Filed: Sep. 04, 2001
Latest Update: Mar. 02, 2020
Summary: 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 %2%j6 %(9(5$*( ,1& ; 8//0$1 2,/ ,1& 3ODLQWLIIV$SSHOODQWV 1R Y ! $&0( ,1& s$0(6 %$5(6 LQGLYLGXDOO\DQGLQKLV FDSDFLW\DVSUHVLGHQWDQG VKDUHKROGHURI$FPH,QF 'HIHQGDQWV $/%$75266 /7' %(1s$0,1 + 0(5.(/ +(15 W@KHGLVFKDUJH
Summary: 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 %2%j6 %(9(5$*( ,1& ; 8//0$1 2,/ ,1& 3ODLQWLIIV$SSHOODQWV 1R Y ! $&0( ,1& s$0(6 %$5(6 LQGLYLGXDOO\DQGLQKLV FDSDFLW\DVSUHVLGHQWDQG VKDUHKROGHURI$FPH,QF 'HIHQGDQWV $/%$75266 /7' %(1s$0,1 + 0(5.(/ +(15 W@KHGLVFKDUJH ..
More
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 %2%j6 %(9(5$*( ,1& ; 8//0$1 2,/ ,1& 3ODLQWLIIV$SSHOODQWV 1R Y ! $&0( ,1& s$0(6 %$5(6 LQGLYLGXDOO\DQGLQKLV FDSDFLW\DVSUHVLGHQWDQG VKDUHKROGHURI$FPH,QF 'HIHQGDQWV $/%$75266 /7' %(1s$0,1 + 0(5.(/ +(15 W@KHGLVFKDUJH 'HIHQGDQWVFHDVHGWKHLURSHUDWLRQVWKH\DEDQGRQHGWKH GHSRVLWLQMHFWLRQGXPSLQJVSOLWWLQJOHDNLQJRUSODFLQJRI JDOORQGUXPVVWRUHGDWWKHIDFLOLW\ DQ\VROLGZDVWHRUKD]DUGRXVZDVWHRUDQ\FRQVWLWXHQWWKHUHRI PD\ HQWHU WKH HQYLURQPHQW RU EH HPLWWHG LQWR WKH DLU RU 2Q 6HSWHPEHU +XQWLQJWRQ 1DWLRQDO %DQN GLVFKDUJHG LQWR DQ\ ZDWHUV LQFOXGLQJ JURXQG ZDWHUVl m+XQWLQJWRQlSXUFKDVHGWKH3URSHUW\DQGVXEVHTXHQWO\VROG 86& TXRWLQJ 5&5$ 86& LW WR WKH 0HUNHO 'HIHQGDQWV RQ RU DERXW $XJXVW 8QLWHG6WDWHVY$FUHVRI/DQG)GWK&LU 7KH 0HUNHO 'HIHQGDQWV FRQGXFWHG QR HQYLURQPHQWDO LQYHVWLJDWLRQ SULRU WR WKH SXUFKDVH RI WKH SURSHUW\ $SSUR[LPDWHO\ WZHQW\ILYH JDOORQ GUXPV ZHUH RQ WKH $ 'LVSRVDO LV QRW WKH VDPH DV D UHOHDVH $FUHV SURSHUW\ZKHQWKH0HUNHO'HIHQGDQWVSXUFKDVHGLWLQ )GDW7KHWHUPmUHOHDVHlLVEURDGHUWKDQ'LVSRVDO ,G$'LVSRVDOUHTXLUHVHYLGHQFHRImDFWLYHKXPDQFRQGXFWl 7KH 0HUNHO 'HIHQGDQWV XVHG WKH 3URSHUW\ IRU VWRUDJH RI