Simmons-Harris v. Zelman
Simmons-Harris v. Zelman
Opinion
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
'25,6 6,00216+$55,6 ; 0$5/$ )5$1./,1 67(9(1 %(+55HY 68( *$7721 1RV 0$5< 0853+< 0,&+$(/ '(%26( &+(5</ '(%26( ! */(11 $/76&+8/' '(,'5$ 3($5621 3ODLQWLIIV$SSHOOHHV Y 686$1 7$9( =(/0$1 6XSHULQWHQGHQWRI3XEOLF ,QVWUXFWLRQ6WDWHRI2KLRHW DO 'HIHQGDQWV$SSHOODQWV 6(1(/ +(50$1 7$</25HW DO ,QWHUYHQRUV'HIHQGDQWV $SSHOODQWV
6LPPRQV+DUULVHWDO 1RV Y=HOPDQHWDO
+$11$ 3(5.,16 6&+22/ HWDO ,QWHYHQRUV'HIHQGDQWV $SSHOODQWV 1
$SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH1RUWKHUQ'LVWULFWRI2KLRDW&OHYHODQG 1RV n6RORPRQ2OLYHUsU'LVWULFW sXGJH $UJXHG sXQH 'HFLGHGDQG)LOHG 'HFHPEHU %HIRUH 5<$16,/(5DQG&/$<&LUFXLWsXGJHV BBBBBBBBBBBBBBBBB &2816(/ $5*8(' &OLQW %ROLFN ,167,787( )25 s867,&( :DVKLQJWRQ '& (GZDUG % )ROH\ 2)),&( 2) 7+( $77251(<*(1(5$/2)2+,2&ROXPEXV2KLR'DYLG s<RXQJ648,5(6$1'(56 '(036(<&ROXPEXV 2KLR IRU $SSHOODQWV 5REHUW + &KDQLQ %5('+2)) .$,6(5:DVKLQJWRQ'&0DUYLQ()UDQNHO.5$0(5 /(9,11$)7$/,6 )5$1.(/1HZ<RUN1HZ<RUN IRU$SSHOOHHV21%5,() &OLQW%ROLFN0DWWKHZ%HUU\ ,167,787( )25 s867,&( :DVKLQJWRQ '& 'DYLG & 7U\RQ 3257(5 :5,*+7 0255,6 $57+85 &OHYHODQG 2KLR (GZDUG % )ROH\ .DUHQ / /D]RULVKDN 5RJHU ) &DUUROO sDPHV * 7DVVLH 0DU\ /\QQ 5HDGH\ 2)),&( 2) 7+( $77251(< *(1(5$/ &ROXPEXV 2KLR 'DYLG s <RXQJ 0LFKDHO 5 5HHG 648,5( 6$1'(56 '(036(<&ROXPEXV2KLRIRU$SSHOODQWV 5REHUW + &KDQLQ $QGUHZ ' 5RWK %5('+2)) .$,6(5:DVKLQJWRQ'&'DYLG*/DWDQLFN&/233(57 32570$16$87(5/$7$1,&. )2/(<&ROXPEXV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO
2KLR(OOLRW00LQFEHUJsXGLWK(6FKDHIIHU3(23/()25 7+( $0(5,&$1 :$< :DVKLQJWRQ '& 5D\PRQG 9DVYDUL$&/82)2+,2)281'$7,21,1&&OHYHODQG 2KLR 6WHYHQ . *UHHQ $0(5,&$16 81,7(' )25 6(3$5$7,21 2) &+85&+ $1' 67$7( :DVKLQJWRQ '&0DUYLQ()UDQNHO.5$0(5/(9,11$)7$/,6 )5$1.(/1HZ<RUN1HZ<RUNIRU$SSHOOHHV:LOOLDP ( 7KUR 2)),&( 2) 7+( $77251(< *(1(5$/ 5LFKPRQG 9LUJLQLD 0 5HHG +RSSHU 3$&,),& /(*$/ )281'$7,21 6DFUDPHQWR &DOLIRUQLD 3DXO &OHPHQW .,1* 63$/',1* :DVKLQJWRQ '& 9LFWRULD : 1L 5(%28/ 0$&0855$< +(:,77 0$<1$5' .5,672/ 1HZ <RUN 1HZ <RUN sRVKXD 5 &RKHQ .$+50$1 s$&.621 .5$17= &OHYHODQG 2KLR 1LFKRODV $ 3LWWQHU %5,&.(5 (&./(5 &ROXPEXV 2KLRIRU$PLFL&XULDH &/$< s GHOLYHUHG WKH RSLQLRQ RI WKH FRXUW LQ ZKLFK 6,/(5sMRLQHG5<$1s GHOLYHUHGDVHSDUDWH RSLQLRQFRQFXUULQJLQSDUWDQGGLVVHQWLQJLQSDUW BBBBBBBBBBBBBBBBB 23,1,21 BBBBBBBBBBBBBBBBB &/$< &LUFXLW sXGJH 'HIHQGDQWV DQG ,QWHUYHQRUV 'U 6XVDQ7DYH=HOPDQHWDO 6HQHO7D\ORUHWDO DQG+DQQD 3HUNLQV6FKRROHWDODSSHDOIURPWKHRUGHUHQWHUHGE\WKH 8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH1RUWKHUQ'LVWULFWRI2KLR HQMRLQLQJ RQ VXPPDU\ MXGJPHQW WKH 2KLR 3LORW 3URMHFW 6FKRODUVKLS 3URJUDP RQ WKH JURXQG WKDW LW YLRODWHV WKH (VWDEOLVKPHQW &ODXVH RI WKH )LUVW $PHQGPHQW )RU WKH IROORZLQJUHDVRQVZH$)),50 , ,Q 2KLRjV*HQHUDO$VVHPEO\DGRSWHGWKH2KLR3LORW 3URMHFW 6FKRODUVKLS 3URJUDP mYRXFKHU SURJUDPl RU mWKH SURJUDPl LQ UHVSRQVH WR DQ RUGHU E\ WKH 8QLWHG 6WDWHV 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
'LVWULFW&RXUWWKDWSODFHGWKH&OHYHODQG6FKRRO'LVWULFWXQGHU PLQRULW\FKLOGUHQLQ&OHYHODQGWRUHWXUQWRWKHLQGLVSXWDEO\ WKH GLUHFW PDQDJHPHQW DQG VXSHUYLVLRQ RI WKH 6WDWH IDLOHG&OHYHODQGSXEOLFVFKRROVIURPZKLFKLQPDQ\FDVHV 6XSHULQWHQGHQWRI3XEOLF,QVWUXFWLRQGXHWRPLVPDQDJHPHQW WKH\HVFDSHGDVORQJDVWKUHH\HDUVDJRnLVDQH[HUFLVHLQUDZ E\WKHORFDOVFKRROERDUG7KHYRXFKHUSURJUDPFRYHUVDQ\ MXGLFLDOSRZHUKDYLQJQREDVLVLQWKH)LUVW$PHQGPHQWRULQ VWDWHVFKRROGLVWULFWWKDWKDVEHHQWKHVXEMHFWRIDIHGHUDOFRXUW WKH6XSUHPH&RXUWjV(VWDEOLVKPHQW&ODXVHMXULVSUXGHQFH RUGHUmUHTXLULQJVXSHUYLVLRQDQGRSHUDWLRQDOPDQDJHPHQWRI WKH GLVWULFW E\ WKH VWDWH VXSHULQWHQGHQWl 2KLR 5HY &RGH ,QDOOHYHQWVDPDWWHURIWKLVJUDYLW\DQGRIVXFKLPPHQVH $ 7KH SURJUDP SURYLGHV VFKRODUVKLSV WR LPSRUWDQFH WR WKH &OHYHODQG FKLOGUHQ ZKR DUH GLUHFWO\ FKLOGUHQ UHVLGLQJ ZLWKLQ WKH DSSOLFDEOH GLVWULFW LQ JUDGHV DIIHFWHGDQGLQGHHGWRWKHQDWLRQVKRXOGQRWEHGHWHUPLQHG NLQGHUJDUWHQ WKURXJK HLJKWK JUDGH 6HH 2KLR 5HY &RGH E\MXVWWZRMXGJHVRIWKLVFRXUW7KHUHIRUH,UHVSHFWIXOO\XUJH & 7KHSURJUDPJLYHVmSUHIHUHQFHWRVWXGHQWV P\FROOHDJXHVWRWDNHWKLVFDVHIRUHQEDQFUHYLHZLIWKH\DUH IURP ORZLQFRPH IDPLOLHVl GHILQLQJ WKHP DV WKRVH ZKRVH DVNHGWRGRVRDQGGHFLGHWKHYLWDOO\LPSRUWDQW(VWDEOLVKPHQW IDPLOLHVjLQFRPHLVOHVVWKDQRIWKHSRYHUW\OLQH6HH &ODXVHLVVXHLWSUHVHQWVDIWHUJLYLQJFDUHIXOFRQVLGHUDWLRQWR 2KLR 5HY &RGH $ m6FKRODUVKLSV PD\ EH WKH IXOO SDQRSO\ RI 6XSUHPH &RXUW (VWDEOLVKPHQW &ODXVH DZDUGHGWRVWXGHQWVZKRDUHQRWIURPORZLQFRPHIDPLOLHV MXULVSUXGHQFHDQGQRWMXVWRQHLQDSSRVLWH FDVH RQO\LIDOOVWXGHQWVIURPORZLQFRPHIDPLOLHVKDYHEHHQJLYHQ ILUVWFRQVLGHUDWLRQIRUSODFHPHQWl&OHYHODQG6FKRODUVKLSDQG $VWRZKDWLVZULWWHQLQSDUW,9RIWKHPDMRULW\RSLQLRQ, 7XWRULQJ3URJUDP$GPLQLVWUDWLRQ3URFHGXUHV0DQXDO KDYHQRGLVDJUHHPHQW s$DW HPSKDVLVRULJLQDO 2YHUVL[W\SHUFHQWRIWKH FKLOGUHQ UHFHLYLQJ VFKRODUVKLSV LQ WKH SURJUDP DUH IURP IDPLOLHVZLWKLQFRPHVDWRUEHORZWKHSRYHUW\OLQH 7KHYRXFKHUSURJUDPSD\VVFKRODUVKLSVDFFRUGLQJWRIDPLO\ LQFRPH7KHSURJUDPUHTXLUHVSDUWLFLSDWLQJSULYDWHVFKRROV WRFDSWXLWLRQDWSHUVWXGHQWSHU\HDUDQGSD\V RI ZKDWHYHUWXLWLRQWKHVFKRRODFWXDOO\FKDUJHVIRUORZLQFRPH IDPLOLHV IRURWKHUIDPLOLHVWKH6WDWHSD\VRIWKHVFKRROj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
LQGRFWULQDWLRQRI&OHYHODQGVFKRROFKLOGUHQRUIRUHFORVHVLW 6WDWHjVHGXFDWLRQDOVWDQGDUGVPD\SDUWLFLSDWH6HH2KLR5HY IURPGHILQLQJWKHUHFLSLHQWVRIWKHYRXFKHUVE\UHIHUHQFHWR &RGH $ DQG 6FKRROV DUH UHTXLUHG WR UHOLJLRQ WKDQ WKURXJK WKH UDQJH RI IUHH DQG LQGHSHQGHQW IROORZWKHSURJUDPj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mUHFHLYHVFKRODUVKLS FKRLFH,WGRHVVRE\UHDFKLQJEDFNWRD 6XSUHPH&RXUW SD\PHQWV RQ EHKDOI RI SDUHQWVl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jVGLVFODLPHUWKDWmFRXUWVGRQRWPDNH RI WKHVH VFKRROV UHIOHFW WKDW PRVW EHOLHYH LQ LQWHUZHDYLQJ HGXFDWLRQDOSROLF\ ZHGRQRWVLWLQRPQLSRWHQWMXGJPHQWDV UHOLJLRXVEHOLHIVZLWKVHFXODUVXEMHFWV7KHVHFWDULDQVFKRROV WRWKHHIILFDF\RIRQHVFKHPHRUSURJUDPYHUVXVDQRWKHUlVOLS DOVR IROORZ UHOLJLRXV JXLGHOLQHV LQFOXGLQJ LQVWUXFWLRQ LQ RSDW WKHPDMRULW\RSLQLRQLVQRWKLQJPRUHWKDQDQDWWDFN UHOLJLRQ DQG PDQGDWHG SDUWLFLSDWLRQ LQ UHOLJLRXV VHUYLFHV XSRQWKHSKLORVRSKLFDODQGFXOWXUDOGHVLUDELOLW\RISXEOLFO\ LQWHUZHDYLQJRI&KULVWLDQGRFWULQHVZLWKVFLHQFHDQGODQJXDJH IXQGHG HGXFDWLRQDO FKRLFH IRU WKH SRRU 7KLV FDVH DQG LWV DUWV FODVVHV UHTXLULQJ WKDW mDOO OHDUQLQJ WDNH SODFH LQ DQ UHVXOWnVHQWHQFLQJ QHDUO\ SRYHUW\OHYHO PRVWO\ DWPRVSKHUHRIUHOLJLRXVLGHDOVl6W9LQFHQWGH3DXO6FKRRO 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
3DUHQW+DQGERRN DQGGHVLJQLQJHGXFDWLRQDO LJQRULQJ WKH UHFHQW 6XSUHPH &RXUW FDVHV HPSKDVL]LQJ WKH VFKRODUVKLS LQ RUGHU mWR PDNH IDLWK EHFRPH OLYLQJ LPSRUWDQFHRIJHQXLQHO\LQGHSHQGHQWDQGSULYDWHFKRLFHVDQG FRQVFLRXV DQG DFWLYH WKURXJK WKH OLJKW RI LQVWUXFWLRQ WKHGLVWLQFWLRQEHWZHHQWUXHSULYDWHFKRLFHSURJUDPVDQGSHU UHOLJLRXVWUXWKVDQGYDOXHVSHUPHDWHWKHZKROHDWPRVSKHUHRI FDSLWDVFKRRODLGSURJUDPVWKHPDMRULW\KDVIDLOHGWRFRQGXFW WKHVFKRROl6DLQW5RFFR6FKRRO3DUHQW6WXGHQW+DQGERRN D mPHDQLQJIXOl LQGHSHQGHQW DQDO\VLV RI WKH YRXFKHU 2WKHUVHFWDULDQVFKRROVLQWKHYRXFKHUSURJUDP SURJUDPjVFRQVWLWXWLRQDOLW\ EHOLHYHWKDWmWKHRQHFDUGLQDOREMHFWLYHRIHGXFDWLRQWRZKLFK DOORWKHUVSRLQWLVWRGHYHORSGHYRWLRQWR*RGDVRXU&UHDWRU ,,, 5HGHHPHUDQG6DQFWLILHUl6DLQWsRKQ1RWWLQJKDP/XWKHUDQ 6FKRRO 3DUHQW +DQGERRN DQG WR UHTXLUH ,QVXPPDU\DQGWRUHSHDWDFFRUGLQJWRWKH6XSUHPH&RXUW VWXGHQWVWRmSOHGJHDOOHJLDQFHWRWKH&KULVWLDQIODJDQGWRWKH D WUXH SULYDWHFKRLFH SURJUDP GRHV QRW UHVXOW LQ 6DYLRUIRUZKRVH.LQJGRPLWVWDQGV2QH6DYLRUFUXFLILHG mJRYHUQPHQWDO LQGRFWULQDWLRQl VR ORQJ DV WKH SDWK RI WKH ULVHQ DQG FRPLQJ DJDLQ ZLWK OLIH DQG OLEHUW\ IRU DOO ZKR JRYHUQPHQWDLGLVGHWHUPLQHGE\WKHmµJHQXLQHO\LQGHSHQGHQW EHOLHYHl &DOYDU\ &HQWHU $FDGHP\ 3DUHQW6WXGHQW DQGSULYDWHFKRLFH>@jlRIWKHDLGUHFLSLHQWV6HH0LWFKHOO +DQGERRN 6&WDW FLWDWLRQRPLWWHG LGDW 2j&RQQRUs FRQFXUULQJ $JRVWLQL86DW =REUHVW 86DW ,Q SULRU OLWLJDWLRQ 'RULV 6LPPRQV+DUULV RQH RI WKH :LWWHUV86DW 0XHOOHU86DW 3ODLQWLIIVKHUHLQEURXJKWDVWDWHFRXUWODZVXLWFKDOOHQJLQJWKH FRQVWLWXWLRQDOLW\ RI WKH YRXFKHU SURJUDP XQGHU PXOWLSOH SURYLVLRQV RI WKH 2KLR &RQVWLWXWLRQ DQG XQGHU WKH 2KLRjVYRXFKHUSURJUDPHDVLO\PHHWVWKLVWHVW%HIRUHD (VWDEOLVKPHQW&ODXVHRIWKH8QLWHG6WDWHV&RQVWLWXWLRQ2Q YRXFKHULVmVSHQWlDWDUHOLJLRXVVFKRRO&OHYHODQGSDUHQWV 0D\ WKH2KLR6XSUHPH&RXUWLVVXHGDMXGJPHQWLQ PXVWLQGHSHQGHQWO\PDNHWZRLPSRUWDQWFKRLFHV IDYRURI3ODLQWLIIVKROGLQJWKDWWKH YRXFKHUSURJUDPKDG EHHQHQDFWHGLQYLRODWLRQRIWKHRQHVXEMHFWUXOHRIWKH2KLR )LUVW WKH\ PXVW GHFLGH ZKHWKHU WKHLU FKLOG ZLOO WDNH &RQVWLWXWLRQDQGmPXVWEHVWULFNHQlIURPWKH2KLRVWDWXWH DGYDQWDJHRIWKHYRXFKHUDOWHUQDWLYHVDWDOORUVHOHFWDQRWKHU ERRNV6HH6LPPRQV+DUULVY*RII1(G RSWLRQ VXFK DV UHPDLQLQJ LQ WKH &OHYHODQG VFKRROV 2KLR +RZHYHU D PDMRULW\ RI WKH MXVWLFHV UHMHFWHG XQGHUWDNLQJKRPHVFKRROLQJRUDWWHQGLQJRQHRI&OHYHODQGjV 3ODLQWLIIVjFODLPVWKDWWKHSURJUDPYLRODWHGWKH(VWDEOLVKPHQW ZHOO UHJDUGHG FRPPXQLW\ VFKRROV 6HFRQG LI D FKLOGjV &ODXVH,GDW 7KRVHMXVWLFHVUHDVRQHGWKDW SDUHQWVFKRRVHWKHYRXFKHURSWLRQWKH\PXVWPDNHWKHIXUWKHU m>W@KH1\TXLVWKROGLQJ>KDGEHHQ@XQGHUPLQHGlE\VXEVHTXHQW mJHQXLQHO\LQGHSHQGHQWDQGSULYDWHFKRLFH>@lZKHWKHUWRXVH FDVHV DQG ZDV WKXV QR ORQJHU JRRG ODZ ,G DW $ WKHYRXFKHUDWDSULYDWHVFKRROQRQUHOLJLRXVRUUHOLJLRXVRU FRQFXUULQJRSLQLRQQRWHGWKDWm>Z@LWKUHJDUGWRWKHUHVWRIWKH IRU VSHFLDO WXWRULQJ LQ WKH &OHYHODQG SXEOLF VFKRROV 7KH PDMRULW\RSLQLRQ>WKHVHFWLRQQRWGHDOLQJZLWKWKHRQHVXEMHFW YRXFKHUXVH FKRLFH RI DWWHQGLQJ D SXEOLF VFKRRO LQ D UXOH@ , ILQG D QXPEHU RI WKH RWKHU DVVHUWLRQV E\ WKH QHLJKERULQJGLVWULFWLVQRWSUHVHQWO\DYDLODEOHWR&OHYHODQG PDMRULW\WREHDGYLVRU\LQQDWXUHl,GDW 'RXJODVs SDUHQWV EHFDXVH QR QHLJKERULQJ GLVWULFW KDV RSWHG LQWR WKH MRLQHG E\ 5HVQLFN DQG 6ZHHQH\ ss FRQFXUULQJ LQ WKH YRXFKHUSURJUDP MXGJPHQWRQO\ 6LQFHWKLVFDVHWKH2KLR/HJLVODWXUHKDVUH HQDFWHGWKHYRXFKHUSURJUDPLQDPDQQHUUHPHG\LQJWKHRQH ,WLVGLIILFXOWWRLPDJLQHKRZ D YRXFKHUVWDWXWHFRXOGEH VXEMHFWSUREOHP KRZHYHUWKH SURJUDPLVLQDOOUHOHYDQW FUDIWHG WKDW PRUH FOHDUO\ DQG GHFLVLYHO\ IRUHFORVHV WKH JRYHUQPHQW IURP KDYLQJ DQ\ UROH LQ WKH UHOLJLRXV 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
