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representations; the facts misrepresented; the identity of the person(s) making the

misrepresentation; and what that person(s) gained from making the misrepresentation123

exists in large measure so that defendants are not subjected to fraud claims simply

because business plans did not work out as hoped.124 The requirement of particularized

pleading ensures that a plaintiff must plead circumstances suggesting that the defendants

were positioned to know that they were making erroneous statements of material facts

and had an interest in doing so.125 That has not been done here.

Recognizing the deficiencies in its complaint, the Litigation Trust devoted much

of its briefing on its fraud claims to seeking an exemption from Rule 9(b) for itself. The

Litigation Trust argues that Rule 9(b) should be less stringently applied in the context

where a plaintiff is a third-party, such as a trustee, because third-parties generally have

less information on which to base their allegations. Accordingly, the Litigation Trust

maintains that as long as the defendants have notice that is “not vague[] or general[],” the

complaint will meet the requirements of Rule 9(b).126 That is not a correct statement of

law and its logical premise is flawed. Most fraud plaintiffs possess less information than

the defendants who made the statements at issue. Protecting those who occupy that

vulnerable posture is the essential purpose of the law of fraud — to act as a safeguard

when there is reasonable, detrimental reliance on another’s statement of fact by someone

123 124 , 2005 WL 2130607, at *7. , 1999 WL 608850, at *3 (noting that one of Rule 9(b)’s purposes is to protect defendants from unfounded charges of wrongdoing that could injure their reputation and goodwill, and refusing to sustain a fraud claim based on general allegations by one joint venture partner that the other breached promises made going into the joint venture).

125 . at 11; 914265, at *4).

, 854 A.2d at 147 (citing

, 1998 WL


Trust Br. 43-44.


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