DQGDGGUHVVHVmDFWLYLW\WKDWSUHFHGHVWKHHQWU\RIDVXEVWDQFH DXWRPRELOHV 7KH 0HUNHO 'HIHQGDQWV LQKHULWHG D VHSWLF LQWRWKHHQYLURQPHQWl,G,QDGGLWLRQFURVVFRQWDPLQDWLRQ V\VWHPWKDWZDVQRWIXQFWLRQDODQGZDVEHORZJRYHUQPHQW FDXVLQJWKHVSUHDGRIFRQWDPLQDWLRQmLQWRRURQlSUHYLRXVO\ VWDQGDUGV7ZR\HDUVODWHUWKH0HUNHO'HIHQGDQWVGHFLGHGWR XQFRQWDPLQDWHGmVRLORUZDWHUlE\DIRUPHURZQHURSHUDWRU XSJUDGHWKHV\VWHP FRQVWLWXWHVD'LVSRVDO6HH8QLWHG6WDWHVY&'0*5HDOW\ &R )G G &LU 7DQJOHZRRG (DVW :KHQWKHVHSWLFV\VWHPZDVRSHQHGLQDVVRFLDWLRQZLWKWKH +RPHRZQHUVY&KDUOHV7KRPDV,QF)G XSJUDGHWKHWDQNZDVFRDWHGZLWKDWKLFNJUHDV\ILOPZKLFK WK&LU FRQILUPHGWKDWWKHVHSWLFV\VWHPKDGEHHQSUHYLRXVO\XVHGIRU WKH GLVSRVDO RI PDWHULDOV RWKHU WKDQ VDQLWDU\ VHZDJH ,Q $SSHOODQWVj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jVHFRQGFODLPWKDWD'LVSRVDORFFXUUHGWKURXJK WKDWLQVWDOODWLRQODUJHTXDQWLWLHVRIVRLOLQWKHGUXPDUHDZHUH SDVVLYHPLJUDWLRQRQWKH3URSHUW\GXULQJWKHRZQHUVKLSRIWKH PRYHG 0HUNHO 'HIHQGDQWV LV DOVR ZLWKRXW PHULW 7KLV &RXUW LQ 8QLWHG6WDWHVY$FUHVRI/DQG)GWK %REjV%HYHUDJHHWDO 1R 1R %REjV%HYHUDJHHWDO Y$FPH,QFHWDO Y$FPH,QFHWDO LQFXUUHG E\ WKH $SSHOODQWV ,Q IDFW ZLWK WKH UHOHDVH RI ,Q6HSWHPEHUWKH0HUNHO'HIHQGDQWVKDGVL[GUXPV &92&VIURPWKHVRLOUHVXOWLQJIURPWKHUHSODFHPHQWRIWKH RImZDVWHRLOlUHPRYHGIURPWKHEDFNRIWKH3URSHUW\,Q0D\ VHSWLFV\VWHPWKH0HUNHO'HIHQGDQWVPD\KDYHUHGXFHGWKH WKH0HUNHO'HIHQGDQWVVROGWKH3URSHUW\WR$SSHOODQW UHVSRQVHFRVWVRIWKH$SSHOODQWVDOEHLWLQILQLWHVLPDOO\ %REjV%HYHUDJH,QF2QsXO\$SSHOODQW8OOPDQ2LO ,QFEHFDPHWKHRSHUDWRURIWKH3URSHUW\$SSHOODQW%REjV %HFDXVH $SSHOODQWV KDYH IDLOHG WR GHPRQVWUDWH WKDW D %HYHUDJH GLG QRW FRQGXFW DQ\ DVVHVVPHQW RI WKH UHOHDVH E\ WKH 0HUNHO 'HIHQGDQWV DIIHFWHG WKH $SSHOODQWVj HQYLURQPHQWDOFRQGLWLRQRIWKH3URSHUW\SULRUWRLWVSXUFKDVH UHVSRQVH FRVWV $SSHOODQWV KDYH IDLOHG WR SURYH WKHLU FRVW ,WKDGRZQHGDQGRSHUDWHGWKHDGMDFHQWSURSHUW\DQGGLGQRW UHFRYHU\FDXVHRIDFWLRQ7KHKROGLQJRIWKHGLVWULFWFRXUW NQRZWKDWWKH3URSHUW\KDGIXHORLOLQWKHVXEVXUIDFH WKHUHIRUHLV$)),50(' $SSHOODQW8OOPDQ2LO,QFXVHVWKH3URSHUW\IRUWKHVWRUDJH ,9 RISHWUROHXPDQGSHWUROHXPGLVWLOODWHSURGXFWVDQGIRURIILFH VSDFH1HLWKHURIWKH$SSHOODQWVHYHUXVHGVWRUHGWUHDWHGRU (YHQ LI WKH &RXUW ZHUH WR GHFLGH WKDW $SSHOODQWV FRXOG GLVSRVHGRIFKORULQDWHGVROYHQWVDWHLWKHU(DVW:DVKLQJWRQ VXUYLYH WKH FDXVDWLRQ LQTXLU\ WKH WKH $SSHOODQWV DUH VWLOO 6WUHHWSURSHUW\ XQDEOH WR SUHYDLO XQGHU WKH IRXUWK SURQJ RI FRVW UHFRYHU\ XQGHU3LHUVRQDQG&(5&/$%RWKRI$SSHOODQWVjDUJXPHQWV ,Q 1RYHPEHU LW ZDV GLVFRYHUHG WKDW WKH GULQNLQJ WKDWD'LVSRVDORFFXUUHGIDLODQGDVDUHVXOWGLVWULFWFRXUWjV ZDWHU RQ WKH 3URSHUW\ DQG RQ DGMDFHQW SURSHUWLHV ZDV KROGLQJ ZRXOG VWLOO EH $)),50(' IRU WKH UHDVRQV WKDW FRQWDPLQDWHG ZLWK &92&V DQG KHDY\ PHWDOV 8OOPDQ IROORZHYHQLI$SSHOODQWVFRXOGHVWDEOLVKFDXVDWLRQ QRWLILHGWKH2KLR(QYLURQPHQWDO3URWHFWLRQ$JHQF\m2KLR (3$lDQGWRRNLQWHULPUHPHGLDODFWLRQLQFOXGLQJSURYLGLQJ &(5&/$ GHILQHV WKH IRXU FDWHJRULHV RI SHUVRQV DOVR DQ DOWHUQDWH ZDWHU VXSSO\ WR WKH )DFLOLW\ DQG WR DIIHFWHG NQRZQ DV 353V ZKR PD\ EH OLDEOH XQGHU &(5&/$ WR QHLJKERUV%REjV%HYHUDJHHQWHUHGLQWRD&RQVHQW2UGHUZLWK LQFOXGHWKHFXUUHQWRZQHURSHUDWRURIDIDFLOLW\IURPZKLFK WKH 2KLR (3$ UHTXLULQJ %REjV %HYHUDJH WR FRPSOHWH D WKHUH KDV EHHQ D UHOHDVH D SHUVRQ mZKR DW WKH WLPH RI 5HPHGLDO,QYHVWLJDWLRQDQG)HDVLELOLW\6WXG\IRUWKH3URSHUW\ GLVSRVDORUWUHDWPHQWRIDQ\KD]DUGRXVVXEVWDQFHVRZQHGRU 7KH 5HPHGLDO ,QYHVWLJDWLRQ DQG )HDVLELOLW\ 6WXG\ DUH RSHUDWHGDQ\IDFLOLW\DWZKLFKVXFKKD]DUGRXVVXEVWDQFHVZHUH FRPSOHWH7KHZULWWHQUHSRUWVGRFXPHQWLQJWKHPKDYHEHHQ GLVSRVHG RIl JHQHUDWRUV RI KD]DUGRXV ZDVWH DQG DFFHSWHG E\ WKH 2KLR (3$ 7KH 2KLR (3$ KDV QRW \HW DUUDQJHUV IRU WKH GLVSRVDO