RUQRWsXVWLFH2j&RQQRUFRQFOXGHGWKDWWUXHSULYDWHFKRLFH DVSHFWVWKHVDPHDVWKHRULJLQDOSLORWVFKRODUVKLSSURJUDP SURJUDPVZHUHPRUHOLNHO\WRVXUYLYH(VWDEOLVKPHQW&ODXVH HQDFWHGE\WKH/HJLVODWXUHLQ FKDOOHQJHVHYHQWKRXJKJRYHUQPHQWDLGZDVGLYHUWHGWRWKH UHOLJLRXV VFKRROV EHFDXVH mµ>D@Q\ DLG WKDW XOWLPDWHO\ 2QsXO\ 6LPPRQV+DUULVWKHSDUHQWRIDPLQRU IORZVWRUHOLJLRXVLQVWLWXWLRQVGRHVVRRQO\DVDUHVXOWRIWKH FKLOGHQUROOHGLQWKH&OHYHODQG&LW\6FKRRO'LVWULFWIRUWKH JHQXLQHO\LQGHSHQGHQWDQGSULYDWHFKRLFHVRIDLGUHFLSLHQWVjl VFKRRO \HDU 0DUOD )UDQNOLQ D WHDFKHU LQ WKH ,GDW TXRWLQJ:LWWHUV86DW 2j&RQQRUs /RUDLQ&LW\6FKRRO'LVWULFW DQG6WHYHQ%HKUSDVWRURI2XU FRQFXUULQJ 6DYLRU1XHVWUR6DOYDGR&KXUFKLQ/RUDLQ2KLRILOHGVXLWLQ &DVH 1R FY DJDLQVW 'HIHQGDQW 'U 6XVDQ 7DYH 7UXHSULYDWHFKRLFHSURJUDPVE\WKHLUYHU\QDWXUHFDQQRW =HOPDQLQKHURIILFLDOFDSDFLW\DV6XSHULQWHQGHQWRI3XEOLF KDYH WKH IRUELGGHQ mSULPDU\ HIIHFWl RI WKH JRYHUQPHQW ,QVWUXFWLRQIRUWKH2KLR'HSDUWPHQWRI(GXFDWLRQVHHNLQJWR mDGYDQFLQJUHOLJLRQlEHFDXVHWKHDLGLVJLYHQGLUHFWO\WRWKH HQMRLQDSRUWLRQRIWKHSURJUDPRQWKHJURXQGWKDWLWYLRODWHG EHQHILFLDU\ DQG WKDW VWXGHQW RU SDUHQW UHWDLQV FRQWURO RYHU WKH(VWDEOLVKPHQW&ODXVHRIWKH)LUVW$PHQGPHQW2QsXO\ ZKHUHWKHDLGZLOOEHDSSOLHGm7KHIDFWWKDWDLGIORZVWRWKH 6XH*DWWRQFKDLURI&LWL]HQV$JDLQVW9RXFKHUV UHOLJLRXVVFKRRODQGLVXVHGIRUWKHDGYDQFHPHQWRIUHOLJLRQ 0DU\ 0XUSK\ D WHDFKHU LQ WKH &OHYHODQG &LW\ 6FKRRO LV WKHUHIRUH ZKROO\ GHSHQGHQW RQ WKH VWXGHQWjV SULYDWH 'LVWULFW 0LFKDHO'HERVHDSDVWRULQ&X\DKRJD&RXQW\2KLR GHFLVLRQl,GDW )XUWKHUPRUHZKHQJRYHUQPHQWDLG &KHU\O 'HERVH DQG *OHQQ $OWVFKXOG 2KLR 7D[SD\HUV DQG IORZV WR D UHOLJLRXV VFKRRO DV D UHVXOW RI mLQGHSHQGHQW 'HLGUD3HDUVRQWKHSDUHQWRIDFKLOGHQUROOHGLQWKH&OHYHODQG GHFLVLRQVPDGHE\QXPHURXVLQGLYLGXDOV>Q@RUHDVRQDEOH &LW\ 6FKRRO 'LVWULFW ILOHG VXLW LQ &DVH 1R FY REVHUYHULVOLNHO\WRGUDZIURPWKHIDFWVDQLQIHUHQFHWKDW DJDLQVW'HIHQGDQWV'U6XVDQ7DYH=HOPDQLQKHURIILFLDO WKH6WDWHLWVHOILVHQGRUVLQJDUHOLJLRXVSUDFWLFHRUEHOLHIl,G FDSDFLW\ DV 6XSHULQWHQGHQW WKH 6WDWH RI 2KLR WKURXJK LWV LQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQRPLWWHG *HQHUDO$VVHPEO\*RYHUQRUDQGRWKHUDJHQWV DQG6DXQGUD %HUU\LQKHURIILFLDOFDSDFLW\DV3URJUDP$GPLQLVWUDWRURIWKH 7KH PDMRULW\ RSLQLRQ LQ WKLV FDVH FODLPV WKH YRXFKHU 2KLR3LORW6FKRODUVKLS3URJUDPVHHNLQJWKHVDPHLQMXQFWLYH SURJUDP mLQYROYHV WKH JUDQW RI VWDWH DLG GLUHFWO\ DQG UHOLHIDVLQ&DVH1R FY SUHGRPLQDQWO\WRWKHFRIIHUVRIWKHSULYDWHUHOLJLRXVVFKRROVl 6OLS RS DW )XUWKHUPRUH DFFRUGLQJ WR WKH PDMRULW\ 3URSRVHG,QWHUYHQRUV6HQHO7D\ORUsRKQQLHWWD0F*UDG\ m>W@KHUHLVQRQHXWUDODLGZKHQWKDWDLGSULQFLSDOO\IORZVWR &KULVWLQH6XPD$UNHOD:LQVWRQDQG$P\+XGRFNRQWKHLU UHOLJLRXVLQVWLWXWLRQVl,GDW7KHPDMRULW\LJQRUHV RZQ EHKDOI DQG DV QDWXUDO JXDUGLDQV RI WKHLU UHVSHFWLYH WKDWWKLVYLHZKDVEHHQIODWRXWUHMHFWHGE\WKH6XSUHPH&RXUW FKLOGUHQILOHGDQDQVZHUWR6LPPRQV+DUULVjFRPSODLQWRQ LQWKHGHFLVLRQV,KDYHGLVFXVVHGZKLFKPDNHLWYHU\FOHDUWKDW sXO\ 3URSRVHG,QWHUYHQRUV+DQQD3HUNLQV6FKRRO WKHQXPEHURIUHOLJLRXVVFKRROVSDUWLFLSDWLQJLQWKHYRXFKHU ,Y\ &KDPEHUV &DURO /DPEHUW 2XU /DG\ RI 3HDFH 6FKRRO SURJUDPWKHWKRURXJKQHVVRIWKHUHOLJLRXVWUDLQLQJWKDWRFFXUV :HVWSDUN /XWKHUDQ 6FKRRO $VVRFLDWLRQ ,QF /XWKHUDQ WKHUHDQGWKHXVHWRZKLFKVXFKVFKRROVPLJKWSXWWKHIXQGV 0HPRULDO$VVRFLDWLRQRI&OHYHODQGDQG'HORUHVsRQHVILOHG DUHDOOWRWDOO\LUUHOHYDQWWRWKHTXHVWLRQRIWKHJRYHUQPHQWjV DQDQVZHUWR6LPPRQV+DUULVjFRPSODLQWRQ$XJXVW QHXWUDOLW\ZKHQWKHJRYHUQPHQWDLGUHDFKHVDUHOLJLRXVVFKRRO RQO\DVDUHVXOWRIWKHUHFLSLHQWjVmµJHQXLQHO\LQGHSHQGHQWDQG 2Q$XJXVW WKHGLVWULFWFRXUWKHOGDSUHOLPLQDU\ SULYDWHFKRLFH>@jl6HH0LWFKHOO6&WDW FLWDWLRQ LQMXQFWLRQ KHDULQJ LQ ERWK FDVHV DQG RQ $XJXVW RPLWWHG =REUHVW 86DW :LWWHUV86DW%\ JUDQWHG3ODLQWLIIVWKHLQMXQFWLYHUHOLHIVRXJKW,QWKHVDPH 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
RUGHUWKHGLVWULFWFRXUWFRQVROLGDWHGWKHWZRFDVHVDQGIRXQG WKHJRYHUQPHQWjVUROHLQWKHSURJUDPLVQHXWUDO1HXWUDOLW\ WKDWWKH2KLR6XSUHPH&RXUWjVGHFLVLRQLQ6LPPRQVY*RII H[LVWV LI WKH mJRYHUQPHQWDO DLG WKDW JRHV WR D UHOLJLRXV 1(G 2KLR GLG QRW SUHFOXGH IHGHUDO LQVWLWXWLRQ GRHV VR µRQO\ DV D UHVXOW RI WKH JHQXLQHO\ FRQVLGHUDWLRQRIWKHFRQVWLWXWLRQDOFKDOOHQJHWRWKHYRXFKHU LQGHSHQGHQWDQGSULYDWHFKRLFHVRILQGLYLGXDOVjl,G TXRWLQJ SURJUDPEHFDXVHWKH2KLRFRXUWjVGHFLVLRQUHVWHGRQDVWDWH $JRVWLQL 86 DW sXVWLFH 7KRPDV ZURWH WKDW JURXQGZKLFKLQGHSHQGHQWO\VXSSRUWHGLWVUHVROXWLRQRIWKH mVLPSO\EHFDXVHDQDLGSURJUDPRIIHUVSULYDWHVFKRROVDQG FDVH 7KHUHDIWHU RQ $XJXVW WKH GLVWULFW FRXUW WKXVUHOLJLRXVVFKRROVDEHQHILWWKDWWKH\GLGQRWSUHYLRXVO\ JUDQWHG LQ SDUW 'HIHQGDQWVj PRWLRQ IRU D VWD\ RI WKH UHFHLYHGRHVQRWPHDQWKDWWKHSURJUDPE\UHGXFLQJWKHFRVW SUHOLPLQDU\LQMXQFWLRQ RIVHFXULQJDUHOLJLRXVHGXFDWLRQFUHDWHVDQµLQFHQWLYHj IRUSDUHQWVWRFKRRVHVXFKDQHGXFDWLRQIRUWKHLUFKLOGUHQl 2Q$XJXVW WKHVDPHGD\WKDWWKHGLVWULFWFRXUW ,GDW)LQDOO\sXVWLFH7KRPDVFRQFOXGHGWKDWWKH JUDQWHG3ODLQWLIIVjPRWLRQIRUDSUHOLPLQDU\ LQMXQFWLRQWKH SRVVLELOLW\ WKDW JRYHUQPHQW DLG PLJKW EH GLYHUWHG E\ D 6WDWH DQG WKH WZR LQWHUYHQLQJ 'HIHQGDQWV DSSHDOHG WKDW VHFWDULDQVFKRROWRZDUGVVRPHUHOLJLRXVHQGLVLUUHOHYDQWIRU GHFLVLRQWRWKLV&RXUW$IWHUWKHGLVWULFWFRXUWjV$XJXVW (VWDEOLVKPHQW &ODXVH SXUSRVHV LI WKH JRYHUQPHQW DLG RUGHU JUDQWLQJ D OLPLWHG VWD\ RI LWV SUHOLPLQDU\ SURJUDPSURYLGHVWKHDLGLQDQHXWUDOPDQQHU6HHLGDW LQMXQFWLRQDOO'HIHQGDQWVILOHGUHYLVHGEULHIVZLWKWKLV&RXUW DSSHDOLQJWKHSUHOLPLQDU\LQMXQFWLRQZLWKUHJDUGWRVWXGHQWV ,QKHUFRQFXUULQJRSLQLRQLQ0LWFKHOOsXVWLFH2j&RQQRU ZKRZHUHQHZWRWKHYRXFKHUSURJUDPLHWKHSRUWLRQRI MRLQHG E\ sXVWLFH %UH\HU DJUHHG WKDW mQHXWUDOLW\ LV DQ WKHSUHOLPLQDU\LQMXQFWLRQQRWVWD\HGE\WKHGLVWULFWFRXUWjV LPSRUWDQW UHDVRQ IRU XSKROGLQJ JRYHUQPHQWDLG SURJUDPVl $XJXVW RUGHU:KLOHWKRVHDSSHDOVZHUHSHQGLQJ DJDLQVW(VWDEOLVKPHQW&ODXVHFKDOOHQJHVEXWVKHUHLWHUDWHG WKH 6WDWH ILOHG D PRWLRQ IRU D VWD\ RI WKH SUHOLPLQDU\ WKDW LW ZDV MXVW RQH IDFWRU WR FRQVLGHU LQ FKDOOHQJHV WR LQMXQFWLRQZLWKWKH8QLWHG6WDWHV6XSUHPH&RXUWZKLFKWKH JRYHUQPHQW VFKRRODLG SURJUDPV DQG QRW D mIDFWRU >RI@ 6XSUHPH &RXUW JUDQWHG E\ D YRWH RI RQ 1RYHPEHU VLQJXODU LPSRUWDQFHl ,G DW 2j&RQQRU s SHQGLQJ WKLV &RXUWjV ILQDO GLVSRVLWLRQ RI WKH HQWLUH FRQFXUULQJ (YHQsXVWLFH6RXWHUjVGLVVHQWLQJRSLQLRQZKLFK DSSHDO 6HH 6LPPRQV+DUULV Y =HOPDQ 6 &W sXVWLFHV 6WHYHQV DQG *LQVEXUJ MRLQHG FRQFHGHG WKDW WKH 7KHUHDIWHUWKLV&RXUWHQWHUHGDQRUGHURQ1RYHPEHU (VWDEOLVKPHQW&ODXVHSUHVHQWVQRREVWDFOHWRJRYHUQPHQWDLG FRQFOXGLQJ WKDW WKH 6XSUHPH &RXUWjV GHFLVLRQ LILWUHDFKHVVHFWDULDQVFKRROVDVDUHVXOWRIWKHSULYDWHFKRLFHV JUDQWLQJ WKH 6WDWHjV PRWLRQ IRU D VWD\ UHQGHUHG PRRW RIDLGUHFLSLHQWV6HHLGDW 6RXWHUsGLVVHQWLQJ 'HIHQGDQWVjSHQGLQJPRWLRQVIRUDVWD\LQWKLV&RXUW7KH FDVHSURFHHGHGLQWKHGLVWULFWFRXUWRQDQH[SHGLWHGEDVLV sXVWLFH2j&RQQRUHPSKDVL]HGWKHGLVWLQFWLRQEHWZHHQmWUXH SULYDWHFKRLFH SURJUDPVl DQG mSHUFDSLWD VFKRRODLG 2Q 2FWREHU DOO SDUWLHV VWLSXODWHG WKDW WKH SURJUDPVl,GDW 2j&RQQRUsFRQFXUULQJ 7KH2KLR KDQGERRNVPLVVLRQVWDWHPHQWVDQGEURFKXUHVRIWKHVFKRROV YRXFKHUSURJUDPOLNHWKHSURJUDPVLQ=REUHVWDQG:LWWHUVLV SDUWLFLSDWLQJ LQ WKH &OHYHODQG VFKRODUVKLS SURJUDP DUH DWUXHSULYDWHFKRLFHSURJUDPEHFDXVHWKHDLGLVJLYHQGLUHFWO\ mDXWKHQWLFVSHDNIRUWKHPVHOYHVKDYHEHHQPDGHDYDLODEOHWR WRHOLJLEOHLQGLYLGXDOVZKRLQWXUQGHFLGHZKHUHWRVSHQGLW WKHSDUHQWVRIWKHVFKRODUVKLSVWXGHQWVDQGDUHQRWIDOVHRU 7KH SURJUDPV FRQVLGHUHG LQ 0LWFKHOO DQG $JRVWLQL ZHUH PLVOHDGLQJ 6RPH RI WKHVH GRFXPHQWV KRZHYHU PD\ QRW H[DPSOHVRISHUFDSLWDVFKRRODLGSURJUDPVEHFDXVHDLGZDV DFFXUDWHO\UHIOHFWDGPLVVLRQVWDQGDUGVWKDWKDGWREHUHYLVHGl GLVWULEXWHGEDVHGRQWKHQXPEHURIVWXGHQWVDWWHQGLQJHDFK VFKRROUHJDUGOHVVRIZKHWKHUWKHVFKRROZDVUHOLJLRXVO\EDVHG 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
SDUWLFLSDWLQJSULYDWHVFKRROVDUHZLOOLQJWRDFFHSWWKHYRXFKHU 3ODLQWLIIV DQG 'HIHQGDQWV ERWK ILOHG PRWLRQV IRU VXPPDU\ DVPHHWLQJDSRUWLRQRIWKHDFWXDOHGXFDWLRQDOFRVWVIRUWKHVH MXGJPHQWRQ1RYHPEHU FKLOGUHQDQGDUHZLOOLQJWRDEVRUEWKHGLIIHUHQWLDOFRVWDVSDUW RIWKHLUSURERQRVHUYLFHLQ&OHYHODQGWRKHOSVDYHDVPDQ\RI 2Q1RYHPEHU WKHGLVWULFWFRXUWGHQLHG,QWHUYHQRU WKHVHFKLOGUHQDVSRVVLEOHIURPWKHGLVDVWURXVFRQVHTXHQFHV 7D\ORUjVPRWLRQWRKDYHWKHIROORZLQJTXHVWLRQFHUWLILHGWRWKH RIFRQWLQXLQJLQWKHFLW\jVIDLOHGSXEOLFVFKRROV 2KLR6XSUHPH&RXUW m'RHV2KLRODZJLYHSUHFOXVLYHHIIHFW WR WKH UHVROXWLRQ RI WKH (VWDEOLVKPHQW &ODXVH FODLP LQ %XWPRUHLPSRUWDQWWKDQDOORIWKLVVSHFXODWLRQLVWKHUHDOLW\ 6LPPRQV+DUULVY*RII1(G 2KLR "l WKDWWKHPDMRULW\jVmQHXWUDORQO\LIDIIRUGDEOHWRDOOlWHVWLV XWWHUO\PHULWOHVVDVDPDWWHURIODZEHFDXVHWKHQRZVHWWOHG 7KHGLVWULFWFRXUWJUDQWHG3ODLQWLIIVjPRWLRQIRUVXPPDU\ (VWDEOLVKPHQW &ODXVH MXULVSUXGHQFH LV WKDW ZKHWKHU DLG LV MXGJPHQW RQ 'HFHPEHU ILQGLQJ WKDW WKH YRXFKHU DOORFDWHGRQWKHEDVLVRIQHXWUDOVHFXODUFULWHULDLVWKHNH\ SURJUDP YLRODWHG WKH (VWDEOLVKPHQW &ODXVH HQMRLQHG GHWHUPLQDQWRIZKHWKHUKDYLQJPDGHWKHDLGDYDLODEOHWKH 'HIHQGDQWV IURP DGPLQLVWHULQJ WKH SURJUDP DQG GHQLHG VWDWHKDVHQJDJHGLQJRYHUQPHQWDOLQGRFWULQDWLRQLQUHOLJLRQ 'HIHQGDQWVjPRWLRQIRUVXPPDU\MXGJPHQW6HH6LPPRQV 6HH$JRVWLQL86DW +DUULVY=HOPDQ)6XSSG 1'2KLR 7KHFRXUWVWD\HGLWVVXPPDU\MXGJPHQWRUGHUZLWK3ODLQWLIIVj ,I WKH VLPSOLFLW\ DQG FODULW\ RI WKH 6XSUHPH &RXUWjV FRQVHQW SHQGLQJ UHYLHZ E\ WKLV &RXUW 'HIHQGDQWV DQG ODQJXDJHLQ$JRVWLQLLVQRWVXIILFLHQWWRGHPRQVWUDWHWKDWWKH ,QWHUYHQRUVDSSHDOHGWRWKLV&RXUWRQsDQXDU\ 2KLR VWDWXWH GRHV QRW LQ DQ\ UHVSHFW RSHUDWH WR DGYDQFH UHOLJLRQFRQILUPDWRU\ODQJXDJHRIFU\VWDOFODULW\DSSHDUVLQ ,, WKH6XSUHPH&RXUWjVUHFHQWGHFLVLRQLQ0LWFKHOO,QDSDVVDJH LQKLVRSLQLRQZKLFKHQMR\VWKHVXSSRUWRIDPDMRULW\RIWKH :HUHFRJQL]HWKHVLJQLILFDQFHWKDWWKLVLVVXHKROGVIRUPDQ\ sXVWLFHV DQG DUJXDEO\ HYHQ WKH VXSSRUW RI WKH GLVVHQWHUV PHPEHUVRIRXUVRFLHW\7KHLVVXHRIVFKRROYRXFKHUVKDV s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jV mLPSHUPLVVLEOH RPQLSRWHQW MXGJPHQW DV WR WKH HIILFDF\ RI RQH VFKHPH RU LQFHQWLYHlDUJXPHQWKDVQREDVLVLQRXU(VWDEOLVKPHQW&ODXVH SURJUDPYHUVXVDQRWKHU7KHGHVLJQRUVSHFLILFVRIDSURJUDP MXULVSUXGHQFH 7KH UXOH LV QRZ VHWWOHG WKDW D JRYHUQPHQW LQWHQGHG WR UHPHG\ WKH SUREOHP RI IDLOLQJ VFKRROV DQG WR SURJUDP WKDW SHUPLWV ILQDQFLDO DLG XOWLPDWHO\ WR UHDFK UHFWLI\HGXFDWLRQDOLQHTXDOLW\PXVWEHUHVHUYHGWRWKHVWDWHV UHOLJLRXVVFKRROVGRHVQRWRIIHQGWKH(VWDEOLVKPHQW&ODXVHLI DQG WKH VFKRRO ERDUGV ZLWKLQ WKHP ZLWK RQH FDYHDW WKH 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
