Filed: Aug. 24, 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 0,&+$(/ %/$&.$5'DQG ; 6+$521 %/$&.$5'ERWK LQGLYLGXDOO\DQGDVSDUHQWV 1R OHJDOJXDUGLDQVDQGQH[W IULHQGVIRU$6+/( VLF@ YLHZV $QQ D7KH$FWSURYLGHGWKDWLQFDVHVZKHUH ZHUH QRW HQGRUVHG E\ D PDMRULW\ RI WKH &RXUW KLV WKHPLQRUGLG
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 0,&+$(/ %/$&.$5'DQG ; 6+$521 %/$&.$5'ERWK LQGLYLGXDOO\DQGDVSDUHQWV 1R OHJDOJXDUGLDQVDQGQH[W IULHQGVIRU$6+/( VLF@ YLHZV $QQ D7KH$FWSURYLGHGWKDWLQFDVHVZKHUH ZHUH QRW HQGRUVHG E\ D PDMRULW\ RI WKH &RXUW KLV WKHPLQRUGLGQ..
More
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jV UHTXLUHPHQWV E\ $W WKH WLPH WKDW $VKOH\ %ODFNDUG REWDLQHG KHU DERUWLRQ UHJLVWHULQJZLWKWKHDSSURSULDWHVWDWHHQWLWLHVJLYLQJWKH KRZHYHU WKHUH ZDV DQ LQMXQFWLRQ LQ SODFH HQMRLQLQJ WKH UHTXLUHGQRWLFHHWF HQIRUFHPHQW RI WKH 3DUHQWDO &RQVHQW $FW SDUWLFXODUO\ WKH ,Q WKH FDVH VXE MXGLFH KRZHYHU sXGJH 1L[RQjV MXGLFLDOE\SDVVSURFHGXUH7KHLQMXQFWLRQUHVXOWHGIURPDQ SUHOLPLQDU\ LQMXQFWLRQ PDGH LW QRW MXVW GLIILFXOW EXW DFWLRQILOHGLQWKH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH0LGGOH LPSRVVLEOHIRUVRPHPLQRUVLQFOXGLQJ$VKOH\%ODFNDUG 'LVWULFWRI7HQQHVVHHWKH+RQRUDEOHsRKQ1L[RQFDSWLRQHG WRUHFHLYHDERUWLRQVZLWKRXWYLRODWLQJWKHVWDWXWH$VWKLV 0HPSKLV3ODQQHG3DUHQWKRRG,QFY6XQGTXLVW)6XSS &RXUW SUHYLRXVO\ IRXQG WKH HIIHFW RI sXGJH 1L[RQjV G 0' 7HQQ 7KLV DFWLRQ LQYROYHG D VXLW 2UGHU ZDV WR SUHYHQW WKH LPSOHPHQWDWLRQ RI WKH 7HQQHVVHHMXGLFLDOE\SDVVSURFHGXUH L@WLVFOHDUWRWKH&RXUWIURPWKHUHFRUGQRZSUHVHQWHG XSRQWKH5XOHMXGLFLDOE\SDVVSHWLWLRQQRUZRXOGWKH WKDW sXGJH 1L[RQjV LQMXQFWLRQ HIIHFWLYHO\ EORFNHG sXYHQLOH&RXUWKDYHDFWHGRQWKHSHWLWLRQ HQIRUFHPHQW RI WKH MXGLFLDO E\SDVV SURFHGXUH FRQWHPSODWHG E\ WKH &RQVHQW $FW DQG WKDW QR VXFK s$DWDIILGDYLWRI&5m%REl0DUWLQ&RXUW&OHUN MXGLFLDOE\SDVVSURFHGXUHH[LVWHGDWWKHWLPHRI$VKOH\ RI WKH sXYHQLOH &RXUW RI 0HPSKLV DQG 6KHOE\ &RXQW\ %ODFNDUGjV DERUWLRQ )RU WKLV UHDVRQ WKH 'HIHQGDQWV 7HQQHVVHH,QDGGLWLRQ'HIHQGDQWVVXEPLWWHGWKHDIILGDYLW FDQQRWEHFKDUJHGZLWKYLRODWLQJIRUIDLOLQJ RIDIRUPHUMXYHQLOHFRXUWMXGJHZKRZDVDQDFWLYHMXGJHDW WR FRPSO\ ZLWK 7HQQHVVHHjV DERUWLRQ MXGLFLDO E\SDVV WKHWLPHRI$VKOH\%ODFNDUGjVDERUWLRQWKLVDIILGDYLWSURYLGHG SURFHGXUH WKDW s$DW $PRQJ P\ UHVSRQVLELOLWLHV GXULQJ P\ WHQXUH DV D MXGJH ZDV SUHVLGLQJ RYHU SHWLWLRQV ILOHG E\ PLQRUV 3ODLQWLIIVFRQWHQGWKDWWKHGLVWULFWFRXUWHUUHGLQJUDQWLQJ VHHNLQJ ZDLYHU RI WKH UHTXLUHPHQW WKDW WKH\ REWDLQ D 'HIHQGDQWVj PRWLRQ IRU UHOLHI IURP D SULRU RUGHU :H SDUHQWjV FRQVHQW IRU WHUPLQDWLRQ RI SUHJQDQF\ 7KH GLVDJUHH 7KH GLVWULFW FRXUW GLG QRW DEXVH LWV GLVFUHWLRQ LQ UHTXLUHPHQWWKDWWKHPLQRUREWDLQSDUHQWDOFRQVHQWDQG JUDQWLQJ 'HIHQGDQWVj PRWLRQ IRU UHOLHI IURP D SULRU RUGHU WKDWVKHEHDEOHWRSHWLWLRQWKHMXYHQLOHFRXUWIRUDZDLYHU 7KHGLVWULFWFRXUWj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jVFRQFOXVLRQWKDW'HIHQGDQWVFRXOGQRWEHOLDEOHXQGHU ZKHQWKH$FWZDVQRWHQMRLQHG WKH3DUHQWDO&RQVHQW$FWLQWKHDEVHQFHRIDMXGLFLDOE\SDVV 'XULQJP\WLPHRQWKHEHQFK,FRPSOLHGZLWKWKH SURFHGXUHZDVSURSHU$EVHQWWKHMXGLFLDOE\SDVVSURFHGXUH UHTXLUHPHQWVRIWKHODZUHJDUGLQJWKH3DUHQWDO&RQVHQW WKH3DUHQWDO&RQVHQW$FWFRXOGQRWRSHUDWHWRUHTXLUHHLWKHU IRU $ERUWLRQV E\ 0LQRUV $FW 2Q PRUH WKDQ RQH 'HIHQGDQWV RU $VKOH\ %ODFNDUG WR REWDLQ SDUHQWDO FRQVHQW RFFDVLRQ GXULQJ P\ WHQXUH WKH $FW ZDV HQMRLQHG E\ SULRUWR$VKOH\%ODFNDUGjVDERUWLRQ6HH%HOORWWL86DW sXGJH1L[RQRIWKH8QLWHG6WDWHV'LVWULFW&RXUW:KHQ WKHVHLQMXQFWLRQVZHUHLQHIIHFWDJDLQVWWKH$FWLWZDVP\ XQGHUVWDQGLQJ WKDW WKH MXYHQLOH FRXUW GLG QRW KDYH WKH 7KHVWDWXVRIWKHMXGLFLDOE\SDVVSURFHGXUHLHZKHWKHULW OHJDO DXWKRULW\ WR KHDU D PLQRUjV SHWLWLRQV IRU MXGLFLDO ZDVHQIRUFHDEOHDWWKHWLPHRI$VKOH\%ODFNDUGjVDERUWLRQ ZDLYHURIWKHSDUHQWDOFRQVHQWUHTXLUHPHQW WXUQV RQ WKH VFRSH RI WKH 0HPSKLV 3ODQQHG 3DUHQWKRRG LQMXQFWLRQ&RQWUDU\WRZKDW3ODLQWLIIVZRXOGKDYHWKLV&RXUW s$ DW DIILGDYLW RI +RQRUDEOH $QGUHZ s FRQFOXGH LI WKH 7HQQHVVHH MXYHQLOH FRXUWV ZHUH ZLWKLQ WKH 6KRRNKRII VFRSHRIWKHLQMXQFWLRQWKHMXYHQLOHFRXUWVFRXOGQRWLJQRUH WKH LQMXQFWLRQ DQG HQIRUFH WKH 3DUHQWDO &RQVHQW $FW RU LWV MXGLFLDOE\SDVVSURFHGXUH:ROII6KRH&RY8QLWHG6WDWHV %ODFNDUGHWDOY0HPSKLV$UHD 1R 1R %ODFNDUGHWDOY0HPSKLV$UHD 0HG&WUIRU:RPHQHWDO 0HG&WUIRU:RPHQHWDO )G)HG&LUmµ>3@HUVRQVVXEMHFWWR FDVHV