Internal Projections That Pre-Date a Solicitation and Fall Within a Disclosed Range Are Not Material Omissions

Delaware Supreme Court affirms dismissal in Van den Wildenberg v. Sign‑Zone, refining duty‑to‑speak and materiality standards for forward‑looking information

Introduction

In Rick Henricus Van den Wildenberg v. Sign-Zone Holdings L.P. (Del. Oct. 17, 2025), the Delaware Supreme Court affirmed the Court of Chancery’s dismissal of a negligent misrepresentation complaint arising from a private capital raise. The limited partner–plaintiff alleged that the general partner and affiliated entities “sandbagged” him with unduly pessimistic projections while withholding a more favorable internal analysis, causing him to forgo a profitable follow-on investment.

The case presents two recurring issues in private-company fundraising disputes:

• When does a duty to speak arise such that the omission of internal projections becomes actionable?
• When are undisclosed projections “material” such that their absence significantly alters the total mix of information available to an investor?

The Court’s answer is two-fold and will resonate in both private equity and closely held company contexts: (1) there is no “subsequently acquired information” duty to update where the internal analysis predates the solicitation; and (2) an undisclosed internal forecast that sits within a range of projections already disclosed to the investor is not a material omission under Delaware law.

Background

Plaintiff Rick Henricus van den Wildenberg invested in Sign‑Zone Holdings, L.P. in 2019. In April 2021, during a new capital raise, Sign‑Zone sent him a Unitholder Presentation reflecting a pandemic‑era performance decline and warning that existing debt would have priority over new equity. The deck included three scenarios for 2023 EBITDA:

• Extended Recovery Case: $10.1 million
• Base Case: $15.8 million
• Upside Case: $22.48 million

The CEO also conveyed that the company “purportedly had bad projections.” Choosing caution and mindful of his prior stake, Wildenberg did not participate. By 2024, however, the company’s actual performance had outstripped even the “Upside Case.” Wildenberg then learned that management and other limited partners had, as of December 31, 2020, a Quantitative Impairment Analysis (QIA) projecting 2023 EBITDA of approximately $20.74 million—materially more optimistic than the Base Case and close to the upper end of the disclosed range. He sued for negligent misrepresentation, alleging both actionable omissions and affirmatively false statements. The Court of Chancery dismissed under Rule 12(b)(6) for failure to plead a false statement of fact or an actionable omission, and the Supreme Court affirmed.

Summary of the Opinion

The Supreme Court held:

• No duty-to-update omission: The QIA predated the Unitholder Presentation; therefore, it was not “subsequently acquired information” that would trigger a duty to update prior statements under Restatement (Second) of Torts § 551.
• No material omission: Even assuming the QIA was reliable, its 2023 EBITDA estimate fell within the disclosed range ($10.1–$22.48 million). Disclosing it would not have significantly altered the total mix of information available to a reasonable investor.
• No actionable affirmative misrepresentation: The CEO’s pessimistic characterization and the tone of the deck were forward-looking opinions. Without well‑pleaded contemporaneous facts showing knowledge of falsity, such opinions are not actionable as “false statements of fact.” The mere existence of an internal model within the disclosed range does not plausibly imply knowledge that the negative outlook was false.

Because the complaint failed the “false information” element, the negligent misrepresentation claim was properly dismissed.

Analysis

Precedents Cited and Their Influence

• Fraud by omission and the duty to speak: The Court reaffirmed that fraud can arise from silence where a duty to speak exists (Stephenson v. Capano Development; Nicolet v. Nutt). It focused on one recognized duty—when a party acquires subsequent information that renders earlier statements misleading (In re Wayport; Restatement § 551(2)(c)). The QIA, dated before the solicitation, did not qualify as “subsequently acquired,” so no duty arose on that basis.
• Soft versus hard information and disclosure of projections: The Court acknowledged that management projections—often “soft information”—can be material and require disclosure when sufficiently reliable and significant (Zirn v. VLI; Weinberger v. UOP; In re Pure Resources). But disclosure obligations turn on context, reliability, and materiality, with courts wary of inundating investors with speculative data (Arnold v. Society for Savings Bancorp; In re PNB Holding; Kihm v. Mott).
• Materiality and the “total mix” standard: Applying the familiar “substantial likelihood” test (Arnold; Skeen v. Jo‑Ann Stores), the Court concluded that because the QIA’s EBITDA forecast fell within the already disclosed range—and the Upside Case exceeded it—adding the QIA would not have significantly altered the total mix. The Court analogized to Olenik v. Lodzinski, where omission of an earlier analysis was immaterial given the similarities to what stockholders already had and their ability to “place the emphasis where warranted.”
• Opinions, predictions, and falsity: Predictions are generally non‑actionable opinions unless the speaker knows they are false when made (Great Lakes Chemical v. Pharmacia; Eastern States Petroleum; Nye Odorless; KnighTek v. Jive). While Rule 9(b) allows knowledge to be averred generally, it must be reasonably inferable from particular facts (In re Swervepay Acquisition). The Court contrasted cases that survive dismissal because plaintiffs pled contemporaneous “red flags” undermining management’s public stance (Agspring Holdco) with this case, where the internal analysis merely represented one end of a disclosed spectrum.
• Pleading standard: The Court reviewed the Rule 12(b)(6) dismissal de novo, crediting well‑pleaded allegations and drawing reasonable inferences in the plaintiff’s favor (VLIW Tech. v. Hewlett‑Packard), but concluded the complaint still did not cross the plausibility threshold on falsity.