SURSRVHG SURJUDP PD\ QRW UXQ DIRXO RI WKH IUHHGRPV EHHQ GLVFRXUDJHG IURP SDUWLFLSDWLQJ LQ WKH VFKRRO YRXFKHU JXDUDQWHHGWRDOOFLWL]HQVLQWKH&RQVWLWXWLRQ,QRWKHUZRUGV SURJUDPEHFDXVHLWFDQQRWmDIIRUGlWRGRVR7KHLPSRUWRI WKHGHWHUPLQDWLRQVRIVWDWHVDQGVFKRROERDUGVFDQQRWLQIULQJH WKLVDUJXPHQWDVEHVW,FDQXQGHUVWDQGLWLVWKDWWKHSDUHQWV XSRQWKHQHFHVVDU\VHSDUDWLRQEHWZHHQFKXUFKDQGVWDWH:H RI WKH &OHYHODQG VFKRRO FKLOGUHQ KDYH DQ mLQFHQWLYHl WR WKHUHIRUHFRQVLGHUWKHSURJUDPSUHVHQWHGEHIRUHXVXQGHUWKH FKRRVH&OHYHODQGjVUHOLJLRXVVFKRROVEHFDXVHWKHUHDUHQRW FRQWUROOLQJSUHFHGHQWVRIWKH8QLWHG6WDWHV6XSUHPH&RXUW HQRXJKQRQUHOLJLRXVVFKRROVSDUWLFLSDWLQJLQWKHSURJUDP2I DQGWKLV&RXUWWRGHWHUPLQHZKHWKHUVXFKLQIULQJHPHQWKDV FRXUVHWKHUHLVQRHYLGHQFHRIWKDWHLWKHU$QGWKHUHLVQR RFFXUUHG HYLGHQFHWKDWDQ\RIWKHVHYHUDOQRQUHOLJLRXVSULYDWHVFKRROV SDUWLFLSDWLQJ LQ WKH SURJUDP KDYH HYHU UHMHFWHG D VLQJOH 7KLV&RXUWUHYLHZVWKHGLVWULFWFRXUWjVJUDQWRIVXPPDU\ YRXFKHU DSSOLFDQW IRU DQ\ UHDVRQ LQFOXGLQJ D VXSSRVHG MXGJPHQWGHQRYR6HH&ROHVY&OHYHODQG%GRI(GXF LQDELOLW\ WR DIIRUG WKH GLIIHUHQWLDO EHWZHHQ WKH YDOXH RI D )G WK&LU 6XPPDU\MXGJPHQWLVSURSHU YRXFKHUDQGWKHDFWXDOFRVWRIDQRQUHOLJLRXVSULYDWH ZKHQWKHSOHDGLQJVGHSRVLWLRQVDQVZHUVWRLQWHUURJDWRULHV VFKRROHGXFDWLRQ DQGDGPLVVLRQVRQILOHWRJHWKHUZLWKWKHDIILGDYLWVLIDQ\ VKRZWKDWWKHUHLVQRJHQXLQHLVVXHDVWRDQ\PDWHULDOIDFWDQG :KLOH,KHVLWDWHWRGLJQLI\WKHPDMRULW\jVVSHFXODWLRQZLWK WKDWWKHPRYLQJSDUW\LVHQWLWOHGWRMXGJPHQWDVDPDWWHURI VSHFXODWLRQRIP\RZQZKDWLVDWVWDNHLQWKLVFDVHLVWRR ODZ )HG 5 &LY 3 F 7KHUH LV QR JHQXLQH LVVXH RI LPSRUWDQWWROHWDQ\RIP\FROOHDJXHVjPHULWOHVVDUJXPHQWVJR PDWHULDOIDFWZKHQWKHmUHFRUGWDNHQDVDZKROHFRXOGQRWOHDG XQDQVZHUHG D UDWLRQDO WULHU RI IDFW WR ILQG IRU WKH QRQPRYLQJ SDUW\l 0DWVXVKLWD(OHF,QGXV&RY=HQLWK5DGLR&RUS86 ,WLVLQGLVSXWDEOHWKDWQRQRQUHOLJLRXVSULYDWHVFKRRORUDQ\ RWKHUVFKRROIRUWKDWPDWWHUKDVHYHUEHHQGLVFRXUDJHGIURP SDUWLFLSDWLQJLQWKH&OHYHODQGYRXFKHUSURJUDPDQGWKHUHLV 7KH (VWDEOLVKPHQW &ODXVH SURYLGHV WKDW m&RQJUHVV VKDOO QRHYLGHQFHWKDWDQ\SULYDWHVFKRROUHOLJLRXVRUQRQUHOLJLRXV PDNHQRODZUHVSHFWLQJDQHVWDEOLVKPHQWRIUHOLJLRQl KDV HYHU WXUQHG DZD\ D YRXFKHU DSSOLFDQW IRU DQ\ UHDVRQ 86&RQVWDPHQG,,Q/HPRQY.XUW]PDQ86 7KHUHIRUH ZKDW P\ FROOHDJXHV PXVW EH JHWWLQJ DW LV HYHQ WKH6XSUHPH&RXUWVHWIRUWKWKHIROORZLQJWHVW PRUHLQVLGLRXVDQGRIIHQVLYH7KHSRLQWDSSDUHQWO\LVWKDW WR GHWHUPLQH ZKHWKHU D VWDWXWH SDVVHV PXVWHU XQGHU WKH &OHYHODQGSDUHQWVZRXOGQHYHUFKRRVHWRVHQGWKHLUFKLOGUHQ (VWDEOLVKPHQW &ODXVH WKH VWDWXWH PXVW KDYH D VHFXODU WRDUHOLJLRXVVFKRROLQ&OHYHODQGLIWKH\FRXOGDIIRUGWRVHQG OHJLVODWLYHSXUSRVH WKHSULQFLSDORUSULPDU\HIIHFWRIWKH WKHP WR D QRQUHOLJLRXV SULYDWH VFKRRO RU DQRWKHU SXEOLF VWDWXWHPXVWEHRQHWKDWQHLWKHUDGYDQFHVQRULQKLELWVUHOLJLRQ VFKRROEXWWKDWWKH\FDQQRWGRVREHFDXVHWKHFRVWGLIIHUHQWLDO DQG WKHVWDWXWHPXVWQRWIRVWHUH[FHVVLYHHQWDQJOHPHQWZLWK EHWZHHQWKHYDOXHRIDYRXFKHUDQGWKHDFWXDOWXLWLRQ UHOLJLRQ,IDVWDWXWHIDLOVDQ\SRUWLRQRIWKLVWHVWLWYLRODWHV RI&OHYHODQGjVQRQUHOLJLRXVSULYDWHVFKRROVLVSURKLELWLYH WKH (VWDEOLVKPHQW &ODXVH ,G 7KH 6XSUHPH &RXUW KDV $JDLQLWLVRIQRVPDOOLPSRUWDQFHWKDWWKHUHLVDEVROXWHO\QR DSSOLHGWKH/HPRQWHVWUHJXODUO\LQWKHFRQWH[WRIVFKRROVDQG HYLGHQFHLQWKHUHFRUGWKDWDQ\&OHYHODQGSXEOLFVFKRROSDUHQW HGXFDWLRQ6HHHJ.LU\DVs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
7KHPDMRULW\LQWKLVFDVHVWUDLQLQJPLJKWLO\WRVWULNHGRZQ .HQGULFN86 KROGLQJWKDW(VWDEOLVKPHQW WKLV ODZ WKHQ FRQMXUHV VWLOO DQRWKHU DQWLYRXFKHU DUJXPHQW &ODXVH GRHV QRW SUHYHQW UHOLJLRXV RUJDQL]DWLRQV IURP WKHUHDGHUZLOOUHFDOOWKDWWKHPDMRULW\jVGHFLVLRQDOSUHPLVH SDUWLFLSDWLQJ LQ IHGHUDOO\ IXQGHG SURJUDP (GZDUGV Y LVWKDWWKLVFDVHLVFRQWUROOHGE\1\TXLVWDQGLPSOLFLWO\WKDW $JXLOODUG 86 RYHUWXUQLQJVWDWXWHZKLFK DOOHOVHLVLUUHOHYDQW UHTXLUHG WKH WHDFKLQJ RI &UHDWLRQLVP LQ SXEOLF VFKRROV $JXLODUY)HOWRQ86 SD\LQJSXEOLFVFKRRO 0\ FROOHDJXHVj QH[W QRQ1\TXLVW DUJXPHQW LV WKDW WKH HPSOR\HHV WR WHDFK LQ SDURFKLDO VFKRRO YLRODWHV WKH mVFKRROYRXFKHUSURJUDPLVQRWQHXWUDOLQWKDWLWGLVFRXUDJHV (VWDEOLVKPHQW&ODXVH RYHUUXOHGE\$JRVWLQLY)HOWRQ WKH SDUWLFLSDWLRQ E\ VFKRROV QRW IXQGHG E\ UHOLJLRXV 86 *UDQG5DSLGV6FK'LVWY%DOO86 LQVWLWXWLRQVl6OLSRSDW7KLVVWDWHPHQWLQWKHPDMRULW\ ILQGLQJDVKDUHGWLPHSURJUDPWREHDYLRODWLRQ RSLQLRQZKLFKOLNHVRPDQ\RWKHUVLQWKHRSLQLRQLVWRWDOO\ RI (VWDEOLVKPHQW &ODXVH RYHUUXOHG E\ $JRVWLQL Y )HOWRQ ZLWKRXW DQ\ EDVLV LQ WKH HYLGHQFH LV WKHQ IRUWLILHG E\ P\ 86 0XHOOHU Y $OOHQ 86 EURWKHUVjLSVHGL[LWWKDWmUHOLJLRXVVFKRROVRIWHQKDYHORZHU SHUPLWWLQJWD[SD\HUVWRGHGXFWIURPVWDWHLQFRPHWD[ RYHUKHDGFRVWVVXSSOHPHQWDOLQFRPHIURPSULYDWHGRQDWLRQV H[SHQVHVLQFXUUHGLQVHQGLQJFKLOGUHQWRSDURFKLDOVFKRROV DQGFRQVHTXHQWO\ORZHUWXLWLRQQHHGVl,GDW7KHRQO\ GRHVQRWYLRODWH(VWDEOLVKPHQW&ODXVH 5RHPHUY%GRI3XE DXWKRULW\ P\ FROOHDJXHV RIIHU IRU WKLV VSHFXODWLRQ LV D :RUNV 86 ILQGLQJ QR YLRODWLRQ RI )RUGKDP8QLYHUVLW\/DZ5HYLHZDUWLFOH,FDQRQO\VXUPLVH (VWDEOLVKPHQW&ODXVHLQ SURYLGLQJJRYHUQPHQWDLGWRERWK WKDW WKH SRLQW P\ FROOHDJXHV ZLVK WR PDNH KHUH LV WKDW SXEOLFDQGSULYDWHXQLYHUVLWLHV QRQUHOLJLRXVVFKRROVZLOOQRWSDUWLFLSDWHLQ2KLRjVYRXFKHU SURJUDP EHFDXVH WKH YRXFKHU ZLOO QRW FRYHU WKH FRVW RI 7KH6XSUHPH&RXUWDQGLQGLYLGXDOMXVWLFHVKDYHLQWURGXFHG HGXFDWLQJ D VWXGHQW LQ D QRQUHOLJLRXV VFKRRO 7KLV P\ YDULDWLRQVRQ WKH/HPRQWHVWLQRWKHUFRQWH[WV6HH/HHY EURWKHUVUHDVRQFUHDWHVDQmLQFHQWLYHlIRUWKHSDUHQWVWRVHQG :LVHPDQ86 XVLQJFRHUFLRQWHVW WKHLU FKLOGUHQ WR WKH UHOLJLRXV VFKRROV ZKHUH WKH\ FDQ EH GHYHORSHGE\sXVWLFH.HQQHG\WRKROGWKDWVFKRROFRXOGQRW HGXFDWHGPRUHHIILFLHQWO\DQGIRUIHZHUGROODUV SURYLGHIRUQRQVHFWDULDQSUD\HUWREHJLYHQDWJUDGXDWLRQE\ VFKRROVHOHFWHGFOHUJ\PDQ &RXQW\RI$OOHJKDQ\Y$&/8 7KHUHLVDEVROXWHO\QRHYLGHQFHLQWKHUHFRUGWRVXSSRUWWKH 86 XVLQJWZRSDUWWHVW PDMRULW\jVDUJXPHQWWKDWWKH2KLRVWDWXWHFUHDWHVDILQDQFLDO GHYHORSHGE\sXVWLFH2j&RQQRUn(VWDEOLVKPHQW&ODXVHLV mGLVLQFHQWLYHlIRU&OHYHODQGjVQHLJKERULQJVXEXUEDQSXEOLF YLRODWHGZKHQ JRYHUQPHQWLVH[FHVVLYHO\HQWDQJOHGZLWK VFKRRO GLVWULFWV WR SDUWLFLSDWH LQ WKH SURJUDP 7KHUH LV QR UHOLJLRQRU JRYHUQPHQWHQGRUVHVRUGLVDSSURYHVRIUHOLJLRQ HYLGHQFHWRVXSSRUWZKDWWKHPDMRULW\VHHPVWRLPSO\nWKDW nDVSDUWRIWKH/HPRQWHVWUHJDUGLQJJRYHUQPHQWGLVSOD\VRI ZLVKLQJWRXVHDYRXFKHUFKRRVHQRWWRGRVREHFDXVHRWKHU REMHFWV ZLWK UHOLJLRXV FRQQRWDWLRQV LQWURGXFLQJ sXVWLFH &OHYHODQG DUHD SXEOLF VFKRROV DUH QRW SDUWLFLSDWLQJ $QG .HQQHG\jVWZRSDUWFRHUFLRQWHVW JRYHUQPHQWPD\QRW WKHUH LV QR HYLGHQFH WKDW LI D SXEOLF VFKRRO FKRRVHV WR FRHUFHSDUWLFLSDWLRQLQUHOLJLRQDQG JRYHUQPHQWPD\QRW SDUWLFLSDWH LQ WKH YRXFKHU SURJUDP LW ZLOO ORVH LWV VWDWH GLUHFWO\ EHQHILW UHOLJLRQ LQ KLV FRQFXUUHQFH :DOODFH Y IXQGLQJ sDIIUHH 86 Q XVLQJ sXVWLFH 2j&RQQRUjVWZRSDUWWHVWDVSDUWRIWKH/HPRQDQDO\VLVDQG 7KHVHDUJXPHQWVDUHEXLOWRQDmIDFWXDOlSUHGLFDWHWKDWKDV ILQGLQJLWDSSURSULDWHWRGHWHUPLQHZKHWKHUWKHJRYHUQPHQWjV DEVROXWHO\QREDVLVLQWKHUHFRUG7KHUHLVQRWDVFLQWLOODRI SXUSRVH LV WR HQGRUVH RU GLVDSSURYH RI UHOLJLRQ /\QFK Y HYLGHQFHLQWKLVFDVHWKDWDQ\VFKRROSXEOLFRUSULYDWHKDV 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
'RQQHOO\86 LQWURGXFLQJsXVWLFH WKHSURJUDPDUHWRRUHOLJLRXV,QVXSSRUWRIWKLVSURSRVLWLRQ 2j&RQQRUjVWZRSDUWWHVW WKH PDMRULW\ GHYRWHV FRQVLGHUDEOH DWWHQWLRQ WR WKH PLVVLRQ VWDWHPHQWV RI VHYHUDO UHOLJLRXV VFKRROV ZKLFK LQGLFDWH WKH ,Q $JRVWLQL Y )HOWRQ 86 WKH &RXUW SHUYDVLYHO\ UHOLJLRXV FKDUDFWHU RI WKHLU SURJUDPV 0\ UHDIILUPHGWKHLPSRUWDQFHRIWKH/HPRQWHVWLQ(VWDEOLVKPHQW EURWKHUV FRQFOXGH WKHUHIURP WKDW WKHVH VFKRROV mEHOLHYH LQ &ODXVH FDVHV LQYROYLQJ VFKRRO DLG EXW QRWHG WKDW WKH LQWHUZHDYLQJ UHOLJLRXV EHOLHIV ZLWK VHFXODU VXEMHFWVl DQG HQWDQJOHPHQWSURQJFRXOGEHFRQVLGHUHGDVDQDVSHFWRIWKH mLQFRUSRUDWH>LQWKHLUFXUULFXOXP@UHOLJLRXVFRQFHSWVPRWLYHV HIIHFWVLQTXLU\$JRVWLQLIRXQGmWKUHHSULPDU\FULWHULDlXVHG DQGWKHPHVl6OLSRSDW,PDJLQHUHOLJLRXVVFKRROV E\WKH&RXUWLQHYDOXDWLQJZKHWKHUJRYHUQPHQWDLGKDVWKH WKDWDUHWUXO\UHOLJLRXV HIIHFWRIDGYDQFLQJUHOLJLRQ ZKHWKHUWKHVWDWXWHRUSURJUDPV LQTXHVWLRQmUHVXOWLQJRYHUQPHQWDOLQGRFWULQDWLRQ GHILQHLWV 7KLVSODLQO\KRVWLOHDWWDFNRQWKHUHOLJLRXVVFKRROVLQWKH UHFLSLHQWV E\ UHIHUHQFH WR UHOLJLRQ RU FUHDWH DQ H[FHVVLYH 2KLRYRXFKHUSURJUDPLVRQH,ZRXOGRIWKRXJKWXQZRUWK\RI HQWDQJOHPHQWl,GDW PHQWLRQLQDQRSLQLRQIURPWKLVJUHDWFRXUW,VWKHSRLQWEHLQJ PDGHKHUHWKDWUHOLJLRXVVFKRROVPD\SDUWLFLSDWHLQDYRXFKHU 7KH 6XSUHPH &RXUW KDV QRW RYHUWXUQHG RU UHVFLQGHG WKH SURJUDPSURYLGLQJWKH\DUHQRWWRRUHOLJLRXV"2ULVLWWKDW /HPRQ WHVW HYHQ DV LW KDV XVHG LWV IUDPHZRUN WR VKDSH WKHVHSRYHUW\OHYHOSDUHQWVLQ&OHYHODQGFDQQRWEHWUXVWHGWR GLIIHULQJDQDO\VHV$OWKRXJKLQ$JRVWLQLWKH&RXUWDUWLFXODWHG XQGHUVWDQGZKDWWKH\ZLOOEHH[SRVLQJWKHLUFKLOGUHQWRLIWKH\ WKHSULPDU\FULWHULDLWZRXOGXWLOL]HWRGHWHUPLQHZKHWKHUD FKRRVH RQH RI WKHVH UHOLJLRXV VFKRROV" 2QH ZRXOG KDYH JRYHUQPHQWDLGSURJUDPLPSHUPLVVLEO\DGYDQFHGRUHQGRUVHG WKRXJKW WKDW WKH QDLO ZDV ORQJ DJR GULYHQ LQWR WKH FRIILQ UHOLJLRQ WKH &RXUW KDV QRW QHFHVVDULO\ OLPLWHG LWVHOI WR EHDULQJWKHGLVFUHGLWHGDUJXPHQWVWKDWLIDYRXFKHUSURJUDP FRQVLGHULQJVROHO\WKRVHFULWHULD5DWKHULWVHHPVHYLGHQWWKDW LQYROYHGWRRPDQ\UHOLJLRXVVFKRROVRULIWKRVHLQYROYHGDUH WKH$JRVWLQL&RXUWLOOXVWUDWHGWKH/HPRQWHVWjVIOH[LELOLW\DQG KRQHVWO\JHQXLQHO\DQGHVVHQWLDOO\UHOLJLRXVWKHVWDWXWHLV LWV HYROXWLRQ IURP WKH UHODWLYHO\ ULJLG WKUHHSDUW WHVW WR DQ WKHUHIRUH LQYDOLG DV mDGYDQFLQJ UHOLJLRQl 7KLV PRVW DSSURDFK LQ ZKLFK WKH YDU\LQJ FRPSRQHQWV RI D SDUWLFXODU XQDWWUDFWLYHDUJXPHQWZDVXWWHUO\UHMHFWHGLQ:LWWHUV86 SURJUDPRUVWDWXWHDUHDQDO\]HGZLWKUHJDUGWRWKHLULPSDFWRQ DWDQG0XHOOHU86DW DQGDOVRZDV LQ WKH FRQWH[W RI VFKRROV WKH UHOHYDQW VWXGHQWV RU UHMHFWHG LQ sXVWLFH 3RZHOOjV FRQFXUULQJ RSLQLRQ LQ :LWWHUV FRPPXQLWLHV :H WKHUHIRUH ORRN WR WKHVH FRPSRQHQWV DV 6HH :LWWHUV 86 DW 3RZHOO s FRQFXUULQJ DVSHFWVRIWKHSURSHUDQDO\VLVXQGHU/HPRQEXWDFNQRZOHGJH 0RUHRYHUsXVWLFH7KRPDVZULWLQJIRUDFOHDUPDMRULW\RQWKLV WKDWSUHFHGHQWGRHVQRWOLPLWLWVHOIWRRQO\WKHVHFRPSRQHQWV SRLQWLQ0LWFKHOOVWDWHG VKRXOGRWKHUFRPSRQHQWVSUHYLRXVO\XWLOL]HGE\WKH&RXUWEH UHOHYDQW VXFK DV FRHUFLRQ RI FLWL]HQV HQGRUVHPHQW RI ,QVKRUWQRWKLQJLQWKH(VWDEOLVKPHQW&ODXVHUHTXLUHV UHOLJLRQDQGGLUHFWEHQHILWWRUHOLJLRQ6HH0LWFKHOOY+HOPV WKH H[FOXVLRQ RI SHUYDVLYHO\ VHFWDULDQ VFKRROV IURP 6 &W 2j&RQQRU s FRQFXUULQJ RWKHUZLVHSHUPLVVLEOHDLGSURJUDPVDQGRWKHUGRFWULQHV ILQGLQJ WKDW $JRVWLQL UHSUHVHQWV D JHQHUDO IUDPHZRUN IRU RI WKLV &RXUW EDU LW 7KLV GRFWULQH ERUQ RI ELJRWU\ DSSURDFKLQJ TXHVWLRQV FRQFHUQLQJ QHXWUDO VFKRRODLG VKRXOGEHEXULHGQRZ SURJUDPVEXWUHFRJQL]LQJWKDWWKHVHW\SHRIFDVHVGHSHQGRQ WKHSDUWLFXODUIDFWVRIHDFKFDVH 0LWFKHOO6&WDW 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
