQJWKHYDOLGLW\RUH[WHQWRIDPRUWJDJHLQWHUHVWFODLPHGE\2SWLRQ2QH7KLVDSSHDO FRQFHUQVRQO\WKHGLVSXWHEHWZHHQWKH$SSHOOHHDQG2SWLRQ2QH2QsXO\WKH FRPSODLQW ZDV PDLOHG E\ WKH $SSHOOHH E\ UHJXODU ILUVW FODVV PDLO WR 2SWLRQ 2QH LQ &DOLIRUQLDWRWKHDWWHQWLRQRIWKH/HJDO'HSDUWPHQWLQFDUHRIsRKQ6WRFNHUsRKQ6WRFNHU LVDFRQWUDFWHPSOR\HHRI2SWLRQ2QHDQGKDGSUHYLRXVO\FRPPXQLFDWHGZLWKWKH$SSHOOHH UHJDUGLQJWKHPRUWJDJH'XHWRZKDWDSSHDUVWRKDYHEHHQDPLVFRPPXQLFDWLRQEHWZHHQ sRKQ6WRFNHUDQG'HERUDKsDPHVRQWKH$VVLVWDQW9LFH3UHVLGHQWDQGFRXQVHOIRU2SWLRQ 2QH2SWLRQ2QHGLGQRWILOHDWLPHO\DQVZHUWRWKHFRPSODLQWQRUGLGLWILOHDUHTXHVWIRU DQH[WHQVLRQRIWLPHWRDQVZHURURWKHUZLVHUHVSRQGWRWKHFRPSODLQW2SWLRQ2QHKDG

3 WXUQHGWKHFODLPDJDLQVWLWRYHUWRLWVWLWOHLQVXUHUDQG0VsDPHVRQH[SHFWHGWKDWLQVXUHU WRGHIHQGWKHDGYHUVDU\SURFHHGLQJ 2Q$XJXVWWKHSODLQWLIIILOHGIRUDGHIDXOWMXGJPHQW2SWLRQ2QHjVDQVZHU WR WKH RULJLQDO FRPSODLQW DQG D PRWLRQ WR ILOH LWV DQVZHU LQVWDQWHU ZDV ILOHG RQ 6HSWHPEHURQHPRQWKDIWHUWKHPRWLRQ $GHIDXOWKDGQRWEHHQHQWHUHGE\WKHFOHUN7KHEDQNUXSWF\FRXUWKHOGDKHDULQJ RQsDQXDU\DQGFRQFOXGHGWKDW2SWLRQ2QHjVIDLOXUHWRILOHDQDQVZHULQDWLPHO\ PDQQHUZDVPRUHWKDQDPHUHPLVWDNHDQGDPRXQWHGWRQHJOLJHQFH7KHFRXUWKHOGWKDW WKLVQHJOLJHQFHZDVH[DFHUEDWHGZKHQ2SWLRQ2QHDOORZHGWKLUW\GD\VWRSDVVDIWHUWKH PRWLRQIRUGHIDXOWZDVILOHGEHIRUHLWILOHGDQ\UHVSRQVH7KHUHIRUHWKHEDQNUXSWF\FRXUW JUDQWHGWKHGHIDXOWMXGJPHQWKROGLQJWKDW2SWLRQ2QHZDVQRWHQWLWOHGWRSURWHFWLRQRU UHOLHIIURPLWVRZQQHJOLJHQFH