Legal Reasoning

1. Duty-to-speak via “subsequently acquired information” did not attach. The plaintiff’s omission theory hinged on a doctrine that obliges a speaker to correct prior statements upon learning new facts that render those statements misleading. The Court held categorically that a document created before the solicitation is not “subsequently acquired.” Because the QIA predated the Unitholder Presentation, its nondisclosure could not be wrongful under § 551(2)(c). This is a clarifying boundary on the duty to update: it is temporal and triggered by later‑learned facts, not earlier‑prepared materials.
2. Materiality failed because the undisclosed forecast fell within the disclosed range. Materiality asks whether disclosure likely would have significantly altered the total mix. The Unitholder Presentation gave a 2023 EBITDA spectrum from $10.1 million to $22.48 million. The QIA’s $20.74 million estimate was inside that band and below the top end. Providing the QIA would not have transformed the decision context, especially given that the investor already had a more optimistic scenario to weigh. The Court treated the range disclosure as functionally informative enough to encompass the omitted internal model.
3. No actionable affirmative misstatement because the statements were forward-looking opinions unsupported by pleaded knowledge of falsity. The CEO’s characterization (“purportedly bad projections”) and the pessimistic tone of the deck were opinions about an uncertain future. To convert an opinion into an actionable false statement of fact, a plaintiff must plead particularized facts supporting an inference that the speaker knew the opinion was false when made. The complaint offered only the QIA’s existence—an internal forecast consistent with the disclosed range—as its basis. That does not plausibly suggest management knew the pessimistic view was false. Absent contemporaneous contradictory data or internal admissions, the claim sounds in hindsight disagreement, not deceit.
4. Negligent misrepresentation’s “false information” element was not satisfied. Delaware imposes Rule 9(b) particularity on misrepresentation claims. Whether labeled common-law or “equitable” fraud (which relaxes scienter but not other elements), a plaintiff must identify a false statement of fact or a material omission in the face of a duty to speak. Because neither was adequately pled, the claim failed as a matter of law.

Impact and Practical Implications

The decision meaningfully refines Delaware law in the fundraising and valuation context:

• Range disclosures can neutralize omission claims about internal models. If an issuer credibly discloses a reasonable range of outcomes, an internal projection that falls within that range is unlikely to be “material” for tort-based omission claims. This reduces pressure to disclose every internal model, provided the range is not itself misleading and is grounded in reasonable assumptions.
• Limits on the duty to update: The “subsequently acquired information” duty is temporal. Preexisting materials do not trigger a duty to correct or supplement. Parties should still monitor genuinely new developments that would render earlier statements misleading; those can trigger a duty.
• Tone and pessimism are not actionable absent contemporaneous contradictions. Plaintiffs must plead concrete internal facts—board minutes, emails, revised operating plans, or data points—that make it plausible management knew its public posture was false. A different internal forecast, without more, is insufficient—particularly where it falls within a disclosed band.
• Context matters. While the Court borrowed materiality and projection‑disclosure principles from stockholder cases (Weinberger, Pure Resources, Zirn), this case arose in a private LP capital raise under a tort misrepresentation theory. The Court applied the “total mix” test here because the parties did not dispute it. Practitioners should still consider how fiduciary duty contexts (e.g., controller transactions) can elevate disclosure obligations independent of tort law.
• What would change the outcome? Different facts could matter: an internal forecast outside the disclosed range; knowledge that certain scenarios were unattainable; internal communications undermining the public stance; or circumstances where the undisclosed projections underpin fairness determinations given to investors.

Complex Concepts Simplified

• Negligent misrepresentation: A tort claim requiring particularized pleading that the defendant owed a duty to provide accurate information, supplied false information, failed to exercise reasonable care, and caused loss through justifiable reliance. It is not enough to show the information later proved wrong; it must have been false when supplied.
• Duty to speak (omissions): Silence can be actionable only if a duty to disclose exists. One such duty arises when, after making a statement, a party later learns new facts that make the earlier statement misleading. Information that existed beforehand does not fit this “subsequently acquired” duty.
• Soft vs. hard information: Projections and valuations are “soft” because they predict the future. Delaware sometimes requires disclosure of soft information if it is reliable and material. But speculative or confusing data need not be disclosed.
• Materiality and “total mix”: An omitted fact is material if a reasonable investor would view its disclosure as significantly altering the overall body of information. Helpful is not the same as material; the benchmark is whether the decision-making context would have changed meaningfully.
• Opinions vs. facts: Statements about future performance are generally opinions. They become actionable only if the speaker knew they were false when made or if they imply false, verifiable facts. Mere disagreement with an opinion in hindsight does not establish falsity.
• Rule 9(b) particularity: Allegations of misrepresentation must specify the “who, what, when, where, and how,” and although knowledge can be averred generally, the complaint must include facts making knowledge a reasonable inference.

Conclusion

Van den Wildenberg v. Sign‑Zone delivers two clear guideposts for Delaware misrepresentation law in private capital raises. First, the “subsequently acquired information” duty to correct does not compel disclosure of internal analyses that predate a solicitation. Second, an undisclosed internal projection that falls within a range of forward‑looking outcomes already disclosed is not a material omission under the “total mix” test. The Court also reinforces that forward‑looking pessimism is not actionable absent particularized facts indicating knowledge of falsity at the time.

For companies and sponsors, the opinion validates the use of ranges and scenario analyses to inform investors without cataloging every internal model. For investors and litigants, it underscores the need to plead contemporaneous internal contradictions—not merely different internal forecasts—to transform opinions about the future into actionable misstatements. In the broader Delaware jurisprudence, the decision harmonizes omission doctrine, materiality, and the treatment of projections across corporate and private‑fund contexts, offering practical clarity while preserving liability for genuinely misleading communications.