LQFHQWLYH WR XQGHUWDNH UHOLJLRXV LQGRFWULQDWLRQl $JRVWLQL 2I WKH FDVHV ZKLFK IROORZ /HPRQ ZH ILQG WKH PRVW 86DW7KH&RXUWQRWHGWKDWDILQDQFLDOLQFHQWLYHWR SHUVXDVLYHLQWKDWLWLVRQSRLQWZLWKWKHPDWWHUDWKDQGWREH FKRRVHDUHOLJLRXVVFKRRORYHUDQRQUHOLJLRXVVFKRROLVQRW &RPPLWWHH IRU 3XEOLF (GXFDWLRQ Y 1\TXLVW 86 SUHVHQWmZKHUHWKHDLGLVDOORFDWHGRQWKHEDVLVRIQHXWUDO ,Q 1\TXLVW D 1HZ <RUN 6WDWH VWDWXWH HVWDEOLVKHG VHFXODUFULWHULDWKDWQHLWKHUIDYRUQRUGLVIDYRUUHOLJLRQDQGLV DPRQJRWKHUDLGDWXLWLRQJUDQWSURJUDPZKLFKSURYLGHGIRU PDGHDYDLODEOHWRERWKUHOLJLRXVDQGVHFXODUEHQHILFLDULHVRQ SDUWLDOWXLWLRQUHLPEXUVHPHQWWRORZLQFRPHSDUHQWVZKRVH DQRQGLVFULPLQDWRU\EDVLVl,G FKLOGUHQDWWHQGHGSULYDWHHOHPHQWDU\RUVHFRQGDU\ VFKRROV 6HHLGDW7KHWXLWLRQUHLPEXUVHPHQWSODQDSSOLHGWR 'HVSLWHWKHSODLQHYLGHQFHWKDWWKHDLGWRWKHSDUHQWVRIWKH SDUHQWV RI FKLOGUHQ ZKR DWWHQGHG DQ\ SULYDWH VFKRRO QRW &OHYHODQGVFKRROFKLOGUHQLVLQGHHGmDOORFDWHGRQWKHEDVLVRI VROHO\VHFWDULDQVFKRROVDQGZDVOLPLWHGWRRIWXLWLRQ QHXWUDO VHFXODU FULWHULD WKDW QHLWKHU IDYRU QRU GLVIDYRU SDLG,GDW$WWKHWLPHWKHSODQZDVFKDOOHQJHGQHDUO\ UHOLJLRQDQGLVPDGHDYDLODEOHWRERWKUHOLJLRXVDQGVHFXODU RI1HZ<RUNjVVFKRRODJHFKLOGUHQDWWHQGHGQRQSXEOLF EHQHILFLDULHVRQDQRQGLVFULPLQDWRU\EDVLVlLGWKHPDMRULW\ VFKRROV DQG DSSUR[LPDWHO\ RI WKHVH VFKRROV ZHUH FRQWLQXHV WR LQVLVW WKDW WKH YRXFKHU SURJUDP LV QRW QHXWUDO VHFWDULDQ,GDW7KH1\TXLVW&RXUWQRWHGWKDWDOWKRXJK EHFDXVH LW FUHDWHV D IRUELGGHQ mLQFHQWLYHl IRU SDUHQWV LQ mWKH FKDUDFWHULVWLFV RI LQGLYLGXDO VFKRROV PD\ YDU\ ZLGHO\ &OHYHODQG WR FKRRVH D UHOLJLRXV VFKRRO $V EHVW , FDQ IURP>WKH@SURILOHlLQVWLWXWLRQVZKLFKTXDOLILHGIRUDVVLVWDQFH XQGHUVWDQGLWWKH\UHVWWKLVFRQFOXVLRQnXQVXSSRUWHGWKRXJK XQGHUWKHVWDWXWHZHUHRQHVWKDWLQFOXGHGUHOLJLRXVLQVWUXFWLRQ LW LV E\ DQ\ HYLGHQFH LQ WKH UHFRUGnRQ WZR IXUWKHU DQGUHTXLUHPHQWVDVSDUWRIWKHLUDFDGHPLFFXUULFXOXP6HH FRQFOXVLRQV7KHILUVWLVWKDWEHFDXVHWKHYDVWPDMRULW\n LGDW SHUFHQWnRI WKH SULYDWH VFKRROV SDUWLFLSDWLQJ LQ WKH 2KLR SURJUDPDUHUHOLJLRXVWKHSHRSOHRI&OHYHODQGDUHGHQLHGD )ROORZLQJ/HPRQWKH1\TXLVW&RXUWIRXQGWKDWWKH1HZ mJHQXLQHl FKRLFH 7KLV DUJXPHQW LV PDGH GHVSLWH WKH <RUN VWDWXWH SDVVHG WKH ILUVW SURQJ RI WKH /HPRQ WHVW o LQGLVSXWDEOHIDFWWKDWRIDOOWKHSULYDWHQRQUHOLJLRXVSULYDWH ZKHWKHUWKHVWDWXWHKDGDVHFXODUSXUSRVHoEHFDXVHWKHWXLWLRQ VFKRROVSDUWLFLSDWLQJLQWKHSURJUDPQRWRQHKDVHYHUWXUQHG UHLPEXUVHPHQW SURJUDP SURPRWHG SOXUDOLVP DQG GLYHUVLW\ DZD\DYRXFKHUDSSOLFDQWIRUDQ\UHDVRQ7KLVQRWYHU\WKLQO\ DPRQJ1HZ<RUNjVSXEOLFDQGSULYDWHVFKRROVDQGDOOHYLDWHG YHLOHG DQWLSDWK\ WKH PDMRULW\ KDV VKRZQ WRZDUG UHOLJLRXV FRQFHUQWKDWWKH6WDWHjVRYHUEXUGHQHGSXEOLFVFKRROVZRXOG VFKRROVnLWV DUJXPHQW WKDW WKHUH DUH WRR PDQ\ UHOLJLRXV EHKDUPHGLIDODUJHQXPEHURIFKLOGUHQZKRKDGSUHYLRXVO\ VFKRROVLQWKHSURJUDPnLVPHULWOHVVIRUDQRWKHUUHDVRQ WKH EHHQDWWHQGLQJSULYDWHVFKRROVGHFLGHGWRUHWXUQWRWKHSXEOLF 6XSUHPH&RXUWKDVIODWO\UHMHFWHGWKHDUJXPHQWWKDWDKLJK VFKRROV6HH86DW7KH&RXUWGLGmQRWTXHVWLRQ SHUFHQWDJHRIUHOLJLRXVVFKRROVSDUWLFLSDWLQJLQDJRYHUQPHQW WKH SURSULHW\ DQG IXOO\ VHFXODU FRQWHQW RI 1HZ <RUNjV DLGSURJUDPLVDQLQGLFDWRUWKDWWKHJRYHUQPHQWLVHQJDJLQJ LQWHUHVW LQ SUHVHUYLQJ D KHDOWK\ DQG VDIH HGXFDWLRQDO LQJRYHUQPHQWDOLQGRFWULQDWLRQRIUHOLJLRQ6HH0LWFKHOO HQYLURQPHQWIRUDOORILWVVFKRROFKLOGUHQl,G 6 &W DW LG DW 2j&RQQRU s FRQFXUULQJ $JRVWLQL86DW 0XHOOHU86DW 8QGHUWKHVHFRQGSURQJRIWKH/HPRQWHVWWKDWWKHVWDWXWH QHLWKHUDGYDQFHQRULQKLELWUHOLJLRQoWKH1HZ<RUNVWDWXWH 7KHPDMRULW\WKHQDWWHPSWVWRVXSSRUWLWVYLHZWKDWWKH2KLR GLGQRWIDUHDVZHOO7KH&RXUWQH[WIRXQGWKDWWKH1HZ<RUN VWDWXWHFUHDWHVDIRUELGGHQLQFHQWLYHIRUSDUHQWVWRFKRRVHD UHLPEXUVHPHQWSURJUDPIDLOHGEHFDXVHm>L@QWKHDEVHQFHRIDQ UHOLJLRXVVFKRROE\XWLOL]LQJWKHWUDQVSDUHQWDUJXPHQWWKDWWKLV HIIHFWLYH PHDQV RI JXDUDQWHHLQJ WKDW WKH VWDWH DLG GHULYHG VWDWXWHVKRXOGEHVWUXFNGRZQEHFDXVHWKHUHOLJLRXVVFKRROVLQ IURP SXEOLF IXQGV ZLOO EH XVHG H[FOXVLYHO\ IRU VHFXODU 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
QHXWUDO DQG QRQLGHRORJLFDO SXUSRVHV LW LV FOHDU IURP RXU SURJUDPEXWWKHUHLVQRWWKHVOLJKWHVWKLQWLQWKHUHFRUGWKDW FDVHVWKDWGLUHFWDLGLQZKDWHYHUIRUPLVLQYDOLGl86DW ZKHQWKH2KLRVWDWXWHZDVHQDFWHGHLWKHUWKHOHJLVODWRUVRUWKH 7KH&RXUWRSLQHGWKDWWKHIDFWWKDWSURJUDPJUDQWVZHUH JRYHUQRUKDGDQ\LGHDWKDWWKHSXEOLFVFKRROGLVWULFWVDGMDFHQW GHOLYHUHGWRSDUHQWVUDWKHUWKDQVFKRROVZDVmRQO\RQHDPRQJ WR&OHYHODQGZRXOGQRWSDUWLFLSDWH:KDWZHPHDVXUHWRGD\ PDQ\IDFWRUVWREHFRQVLGHUHGl,GDW7KH&RXUWUHVWHG LV QRW ZKHWKHU WKH FKLOGUHQ LQ &OHYHODQG KDYH WKH IXOOHVW LWVDQDO\VLVRQWKHSUHPLVHWKDWWKHUHKDGEHHQmµQRHQGHDYRU FRQFHLYDEOHUDQJHRIRSWLRQVDYDLODEOHWRWKHPWKDWDSDQHORI WR JXDUDQWHH WKH VHSDUDWLRQ EHWZHHQ VHFXODU DQG UHOLJLRXV IHGHUDOMXGJHVPLJKWWKLQNWREHLGHDOEXWUDWKHUZKHWKHUWKH HGXFDWLRQDO IXQFWLRQV DQG WR HQVXUH WKH 6WDWH ILQDQFLDO DLG VWDWXWH DV HQDFWHG KDV WKH SULPDU\ HIIHFW RI DGYDQFLQJ VXSSRUWVRQO\WKHIRUPHUjl,GDW TXRWLQJ/HPRQ UHOLJLRQE\LQYROYLQJWKHVWDWHLQJRYHUQPHQWDOLQGRFWULQDWLRQ 86DW m%\UHLPEXUVLQJSDUHQWVIRUDSRUWLRQRIWKHLU XQGHU$JRVWLQLjVILUVWFULWHULRQ6HH0LWFKHOO6&WDW WXLWLRQELOOWKH6WDWHVHHNVWRUHOLHYHWKHLUILQDQFLDOEXUGHQV 7RP\NQRZOHGJHQRIHGHUDOFRXUWKDVHYHUKHOG VXIILFLHQWO\WRDVVXUHWKDWWKH\FRQWLQXHWRKDYHWKHRSWLRQWR WKDW D VFKRROFKRLFH YRXFKHU SURJUDP LV XQFRQVWLWXWLRQDO VHQG WKHLU FKLOGUHQ WR UHOLJLRQRULHQWHG VFKRROVl ,G 7KH EHFDXVHWKHUDQJHRIFKRLFHVGRHVQRWLQFOXGHDSXEOLFVFKRRO &RXUWQRWHGWKDWmZKLOHWKHRWKHUSXUSRVHVIRUWKDWDLGoWR RSWLRQ FHUWDLQO\WKHPDMRULW\GRHVQRWFLWHVXFKDFDVH SHUSHWXDWH D SOXUDOLVWLF HGXFDWLRQDO HQYLURQPHQW DQG WR SURWHFWWKHILVFDOLQWHJULW\RIRYHUEXUGHQHGSXEOLFVFKRROVo % DUH FHUWDLQO\ XQH[FHSWLRQDEOH WKH HIIHFW RI WKH DLG LV XQPLVWDNDEO\ WR SURYLGH GHVLUHG ILQDQFLDO VXSSRUW IRU 1HLWKHU GRHV WKH 2KLR SURJUDP mGHILQH LWV UHFLSLHQWV E\ QRQSXEOLFVHFWDULDQLQVWLWXWLRQVl,G UHIHUHQFHWRUHOLJLRQlWKHVHFRQG$JRVWLQLIDFWRUIRUWHVWLQJ IRUmLPSHUPLVVLEOHHIIHFWl$JRVWLQL86DW7KH 7KH1\TXLVW&RXUWDOVRUHFRJQL]HGDQGGLVFDUGHGWKHVWDWHjV SURJUDP GHILQHV WKH ILUVWSULRULW\ YRXFKHU UHFLSLHQWV E\ DUJXPHQWV WKDW LW ZDV RI FRQWUROOLQJ VLJQLILFDQFH WKDW 1HZ UHIHUHQFHWR WKHLUDWWHQGDQFHLQRQHRI&OHYHODQGjVSXEOLF <RUNjVSURJUDPFDOOHGIRUUHLPEXUVHPHQWRIWXLWLRQDOUHDG\ VFKRROV DQG DIDPLO\LQFRPHWKDWLVQRWPRUHWKDQ SDLGWKXVHQVXULQJWKDWWKHSDUHQWLVIUHHWRVSHQGWKDWWXLWLRQ SHUFHQWRIWKHIHGHUDOO\HVWDEOLVKHGSRYHUW\OHYHO6HH2KLR PRQH\LQDQ\PDQQHUKHRUVKHVHHVILW86DW 5HY&RGH $ $QGWKHVWDWXWHH[SOLFLWO\IRUELGV m>,@IWKHJUDQWVDUHRIIHUHGDVDQLQFHQWLYHWRSDUHQWVWRVHQG D UHOLJLRXV WHVW IRU DGPLVVLRQ WR D SDUWLFLSDWLQJ VFKRRO WKHLUFKLOGUHQWRVHFWDULDQVFKRROVE\PDNLQJXQUHVWULFWHGFDVK LQFOXGLQJUHOLJLRXVVFKRROV6HHLGDW $ $ SD\PHQWVWRWKHPWKH(VWDEOLVKPHQW&ODXVHLVYLRODWHG SDUHQW KDV WKH FKRLFH RI XVLQJ WKH YRXFKHU LQ D SULYDWH :KHWKHUWKHJUDQWLVODEHOHGDUHLPEXUVHPHQWDUHZDUGRUD UHOLJLRXVVFKRRODSULYDWHQRQUHOLJLRXVVFKRROIRUWXWRULQJLQ VXEVLG\LWVVXEVWDQWLYHLPSDFWLVVWLOOWKHVDPHl,GDW WKH SXEOLF VFKRRO RU LQ D SXEOLF VFKRRO LQ D QHLJKERULQJ 7KH&RXUWDOVRUHMHFWHGWKHVWDWHjVDUJXPHQWWKDWWKHSODQSDLG GLVWULFWLIDQ\ZLVKWRSDUWLFLSDWH7KHVWDWXWHH[SUHVVHVQR IRURQO\DSRUWLRQRIWKHWXLWLRQDWDVHFWDULDQVFKRROVD\LQJ SUHIHUHQFHH[SOLFLWO\RULPSOLFLWO\HLWKHUDVWRWKHUHOLJLRQRI mLIDFFHSWHGWKLVDUJXPHQWZRXOGSURYLGHWKHIRXQGDWLRQIRU WKHYRXFKHUUHFLSLHQWVRULIWKHUHFLSLHQWFKRRVHVDSULYDWH PDVVLYH GLUHFW VXEVLGL]DWLRQ RI VHFWDULDQ HOHPHQWDU\ DQG VFKRRO ZKHWKHU WKH YRXFKHU LV DSSOLHG WR D UHOLJLRXV RU VHFRQGDU\VFKRROVl,GDW QRQUHOLJLRXVVFKRRO 7KHFDVHVRI(YHUVRQY%RDUGRI(GXFDWLRQ86 7KH $JRVWLQL &RXUW UHFRJQL]HG RI FRXUVH WKDW WKH DQG%RDUGRI(GXFDWLRQY$OOHQ 86 HOLJLELOLW\UHTXLUHPHQWVRIDJRYHUQPHQWDLGSURJUDPFRXOG ZHUHFDUHIXOO\GLVWLQJXLVKHGE\WKH&RXUW,Q(YHUVRQWKH mKDYHWKHHIIHFWRIDGYDQFLQJUHOLJLRQE\FUHDWLQJDILQDQFLDO 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
,GDW LQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQRPLWWHG ,I &RXUWXSKHOGWD[GHGXFWLRQVIRUSDUHQWVZKRH[SHQGHGEXV WKHUHFLSLHQWVKDYHVXFKDQLQGHSHQGHQWDQGSULYDWHFKRLFH IDUHIRUFKLOGUHQZKRDWWHQGHGUHOLJLRXVVFKRROVUHDVRQLQJ WKHQWKHJRYHUQPHQWjVGHFLVLRQWRSURYLGHWKHPRQH\WRIXQG WKDWWKHEXVIDUHSURJUDPZDVDQDORJRXVWRWKHSURYLVLRQRI WKDW FKRLFH GRHV QRW KDYH WKH HIIHFW RI DGYDQFLQJ UHOLJLRQ VHUYLFHVVXFKDVSROLFHDQGILUHSURWHFWLRQVHZDJHGLVSRVDO 7KH JRYHUQPHQW LV RI QHFHVVLW\ QHXWUDO LQ WKH PDWWHU KLJKZD\VDQGVLGHZDONVIRUSDURFKLDOVFKRROV6HH86 ,PSOLFLWLQWKDWFRQVWLWXWLRQDOUXOHRIODZDVLWDSSOLHVLQWKLV DW7KH&RXUWIRXQGWKDWWKHVHVHUYLFHVFRPPRQWRDOO FDVHLVWKDWWKHUHPXVWEHDJHQXLQHFKRLFHIURPDPRQJD FLWL]HQVDUHmVRVHSDUDWHDQGVRLQGLVSXWDEO\PDUNHGRIIIURP UDQJHRIDOWHUQDWLYHVWKDWLQGLFDWHFRPSOHWHQHXWUDOLW\RQWKH WKH UHOLJLRXV IXQFWLRQ WKDW WKH\ PD\ IDLUO\ EH YLHZHG DV SDUWRIWKHJRYHUQPHQWDVWRZKHUHWKHUHFLSLHQWSDUHQWVPD\ UHIOHFWLRQVRIDQHXWUDOSRVWXUHWRZDUGUHOLJLRXVLQVWLWXWLRQVl FKRRVH WR VSHQG WKH JRYHUQPHQWDLG IXQGV 7KH YRXFKHU ,GDW,Q$OOHQWKH&RXUWXSKHOGDVWDWXWHZKLFKDOORZHG SURJUDPGRHVQRWRIIHQGWKH(VWDEOLVKPHQW&ODXVHEHFDXVH VHFXODU WH[WERRNV WR EH SURYLGHG WR FKLOGUHQ DWWHQGLQJ WKHVWDWXWHDOORZVSDUHQWVWRPDNHDJHQXLQHFKRLFHIRUWKHLU UHOLJLRXVVFKRROVILQGLQJWKDWmWKH6WDWHFODLPVQRULJKWWR FKLOGUHQZKRDUHFXUUHQWO\LQ&OHYHODQGSXEOLFVFKRROV GLVWULEXWH UHOLJLRXV OLWHUDWXUHl DQG QRWLQJ WKDW mZH FDQQRW DVVXPHWKDWVFKRRODXWKRULWLHVDUHXQDEOHWRGLVWLQJXLVK :KDW DUH WKH FKRLFHV 2KLR KDV JLYHQ WKHVH &OHYHODQG EHWZHHQVHFXODUDQGUHOLJLRXVERRNVl 86DW SDUHQWV" 7KH 1\TXLVW &RXUW GLVWLQJXLVKHG WKHVH WZR FDVHV QRW RQO\ EDVHGRQWKHLUQHXWUDOSRVWXUHWRZDUGUHOLJLRQEXWRQWKHIDFW 7R SHUPLW WKHLU FKLOGUHQ WR UHPDLQ LQ WKH WKDWLQERWKRIWKRVHFDVHVmWKHFODVVRIEHQHILFLDULHVLQFOXGHG &OHYHODQGSXEOLFVFKRROVDVEHIRUH DOOVFKRROFKLOGUHQWKRVHLQSXEOLFDVZHOODVWKRVHLQSULYDWH VFKRROVl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mJUDQWV WR WXWRULDOKHOSLQWKH&OHYHODQGVFKRROV RU SDUHQWVRISULYDWHVFKRROFKLOGUHQDUHJLYHQLQDGGLWLRQWRWKH 7RDFFHSWDYRXFKHUIRUWKHPWRDWWHQGDSXEOLF ULJKWWKDWWKH\KDYHWRVHQGWKHLUFKLOGUHQWRSXEOLFVFKRROV VFKRRO LQ D GLVWULFW DGMDFHQW WR &OHYHODQG WRWDOO\ DW VWDWH H[SHQVHl 86 DW Q LQWHUQDO DOWKRXJK IRU WKH SUHVHQW WKHVH GLVWULFWV KDYH TXRWDWLRQPDUNVRPLWWHG 7KH&RXUWDGGLWLRQDOO\GHWHUPLQHG GHFOLQHGWRSDUWLFLSDWHLQWKHSURJUDP WKDWWKLVDUJXPHQWRIQHXWUDOLW\LIXSKHOGZRXOGEHRYHUO\ EURDGSURYLGLQJmDEDVLVIRUDSSURYLQJWKURXJKWXLWLRQJUDQWV 6HH2KLR5HY&RGH WKH FRPSOHWH VXEVLGL]DWLRQ RI DOO UHOLJLRXV VFKRROV RQ WKH JURXQGWKDWVXFKDFWLRQLVQHFHVVDU\LIWKH6WDWHLVIXOO\ WR ,W LV GLIILFXOW WR LPDJLQH D VWDWXWH WKDW FRXOG DIIRUG LWV HTXDOL]HWKHSRVLWLRQRISDUHQWVZKRHOHFWVXFKVFKRROVoD YRXFKHUUHFLSLHQWVDEURDGHUVSHFWUXPRIHGXFDWLRQDOFKRLFH UHVXOWZKROO\DWYDULDQFHZLWKWKH(VWDEOLVKPHQW&ODXVHl,G ,WLVWUXHRIFRXUVHWKDWWKHSXEOLFVFKRROGLVWULFWVDGMDFHQWWR &OHYHODQG KDYH GHFOLQHG WR SDUWLFLSDWH LQ WKH YRXFKHU 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