HVWDEOLVK DQG ZH UHDIILUP WRGD\ WKDW D 6WDWH PD\ DQ LQMXQFWLYH RUGHU LVVXHG E\ D FRXUW ZLWK MXULVGLFWLRQ DUH UHTXLUHDPLQRUVHHNLQJDQDERUWLRQWRREWDLQWKHFRQVHQWRI H[SHFWHGWRREH\WKDWGHFUHHXQWLOLWLVPRGLILHGRUUHYHUVHG D SDUHQW RU JXDUGLDQ SURYLGHG WKDW WKHUH LV DQ DGHTXDWH HYHQLIWKH\KDYHSURSHU JURXQGVWRREMHFWWRWKHRUGHUjl MXGLFLDO E\SDVV SURFHGXUHl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jV LV ELQGLQJ RQO\ XSRQ WKH SDUWLHV WR WKH DFWLRQ WKHLU DERUWLRQ'HIHQGDQWVVXEPLWWHGDQDIILGDYLWIURPWKHFOHUNRI RIILFHUVDJHQWVVHUYDQWVHPSOR\HHVDQGDWWRUQH\VDQG WKHMXYHQLOHFRXUWZKRVWDWHGWKDW XSRQ WKRVH SHUVRQV LQ DFWLYH FRQFHUW RU SDUWLFLSDWLRQ ZLWK WKHP ZKR UHFHLYH DFWXDO QRWLFH RI WKH RUGHU E\ >G@XULQJ WKH WLPH WKDW >WKH 0HPSKLV 3ODQQHG SHUVRQDOVHUYLFHRURWKHUZLVH 3DUHQWKRRG@LQMXQFWLRQZDVLQIRUFHDQGHIIHFWDQGLQ FRPSOLDQFHZLWKWKLVLQMXQFWLRQWKHsXYHQLOH&RXUW )HG 5 &LY 3 G 5XOH G mLV GHULYHG IURP WKH RI 0HPSKLV DQG 6KHOE\ &RXQW\ 7HQQHVVHH GLG QRW FRPPRQ ODZ GRFWULQH WKDW D GHFUHH RI LQMXQFWLRQ QRW RQO\ LPSOHPHQW RU RSHUDWH WKH MXGLFLDO E\SDVV SURFHGXUH ELQGVWKHSDUWLHVGHIHQGDQWEXWDOVRWKRVHLGHQWLILHGZLWKWKHP SURYLGHG E\ WKH 7HQQHVVHH 3DUHQWDO &RQVHQW IRU LQ LQWHUHVW LQ µSULYLW\j ZLWK WKHP UHSUHVHQWHG E\ WKHP RU $ERUWLRQVE\0LQRUV$FW VXEMHFWWRWKHLUFRQWUROl5HJDO.QLWZHDU&RY1/5% 7RP\NQRZOHGJHWKHsXYHQLOH&RXUWRI0HPSKLV 867RGHWHUPLQHZKHWKHUDSHUVRQLVRQHZKR DQG6KHOE\&RXQW\7HQQHVVHHKDVQRWKHDUGDQ\MXGLFLDO DFWVLQFRQFHUWRULVLGHQWLILHGLQLQWHUHVWZLWKWKHHQMRLQHG E\SDVVSHWLWLRQVVLQFH SDUW\WKHFRXUWPXVWORRNWRWKHDFWXDOUHODWLRQVKLSEHWZHHQ $V WKH &OHUN RI WKH s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j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j FKLHIMXVWLFHWKHUHRI$VVHFUHWDU\WRWKHMXGLFLDOFRXQFLO GHILQLWLRQ RI mLQ DFWLYH FRQFHUW RU SDUWLFLSDWLRQl LV RYHUO\ WKH DGPLQLVWUDWLYH GLUHFWRU RI WKH FRXUWV VKDOO SURYLGH QDUURZDQGGRHVQRWFRPSRUWZLWKWKHODZ,WLVQRWQHFHVVDU\ VWDII DQG VHFUHWDULDO VXSSRUW IRU DOO IXQFWLRQV RI WKH WKDWWKHHQMRLQHGSDUW\FRQWUROWKHWKLUGSDUW\LQRUGHUIRUWKH MXGLFLDOFRXQFLO WKLUGSDUW\WREHERXQGE\WKHLQMXQFWLRQ7KHWKLUGSDUW\LV ERXQG E\ DQ LQMXQFWLRQ LI