,9',6&866,21 7KLV FDVH FRPHV WR WKH %DQNUXSWF\ $SSHOODWH 3DQHO LQ DQ XQXVXDO SRVWXUH 7\SLFDOO\XSRQHQWU\RIDGHIDXOWMXGJPHQWDSSHDOVIROORZWKHWULDOFRXUWj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jVRUDOUXOLQJWKDWD PRWLRQ WR VHW DVLGH WKH GHIDXOW MXGJPHQW ZRXOG KDYH EHHQ IXWLOH  7KH MXGJPHQW ZDV HQWHUHGE\WKHEDQNUXSWF\MXGJHDIWHUDKHDULQJRQWKHPRWLRQIRUGHIDXOWMXGJPHQWDQG WKDWMXGJPHQWLVDILQDORUGHUIRUDSSHDOSXUSRVHV7KHWULDOFRXUWjVDFWLRQLQHQWHULQJD GHIDXOWMXGJPHQWLVDGLVFUHWLRQDU\RQHDVLQGLFDWHGE\WKHmPD\lODQJXDJHRI5XOH E  6HHDOVR$KHUQ 0DF/HDQ %DQNUXSWF\3URFHGXUH0DQXDO † HG  $OWKRXJKQRPRWLRQWRVHWDVLGHWKHGHIDXOWMXGJPHQWLVEHIRUHWKH3DQHOEHFDXVH RI WKH UHFRUG LQFOXGLQJ WKH WULDO FRXUWjV RUDO UXOLQJ ZH DUH DEOH WR HYDOXDWH ZKHWKHU D

4 GHIDXOWMXGJPHQWVKRXOGKDYHEHHQHQWHUHGDQGZHIDLOWRVHHLWVMXVWLILFDWLRQ7KHWULDO FRXUWVDUHJXLGHGLQWKLVFLUFXLWE\FOHDUDXWKRULW\WKDWmµ>W@ULDOVRQWKHPHULWVDUHIDYRUHGLQ IHGHUDOFRXUWVDQGDµJODULQJDEXVHjRIGLVFUHWLRQLVQRWUHTXLUHGIRUUHYHUVDORIDFRXUWjV UHIXVDOWRUHOLHYHDSDUW\RIWKHKDUVKVDQFWLRQRIGHIDXOWjl,QUH%DVNHWW %5DW TXRWLQJ,1967)LQ*URXS,QFY&KHP1XFOHDU6\V,QF)G    WK&LU   FHUWGHQLHG86    VHHDOVR6KHSDUG&ODLPV6HUY,QFY:LOOLDP 'DUUDK  $VVRFV   )G     WK &LU    m:KHQ WKH JUDQW RI D GHIDXOW MXGJPHQW SUHFOXGHV FRQVLGHUDWLRQ RI WKH PHULWV RI D FDVH µHYHQ D VOLJKW DEXVH >RI GLVFUHWLRQ@PD\MXVWLI\UHYHUVDOjl  FLWDWLRQRPLWWHG $OWKRXJKPXFKRIWKHDXWKRULW\LQWKLV FLUFXLWLVLQWKHFRQWH[WRIUHIXVDOWRVHWDVLGHDGHIDXOWMXGJPHQWWKHSUHIHUHQFHIRUWULDOV RQ WKH PHULWV YHUVXV GHIDXOW LV HTXDOO\ DSSOLFDEOH WR WKH WULDO FRXUWjV HQWU\ RI D GHIDXOW MXGJPHQWZLWKRXWVXIILFLHQWFDXVH 7KH EDQNUXSWF\ FRXUW ZDV MXVWLILDEO\ FRQFHUQHG DERXW ZK\ 2SWLRQ 2QH KDG QRW DQVZHUHGWKHFRPSODLQWEXWLQLWVFRQFHUQWKDWFRXUWIDLOHGWRPHQWLRQWKDW2SWLRQ2QHKDG ILOHGLWVDQVZHUDOPRVWIRXUPRQWKVEHIRUHWKHILQDOKHDULQJRQWKHGHIDXOWPRWLRQ8QGHU WKHIDFWVEHIRUHXVWKHJUDQWLQJRIWKHGHIDXOWMXGJPHQWDSSHDUVWREHDQRYHUO\KDUVK VDQFWLRQRQHJUDQWHGVROHO\XSRQDILQGLQJWKDW2SWLRQ2QHKDGEHHQQHJOLJHQWLQIDLOLQJ WR WLPHO\ DQVZHU  ,Q WKH FRQWH[W RI 5XOH  F  WKH 6L[WK &LUFXLW KDV VDLG WKDW PHUH QHJOLJHQFHLVQHYHUHQRXJKWRMXVWLI\UHIXVDOWRVHWDVLGHDGHIDXOW6KHSDUG&ODLPV6HUY ,QF )GDW  WKHGHIDXOWLQJSDUW\jVIDLOXUHPXVWEHZLOOIXODKLJKHUVWDQGDUGWKDQ mFDUHOHVVDQGLQH[FXVDEOHl 7KHEDQNUXSWF\FRXUWjVILQGLQJZDVOLPLWHGWRQHJOLJHQFHDQ LQVXIILFLHQWVWDQGDUGWRMXVWLI\GHIDXOW $OWKRXJKXSRQUHPDQG2SWLRQ2QHjVDQVZHUPD\PRRWLWVFXUUHQWDUJXPHQWDERXW LQVXIILFLHQF\ RI VHUYLFH LQ WKH FRQWH[W RI ZKHWKHU WKH EDQNUXSWF\ FRXUW ZDV FRUUHFW LQ HQWHULQJDGHIDXOWZHFRQFOXGHWKDWWKHEDQNUXSWF\FRXUWZDVLQFRUUHFWLQLWVGHWHUPLQDWLRQ WKDW2SWLRQ2QHKDGEHHQSURSHUO\VHUYHGZLWKWKHFRPSODLQWDQGVXPPRQV6HUYLFHRI SURFHVVLQEDQNUXSWF\FRXUWLVJRYHUQHGE\)HGHUDO5XOHRI%DQNUXSWF\3URFHGXUH ZKLFKVWDWHVLQUHOHYDQWSDUW E 6HUYLFHE\)LUVW&ODVV0DLO([FHSWDVSURYLGHGLQVXEGLYLVLRQ K LQ DGGLWLRQWRWKHPHWKRGVRIVHUYLFHDXWKRUL]HGE\5XOH H  M )5&LY3