7KH6XSUHPH&RXUWKDVUHYLVLWHGPDQ\RIWKHLVVXHVUDLVHG 7KHILUVWRIWKH/HPRQFULWHULDWKDWPXVWEHPHWLIDVWDWXWH LQ1\TXLVW,Q$JRVWLQLY)HOWRQ86 LVWRVXUYLYHDQ(VWDEOLVKPHQW&ODXVHFKDOOHQJHLVWKDWLWKDYH WKH&RXUWVWDWHGWKDWm>Z@HGRQRWDFNQRZOHGJHDQGZHGR DmVHFXODUSXUSRVHl7KH2KLRYRXFKHUSURJUDPPHHWVWKLV QRWKROGWKDWRWKHUFRXUWVVKRXOGFRQFOXGHRXUPRUHUHFHQW FULWHULRQ DQG WKH SODLQWLIIV DJUHH WKDW LW GRHV 7KH VROH FDVHVKDYHE\LPSOLFDWLRQRYHUUXOHGDQHDUOLHUSUHFHGHQWl SXUSRVHRIWKHYRXFKHUSURJUDPLVWRVDYH&OHYHODQGjVPRVWO\ 7KH&RXUWFRQWLQXHGWRUHDIILUPmWKDWLIDSUHFHGHQWRIWKLV SRRU PRVWO\ PLQRULW\ SXEOLF VFKRRO FKLOGUHQ IURP WKH &RXUWKDVGLUHFWDSSOLFDWLRQLQDFDVH\HWDSSHDUVWRUHVWRQ GHYDVWDWLQJFRQVHTXHQFHVRIUHTXLULQJWKHPWRUHPDLQLQWKH UHDVRQVUHMHFWHGLQVRPHRWKHUOLQHRIGHFLVLRQVWKH&RXUWRI IDLOHG&OHYHODQGVFKRROVLIWKH\ZLVKWRHVFDSH7KHUHLVDOVR $SSHDOV VKRXOG IROORZ WKH FDVH ZKLFK GLUHFWO\ FRQWUROV QR VHULRXV FODLP WKDW WKH VWDWXWH LV FRQVWLWXWLRQDOO\ LQYDOLG OHDYLQJ WR WKLV &RXUW WKH SUHURJDWLYH RI RYHUUXOLQJ LWV RZQ VROHO\EHFDXVHLWIRVWHUVDQmH[FHVVLYHHQWDQJOHPHQWlEHWZHHQ GHFLVLRQVl,G HPSKDVLVDGGHG 7KH6XSUHPH&RXUWKDV JRYHUQPHQWDQGUHOLJLRQ5DWKHUWKHRQO\LVVXHLQWKHFDVHLV UHIUDLQHG IURP RYHUUXOLQJ 1\TXLVW DQG KDV LQVWHDG ZKHWKHU WKH YRXFKHU SURJUDP KDV WKH IRUELGGHQ mSULPDU\ GLVWLQJXLVKHGYDULRXVFDVHVRQWKHEDVLVRIWKHLUIDFWV WKLV HIIHFWl RI DGYDQFLQJ UHOLJLRQ 7KLV FRXUWjV ILUVW GXW\ &RXUW KDV DFFRUGLQJO\ IROORZHG WKDW DSSURDFK m$ VLQJOH WKHUHIRUH DIWHU UHFRJQL]LQJ WKDW 1\TXLVWjV IDFWXDOO\ DQG IDFWXDOGLIIHUHQFHFRQVHTXHQWO\FDQVHUYHWRHQWDQJOHRUIUHH OHJDOO\ RXWGDWHG GHFLVLRQ LV RI QR KHOS LV WR SURFHHG WR D SDUWLFXODU JRYHUQPHQWDO SUDFWLFH IURP WKH UHDFK RI WKH H[DPLQHWKHILUVWWZRFULWHULDIURP$JRVWLQLjVmLPSHUPLVVLEOH >(VWDEOLVKPHQW@&ODXVHjVFRQVWLWXWLRQDOSURKLELWLRQl&ROHV HIIHFWlWHVWWRGHWHUPLQHZKHWKHUWKHHIIHFWRI2KLRj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jVILUVWFULWHULRQIRUWHVWLQJDVWDWXWHjV /HPRQWHVWWKH&RXUWDJUHHGWKDWWKHVWDWXWHKDGWKHVHFXODU FODLPHG LPSHUPLVVLEOH HIIHFW ZH PXVW DVN ZKHWKHU WKH SXUSRVH RI GHIUD\LQJ WKH FRVW RI HGXFDWLRQ IRU DOO SDUHQWV JRYHUQPHQWDLGLQWKHIRUPRIWKHWXLWLRQYRXFKHUUHVXOWVLQ UHJDUGOHVVRIWKHW\SHRIVFKRROWKHLUFKLOGUHQDWWHQG,GDW mJRYHUQPHQWDOLQGRFWULQDWLRQl,WLVREYLRXVWKDWWKH2KLR $QDO\]LQJWKHHIIHFWRIWKHVWDWXWHWKH&RXUWKHOGWKDW VWDWXWH GRHV QRW KDYH WKH UHPRWHVW HIIHFW RI SURYLGLQJ WKH SURJUDP GLG QRW KDYH D SULPDU\ HIIHFW RI DGYDQFLQJ JRYHUQPHQWDOLQGRFWULQDWLRQLQDQ\UHOLJLRQWRVD\QRWKLQJRI UHOLJLRQEHFDXVHWKHWD[GHGXFWLRQZDVDWUDGLWLRQDODUHDIRU KDYLQJVXFKDSULPDU\HIIHFW VWDWH OHJLVODWXUHV WR FRGLI\ SROLFLHV ZKLFK mDFKLHYH DQ HTXLWDEOH GLVWULEXWLRQ RI WKH WD[ EXUGHQl DQG EHFDXVH WKH 7KH 6XSUHPH &RXUW GHFLVLRQV VLQFH /HPRQ DQG 1\TXLVW GHGXFWLRQZDVDYDLODEOHIRUHGXFDWLRQDOH[SHQVHVLQFXUUHGE\ KDYH HPSKDVL]HG WKDW WKH FULWLFDO TXHVWLRQ LQ GHWHUPLQLQJ DOOSDUHQWVZKHWKHUWKHLUFKLOGUHQDWWHQGHG SXEOLFVFKRROV ZKHWKHU JRYHUQPHQW DLG XOWLPDWHO\ IORZLQJ WR UHOLJLRXV QRQVHFWDULDQSULYDWHVFKRROVRUFKXUFKDIILOLDWHGVFKRROV,G VFKRROV UHVXOWV LQ JRYHUQPHQWDO LQGRFWULQDWLRQ LV LI WKH DW UHFLSLHQW EHQHILFLDULHV PDNH D mJHQXLQHO\ LQGHSHQGHQW DQG SULYDWHFKRLFH>@lWRmVSHQGlWKHIXQGVLQDUHOLJLRXVVFKRRO 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
DQGSULYDWHVFKRROVERWKUHOLJLRXVDQGQRQUHOLJLRXVsXVWLFH 7KH &RXUW IRXQG LW FRPSHOOLQJ WKDW WKH GHGXFWLRQ ZDV 7KRPDV HPSKDVL]HG WKDW WKH VWDWXWH GLG QRW KDYH DQ DYDLODEOHIRUDOOSDUHQWVZLWKVFKRRODJHFKLOGUHQVWDWLQJWKDW mLPSHUPLVVLEOHHIIHFWlEHFDXVHWKHmSULQFLSOHVRIQHXWUDOLW\ WKLV DVSHFW ZDV mYLWDOO\ GLIIHUHQW IURP WKH VFKHPH VWUXFN DQGSULYDWHFKRLFHDQGWKHLUUHODWLRQVKLSWRHDFKRWKHU>WKDW@ GRZQ LQ 1\TXLVW 7KHUH SXEOLF DVVLVWDQFH DPRXQWLQJ WR ZHUH>DOVR@SURPLQHQWlLQWKH&RXUWjVGHFLVLRQVLQ$JRVWLQL WXLWLRQ JUDQWV ZDV SURYLGHG RQO\ WR SDUHQWV RI FKLOGUHQ LQ =REUHVW:LWWHUVDQG0XHOOHUZHUHSUHVHQW,GDW QRQSXEOLFVFKRROVl,GDW 7KH&RXUWDQDORJL]HGWKHWD[ GHGXFWLRQVFKHPHDVVLPLODUWRWKH*,%LOORURWKHUIRUPVRI ,, mSXEOLFDVVLVWDQFHPDGHDYDLODEOHJHQHUDOO\ZLWKRXWUHJDUGWR WKHVHFWDULDQQRQVHFWDULDQRUSXEOLFQRQSXEOLFQDWXUHRIWKH ,W LV DJDLQVW WKLV EDFNJURXQG RI FKDQJHG 6XSUHPH &RXUW LQVWLWXWLRQEHQHILWWHGl,G7KH&RXUWIRXQGLWVLJQLILFDQWWKDW (VWDEOLVKPHQW &ODXVH MXULVSUXGHQFH WKDW ZH PXVW WHVW WKH XQGHU WKH 0LQQHVRWD SODQ JRYHUQPHQWDO DLG ZDV RQO\ FRQVWLWXWLRQDOLW\RIWKH2KLRYRXFKHUSURJUDP FKDQQHOHGWKURXJKWKHSDUHQWVUDWKHUWKDQGLUHFWO\SDLGWRWKH SDURFKLDOLQVWLWXWLRQVDQGQRWHG WKDWLWZRXOGQRWEDVHWKH 7KH2KLRVWDWXWHLVWKHSURGXFWRID RUGHULVVXHGE\ FRQVWLWXWLRQDOLW\RIDVWDWXWHRQ WKH FRQVLGHUDWLRQRI\HDUO\ WKH8QLWHG6WDWHV'LVWULFW&RXUWLQ&OHYHODQGGLUHFWLQJWKH VWDWLVWLFDOHYLGHQFHFRQFHUQLQJZKLFKQRQVHFWDULDQVFKRROVo 2KLR6XSHULQWHQGHQWRI(GXFDWLRQWRDGGUHVVWKHHGXFDWLRQDO UHOLJLRXVRURWKHUZLVHoEHQHILWWHGIURPWKHWD[GHGXFWLRQ,G FULVLVLQ&OHYHODQGjVSXEOLFVFKRROV6HH5HHGY5KRGHV DW7KH&RXUWVWDWHGWKDWWKH(VWDEOLVKPHQW&ODXVHLVQRW )6XSS 1'2KLR 7KH2KLROHJLVODWXUHDQGWKH DEDUWRmWKHVRUWRIDWWHQXDWHGILQDQFLDOEHQHILWXOWLPDWHO\ VWDWHjVJRYHUQRUUHVSRQGHGZLWKWKHYRXFKHUSURJUDPWKDWLV FRQWUROOHGE\WKHSULYDWHFKRLFHVRILQGLYLGXDOSDUHQWVWKDW EHIRUHXVWRGD\6HH2KLR5HY&RGH HYHQWXDOO\ IORZV WR SDURFKLDO VFKRROV IURP WKH QHXWUDOO\ :HPD\VDIHO\DVVXPHWKDWLQIDVKLRQLQJWKHQHZODZWKH DYDLODEOHWD[EHQHILWDWLVVXHLQWKLVFDVHl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jVSXUSRVH FRQVWLWXWLRQDO6HH0F'RQDOGY%RDUGRI(OHFWLRQ&RPPjUV mXQPLVWDNDEO\ VHFXODUl LG DW DQG IRXQG WKDW XQOLNH 86 +DUWIRUG )LUH ,QV &R Y 1\TXLVWmDQ\DLGSURYLGHGXQGHU:DVKLQJWRQjVSURJUDPWKDW /DZUHQFH'\NHV*RRGHQEHUJHU%RZHU &ODQF\)G XOWLPDWHO\ IORZV WR UHOLJLRXV LQVWLWXWLRQV GRHV VR RQO\ DV D WK&LU 7KLVSUHVXPSWLRQLVQRWDPHUH UHVXOWRIWKHJHQXLQHO\LQGHSHQGHQWDQGSULYDWHFKRLFHVRIDLG OLWHUDU\ ILJXUH IRU URWH UHFLWDWLRQ LQ DOO DSSHOODWH RSLQLRQV UHFLSLHQWVl,GDW7KHIDFWWKDWWKHYRFDWLRQDODVVLVWDQFH DGGUHVVLQJWKHFRQVWLWXWLRQDOLW\RIOHJLVODWLYHHQDFWPHQWV LWLV ZDV SDLG GLUHFWO\ WR WKH VWXGHQW ZKR FRXOG H[SHQG WKH DEHGURFNUXOHRIVWDWXWRU\FRQVWUXFWLRQRQHZHDUHERXQG HGXFDWLRQDOIXQGVRQmZKROO\VHFXODUHGXFDWLRQlSHUVXDGHG DVVLGXRXVO\ WR KRQRU DV ZH EHJLQ RXU DVVHVVPHQW RI WKH WKH&RXUWWRILQGWKDWWKHSURJUDPGLGQRWFUHDWHDQLQFHQWLYH YDOLGLW\RIWKH2KLRVWDWXWH WRDSSO\WKHDLGWRUHOLJLRXVHGXFDWLRQ,Gm$LGUHFLSLHQWVj FKRLFHVDUHPDGHDPRQJDKXJHYDULHW\RISRVVLEOHFDUHHUVRI ZKLFKRQO\DVPDOOKDQGIXODUHVHFWDULDQ1RWKLQJLQWKH 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
UHFRUG LQGLFDWHV WKDW DQ\ VLJQLILFDQW SRUWLRQ RI WKH DLG XQGHUVWDQGLQJRIWKHFULWHULDIRUGHWHUPLQLQJZKHWKHULQDQ\ H[SHQGHGXQGHUWKH:DVKLQJWRQSURJUDPDVDZKROHZLOOHQG VSHFLILFSURJUDPJRYHUQPHQWDLGKDVWKHSULPDU\HIIHFWRI XSIORZLQJWRUHOLJLRXVHGXFDWLRQl,G7KH&RXUWDOVRIRXQG DGYDQFLQJUHOLJLRQKDGmFKDQJHGl,QGHHGLQ$JRVWLQLWKH WKDWmWKHPHUHFLUFXPVWDQFHWKDWSHWLWLRQHUKDVFKRVHQWRXVH 6XSUHPH&RXUWZHQWVRIDUDVWRPRGLI\WKH/HPRQWHVWLWKDG QHXWUDOO\ DYDLODEOH VWDWH DLG WR KHOS SD\ IRU KLV UHOLJLRXV UHOLHG XSRQ LQ 1\TXLVW 7KH $JRVWLQL &RXUW EHJDQ E\ HGXFDWLRQ>GRHVQRW@FRQIHUDQ\PHVVDJHRIVWDWHHQGRUVHPHQW UHFDVWLQJ/HPRQjVmHQWDQJOHPHQWlLQTXLU\DVDIDFWRUXQGHU RIUHOLJLRQl,GDW WKHmLPSHUPLVVLEOHHIIHFWlSURQJUDWKHUWKDQDVDVHSDUDWHDQG LQGHSHQGHQWFULWHULRQ6HH$JRVWLQL86DW,W ,Q$JRVWLQLY)HOWRQWKH&RXUWKHOGWKDWWKH(VWDEOLVKPHQW WKHQ LGHQWLILHG WKUHH QHZ VXEFULWHULD WR FRQVLGHU ZKHQ &ODXVHGLGQRWEDUD1HZ<RUNSURJUDPZKLFKVHQWSXEOLF HYDOXDWLQJ ZKHWKHU D JRYHUQPHQWDLG SURJUDP YLRODWHV VFKRRO WHDFKHUV LQWR SDURFKLDO VFKRROV WR SURYLGH UHPHGLDO /HPRQjVmLPSHUPLVVLEOHHIIHFWlSURQJ7KHVHDUH HGXFDWLRQWRGLVDGYDQWDJHGFKLOGUHQ5HFRJQL]LQJWKDWWKHUH KDG EHHQ VLJQLILFDQW FKDQJHV LQ (VWDEOLVKPHQW &ODXVH ZKHWKHU WKH DLG UHVXOWV LQ JRYHUQPHQWDO MXULVSUXGHQFH WKH &RXUW IRXQG WKDW LW FRXOG QR ORQJHU LQGRFWULQDWLRQ SUHVXPHmWKDWWKHSODFHPHQWRISXEOLFHPSOR\HHVRQSDURFKLDO VFKRROJURXQGVLQHYLWDEO\UHVXOWVLQWKHLPSHUPLVVLEOHHIIHFW ZKHWKHU WKH DLG SURJUDP GHILQHV LWV UHFLSLHQWV E\ RI VWDWHVSRQVRUHG LQGRFWULQDWLRQ RU FRQVWLWXWHV D V\PEROLF UHIHUHQFHWRUHOLJLRQ DQG XQLRQEHWZHHQJRYHUQPHQWDQGUHOLJLRQl86DW 7KH&RXUWQRWHGWKDWWKRVHGLUHFWDLGSURJUDPVZKHUHJUDQWV ZKHWKHU WKH DLG FUHDWHV DQ H[FHVVLYH HQWDQJOHPHQW DUHmPDGHDYDLODEOHJHQHUDOO\ZLWKRXWUHJDUGWRWKHVHFWDULDQ EHWZHHQJRYHUQPHQWDQGUHOLJLRQ QRQVHFWDULDQ RU SXEOLFQRQSXEOLF QDWXUH RI WKH LQVWLWXWLRQ EHQHILWWHG>DUHYDOLGGHSDUWXUHVIURPWKHJHQHUDOUXOH@WKDWDOO 6HHLGDW JRYHUQPHQWDLGWKDWGLUHFWO\DLGVWKHHGXFDWLRQDOIXQFWLRQRI UHOLJLRXVVFKRROVLVLQYDOLGl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mRQO\ DV D UHVXOW RI WKH JHQXLQHO\ LQGHSHQGHQW DQG SULYDWH SXEOLFVFKRRO6HHLGDW7KH$JRVWLQL&RXUWFRQFOXGHG FKRLFHV RI LQGLYLGXDOVl ,G DW FLWLQJ =REUHVW Y WKDWSURJUDPVLQZKLFKPRQH\XOWLPDWHO\IORZVWRDSULYDWH &DWDOLQD)RRWKLOOV6FK'LVW 86 7KH&RXUW UHOLJLRXVVFKRRO EDVHGRQWKHmµJHQXLQHO\LQGHSHQGHQWDQG QRWHG DV D FHQWUDO SDUW RI LWV DQDO\VLV WKDW WKH VHUYLFHV SULYDWH FKRLFHV RIj LQGLYLGXDOVl GR QRW YLRODWH WKH SURYLGHGE\SXEOLFVFKRROHPSOR\HHVZHUHUHPHGLDOVWDWLQJ (VWDEOLVKPHQW&ODXVH,GDW TXRWLQJ:LWWHUV86 WKDWWKHmVHUYLFHVGRQRWWKHUHIRUHUHOLHY>H@VHFWDULDQVFKRROV DW RIFRVWVWKH\RWKHUZLVHZRXOGKDYHERUQHLQHGXFDWLQJWKHLU )LQDOO\ LQ 0LWFKHOO Y +HOPV 6 &W D VWXGHQWVl ,G DW 7KH &RXUW FRQFOXGHG WKDW WKH 1HZ SOXUDOLW\RSLQLRQZULWWHQE\sXVWLFH7KRPDVWKH&RXUWXSKHOG <RUNSURJUDPVHUYLFHVmDUHDYDLODEOHWRDOOFKLOGUHQZKRPHHW WKH FRQVWLWXWLRQDOLW\ RI D IHGHUDOO\ PDQGDWHG /RXLVLDQD SURJUDPZKHUHHGXFDWLRQDOPDWHULDOVZHUHORDQHGWRSXEOLF 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