WKDW SDUW\ LV LGHQWLILHG ZLWK WKH G7KHDGPLQLVWUDWLYHGLUHFWRURIWKHFRXUWVVKDOOZLWKLQ QDPHG HQMRLQHG SDUW\ LQ LQWHUHVW LQ µSULYLW\j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jDUJXPHQWDQGFRQFOXGHWKDWWKHFRQVHQWSURYLVLRQ RIWKHRIILFLDOGXWLHVRIVXFKMXGJH RI WKH 3DUHQWDO &RQVHQW $FW FRXOG QRW EH HQIRUFHG FRQVWLWXWLRQDOO\ZKHUHWKHMXYHQLOHFRXUWMXGJHVZHUHHQMRLQHG I 7KH DGPLQLVWUDWLYH GLUHFWRU RI WKH FRXUWV VKDOO IURPHQIRUFLQJWKHMXGLFLDOE\SDVVSURFHGXUHRIWKH$FW ZLWKLQ WKH OLPLW RI DSSURSULDWHG IXQGV SUHSDUH IRU WKH VXSUHPH FRXUW V DSSURYDO DQ DQQXDO MXGLFLDO HGXFDWLRQ )XUWKHUPRUHWKHGLVWULFWFRXUWSURSHUO\FRQFOXGHGWKDWWKHUH SODQSURYLGLQJIRUWKHRULHQWDWLRQDQGFRQWLQXLQJWUDLQLQJ ZDVLQIDFWQRMXGLFLDOE\SDVVSURFHGXUHLQSODFHDWWKHWLPH DQGHGXFDWLRQRIDOOHOHFWHGRUDSSRLQWHGMXGJHVRIWULDO RI$VKOH\%ODFNDUGjVDERUWLRQHYHQLILWH[LVWHGWKHRUHWLFDOO\ DQGDSSHOODWHFRXUWVRIUHFRUGRIWKLVVWDWH RURQSDSHU7KH%HOORWWLSULQFLSOHWKDWDVWDWHPD\QRWUHTXLUH SDUHQWDOFRQVHQWEHIRUHDPLQRUPD\REWDLQDQDERUWLRQLQWKH J 7KH DGPLQLVWUDWLYH GLUHFWRU RI WKH FRXUWV VKDOO DEVHQFHRIDQDGHTXDWHMXGLFLDOE\SDVVSURFHGXUHKDVEHHQ FRQWLQXRXVO\VXUYH\DQGVWXG\WKHRSHUDWLRQRIWKHVWDWH UHDIILUPHG WLPH DQG WLPH DJDLQ 3ODQQHG 3DUHQWKRRG RI FRXUWV\VWHPWKHYROXPHDQGFRQGLWLRQRIEXVLQHVVLQWKH 6RXWKHDVWHUQ3DY&DVH\86m2XU FRXUWV RI WKH VWDWH ZKHWKHU RI UHFRUG RU QRW WKH %ODFNDUGHWDOY0HPSKLV$UHD 1R 1R %ODFNDUGHWDOY0HPSKLV$UHD 0HG&WUIRU:RPHQHWDO 0HG&WUIRU:RPHQHWDO SURFHGXUHVHPSOR\HGE\WKRVHFRXUWVDQGWKHTXDOLW\DQG WKH$GPLQLVWUDWLYH'LUHFWRURIWKH&RXUWVRI7HQQHVVHH UHVSRQVLYHQHVV RI DOO RI WKH FRXUWV ZLWK UHJDUG WR WKH DFWVµLQDFWLYHFRQFHUWRUSDUWLFLSDWLRQZLWKjWKHFRXUWVRI QHHGV RI FLYLO OLWLJDQWV DQG WKH QHHGV RI WKH FULPLQDO WKH6WDWHRI7HQQHVVHHLQFOXGLQJWKHMXYHQLOHMXGJHVZKR MXVWLFHV\VWHPWKURXJKRXWWKHVWDWH7KHDGPLQLVWUDWLYH ZHUH UHVSRQVLEOH IRU LPSOHPHQWLQJ WKH MXGLFLDO E\SDVV GLUHFWRURIWKHFRXUWVVKDOODOVRSURYLGHOLDLVRQDQGVWDII SURFHGXUHXQGHUWKH&RQVHQW$FW)URPWKLVUHYLHZ VXSSRUW WR WKH MXGLFLDO FRXQFLO ZLWK UHJDUG WR WKH RIWKH$GPLQLVWUDWLYH'LUHFWRUjVGXWLHVLWLVFOHDUWRWKH UHVSRQVLELOLWLHVRIWKHMXGLFLDOFRXQFLOLQWKHDERYHDUHDV &RXUW WKDW WKH $GPLQLVWUDWLYH 'LUHFWRU LV LQ D SULYLW\ K 7KH DGPLQLVWUDWLYH GLUHFWRU RI WKH FRXUWV VKDOO UHODWLRQVKLSZLWKWKHFRXUWVRIWKH6WDWHRI7HQQHVVHH HVWDEOLVKFULWHULDGHYHORSSURFHGXUHVDQGLPSOHPHQWD 7HQQHVVHHFRXUWLQIRUPDWLRQV\VWHP7Q&,67KHV\VWHP s$DW VKDOO SURYLGH DQ LQWHJUDWHG FDVH PDQDJHPHQW DQG DFFRXQWLQJ VRIWZDUH V\VWHP DGGUHVVLQJ WKH VWDWXWRU\ :H GR QRW EHOLHYH WKH GLVWULFW FRXUWjV FRQFOXVLRQ ZDV UHVSRQVLELOLWLHV RI WKH FOHUNV RI WKH JHQHUDO VHVVLRQV FOHDUO\HUURQHRXV7KHUHODWLRQVKLSEHWZHHQWKH$'&DQGWKH FKDQFHU\FLUFXLWDQGMXYHQLOHFRXUWV FRXUWVRI7HQQHVVHHGHPRQVWUDWHVWKDWWKH7HQQHVVHHFRXUWV ZHUH LGHQWLILHG LQ LQWHUHVW ZLWK WKH $'& 7KH $'& LV L)RUWKHSXUSRVHVRIPRQLWRULQJWKHRSHUDWLRQRIWKH UHVSRQVLEOHIRUWKHRULHQWDWLRQDQGFRQWLQXHGHGXFDWLRQRIWKH VWDWH FRXUW V\VWHP UHGXFLQJ XQQHFHVVDU\ GHOD\ DQG MXGJHVRIWKHVWDWHFRXUWVDQGIRUWKHRUGHUO\RSHUDWLRQRIWKH DVVHVVLQJWKHUHVSRQVLYHQHVVRIWKHVWDWHFRXUWV\VWHPWR FRXUW V\VWHP ,W QDWXUDOO\ IROORZV WKDW WKH $'& ZRXOG EH WKHQHHGVRIOLWLJDQWVYLFWLPVRIFULPHDQGWKHFLWL]HQV UHVSRQVLEOHIRUHGXFDWLQJWKHVWDWHFRXUWMXGJHVRQLQMXQFWLRQV RIWKHVWDWHWKHDGPLQLVWUDWLYHGLUHFWRURIWKHFRXUWVVKDOO SURKLELWLQJ WKH HQIRUFHPHQW RI SRWHQWLDOO\ XQFRQVWLWXWLRQDO KDYH WKH UHVSRQVLELOLW\ IRU DQQXDOO\ FROOHFWLQJ VWDWXWHV$QGZKLOHWKH$'&GRHVQRWKDYHGLUHFWVXSHUYLVRU\ FRPSLOLQJDQDO\]LQJDQGSXEOLVKLQJFDVHORDGVWDWLVWLFV DXWKRULW\ RYHU WKH MXGJHV RI WKH VWDWH FRXUWV WKH $'& LV SHUWDLQLQJ WR WKH VWDWH FRXUW V\VWHP ,W LV WKH UHVSRQVLEOH IRU DVVLVWLQJ WKH FKLHI MXVWLFH RI WKH 6XSUHPH UHVSRQVLELOLW\RIWKHDGPLQLVWUDWLYHGLUHFWRURIWKHFRXUWV &RXUWZKRGRHVKDYHVXFKDXWKRULW\ZLWKWKHDGPLQLVWUDWLRQ WR GHYHORS GHILQH XSGDWH DQG GLVVHPLQDWH VWDQGDUG RIWKHVWDWHFRXUWV\VWHP)XUWKHUPRUHWKH$'&LVWKHmFKLHI XQLIRUPPHDVXUHVGHILQLWLRQVDQGFULWHULDIRUFROOHFWLQJ DGPLQLVWUDWLYHRIILFHURIWKHVWDWHFRXUWV\VWHPl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mFKLHIDGPLQLVWUDWLYHRIILFHURIWKHVWDWH WKHVWDWXWRU\UHODWLRQVKLSEHWZHHQWKH$'&DQGWKH7HQQHVVHH FRXUW V\VWHPl 7R HQMRLQ WKH $'& ZLWKRXW KDYLQJ WKDW FRXUWVLQFOXGLQJWKHMXYHQLOHFRXUWVWKHGLVWULFWFRXUWKHOG LQMXQFWLRQUHDFKWKHMXGJHVRIWKH YDULRXVFRXUWVZRXOGEH WKDW