5 VHUYLFHPD\EHPDGHZLWKLQWKH8QLWHG6WDWHVE\ILUVWFODVVPDLOSRVWDJH SUHSDLGDVIROORZV   8SRQDGRPHVWLFRUIRUHLJQFRUSRUDWLRQRUXSRQDSDUWQHUVKLSRU RWKHUXQLQFRUSRUDWHGDVVRFLDWLRQE\PDLOLQJDFRS\RIWKHVXPPRQV DQGFRPSODLQWWRWKHDWWHQWLRQRIDQRIILFHUDPDQDJLQJRUJHQHUDO DJHQWRUWRDQ\RWKHUDJHQWDXWKRUL]HGE\DSSRLQWPHQWRUE\ODZWR UHFHLYH VHUYLFH RI SURFHVV DQG LI WKH DJHQW LV RQH DXWKRUL]HG E\ VWDWXWHWRUHFHLYHVHUYLFHDQGWKHVWDWXWHVRUHTXLUHVE\DOVRPDLOLQJ DFRS\WRWKHGHIHQGDQW

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

)HG5&LY3 K 

sRKQ6WRFNHUWKHSDUW\WRZKRVHDWWHQWLRQWKHFRS\RIWKHFRPSODLQWDQGVXPPRQV ZDVDGGUHVVHGLVQRWDQHPSOR\HHRI2SWLRQ2QH+HLVDOVRQRWDQRIILFHUPDQDJLQJRU JHQHUDODJHQWQRULVKHDXWKRUL]HGWRUHFHLYHVHUYLFHRISURFHVVRQEHKDOIRI2SWLRQ2QH sRKQ6WRFNHULVDQLQGHSHQGHQWFRQWUDFWRURI2SWLRQ2QH7KHUHIRUHLWLVFOHDUWKDWWKHUH ZDVQRSURSHUVHUYLFHRISURFHVVSXUVXDQWWRHLWKHU)HGHUDO5XOHRI%DQNUXSWF\3URFHGXUH RU)HGHUDO5XOHRI&LYLO3URFHGXUH K  )HGHUDO5XOHRI&LYLO3URFHGXUH H  SHUPLWVVHUYLFHRISURFHVVmSXUVXDQWWRWKH ODZRIWKHVWDWHLQZKLFKWKHGLVWULFWFRXUWLVORFDWHGRULQZKLFKVHUYLFHLVHIIHFWHGIRUWKH VHUYLFHRIDVXPPRQVXSRQWKHGHIHQGDQWLQDQDFWLRQEURXJKWLQWKHFRXUWVRIJHQHUDO MXULVGLFWLRQ RI WKH 6WDWHl  )HG 5 &LY 3  H    7KHUHIRUH ZH H[DPLQH 2KLR ODZ