FHUWDLQHGXFDWLRQDOH[SHQVHVIRUSDUHQWVRIVWXGHQWVDWWHQGLQJ WKH $FWjV HOLJLELOLW\ UHTXLUHPHQWV QR PDWWHU ZKDW WKHLU HLWKHUSXEOLFRUSULYDWHVFKRROVUHOLJLRXVRUQRQUHOLJLRXVGLG UHOLJLRXVEHOLHIVRUZKHUHWKH\JRWRVFKRROl,GDW QRW YLRODWH WKH mLPSHUPLVVLEOH HIIHFWl SURQJ RI WKH /HPRQ WHVW7KH&RXUWIRFXVHGRQWKHIDFWWKDWWKHGHGXFWLRQZDV 7KH6XSUHPH&RXUWUHYLVLWHGWKLVLVVXHWKLVSDVWWHUP%\ JLYHQ GLUHFWO\ WR WKH SDUHQWV ZLWKRXW UHJDUG WR WKH W\SH RI DSOXUDOLW\WKH&RXUWXSKHOGDSURJUDPWRORDQHGXFDWLRQDO VFKRROUHOLJLRXVRUQRQUHOLJLRXVWRZKLFKWKHSDUHQWVPLJKW PDWHULDOVDQGHTXLSPHQWWRSULYDWHUHOLJLRXVVFKRROVZKLFK FKRRVH WR VHQG WKHLU FKLOGUHQ DV D VWURQJ LQGLFDWRU RI WKH FKDQQHOHGIHGHUDOIXQGVWKURXJKVWDWHDJHQFLHV6HH0LWFKHOO VWDWXWHjV mQHXWUDOLW\l 6HH LG DW $Q\ PRQH\ Y+HOPV6&W :ULWLQJIRUIRXUMXVWLFHV UHFHLYHGDWDUHOLJLRXVVFKRROWKH&RXUWVDLGZDVmXOWLPDWHO\ sXVWLFH7KRPDVFRQFOXGHGWKDWWKHFULWLFDOTXHVWLRQLQFDVHV FRQWUROOHGE\WKHSULYDWHFKRLFHVRILQGLYLGXDOSDUHQWVl,G RI JRYHUQPHQW DLG WR UHOLJLRXV VFKRROV LV ZKHWKHU WKH DW JRYHUQPHQW DLG LV QHXWUDO ZKHWKHU LW UHVXOWV IURP WKH JHQXLQHO\ LQGHSHQGHQW DQG SULYDWH FKRLFHV RI LQGLYLGXDO 7KLVSULQFLSOHnWKDWZKHWKHUSXEOLFIXQGVILQGWKHLUZD\WR SDUHQWV6HHLGDWsXVWLFH7KRPDVQRWHGWKDWWKH DUHOLJLRXVVFKRROLVRIQRFRQVWLWXWLRQDOFRQVHTXHQFHLIWKH\ QH[XV EHWZHHQ QHXWUDOLW\ DQG SULYDWH FKRLFH ZDV WKH JHW WKHUH DV D UHVXOW RI JHQXLQHO\ SULYDWH FKRLFHnZDV SURPLQHQWHYHQWKHFKLHIIDFWRULQXSKROGLQJJRYHUQPHQWDLG UHDVVHUWHGLQ:LWWHUVY:DVKLQJWRQ'HSDUWPHQWRI6HUYLFHV LQ $JRVWLQL =REUHVW :LWWHUV DQG 0XHOOHU DQG IRXQG WKDW IRUWKH%OLQG86 7KHUHD:DVKLQJWRQVWDWH WKHUHLVDFORVHUHODWLRQVKLSEHWZHHQSULYDWHFKRLFHDQGWKH SURJUDP VXUYLYHG DQ (VWDEOLVKPHQW &ODXVH FKDOOHQJH HYHQ TXHVWLRQRIZKHWKHUDSURJUDPFUHDWHVDILQDQFLDOLQFHQWLYHWR WKRXJKLWSURYLGHGYRFDWLRQDOUHKDELOLWDWLRQDVVLVWDQFHIRUD XQGHUWDNHUHOLJLRXVVFKRROLQJ6HHLGDW EOLQGLQGLYLGXDOWRDWWHQGD&KULVWLDQFROOHJHLQRUGHUWRVWXG\ WR EH D &KULVWLDQ SDVWRU )XQGV XQGHU WKH SURJUDP ZHUH 7KHRSLQLRQJRHVRQWRVWDWHWKDWm>L@IDLGWRVFKRROVHYHQ GLVSHUVHG GLUHFWO\ WR WKH HOLJLEOH DSSOLFDQWV ZKR PDGH WKH GLUHFW DLG LV QHXWUDOO\ DYDLODEOH DQG EHIRUH UHDFKLQJ RU FKRLFHRIZKHUHWRH[SHQGWKHHGXFDWLRQDOIXQGV WKHUHIRUH EHQHILWWLQJDQ\UHOLJLRXVVFKRROILUVWSDVVHVWKURXJKWKHKDQGV m>D@Q\DLGWKDWXOWLPDWHO\IORZ>HG@WRUHOLJLRXVLQVWLWXWLRQV OLWHUDOO\RUILJXUDWLYHO\ RIQXPHURXVSULYDWHFLWL]HQVZKRDUH >GLG@ VR RQO\ DV D UHVXOW RI WKH JHQXLQHO\ LQGHSHQGHQW DQG IUHH WR GLUHFW WKH DLG HOVHZKHUH WKH JRYHUQPHQW KDV QRW SULYDWHFKRLFHVRIDLGUHFLSLHQWVl,GDW SURYLGHG DQ\ VXSSRUW RI UHOLJLRQl 6 &W DW LQWHUQDOFLWDWLRQVRPLWWHG 7KHRSLQLRQUHFRJQL]HVWKDWWKHUH ,Q=REUHVWY&DWDOLQD)RRWKLOOV6FKRRO'LVWULFW 86 H[LVWmVSHFLDO(VWDEOLVKPHQW&ODXVHGDQJHUVZKHQPRQH\LV WKH&RXUWXSKHOGWKHFRQVWLWXWLRQDOLW\RIDSURJUDP JLYHQWRUHOLJLRXVVFKRROVRUHQWLWLHVGLUHFWO\UDWKHUWKDQDVLQ SURYLGLQJDVLJQODQJXDJHLQWHUSUHWHUIRUDGHDIVWXGHQWLQD :LWWHUV DQG 0XHOOHU LQGLUHFWO\l ,G DW LQWHUQDO &DWKROLFKLJKVFKRRO5HO\LQJXSRQ:LWWHUVDQG0XHOOHUWKH FLWDWLRQV RPLWWHG ,Q D IRRWQRWH sXVWLFH 7KRPDV =REUHVW &RXUW FRQFOXGHG WKDW WKH VWDWXWH JDYH SDUHQWV WKH K\SRWKHVL]HG mWKDW WKH SULQFLSOHV RI QHXWUDOLW\ DQG SULYDWH FKRLFHRIZKHUHWRVHQGWKHLUHOLJLEOHFKLOGUHQWRVFKRRODQG FKRLFHZRXOGEHDGHTXDWHWRDGGUHVVWKRVHVSHFLDOULVNVl,G mGLVWULEXWHV EHQHILWV QHXWUDOO\ ZLWKRXW UHJDUG WR WKH DWQ+HFRQWLQXHGWRILQGWKDWDWOHDVWLQUHJDUGVWR µVHFWDULDQQRQVHFWDULDQ RU SXEOLFQRQSXEOLF QDWXUHj RI WKH 1\TXLVWWKHSURKLELWLRQDJDLQVWGLUHFWSD\PHQWVZDVOLQNHGWR VFKRROl,GDW TXRWLQJ:LWWHUV86DW mVHULRXV FRQFHUQV DERXW ZKHWKHU WKH SD\PHQWV ZHUH WUXO\ QHXWUDOl,G 7KLVOLQHRIFDVHVFXOPLQDWHGLQWKH$JRVWLQLGHFLVLRQLQ LQ ZKLFK WKH 6XSUHPH &RXUW GHFODUHG WKDW LWV 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
$OWKRXJKsXVWLFH2j&RQQRUFRQFXUUHGLQWKHMXGJPHQWVKH VWDWXWH PXVW QRW IRVWHU DQ H[FHVVLYH JRYHUQPHQW ZURWHVHSDUDWHO\LQ0LWFKHOOEDVHGXSRQKHUEHOLHIWKDWmWKH HQWDQJOHPHQWZLWKUHOLJLRQ SOXUDOLW\DQQRXQFHVDUXOHRIXQSUHFHGHQWHGEUHDGWKIRUWKH HYDOXDWLRQRI(VWDEOLVKPHQW&ODXVHFKDOOHQJHVWRJRYHUQPHQW ,GDW HPSKDVLVDGGHG LQWHUQDOTXRWDWLRQPDUNVDQG VFKRRODLG SURJUDPVl 6 &W DW sXVWLFH FLWDWLRQRPLWWHG 2j&RQQRUjVFRQFXUULQJRSLQLRQVKRZVGLVDJUHHPHQWQRWRQO\ ZLWKWKHmH[SDQVLYHVFRSHRIWKHSOXUDOLW\jVUXOH>@lEXWZLWK 7KH1\TXLVW&RXUWUXOHGWKDWWKH1HZ<RUNVWDWXWHYLRODWHG WZRVSHFLILFDVSHFWVRILWVDQDO\VLV,G)LUVWVKHIRXQGWKH WKH/HPRQ WHVWEHFDXVHLWKDGWKHmLPSHUPLVVLEOHHIIHFWRI SOXUDOLW\jVmWUHDWPHQWRIQHXWUDOLW\FRPHVFORVHWRDVVLJQLQJ DGYDQFLQJUHOLJLRQl1\TXLVW86DW ,WGLGVRWKH WKDWIDFWRUVLQJXODULPSRUWDQFHLQWKHIXWXUHDGMXGLFDWLRQRI &RXUW VDLG E\ SURYLGLQJ GLUHFW ILQDQFLDO DVVLVWDQFH WR (VWDEOLVKPHQW&ODXVHFKDOOHQJHVWRJRYHUQPHQWVFKRRODLG UHOLJLRXVVFKRROVZLWKRXWDQ\UHVWULFWLRQVDVWRWKHVFKRROVj SURJUDPVl,G6HFRQGVKHIRXQGmWKHSOXUDOLW\jVDSSURYDO XVHRIWKHIXQGVWKHUHIRUHmDGYDQF>LQJ@WKHUHOLJLRXVPLVVLRQ RI DFWXDO GLYHUVLRQ RI JRYHUQPHQW DLG WR UHOLJLRXV RIVHFWDULDQVFKRROVl,GDW %XWWKUHH\HDUVDJRLQ LQGRFWULQDWLRQ LV LQ WHQVLRQ ZLWK RXU SUHFHGHQWV DQG $JRVWLQLY)HOWRQ86 WKH6XSUHPH&RXUW XQQHFHVVDU\WRGHFLGHWKHLQVWDQWFDVHl,G GHFODUHGXQPLVWDNDEO\WKDWmZHKDYHGHSDUWHGIURPWKHUXOH WKDWDOOJRYHUQPHQWDLGWKDWGLUHFWO\DVVLVWVWKHHGXFDWLRQDO :KLOHDJUHHLQJZLWKsXVWLFH7KRPDVWKDWmQHXWUDOLW\LVDQ IXQFWLRQ RI UHOLJLRXV VFKRROV LV LQYDOLGl ,G DW 7KH LPSRUWDQW UHDVRQ IRU XSKROGLQJ JRYHUQPHQWDLG SURJUDPV $JRVWLQL &RXUW WKHQ SURFHHGHG WR UHGHILQH DQG QDUURZ WKH DJDLQVW(VWDEOLVKPHQW&ODXVHFKDOOHQJHVlsXVWLFH2j&RQQRU FULWHULDIRUGHWHUPLQLQJZKHQJRYHUQPHQWDLGWKDWILQGVLWV RSLQHGWKDWmQHXWUDOLW\LVQRWDORQHVXIILFLHQWWRTXDOLI\WKHDLG ZD\WRDUHOLJLRXVVFKRROKDVWKHSULPDU\HIIHFWRIDGYDQFLQJ DV FRQVWLWXWLRQDOl 6 &W DW 6KH FULWLFL]HG UHOLJLRQ sXVWLFH7KRPDVjVRSLQLRQIRUUHO\LQJRQORJLFZKLFKZRXOG VXSSRUWGLUHFWJRYHUQPHQWDLGWRUHOLJLRXVRUJDQL]DWLRQVEDVHG $JDLQ,GRQRWTXHVWLRQIRUDPRPHQWWKHFRUUHFWQHVVRI RQ WKH QXPEHU RI SHUVRQV EHORQJLQJ WR HDFK RUJDQL]DWLRQ WKH 6XSUHPH &RXUWjV GHFLVLRQ LQ 1\TXLVW , DFFHSW LW ERWK m>7@KHSOXUDOLW\RSLQLRQIRUHVKDGRZVWKHDSSURYDORIGLUHFW DQDO\WLFDOO\DQGSUHFHGHQWLDOO\DVDIDLWKIXO DSSOLFDWLRQ PRQHWDU\VXEVLGLHVWRUHOLJLRXVRUJDQL]DWLRQVHYHQZKHQWKH\ RIWKHmSULPDU\HIIHFWlWHVWRI/HPRQ+RZHYHU1\TXLVWZDV XVHWKHPRQH\WRDGYDQFHWKHLUUHOLJLRXVREMHFWLYHVl,GDW QRW DQDO\]HG DQG GHFLGHG XQGHU ZKDW WKH $JRVWLQL &RXUW sXVWLFH 2j&RQQRU UHMHFWHG DQ RXWULJKW EDQ RQ DQ\ FDOOHGLWVmFKDQJHGXQGHUVWDQGLQJRIWKHFULWHULDXVHGWR GLYHUVLRQRIJRYHUQPHQWIXQGVWRVHFWDULDQXVHVEXWZRXOG DVVHVVZKHWKHUDLGWRUHOLJLRQKDVDQLPSHUPLVVLEOHHIIHFWl HQDFWDUXOHZKLFKUHTXLUHVSODLQWLIIVWRSURYHWKDWWKHDLGLQ ,GDW6LQFHWKLVDSSHDOLVDOVRDQmLPSHUPLVVLEOHHIIHFWl TXHVWLRQ LV RU KDV EHHQ XVHG IRU UHOLJLRXV SXUSRVHV DQG FDVHRXUGHFLVLRQFDQQRWEHFRQWUROOHGE\1\TXLVW IRXQG WKDW mSUHVXPSWLRQV RI UHOLJLRXV LQGRFWULQDWLRQ DUH QRUPDOO\ LQDSSURSULDWH ZKHQ HYDOXDWLQJ QHXWUDO VFKRRODLG % SURJUDPVXQGHUWKH(VWDEOLVKPHQW&ODXVHl,GDW :KDW WKHQ LV WKH 6XSUHPH &RXUWjV mFKDQJHG sXVWLFH 2j&RQQRU FRQFOXGHG WKDW EHFDXVH WKH VFKRRODLG XQGHUVWDQGLQJlRIWKHSURSHUWHVWIRUGHWHUPLQLQJZKHWKHUD SURJUDPLQ$JRVWLQLZDVVLPLODUWRWKDWDWLVVXHLQ0LWFKHOO ODZKDVWKHSULPDU\HIIHFWRIDGYDQFLQJUHOLJLRQ" WKH$JRVWLQLFULWHULDVKRXOGFRQWUROWKHRXWFRPHRIWKHFDVH KRZHYHU VKH QRWHG WKDW WKH mVFKRRODLG FDVHV RIWHQ SRVH ,Q0XHOOHUY$OOHQ86 WKH&RXUWKHOG WKDW D 0LQQHVRWD VWDWXWH DXWKRUL]LQJ D WD[ GHGXFWLRQ IRU 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
7KLUGWKH1HZ<RUNVWDWXWHSHUPLWWHGJRYHUQPHQWDLGWR GLIILFXOWTXHVWLRQVDWWKHLQWHUVHFWLRQRIWKHQHXWUDOLW\DQGQR VFKRROV WKDW GLVFULPLQDWHG DJDLQVW FKLOGUHQ RQ WKH EDVLV RI DLGSULQFLSOHVDQGWKHUHIRUHGHI\VLPSOHFDWHJRUL]DWLRQXQGHU UHOLJLRQ DQG LQ IDFW VHYHUDO TXDOLI\LQJ VFKRROV LPSRVHG HLWKHUUXOHl6&WDW UHOLJLRXVUHVWULFWLRQVRQDGPLVVLRQV6HHLGDW ,QUHJDUGWR0LWFKHOODQGLWVVKDUSO\GLYLGHGSOXUDOLW\ZH 7KH2KLRYRXFKHUSURJUDPRQWKHRWKHUKDQGFRQWDLQVD QRWHWKDWm>Z@KHQDIUDJPHQWHG&RXUWGHFLGHVDFDVHDQGQR SURYLVLRQ H[SOLFLWO\ IRUELGGLQJ SDUWLFLSDWLQJ VFKRROV IURP VLQJOHUDWLRQDOHH[SODLQLQJWKHUHVXOWHQMR\VWKHDVVHQWRIILYH GLVFULPLQDWLQJ DJDLQVW SURVSHFWLYH VWXGHQWV RQ WKH EDVLV RI sXVWLFHV WKH KROGLQJ RI WKH &RXUW PD\ EH YLHZHG DV WKDW UHOLJLRQ6HH2KLR5HY&RGH $ SRVLWLRQ WDNHQ E\ WKRVH 0HPEHUV ZKR FRQFXUUHG LQ WKH MXGJPHQWV RQ WKH QDUURZHVW JURXQGVjl 0DUNV Y 8QLWHG ,WLVFOHDUWKDWWKH1HZ<RUNVWDWXWHVWUXFNGRZQLQ1\TXLVW 6WDWHV86 TXRWLQJ*UHJJY*HRUJLD DQGWKH2KLRVWDWXWHEHIRUHXVDUHGLVVLPLODUODZVERWKLQWKHLU 86 Q $FFRUGLQJO\ZHILQGWKDWWKH SXUSRVHV DQG WKH PHWKRGRORJLHV IRU FDUU\LQJ RXW WKHLU RSLQLRQRIsXVWLFH2j&RQQRULVWKHQDUURZHURIWKHSOXUDOLW\ SXUSRVHV$VWKHPDMRULW\DFNQRZOHGJHVm>D@VLQJOHIDFWXDO DV LW XWLOL]HV WKH VWDQGDUG RI $JRVWLQL EDVHG RQ D IDFWXDO GLIIHUHQFH FRQVHTXHQWO\ FDQ VHUYH WR HQWDQJOH RU IUHH D VLPLODULW\ UDWKHU WKDQ FUHDWLQJ D QHZ VWDQGDUG FHQWHUHG RQ SDUWLFXODU JRYHUQPHQWDO SUDFWLFH IURP WKH UHDFK RI WKH QHXWUDOLW\WKHUHE\PDNLQJLWVPDQGDWHVFRQWUROOLQJ >(VWDEOLVKPHQW@&ODXVHjVFRQVWLWXWLRQDOSURKLELWLRQl6OLSRS DWBB LQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQRPLWWHG $FDVH ,,, FRQVWUXLQJ D VWDWXWH VR PDQLIHVWO\ GLIIHUHQW WKDQ WKH RQH EHIRUH XV FRXOG KDUGO\ DV D IDFWXDO PDWWHU EH D ELQGLQJ :HQRZDSSO\WKHIUDPHZRUNHVWDEOLVKHGE\SUHFHGHQWWR SUHFHGHQWRQWKLVFRXUW WKHFDVHEHIRUHXVUHFRJQL]LQJWKHSUHGRPLQDWLQJWKHPHLQ WKLVDUHDRIODZWREHWKHQHHGIRUFDUHIXOMXGLFLDODWWHQWLRQWR WKHIDFWXDOGHWDLOLQWKHFKDOOHQJHGVWDWXWRU\VFKHPH 7KHVXEVWDQWLDOGLIIHUHQFHVLQWKHSXUSRVHDQGDSSOLFDWLRQ $W WKH RXWVHW ZH QRWH WKDW 'HIHQGDQWVj DUJXPHQW RI WKHWZRVWDWXWHVLVQRWWKHRQO\UHDVRQ1\TXLVWGRHVQRW FRQFHUQLQJRWKHURSWLRQVDYDLODEOHWR&OHYHODQGSDUHQWVVXFK JRYHUQRXUUHVXOW7KHDGGLWLRQDOUHDVRQLVWKDWWKHUXOHRIODZ DVWKH&RPPXQLW\6FKRROVLVDWEHVWLUUHOHYDQW$QDO\]LQJWKH XSRQ ZKLFK 1\TXLVW ZDV GHFLGHG KDV FKDQJHG )LUVW WKH VFKRODUVKLS SURJUDP FKRLFHV DV FRPSDUHG WR FKRLFHV RU 1\TXLVWHUDFDWHJRULFDOSURKLELWLRQDJDLQVWGLUHFWJUDQWVWRDLG VFKRROVRXWVLGHWKHSURJUDPLVDVNLQJWKLV&RXUWWRH[DPLQH UHOLJLRXVVFKRROVLVQRORQJHUWKHODZ DQGVHFRQGWKHFULWHULD WKHHQWLUHFRQWH[WRI2KLRHGXFDWLRQ6XFKDTXHVWLRQLVQRW IRU GHWHUPLQLQJ ZKHQ D VWDWXWH KDV WKH IRUELGGHQ mSULPDU\ EHIRUHWKLV&RXUW7KH'HIHQGDQWVjDUJXPHQWZRXOGUHZULWH HIIHFWl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