RI KD]DUGRXV ZDVWH 6HH VHOHFWHGDILQDOUHPHG\ 86&D ,, $SSHOODQWVDUJXHWKDWWKH0HUNHO'HIHQGDQWVDUHSHUVRQV mZKRDWWKHWLPHRIGLVSRVDORUWUHDWPHQWRIDQ\KD]DUGRXV 7KH$SSHOODQWVILOHGWKHLULQLWLDOFRPSODLQWRQ0DUFK VXEVWDQFHV RZQHG RU RSHUDWHG DQ\ IDFLOLW\ DW ZKLFK VXFK DJDLQVWWKH0HUNHO'HIHQGDQWVDOOHJLQJYLRODWLRQVRI KD]DUGRXVVXEVWDQFHVZHUHGLVSRVHGRIl,G6SHFLILFDOO\WKH VHFWLRQV D DQG I RI WKH &RPSUHKHQVLYH $SSHOODQWVDVVHUWWKDWDWWKHWLPHRIWKH0HUNHO'HIHQGDQWVj RZQHUVKLS RI WKH 3URSHUW\ WZR LQVWDQFHV ZKHUH KD]DUGRXV VXEVWDQFHVZHUHGLVSRVHGRIm'LVSRVDOVlRFFXUUHG)LUVW 7KH $SSHOODQWV SURFHHGHG XQGHU 86& D DQG QRW WKH$SSHOODQWVFODLPWKDWWKHUHSODFHPHQWRIWKHVHSWLFWDQN 86& I EHFDXVH WKH WULDO FRXUW IRXQG WKDW WKH $SSHOODQWV ZHUH FDXVHGD'LVSRVDO,QDGGLWLRQWKH$SSHOODQWVDUJXHWKDWWKH LQQRFHQW ODQGRZQHUV LQ DFFRUGDQFH ZLWK 86& E %REjV%HYHUDJHHWDO 1R 1R %REjV%HYHUDJHHWDO Y$FPH,QFHWDO Y$FPH,QFHWDO (QYLURQPHQWDO 5HVSRQVH &RPSHQVDWLRQ DQG /LDELOLW\ $FW RFFXUUHGDWDmIDFLOLW\lWKHUHOHDVHRUWKUHDWHQHGUHOHDVH m&(5&/$l $IWHU WKH &RXUW UHMHFWHG WKH 0HUNHO FDXVHGWKHLQFXUUHQFHRIWKH3ODLQWLIIVjUHVSRQVHFRVWVWKH 'HIHQGDQWVj0RWLRQWR'LVPLVVWKH0HUNHO'HIHQGDQWVILOHG UHVSRQVH FRVWV ZHUH QHFHVVDU\ DQG FRQVLVWHQW ZLWK WKH DFURVVFODLPDJDLQVWWKH$FPH'HIHQGDQWV$OOSDUWLHVWKHQ 1DWLRQDO &RQWLQJHQF\ 3ODQ m1&3l DQG WKDW WKH PRYHGIRUVXPPDU\MXGJPHQWZKLFKWKHGLVWULFWFRXUWGHQLHG GHIHQGDQWIDOOVZLWKLQRQHRIWKHIRXUFDWHJRULHVRIFRYHUHG LQ DQ RSLQLRQ RQ sDQXDU\ EHFDXVH WKHUH ZHUH SHUVRQZKRPD\EHKHOGOLDEOHLHDSRWHQWLDOO\UHVSRQVLEOH JHQXLQH LVVXHV RI IDFW FRQFHUQLQJ ZKHWKHU WKHUH ZDV D SDUW\ m353l 3LHUVRQ 6DQG *UDYHO ,QF Y 3LHUVRQ GLVSRVDO RI DQ\ KD]DUGRXV ZDVWH GXULQJ HDFK SDUW\jV 7RZQVKLS (5& WK &LU 86& RZQHUVKLSRIWKH3URSHUW\ D $ WULDO ZDV KHOG RQ $SSHOODQWVj &(5&/$ FODLPV RQ 7KH GLVWULFW FRXUW GHWHUPLQHG DQG WKH