6 EHFDXVHWKLVLVWKHORFDWLRQRIWKHGLVWULFWFRXUWLIQRWDOVRWKHVWDWHLQZKLFKWKHVHUYLFH ZDVHIIHFWHG 2KLR5XOHRI&LYLO3URFHGXUH ) JRYHUQVVHUYLFHRISURFHVVXSRQFRUSRUDWLRQV DQGVWDWHVWKDWVHUYLFHVKDOOEHPDGHDVIROORZV )  8SRQ D FRUSRUDWLRQ HLWKHU GRPHVWLF RU IRUHLJQ  E\ VHUYLQJ WKH DJHQW DXWKRUL]HGE\DSSRLQWPHQW RUE\ODZWRUHFHLYHVHUYLFHRISURFHVV RUE\ VHUYLQJWKHFRUSRUDWLRQE\FHUWLILHGRUH[SUHVVPDLODWDQ\RILWVXVXDOSODFHV RIEXVLQHVV RUE\VHUYLQJDQRIILFHURUDPDQDJLQJRUJHQHUDODJHQWRIWKH FRUSRUDWLRQ

2KLR5HY&RGH$QQ†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mDSSDUHQW DXWKRULW\lDQDO\VLVZLWKRXWH[SUHVVLQJLWLQWKRVHWHUPVEXWWKHSDUWLHVGLGQRWDGGUHVVWKH VHUYLFHLVVXHWRXVLQWKRVHWHUPV7KHUHLVDXWKRULW\LQWKLVFLUFXLWWRDUJXHDQDSSDUHQW DXWKRULW\RI0U6WRFNHULQWKLVFDVH)RUG0RWRU&UHGLW&RY:HDYHU)G WK &LU  EXWLWLVXQQHFHVVDU\IRUWKH3DQHOWRH[DPLQHWKDWDVSHFWVLQFHWKHSDUWLHVGLG QRWDGGUHVVLWDQGVLQFHZHRWKHUZLVHILQGWKHGHIDXOWMXGJPHQWLQDSSURSULDWH $QDGGLWLRQDOUHDVRQLIQRWSULQFLSDORQHIRURXUYDFDWLQJWKHGHIDXOWMXGJPHQWLV RXUFRQFHUQDERXWWKHMXULVGLFWLRQDOSRVWXUHRIWKLVSURFHHGLQJ7KHFRPSODLQWZDVILOHG

 %HFDXVH RXU FRQFOXVLRQV DUH RWKHUZLVH WKDW WKH GHIDXOW MXGJPHQW PXVW EH YDFDWHG ZH ZLOO QRW SXUVXH H[DPLQDWLRQ RI WKH ODZ RI &DOLIRUQLD ZKHUH VHUYLFH ZDV DUJXDEO\ HIIHFWHG 8QGHU WKDW VWDWHjV &RGH RI &LYLO 3URFHGXUH VHUYLFH PD\ EH REWDLQHG XSRQ DXWKRUL]HG RIILFHUV DQG DJHQWV RI FRUSRUDWLRQV E\ ILUVW FODVV RU DLU PDLO &DO &LY 3 ††    :HVW  