+RZHYHUWKHVWDWXWRU\UHFRUGGRHVQRWVXSSRUWWKLVDUJXPHQW QHXWUDO DQG QRQLGHRORJLFDO SXUSRVHV LW LV FOHDU IURP RXU H[FHSWIRUSHUKDSVWKHOLWHUDOPHDQLQJWKDWWKHWZRSURJUDPV FDVHVWKDWGLUHFWDLGLQZKDWHYHUIRUPLVLQYDOLGl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jV ILQDQFLDOO\ WURXEOHG SULYDWH VLPLODUO\DFRPSOHWHSURJUDPZLWKLQWKH&RGH WKHVWDWXWRU\ VFKRROVEHFDXVHWKHLUFORVLQJZRXOGIRUFH1HZ<RUNjVSXEOLF SURYLVLRQV JRYHUQ DOO DVSHFWV RI WKH SURJUDP ZLWKRXW VFKRROV WR DEVRUE WKH SULYDWH VFKRRO VWXGHQWV UHVXOWLQJ LQ UHIHUHQFHWRWKHYRXFKHUSURJUDP:HPD\QRWYLHZWKHVH PDVVLYHLQFUHDVHGFRVWVDQGWKHUHODWHGEXUGHQVRIDEVRUELQJ WZRSURJUDPVDVLQH[WULFDEO\LQWHUGHSHQGHQWZKHQWKHSODLQ DVPDQ\DVWKUHHTXDUWHUVRIDPLOOLRQQHZVWXGHQWV ODQJXDJHRIWKHVWDWXWRU\VFKHPHGHPRQVWUDWHVWKHRSSRVLWH ,W LV VLPSO\ QRW WKH SURSHU UROH RI WKH FRXUWV WR FKDQJH 7KHSXUSRVHRIWKH2KLRVWDWXWHRQWKHRWKHUKDQGLVWR VWDWXWRU\FRQVWUXFWLRQE\MXGLFLDOILDW6HH%URJDQY8QLWHG SURYLGHILQDQFLDOKHOSWRSRYHUW\OHYHOVWXGHQWVDWWHQGLQJWKH 6WDWHV86 1DW O/LIHDQG$FFLGHQW,QV SXEOLFVFKRROVLQ&OHYHODQGLQRUGHUWRHQDEOHWKHPLIWKH\ &RY8QLWHG6WDWHV)G WK&LU m7KH ZLVKWRDWWHQGQRQUHOLJLRXVSULYDWHVFKRROVUHOLJLRXVSULYDWH &RXUWV GR QRW KDYH WKH SRZHU WR UHSHDO RU DPHQG WKH VFKRROVSXEOLFVFKRROVLQQHLJKERULQJGLVWULFWVWKDWZLVKWR HQDFWPHQWVRIWKHOHJLVODWXUHHYHQWKRXJKWKH\PD\GLVDJUHH SDUWLFLSDWH LQ WKH YRXFKHU SURJUDP RU WR REWDLQ VSHFLDO ZLWKWKHUHVXOW UDWKHULWLVWKHLUIXQFWLRQWRJLYHWKHQDWXUDO WXWRULQJZKLOHUHPDLQLQJLQWKH&OHYHODQGSXEOLFVFKRROV DQG SODLQ PHDQLQJ HIIHFW WR VWDWXWHV l 6KRXOG ZH FRQVLGHUWKH&RPPXQLW\6FKRROVSURJUDPLQRXUDQDO\VLVRI 6HFRQGWKH1HZ<RUNSURJUDPLQYROYHGGLUHFWILQDQFLDO WKHFRQVWLWXWLRQDOLW\RIWKHVFKRROYRXFKHUSURJUDPZHZRXOG JUDQWV WR 1HZ <RUNjV SULYDWH VFKRROV UHOLJLRXV DQG RSHQWKHGRRUWRDZLGHUHDFKLQJDQDO\VLVZKLFKZRXOGSHUPLW QRQUHOLJLRXVSULPDULO\IRUPDLQWHQDQFHDQGUHSDLU$OWKRXJK XVWRFRQVLGHUDQ\DQGDOOVFKRODUVKLSSURJUDPVDYDLODEOHWR WKHWXLWLRQUHLPEXUVHPHQWDQGWD[UHOLHIVHFWLRQVRIWKHVWDWXWH FKLOGUHQ ZKR TXDOLI\ IRU WKH VFKRRO YRXFKHU SURJUDP ZH DSSHDUHGWREHQHILWWKHSDUHQWVRISULYDWHVFKRROFKLOGUHQWKH ZRXOGEHFRQVLGHULQJDQGFRPSDULQJHYHU\DYDLODEOHRSWLRQ 1\TXLVW&RXUWVWDWHGWKDWWKHmWXLWLRQUHLPEXUVHPHQWSURJUDP IRU&OHYHODQGFKLOGUHQ6XFKDQDQDO\VLVZRXOGH[SDQGRXU DOVR IDLOV WKH µHIIHFWj WHVW IRU PXFK WKH VDPH UHDVRQV WKDW MXULVGLFWLRQIDUEH\RQGWKHFDVHDWKDQG ZHDUHSUHVHQWHGRQO\ JRYHUQLWVPDLQWHQDQFHDQGUHSDLUJUDQWVl,G ZLWK WKH TXHVWLRQ RI ZKHWKHU WKH VFKRRO YRXFKHU SURJUDP 8QGHUWKH2KLRYRXFKHUSURJUDPRQWKHRWKHUKDQGWKHUH YLRODWHV WKH (VWDEOLVKPHQW &ODXVH DQG ZH PXVW OLPLW LVQRSURYLVLRQIRUDQ\ILQDQFLDOJUDQWVLQDQ\IRUPWRDQ\ RXUVHOYHV WR WKDW LVVXH UHJDUGOHVV RI WKH WHPSWDWLRQV SULYDWHVFKRROV$YRXFKHUUHFLSLHQWUHFHLYHVDVFKRODUVKLS 'HIHQGDQWVjDUJXPHQWVSUHVHQW FKHFN DQG WKH IXQGV WKHUHIURP UHDFK D SULYDWH UHOLJLRXV :H ILQG WKDW 1\TXLVW JRYHUQV RXU UHVXOW )DFWXDOO\ WKH VFKRRORQO\DIWHUDFKLOGjVSDUHQWVKDYHFRQVLGHUHGDYDULHW\ SURJUDPDWKDQGLVDWXLWLRQJUDQWSURJUDPIRUORZLQFRPH RIRSWLRQVDYDLODEOHWRWKHPDQGKDYHFKRVHQWKHUHOLJLRXV SULYDWHVFKRRODVWKHEHVWRSWLRQIRUWKHLUFKLOG 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
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jVSULYDWH VHFWDULDQ 7KH 1\TXLVW &RXUW LWVHOI IRXQG WKHUH WR EH QR VFKRROV YLRODWHG WKH (VWDEOLVKPHQW &ODXVH 7KH VWDWXWH GLVWLQFWLRQEHWZHHQmDUHLPEXUVHPHQWDUHZDUGRUDVXEVLG\ SURYLGHGIRUWKUHHIRUPVRIDVVLVWDQFH GLUHFWJUDQWVIRU >DVLQDOOWKUHH@WKHVXEVWDQWLYHLPSDFWLVVWLOOWKHVDPHl EXLOGLQJPDLQWHQDQFHDQGUHSDLUVIRUSULYDWHVFKRROEXLOGLQJV 86DW$VLQ1\TXLVWWKH2KLRSURJUDPFRQWDLQVQR WXLWLRQUHLPEXUVHPHQWJUDQWVIRUVRPHORZLQFRPHSDUHQWV mHIIHFWLYH PHDQV RI JXDUDQWHHLQJ WKDW WKH VWDWH DLG GHULYHG RIFKLOGUHQDOUHDG\DWWHQGLQJWKHSULYDWHVFKRROV DQG D IURP SXEOLF IXQGV ZLOO EH XVHG H[FOXVLYHO\ IRU VHFXODU IRUPRIWD[UHOLHIIRUSDUHQWVZKRIDLOHGWRTXDOLI\IRUWXLWLRQ QHXWUDODQGQRQLGHRORJLFDOSXUSRVHVl,GDW+HUHWKHUH UHLPEXUVHPHQWXQGHUWKHVWDWXWH6HH1\TXLVW86DW LVFOHDUO\mQRHQGHDYRUWRJXDUDQWHHWKHVHSDUDWLRQEHWZHHQ VHFXODU DQG UHOLJLRXV IXQFWLRQV DQG WR HQVXUH WKDW 6WDWH ILQDQFLDODLGVXSSRUWVRQO\WKHIRUPHUl,GDW,QERWK 7KH1HZ<RUNOHJLVODWXUHHQDFWHGWKHVWDWXWHIRUWKHVROH 1\TXLVWDQGWKLVFDVHWKHUHDUHQRUHVWULFWLRQVRQWKHUHOLJLRXV SXUSRVH RI GLUHFWO\ EHQHILWWLQJ 1HZ <RUN VWDWHjV VFKRROVDVWRWKHLUXVHRIWKHWXLWLRQIXQGVoWKHIXQGVPD\EH ILQDQFLDOO\SUHVVHGSULYDWHVFKRROVZKHUHLQVRPH XVHG IRU UHOLJLRXV LQVWUXFWLRQ RU PDWHULDOV DV HDVLO\ DV IRU VWXGHQWVnDOPRVW RI WKH VWDWHjV HQWLUH HUDVHUVDQGSOD\JURXQGHTXLSPHQW HOHPHQWDU\ DQG VHFRQGDU\ VFKRRO SRSXODWLRQnZHUH EHLQJ HGXFDWHG6HHLGDW7KHOHJLVODWLYHmILQGLQJVlLQWKH 'HVSLWHWKHODQJXDJHRIWKHVWDWXWHWKHUHLVQRHYLGHQFHWKDW 1HZ<RUNVWDWXWHGHFODUHG LWZDVLQWKHVWDWHjVLQWHUHVWWR WKHWXLWLRQYRXFKHUVVHUYHDVDQHXWUDOIRUPRIVWDWHDVVLVWDQFH SURYLGHIXQGLQJIRUmPDLQWHQDQFHDQGUHSDLUlRIWKHVWDWHjV ZKLFK ZRXOG H[FXVH WKH GLUHFW IXQGLQJ RI UHOLJLRXV SULYDWH VFKRROV LQ RUGHU WR SURWHFW WKH KHDOWK DQG VDIHW\ RI LQVWLWXWLRQV E\ WKH VWDWH GHVSLWH WKH VWDWXWHjV ODQJXDJH WKRVHDWWHQGLQJWKHVFKRROV WKHVWDWHKDGDQLQWHUHVWLQ $GPLWWHGO\WKHYRXFKHUSURJUDPGRHVQRWUHVWULFWHQWU\LQWR SURPRWLQJ mDOWHUQDWLYH HGXFDWLRQDO V\VWHPVl DQG D WKH SURJUDP WR UHOLJLRXV RU VHFWDULDQ VFKRROV EXW IDFLDO mSUHFLSLWRXV GHFOLQHl LQ WKH QXPEHU RI FKLOGUHQ DWWHQGLQJ QHXWUDOLW\DORQHGRHVQRWEULQJVWDWHDFWLRQLQWRFRPSOLDQFH SULYDWHVFKRROVZRXOGSHUSHWXDWHDQDOUHDG\H[LVWLQJILVFDO ZLWKWKH)LUVW$PHQGPHQW6HH&KXUFKRIWKH/XNXPL%DEOX FULVLVLQSXEOLFVFKRROV,GDW $\H,QFY&LW\RI+LDOHDK86 7KH VFKRROYRXFKHUSURJUDPLVQRWQHXWUDOLQWKDWLWGLVFRXUDJHV 7KH1\TXLVW&RXUWKHOGWKDWWKH1HZ<RUNODZRIIHQGHGWKH WKH SDUWLFLSDWLRQ E\ VFKRROV QRW IXQGHG E\ UHOLJLRXV (VWDEOLVKPHQW &ODXVH EHFDXVH mWKH HIIHFW RI WKH DLG >ZDV@ LQVWLWXWLRQVDQGWKH&OHYHODQGSURJUDPOLPLWVWKHVFKRROVWR XQPLVWDNDEO\ WR SURYLGH GHVLUHG ILQDQFLDO VXSSRUW IRU ZKLFKDSDUHQWFDQDSSO\WKHYRXFKHUIXQGVWRWKRVHZLWKLQ QRQSXEOLFVHFWDULDQLQVWLWXWLRQVl,GDW)XUWKHUPRUH WKH SURJUDP 3UDFWLFDOO\ VSHDNLQJ WKH WXLWLRQ UHVWULFWLRQV WKH 1\TXLVW &RXUW FRQFOXGHG WKDW m>L@Q WKH DEVHQFH RI DQ PDQGDWHG E\ WKH VWDWXWH OLPLW WKH DELOLW\ RI QRQVHFWDULDQ HIIHFWLYH PHDQV RI JXDUDQWHHLQJ WKDW WKH VWDWH DLG GHULYHG VFKRROV WR SDUWLFLSDWH LQ WKH SURJUDP DV UHOLJLRXV VFKRROV IURP SXEOLF IXQGV ZLOO EH XVHG H[FOXVLYHO\ IRU VHFXODU RIWHQKDYHORZHURYHUKHDGFRVWVVXSSOHPHQWDOLQFRPHIURP 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
SULYDWHGRQDWLRQVDQGFRQVHTXHQWO\ORZHUWXLWLRQQHHGV6HH FDVH LV GLUHFWO\ RQ SRLQW DQG WKH IDFWXDOO\ XQVXSSRUWHG 0DUWKD0LQRZ5HIRUPLQJ6FKRRO5HIRUP)RUGKDP/ DQWLUHOLJLRXVVFKRROV DUJXPHQWV LQ WKH RSLQLRQ VWURQJO\ 5HY ILQGLQJ WKDW YRXFKHU IXQGLQJ OHYHOV VXJJHVWWKDWWKHPDMRULW\KDVVLPSO\VLJQHGRQWRWKHIDPLOLDU W\SLFDOO\ mDSSUR[LPDWH>@ WKH WXLWLRQ OHYHO VHW E\ SDURFKLDO DQWLYRXFKHUPDQWUDWKDWYRXFKHUSURJUDPVDUHQRPRUHWKDQ VFKRROV>ZKLFK@UHIOHFWVVXEVLGLHVIURPRWKHUVRXUFHVl ,Q DVFKHPHWRIXQQHOSXEOLFIXQGVLQWRUHOLJLRXVVFKRROV IDFW 'HIHQGDQWV DGPLW WKDW WKHUH LV LQFHQWLYH IRU SULYDWH QRQVHFWDULDQVFKRROVWRSDUWLFLSDWHLQWKHFRPPXQLW\VFKRROV , SURJUDPUDWKHUWKDQLQWKHVFKRROYRXFKHUSURJUDP6HH%ULHI RI6WDWHDW7KHHYLGHQFHLOOXVWUDWHVWKLVSRLQWLQWKDW ,W LV LPSOLFLW LQ WKH PDMRULW\jV UHDVRQLQJ WKDW WKHUH LV QR RISDUWLFLSDWLQJVFKRROVDUHVHFWDULDQMXVWDVLQ1\TXLVWZKHUH QHHGIRUDQ\LQGHSHQGHQWDQDO\VLVZKHWKHU2KLRjVYRXFKHU RIWKHSDUWLFLSDWLQJVFKRROVZHUHVHFWDULDQ%H\RQGWKDW SURJUDPYLRODWHVWKH(VWDEOLVKPHQW&ODXVHEHFDXVH1\TXLVW ZHQRWHWKDWWKHQXPEHURIDYDLODEOHSODFHVIRUVWXGHQWVLQ LVmRQSRLQWZLWKWKHPDWWHUDWKDQGl6OLSRSDW,QP\ VHFWDULDQVFKRROVLVKLJKHUWKDQDVPDQ\RIWKHVHFWDULDQ MXGJPHQWWKHPDMRULW\LVPLVWDNHQDVDPDWWHURIIDFW WKHWZR VFKRROVDUHODUJHUDQGSURYLGHDJUHDWHUQXPEHURISODFHVIRU VWDWXWHV DUH WRWDOO\ GLIIHUHQW DQG DV D PDWWHU RI ODZ WKH FKLOGUHQLQWKHYRXFKHUSURJUDP0RUHRYHUFORVHWR RI UHOHYDQW (VWDEOLVKPHQW &ODXVH MXULVSUXGHQFH KDV FKDQJHG WKHVWXGHQWVHQUROOHGLQWKHSURJUDPIRUWKH VFKRRO VLQFH 1\TXLVW $V WR WKH ODWWHU D UHDGLQJ RI WKH 6XSUHPH \HDUDWWHQGHGVHFWDULDQLQVWLWXWLRQV &RXUWjV (VWDEOLVKPHQW &ODXVH FDVHV GHFLGHG VLQFH PDNHVLWXQPLVWDNDEO\FOHDUWKDWWKHYRXFKHUSURJUDPSDVVHV 7KHDOOHJHGFKRLFHDIIRUGHGERWKSXEOLFDQGSULYDWHVFKRRO FRQVWLWXWLRQDOPXVWHU,GRQRWFODLPWKDWWKH1\TXLVWGHFLVLRQ SDUWLFLSDQWVLQWKLVSURJUDPLVLOOXVRU\LQWKDWWKHSURJUDPjV KDV EHHQ RYHUUXOHG DOWKRXJK VRPH RI WKH UHDVRQLQJ LQ WKH GHVLJQ GRHV QRW UHVXOW LQ WKH SDUWLFLSDWLRQ RI WKH DGMDFHQW 1\TXLVWRSLQLRQKDVEHHQmXQGHUPLQHGlDVWKH2KLR6XSUHPH SXEOLFVFKRROVIURPRXWVLGHWKH&OHYHODQGVFKRROGLVWULFW3HU &RXUWSXWLWLQ6LPPRQV+DUULVY*RII1(G SXSLOH[SHQGLWXUHVLQWKHSXEOLFVFKRROVDUHEDFNHGE\ 2KLR 1\TXLVWLVVLPSO\LQDSSRVLWHWRWKHDSSHDOEHIRUH LQSXEOLFIXQGLQJ6HH%ULHIRI6HQHO7D\ORU,QWHUYHQRUVDW XV $WDPD[LPXPRIWKHUHLVDILQDQFLDOGLVLQFHQWLYH IRUSXEOLFVFKRROVRXWVLGHWKHGLVWULFWWRWDNHRQVWXGHQWVYLD 7KH1HZ<RUNVWDWXWRU\SURYLVLRQVVWUXFNGRZQLQ1\TXLVW WKHVFKRROYRXFKHUSURJUDP6LQFHLWVLQFHSWLRQQRSXEOLF DQGWKH2KLRYRXFKHUSURJUDPDUHHVVHQWLDOO\GLIIHUHQWODZV VFKRROVIURPRXWVLGH&OHYHODQGKDYHUHJLVWHUHGLQWKHVFKRRO WKH\ DUH SODLQO\ GLVWLQJXLVKDEOH ERWK LQ WKHLU GHFODUHG YRXFKHU SURJUDP DQG WKHUH DUH QR VSDFHV DYDLODEOH IRU SXUSRVHV DQG LQ WKH PDQQHU RI WKHLU DSSOLFDWLRQ )RU WKDW FKLOGUHQZKRZLVKWRDWWHQGDVXEXUEDQSXEOLFVFKRROLQSODFH UHDVRQDORQHWKHUHDVRQLQJDQGWKHKROGLQJRIWKH1\TXLVW RI D SULYDWH VFKRRO XQGHU WKH SURJUDP 7KHUHIRUH WKH GHFLVLRQFDQQRWJRYHUQRXUUHVXOW SURJUDP FOHDUO\ KDV WKH LPSHUPLVVLEOH HIIHFW RI SURPRWLQJ VHFWDULDQVFKRROV $
7KLV LV QRW WKH W\SH RI FDVH ZKLFK ZRXOG IDOO LQWR WKH , EHJLQ ZLWK D FRPSDULVRQ RI WKH 1HZ <RUN VWDWXWRU\ H[FHSWLRQWRWKH1\TXLVWUXOHV+HUHVWDWHDVVLVWDQFHLVRQO\ SURYLVLRQVFRQVWUXHGLQ1\TXLVWDQGWKH2KLRVWDWXWHEHIRUH DYDLODEOHWRWKRVHVWXGHQWVZKRDWWHQGSULYDWHVFKRROVoWKH XV DFRPSDULVRQWKDWVKRZVYHU\FOHDUO\WKDWWKHWZRODZVDUH DLGLVFOHDUO\GHSHQGHQWRQZKHWKHUSDUHQWVFKRRVHSXEOLFRU HVVHQWLDOO\ GLIIHUHQW , WKHQ H[DPLQH WKH 6XSUHPH &RXUW SULYDWHVFKRROV7KDWWKHPDMRULW\RISODFHVDYDLODEOHLQWKH (VWDEOLVKPHQW &ODXVH FDVHV GHFLGHG VLQFH 1\TXLVW ZKLFK 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB SURJUDPDUHIRUVWXGHQWV DWWHQGLQJVHFWDULDQVFKRROVLVQRW XQSHUVXDVLYH7KLVSURJUDPSURYLGHVLQFHQWLYHVIRUSDUHQWV &21&855,1*,13$57',66(17,1*,13$57 WRFKRRVHVFKRROVRWKHUWKDQPDLQVWUHDPSXEOLFRQHVEXWWKDW BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB FKRLFH GRHV QRW H[WHQG WR VFKRROV RXWVLGH RI WKH SURJUDP 6WXGHQWV PD\ QRW FKRRVH WR DWWHQG FRPPXQLW\ RU PDJQHW 5<$1&LUFXLWsXGJHFRQFXUULQJLQSDUWDQGGLVVHQWLQJLQ VFKRROV XVLQJ D YRXFKHU WKH\ PD\ QRW DSSO\ D YRXFKHU WR SDUW0\FROOHDJXHVjUHVROXWLRQRIWKHTXHVWLRQSUHVHQWHGE\ WXLWLRQ DW D SULYDWH VFKRRO RXWVLGH WKH &OHYHODQG 6FKRRO WKHSODLQWLIIVjFROODWHUDOHVWRSSHOFODLPLVHPLQHQWO\FRUUHFW 'LVWULFW DQG WKH\ PD\ QRW UHFHLYH D YRXFKHU IRU D SULYDWH DQG VR , MRLQ SDUW ,9 RI WKH FRXUWjV RSLQLRQ +RZHYHU VFKRROZLWKLQWKH&OHYHODQG6FKRRO'LVWULFWZKLFKKDVQRW EHFDXVH,EHOLHYH2KLRjVYRXFKHUSURJUDPWREHFRQVWLWXWLRQDO UHJLVWHUHG DV SDUW RI WKH SURJUDP 5DWKHU WKH SURJUDP XQGHU WKH )LUVW $PHQGPHQW DQG WKH 6XSUHPH &RXUWjV SURYLGHVILQDQFLDODVVLVWDQFHIRUWKRVHSDUHQWVZKRZLVKWR (VWDEOLVKPHQW &ODXVH FDVHV LQWHUSUHWLQJ WKH DPHQGPHQW , SODFHWKHLUFKLOGUHQLQWKHSDUWLFXODUSULYDWHVFKRROVPRVWO\ PXVWUHVSHFWIXOO\GLVVHQWIURPWKHPDMRULW\jVWUHDWPHQWRIWKH UHOLJLRXVZKLFKWDNHSDUWLQWKHSURJUDP:HILQGVXFKD YRXFKHUSURJUDPjVFRQVWLWXWLRQDOLW\ VFKHPHGLUHFWO\DNLQWR1\TXLVWjVRIIHQVLYHDLGWRRQO\SULYDWH VFKRRO VWXGHQWV DQG QRW DQ LQVWDQFH ZKHUH mWKH FODVV RI 0\EURWKHUVKDYHVWUXFNGRZQDVXQFRQVWLWXWLRQDO2KLRjV EHQHILFLDULHVLQFOXGHGDOOVFKRROFKLOGUHQWKRVHLQSXEOLFDV