SDUWLHV GR QRW )HEUXDU\ 2Q 'HFHPEHU WKH GLVWULFW GLVSXWHWKDWWKH3URSHUW\LVDmIDFLOLW\lZLWKLQWKHPHDQLQJRI FRXUW LVVXHG )LQGLQJV RI )DFW &RQFOXVLRQV RI /DZ DQG D &(5&/$7KHGLVWULFWFRXUWIXUWKHUKHOGWKDWDQ\UHOHDVHWKDW sXGJPHQW DJDLQVW WKH $FPH 'HIHQGDQWV LQ WKH DPRXQW RI RFFXUUHGGXULQJWKHRZQHUVKLSRIWKH0HUNHO'HIHQGDQWVGLG 7KHFRXUWIRXQGWKDWWKH0HUNHO'HIHQGDQWV QRWFDXVHWKHLQFXUUHQFHRIWKH$SSHOODQWVjUHVSRQVHFRVWV ZHUHQRWOLDEOH7KH$SSHOODQWVWLPHO\ILOHGWKHLUQRWLFHRI DSSHDO FKDOOHQJLQJ WKH &RXUWj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sRQHV/XPEHU&RY'L[LH G&LU$SSHOODQWLVFRUUHFWLQUHFRJQL]LQJ 'LVWULE&R)GWK&LU7KLV&RXUW WKDWLWGRHVQRWQHHGWRHVWDEOLVKWKDWWKH0HUNHO'HIHQGDQWV VLPLODUO\UHYLHZVPL[HGTXHVWLRQVRIIDFWDQGODZGHQRYR ZDVWHFDXVHGRUFRQWULEXWHGWRWKHUHVSRQVHFRVWV$SSHOODQWV 6HH:RROGULGJHY0DUOHQH,QGXV&RUS)G KRZHYHUIDLOHGWRUHDGWKHQH[WVHQWHQFHLQ&RQWURO'DWD WK&LU,QDGGLWLRQWKHGLVWULFWFRXUW VIDFWXDOILQGLQJV ZKLFK QRWHV WKDW m&(5&/$ IRFXVHV RQ ZKHWKHU WKH DUHUHYLHZHGIRUFOHDUHUURU6HHLG GHIHQGDQW VUHOHDVHRUWKUHDWHQHGUHOHDVHFDXVHGKDUPWRWKH SODLQWLIILQWKHIRUPRIUHVSRQVHFRVWVl&RQWURO'DWD 7R HVWDEOLVK D SULPD IDFLH FRVW UHFRYHU\ FODLP XQGHU )GDW7KLVLVH[DFWO\WKHLQTXLU\WKDWWKHGLVWULFWFRXUW 86& D DOVR NQRZQ DV &(5&/$ D D XQGHUWRRN ,W IRXQG WKDW WKHUH ZDV QR HYLGHQFH WKDW DQ\ SODLQWLIIPXVWSURYHDUHOHDVH RUWKUHDWHQHGUHOHDVHKDV UHOHDVH WKDW RFFXUUHG GXULQJ WKH RZQHUVKLS RI WKH 0HUNHO 'HIHQGDQWV FDXVHG DQ\ LQFUHDVH LQ WKH UHVSRQVH FRVWV ODWHU $ UHOHDVH LV GHILQHG DV DQ\ m>V@SLOOLQJ OHDNLQJ SXPSLQJ SRXULQJ HPLWWLQJ HPSW\LQJ GLVFKDUJLQJ LQMHFWLQJ HVFDSLQJ OHDFKLQJ GXPSLQJ RU GLVSRVLQJ LQWR WKH HQYLURQPHQW LQFOXGLQJ WKH DEDQGRQPHQW RU DQ\ KD]DUGRXV VXEVWDQFH RU SROOXWDQW RU FRQWDPLQDWLRQl 86& GLVFDUGLQJ RI EDUUHOV FRQWDLQHUV DQG RWKHU FORVHG UHFHSWDFOHV FRQWDLQLQJ