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Yet, the Litigation Trust does not point to one specific asset of Trenwick or

Trenwick America that was overstated in their financial statements. It does not contend

that the revenue figures in their financial statements were phony. In the end, it simply

argues that Trenwick must have intentionally understated the claims it faced because

those claims eventually rose to a level beyond Trenwick’s ability to pay them and remain

solvent. In other words, there must have been fraud because the estimates eventually

turned out wrong. Indeed, the fraud is a subtle one, because the complaint concedes that

when Trenwick purchased Chartwell, it required Chartwell to buy $100 million in

coverage to cover what Trenwick and its advisors perceived to be a lack of adequate

reserves.

To this point, it is notable that the Litigation Trust is trying to ground its fraud

claims on the softest of turf. For example, it claims that statements by Trenwick that the

company believed that the Chartwell acquisition would generate good results were

fraudulent. But these sorts of statements are the softest of information, and very difficult

to base a fraud claim on for good reason. They are simply statements of expectation or

opinion about the future of the company and the hoped for results of business

strategies.118 Such opinions and predictions are generally not actionable under Delaware

law.119 The Litigation Trust fails to plead particularized facts regarding these soft

118 , 867 A.2d 904, 938 (Del. Ch. 2004) (“The more tentative and soft the information, the more reluctant our courts have been to deem it material.”)

119

,

at 935 (“Because, by their very nature, predictions of the future are less certain

than statements about past events, courts have been less apt to find forward-looking statements material and have been more dubious of claims that it was reasonable for investors to rely upon

s u c h s t a t e m e n t s i n m a k i n g t r a d i n g d e c i s i o n s . ) ;

,

2 0 0 4 W L 2 6 9 4 9 1 6 , a t

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