HIIRUWWRHVWDEOLVKDVFKRROFKRLFHYRXFKHUSURJUDPZKRVH ZHOODVWKRVHLQSULYDWHVFKRROVl86DWQ7KH SULPDU\SXUSRVHLVWRHQDEOHPRVWO\PLQRULW\SRYHUW\OHYHO HIIHFWRIWKLVSURJUDPOLNH1\TXLVWDQGXQOLNH0XHOOHUDQG VFKRROFKLOGUHQLQ&OHYHODQG2KLRWRHVFDSHWKHGHYDVWDWLQJ VXEVHTXHQWFDVHVLVRQHZKHUHmSXEOLFDVVLVWDQFHDPRXQWLQJ FRQVHTXHQFHVRIDWWHQGLQJ&OHYHODQGjVGHPRQVWUDEO\IDLOHG WRWXLWLRQJUDQWVZDVSURYLGHGRQO\WRSDUHQWVRIFKLOGUHQLQ SXEOLFVFKRROV0\FROOHDJXHVKDYHGRQHVRQRWRQWKHEDVLV QRQSXEOLFVFKRROVl0XHOOHU86DW RIDQ\LQGHSHQGHQWFRQVWLWXWLRQDODQDO\VLVRIWKH2KLR3LORW 3URMHFW 6FKRODUVKLS 3URJUDP DV WKH YRXFKHU SURJUDP LV &RQWUDU\ WR WKH WD[ GHGXFWLRQ JHQHUDOO\ DYDLODEOH LQ IRUPDOO\NQRZQEXWEHFDXVHWKH\FODLPWKHLQYDOLGLW\RIWKH 0XHOOHUWKH2KLRYRXFKHUSURJUDPLVDYDLODEOHWRFXUWDLORQO\ VWDWXWH LV D FRQFOXVLRQ IRUHRUGDLQHG E\ WKH 8QLWHG 6WDWHV WKRVH H[SHQVHV ZKLFK VWXGHQWV DWWHQGLQJ FHUWDLQ SULYDWH 6XSUHPH&RXUWjVGHFLVLRQLQ&RPPLWWHHIRU3XEOLF(GXFDWLRQ VFKRROV DFFUXH 6HH 86 DW GLVWLQJXLVKLQJ WKH DQG 5HOLJLRXV /LEHUW\ Y 1\TXLVW 86 , 0XHOOHU SURJUDP IURP WKDW LQ 1\TXLVW EHFDXVH LQ 1\TXLVW GLVDJUHH7KH1HZ<RUNVWDWXWHLQWHUSUHWHGLQ1\TXLVWDQG mWXLWLRQJUDQWV>ZHUH@SURYLGHGRQO\WRSDUHQWVRIFKLOGUHQLQ WKH2KLRVWDWXWHEHIRUHXVDUHWRWDOO\GLIIHUHQWLQDOORIWKHLU QRQSXEOLF VFKRROVl 7KH LGHD RI SDUHQWDO FKRLFH DV D HVVHQWLDOUHVSHFWVERWKLQWKHLUSXUSRVHVDQGWKHLUSURYLVLRQV GHWHUPLQLQJIDFWRUZKLFKEUHDNVDJRYHUQPHQWFKXUFKQH[XV IRUFDUU\LQJRXWWKHLUUHVSHFWLYHSXUSRVHV,WLVLPSRVVLEOHWR LVLQDSSURSULDWHLQWKHFRQWH[WRIJRYHUQPHQWOLPLWDWLRQRIWKH WDNHVHULRXVO\WKHPDMRULW\jVFODLPWKDW1\TXLVWJRYHUQVRXU DYDLODEOHFKRLFHVWRRYHUZKHOPLQJO\VHFWDULDQSULYDWHVFKRROV UHVXOW DQG IRU WKDW UHDVRQ UHTXLUHV WKDW WKH 2KLR YRXFKHU ZKLFKFDQDIIRUGWKHWXLWLRQUHVWULFWLRQVSODFHGXSRQWKHPDQG SURJUDPPXVWEHVWUXFNGRZQ ZKLFKKDYHUHJLVWHUHGZLWKWKHSURJUDP7KHDEVHQFHRIDQ\ PHDQLQJIXO SXEOLF VFKRRO FKRLFH IURP WKH GHFLVLRQ PDWUL[ 0RUHRYHUWKHPDMRULW\jVUHIXVDOWRFRQGXFWDQ\PHDQLQJIXO \LHOGV D OLPLWHG DQG UHVWULFWHG SDOHWWH IRU SDUHQWV ZKLFK LV DQDO\VLVRIWKH6XSUHPH&RXUWjVVHYHUDO(VWDEOLVKPHQW&ODXVH VROHO\FDXVHGE\VWDWHOHJLVODWLYHVWUXFWXULQJ GHFLVLRQV KDQGHG GRZQ LQ WKH \HDUV VLQFH 1\TXLVW ZDV GHFLGHGLWVLQVLVWHQFHWKDWWKHSODLQO\GLVWLQJXLVKDEOH1\TXLVW 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
,Q FRQWUDGLVWLQFWLRQ WR:LWWHUV D VWXGHQW XQGHU WKH 2KLR VWDWXWRU\ VFKHPH ZKHUH LW FRQVWLWXWHV DQ LPSHUPLVVLEOH VWDWXWHFDQQRWDSSO\VWDWHDLGWRDQ\VFKRROKHRUVKHFKRRVHV LQIULQJHPHQW XQGHU WKH (VWDEOLVKPHQW &ODXVH RI WKH )LUVW LQFOXGLQJSXEOLFVFKRROVVLQFHXQGHUWKH2KLRSURJUDPQR $PHQGPHQW :H WKHUHIRUH $)),50 WKH GLVWULFW FRXUWjV SXEOLF VFKRROV KDYH HQUROOHG QRU DUH OLNHO\ WR HQUROO RUGHUILQGLQJWKHVFKRROYRXFKHUSURJUDPXQFRQVWLWXWLRQDODV 6LPLODUO\$JRVWLQLLVLQDSSRVLWHEHFDXVHWKHVHUYLFHVPDGH ZHOO DV WKH FRXUWjV GHWHUPLQDWLRQ WKDW 3ODLQWLIIV DUH QRW DYDLODEOH WR VWXGHQWV DW SDURFKLDO VFKRROV WKURXJK WKH FROODWHUDOO\HVWRSSHG SODFHPHQWRISXEOLFVFKRROWHDFKHUVWRWHDFKVHFXODUVXEMHFWV ZHUHDYDLODEOHWRDOOTXDOLI\LQJVWXGHQWVZLWKRXWUHJDUGWRWKH QDWXUH RI WKH LQVWLWXWLRQ WKH\ DWWHQGHG 86 DW ILQGLQJ WKDW XQGHU WKH 1HZ <RUN SURJUDP DW LVVXH LQ $JRVWLQL DQG XQOLNH WKH 1\TXLVW SURJUDP VHUYLFHV mDUH DYDLODEOH WR DOO FKLOGUHQ ZKR PHHW WKH $FWjV HOLJLELOLW\ UHTXLUHPHQWVQRPDWWHUZKHUHWKH\JRWRVFKRRO :KLOH WKH SURJUDP XSKHOG LQ 0LWFKHOO SURYLGHG IRU WKH ORDQ RI LQVWUXFWLRQDOHTXLSPHQWE\VWDWHDJHQFLHVWRERWKSXEOLFDQG SULYDWHVFKRROVLQWKLVFDVHDLGSUHGRPLQDQWO\IORZVGLUHFWO\ WRWKHFRIIHUVRIUHOLJLRXVLQVWLWXWLRQV8QOLNH0LWFKHOOXQGHU WKH2KLRVWDWXWHWKHUHDUHQRWmQXPHURXVSULYDWHFLWL]HQVZKR DUH IUHH WR GLUHFW WKH DLG HOVHZKHUHl DV WKH PDMRULW\ RI WKH FKRLFHV DYDLODEOH WR SDUHQWV DQG VWXGHQWV DUH UHOLJLRXV LQVWLWXWLRQV6&WDW 7KRPDVsSOXUDOLW\ 7KH YRXFKHU SURJUDP DW LVVXH FRQVWLWXWHV WKH W\SH RI mGLUHFW PRQHWDU\ VXEVLGLHV WR UHOLJLRXV LQVWLWXWLRQVl WKDW sXVWLFH 2j&RQQRUIRXQGLPSHUPLVVLEOHLQ0LWFKHOO,GDW 2j&RQQRUsFRQFXUULQJ 7KLVSURJUDPLVGLVVLPLODUWRWKDW XSKHOGLQERWK$JRVWLQLDQG0LWFKHOODVKHUHDLGJRHVRQO\WR VWXGHQWVHQUROOHGLQSULYDWHVFKRROVWKHUHE\IRVWHULQJWKHW\SH RI JRYHUQPHQW HQWDQJOHPHQW SURKLELWHG XQGHU WKH (VWDEOLVKPHQW&ODXVH 7R DSSURYH WKLV SURJUDP ZRXOG DSSURYH WKH DFWXDO GLYHUVLRQ RI JRYHUQPHQW DLG WR UHOLJLRXV LQVWLWXWLRQV LQ HQGRUVHPHQWRIUHOLJLRXVHGXFDWLRQVRPHWKLQJmLQWHQVLRQl ZLWKWKHSUHFHGHQWVRIWKH6XSUHPH&RXUW0LWFKHOO6 &WDW:HILQGWKDWZKHQDVKHUHWKHJRYHUQPHQWKDV HVWDEOLVKHGDSURJUDPZKLFKGRHVQRWSHUPLWSULYDWHFLWL]HQV WRGLUHFWJRYHUQPHQWDLGIUHHO\DVLVWKHLUSULYDWHFKRLFHEXW ZKLFK UHVWULFWV WKHLU FKRLFH WR D SDQRSO\ RI UHOLJLRXV LQVWLWXWLRQV DQG VSDFHV ZLWK RQO\ D IHZ DOWHUQDWLYH 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
GRZQ +RZHYHU LQ 3DUW ,, RI WKLV RSLQLRQ WKH PDMRULW\ SRVVLELOLWLHVWKHQWKH(VWDEOLVKPHQW&ODXVHLVYLRODWHG7KLV SDLQVWDNLQJO\ VHWV IRUWK )LUVW $PHQGPHQW (VWDEOLVKPHQW VFKHPH LQYROYHV WKH JUDQW RI VWDWH DLG GLUHFWO\ DQG &ODXVHMXULVSUXGHQFHDQGLWVHYROXWLRQVLQFH1\TXLVWZKLOH SUHGRPLQDQWO\WRWKHFRIIHUVRIWKHSULYDWHUHOLJLRXVVFKRROV FDUHIXOO\ DSSO\LQJ WKDW ODZ WR WKH VWDWXWH DW KDQG LQ WKH DQG LW LV XQTXHVWLRQHG WKDW WKHVH LQVWLWXWLRQV LQFRUSRUDWH IROORZLQJVHFWLRQ$JDLQLWLVREYLRXVWKDWWKHGLVVHQWjVEDOG UHOLJLRXVFRQFHSWVPRWLYHVDQGWKHPHVLQWRDOOIDFHWVRIWKHLU IDFHG DVVHUWLRQ WKDW WKLV DQDO\VLV LV QRW mPHDQLQJIXOl LV HGXFDWLRQDOSODQQLQJ7KHUHLVQRQHXWUDODLGZKHQWKDWDLG DSSDUHQWO\ ERUQ RXW RI QRWKLQJ PRUH WKDQ LWV GLVDJUHHPHQW SULQFLSDOO\IORZVWRUHOLJLRXVLQVWLWXWLRQV QRULVWKHUHWUXO\ ZLWKWKHRXWFRPHRIWKLVFDVHUDWKHUWKDQZLWKDQREMHFWLYH mSULYDWHFKRLFHlZKHQWKHDYDLODEOHFKRLFHVUHVXOWLQJIURPWKH REVHUYDWLRQ,WLVWKHPDMRULW\ZKLFKHPSOR\VWKHHYROYLQJ SURJUDPGHVLJQDUHSUHGRPLQDQWO\UHOLJLRXV MXULVSUXGHQWLDOVWDQGDUGVLQUHDFKLQJLWVRXWFRPHZKLOHWKH GLVVHQWHPSOR\VDULJLGDQWLTXDWHGVWDQGDUGWRUHDFKLWVUHVXOW :H FRQFOXGH WKDW XQOLNH 0LWFKHOO $JRVWLQL :LWWHUV DQG GULYHQ RXWFRPH LQ FRQWUDYHQWLRQ RI WKH 6XSUHPH &RXUWj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jV WKHSULPDU\HIIHFWRIDGYDQFLQJUHOLJLRQDQGWKDWLWFRQVWLWXWHV DQ HQGRUVHPHQW RI UHOLJLRQ DQG VHFWDULDQ HGXFDWLRQ LQ YLRODWLRQRIWKH(VWDEOLVKPHQW&ODXVH:HWKHUHIRUHDIILUP sXGJH 5\DQ LQDSSURSULDWHO\ FDOOV IRU DQ 03 s,3. UHYLHZ RI WKH PDWWHU WKH GLVWULFW FRXUWjV RUGHU JUDQWLQJ VXPPDU\ MXGJPHQW WR LQ KLV GLVVHQW 7KHUH DUH UXOHV DQG SURFHGXUHV JRYHUQLQJ D FDOO IRU 03 3ODLQWLIIV s,3. UHYLHZ RQFH D FDVH KDV EHHQ GHFLGHG ZKHWKHU WKH FDOO LV PDGH E\ D SDUW\ RU 8:, 854390 E\ DQ DFWLYH MXGJH RI WKLV &RXUW RU PHPEHU RI WKH ,9 RULJLQDO SDQHO DQG LW LV WKH SURFHVV FRQWHPSODWHG E\ WKHVH UXOHV DQG 03 s,3. ,QWHUYHQRU 7D\ORU DVVHUWV WKDW WKH GLVWULFW FRXUW HUUHG E\ SURFHGXUHV ZKLFK VKRXOG EH XVHG WR LQYRNH UHYLHZ DIWHU WKH &RXUWjV RSLQLRQ KDV EHHQ LVVXHG 6HH &UDIW Y &,5 1RV :/ DW Q WK &LU 1RY FULWLFL]LQJ WKH KROGLQJWKDWWKH2KLR6XSUHPH&RXUWjVRSLQLRQLQ6LPPRQV FRQFXUULQJ RSLQLRQjV H[KRUWDWLRQ IRU HQ EDQF UHYLHZ RI WKH PDWWHU ZKLOH +DUULVY*RII1(G 2KLR GLGQRWHVWRS QRWLQJ WKDW )HG 5 $SS 3 E DQG &LU ,23 F VHW IRUWK WKH 3ODLQWLIIVjFODLPDQGE\UHIXVLQJWRFHUWLI\WKHTXHVWLRQRI DSSURSULDWH SURFHGXUHV WR IROORZ ZKHQ FDOOLQJ IRU VXFK UHYLHZ 7KH HVWRSSHOWRWKH2KLR6XSUHPH&RXUW7KLV&RXUWUHYLHZVWKH XQIRUWXQDWH SUDFWLFH RI DUJXLQJ IRU HQ EDQF UHYLHZ RI D FDVH LQ D SDQHO PHPEHUjV VHSDUDWH RSLQLRQ o LQVWHDG RI VLPSO\ SHUPLWWLQJ WKH &RXUWjV LVVXHRIFROODWHUDOHVWRSSHODVSDUWRIWKHVXPPDU\MXGJPHQW UHJXODU RSHUDWLQJ SURFHGXUHV IRU VHHNLQJ VXFK UHYLHZ WR EH IROORZHG GHWHUPLQDWLRQGHQRYR7KLV&RXUWUHYLHZVWKHGLVWULFWFRXUWjV VXEVHTXHQW WR WKH LVVXDQFH RI WKH PDMRULW\ RSLQLRQ o LV RQH ZKLFK VKRXOG GHQLDO RI FHUWLILFDWLRQ IRU DQ DEXVH RI GLVFUHWLRQ 6HH QRW EH SHUSHWXDWHG 6LPPRQV+DUULVHWDO 1RV 1RV 6LPPRQV+DUULVHWDO Y=HOPDQHWDO Y=HOPDQHWDO
7UDQVDPHULFD,QV&RY'XUR%DJ0IJ&R)G 6LPLODUO\WKHGLVWULFWFRXUWGLGQRWHUULQUHIXVLQJWRFHUWLI\ WK&LU WKHTXHVWLRQWRWKH2KLR6XSUHPH&RXUW7KHJRYHUQLQJODZ DVWRZKHWKHUDSDUW\LVHVWRSSHGIURPUHOLWLJDWLQJDQLVVXHQRW 8QGHUERWKIHGHUDODQGVWDWHODZDQmLVVXHPXVWKDYHEHHQ HVVHQWLDO WR WKH FRXUWjV GHWHUPLQDWLRQ LV FOHDU DQG QHFHVVDU\WRVXSSRUWWKHMXGJPHQWLQWKHSULRUSURFHHGLQJl XQFRQWURYHUWHG ZHWKHUHIRUHILQGQRDEXVHRIGLVFUHWLRQLQ LQRUGHUWRILQGFROODWHUDOHVWRSSHO.QR[&RXQW\(GXF$VVjQ WKHGLVWULFWFRXUWjVGHWHUPLQDWLRQ Y.QR[&RXQW\%GRI(GXF)G WK&LU DFFRUG0HWUR+HDOWK0HG&WUY+RIIPDQQ/D5RFKH 9 ,QF 1(G 2KLR m,VVXH SUHFOXVLRQ SUHFOXGHVWKHUHOLWLJDWLRQRIDQLVVXHWKDWKDVEHHQDFWXDOO\ %HIRUHFRQFOXGLQJZHPXVWSDXVHWREULHIO\DGGUHVVWKH DQGQHFHVVDULO\OLWLJDWHGDQGGHWHUPLQHGLQDSULRUDFWLRQl GLVVHQWQRWIRUWKHSXUSRVHRIGLJQLI\LQJLWVK\SHUEROHEXWWR FI $PHLJK Y %D\FOLIIV &RUS 1(G 2KLR TXDVKDQ\SXWDWLYHO\VXEVWDQWLYHDUJXPHQWZKLFKPD\KDYH m:KHUHWKHMXGJPHQWRIDFRXUWLVQRWGLVSRVLWLYHRQ IRXQGLWVZD\WKURXJKWKHJUDWXLWRXVLQVXOWV7KHGLVVHQWILUVW LVVXHVZKLFKDSDUW\ODWHUVHHNVWROLWLJDWHUHVMXGLFDWDLVQRW PDNHVWKHEDOGIDFHGDVVHUWLRQWKDWWKHPDMRULW\KDVVWUXFN DSSOLFDEOHHYHQLIWKHSULRUFRXUWGHFLVLRQKDVGLVFXVVHG GRZQWKHYRXFKHUSURJUDPDVXQFRQVWLWXWLRQDOZLWKRXWDQ\ WKHLVVXHVWKDWDUHWKHVXEMHFWRIWKHFXUUHQWOLWLJDWLRQl $ mPHDQLQJIXOl LQGHSHQGHQW DQDO\VLV DQG WKDW WKH PDMRULW\ GHWHUPLQDWLRQLVQRWHVVHQWLDOWRWKHMXGJPHQWLIWKHMXGJPHQW VLPSO\ FRQFOXGHV WKDW WKH SURJUDP LV mIRUHRUGDLQHGl WR EH FRXOG EH VXSSRUWHG E\ DQ DGHTXDWH DQG LQGHSHQGHQW VWDWH IRXQG XQFRQVWLWXWLRQDO XQGHU 1\TXLVW $FFRUGLQJ WR WKH JURXQG 6HH /DPEUL[ Y 6LQJOHWDU\ 86 GLVVHQWWKH1HZ<RUNVWDWXWHLQ1\TXLVWLVmWRWDOO\GLIIHUHQWl ,Q*RIIWKH2KLR6XSUHPH&RXUWKHOGWKDWWKH IURP WKH 2KLR VWDWXWH EHIRUH XV WRGD\ WKXV PDNLQJ LW VFKRROYRXFKHUSURJUDPZDVHQDFWHGLQYLRODWLRQRIWKHRQH LPSRVVLEOHWRmWDNHVHULRXVO\lWKHPDMRULW\jVFRQFOXVLRQWKDW VXEMHFW UXOH RI WKH 2KLR &RQVWLWXWLRQ DQG RQ WKDW EDVLV 1\TXLVWLVFRQWUROOLQJ+RZHYHUHYHQDFXUVRU\UHDGLQJRI RUGHUHGWKHSURJUDPLQLWVHQWLUHW\mVWULFNHQl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jVGHWHUPLQDWLRQDVWRWKH QRWLVSRIDFWRUHQGHUWKHDQDO\VLVmPHDQLQJOHVVl (VWDEOLVKPHQW&ODXVHVXFKGHWHUPLQDWLRQVFDQQRWFRQVWLWXWH FROODWHUDOHVWRSSHO6HH&DOY5RRQH\86 6HFRQG LQ D VLPLODU YHLQ WKH GLVVHQW FODLPV WKDW WKH GHFOLQLQJ WR UHYLHZ D )RXUWK $PHQGPHQW UXOLQJ PDMRULW\UHDFKHVLWVFRQFOXVLRQWKDWWKHYRXFKHUSURJUDPLV DGYHUVH WR WKH VWDWH RI &DOLIRUQLD ZKHUH WKDW UXOLQJ ZDV XQFRQVWLWXWLRQDO XQGHU WKH (VWDEOLVKPHQW &ODXVH ZLWKRXW XQQHFHVVDU\WRDMXGJPHQWLQIDYRURIWKHVWDWH FRQGXFWLQJ DQ\ mPHDQLQJIXOl DQDO\VLV LQWR WKH 6XSUHPH &RXUWjVVHYHUDOFDVHVRQWKLVLVVXHVLQFH1\TXLVWZDVKDQGHG
Reference
- Status
- Published