7 DJDLQVWVHYHUDOGHIHQGDQWVE\DSODLQWLIIZKRZDVQRWWKHGHEWRULQEDQNUXSWF\VHHNLQJ UHPHGLHV WKDW DUH QRW H[FOXVLYHO\ EDQNUXSWF\ UHPHGLHV  7KH FRPSODLQWjV MXULVGLFWLRQDO SDUDJUDSKPHUHO\VD\VWKHFRXUWKDVMXULVGLFWLRQXQGHU>SUHVXPDEO\LQWHQGHGWREH @ 86& ††  DQG  WKXV IDLOLQJ WR FRPSO\ ZLWK %DQNUXSWF\ 5XOH  D jV UHTXLUHPHQWWKDWWKHFRPSODLQWmFRQWDLQDVWDWHPHQWWKDWWKHSURFHHGLQJLVFRUHRUQRQ FRUH   l  :H XQGHUVWDQG WKDW EDQNUXSWF\ FRXUWV DUH RIWHQ GHSULYHG RI DQ HIIHFWLYH RSSRUWXQLW\WRGHWHUPLQHZKHWKHUDSURFHHGLQJLVFRUHZKHQWKHSDUWLHVGRQRWDGGUHVVWKDW LVVXH7KHEDQNUXSWF\MXGJHQHYHUWKHOHVVKDVDQLQGHSHQGHQWREOLJDWLRQWRGHWHUPLQH LIDSURFHHGLQJLVFRUH86&† F  7KLVREOLJDWLRQLVKLJKOLJKWHGLQSURFHHGLQJV LQYROYLQJGHIDXOWVFHQDULRV $QRWKHU3DQHODGGUHVVHGVXFKDVFHQDULRLQ,QUH%17HOHFRPP,QF%5 FRQFOXGLQJWKDWWKHEDQNUXSWF\FRXUWj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jVPRUWJDJHOLHQLVLQYDOLGRUWKDWLWLV OLPLWHG WR WKH RQHKDOI LQWHUHVW RZQHG E\ WKH SODLQWLIIjV VSRXVH ZKR LV WKH 'HEWRU LQ EDQNUXSWF\7KHGHIDXOWMXGJPHQWPHUHO\VD\VWKDWMXGJPHQWLVHQWHUHGmLQIDYRURIWKH 3ODLQWLII 'DQLHO s 6FKRHQOHLQ DQG DJDLQVW WKH 'HIHQGDQW 2SWLRQ 2QH 0RUWJDJH &RPSDQ\l:HGRQRWNQRZZKDWWKHMXGJPHQWPHDQV:KLFKDOWHUQDWLYHUHPHG\GRHV LWJUDQW"+RZZRXOGLWEHHQIRUFHDEOHLILWZHUHYDOLG"6LQFHLWLVREYLRXVWKDWWKHUHDO

8 GHIHQGLQJSDUW\LV2SWLRQ2QHjVWLWOHLQVXUHUZHZRQGHUZKDWHIIHFWWKHMXGJPHQWZRXOG KDYH XSRQ WKDW LQVXUHUjV OLDELOLW\  6XFK TXHVWLRQV LQ WKHPVHOYHV SRLQW WR WKH LQHIIHFWLYHQHVVRIWKHMXGJPHQW :HPDNHQRGHWHUPLQDWLRQDERXWWKHXQGHUO\LQJPHULWVRIWKLVSURFHHGLQJEXWGR REVHUYHWKDW2SWLRQ2QHH[SUHVVHVDPHULWRULRXVGHIHQVHRQHGHVHUYLQJRIDMXGLFLDO GHWHUPLQDWLRQUDWKHUWKDQDGHIDXOWIRUVOLJKWGHOD\LQDQVZHULQJWKHFRPSODLQW 7KHUHIRUHZH9$&$7(WKHRUGHUJUDQWLQJDGHIDXOWMXGJPHQWDQG5(0$1'WKLV SURFHHGLQJWRWKHEDQNUXSWF\FRXUWWRPDNHDGHWHUPLQDWLRQRQZKHWKHUWKLVSURFHHGLQJ LVFRUHDQGLIQRWZKHWKHUWKHSDUWLHV FRQVHQWWRWKHHQWU\RIDILQDOMXGJPHQWE\WKH EDQNUXSWF\FRXUW7KDWGHFLVLRQZLOOGHWHUPLQHZKHWKHURUKRZWKHEDQNUXSWF\FRXUWZLOO FRQVLGHUWKHPHULWV

9

Reference

Status
Unknown