Brigade Cavalry Fund Ltd. v Chirico

Holding The court dismissed the fraud claims based on financial projections due to a lack of justifiable reliance and adequate due diligence by the sophisticated investor. Additionally, the North Carolina Securities Act claim was dismissed to the extent it relied on financial projections, while the officer’s certificate claim failed for lack of sufficient scienter allegations.

The court’s words

Brigade did not allege that it availed itself of that contractual right or otherwise engaged in due diligence adequate for an actor of Brigade's sophistication.

2026 NY Slip Op 06382, at the official text

Neither plaintiffs' allegation that on June 23, 2022, an Avaya executive wrote to its general counsel that "our understanding is that [an] assessment of goodwill and trade names for potential impairment is in-process and no conclusions have been reached at this time" nor the allegation that it issued a press release on June 28, 2022 estimating large non-cash impairment charges shows that McGrath knew on July 12 that his statement about Avaya's solvency was false.

2026 NY Slip Op 06382, at the official text

Plaintiffs' attempt to tie Chirico to the certificate fails because its allegation that he "would . . . have been aware of and approved this certification" was made on "information and belief [which] is insufficient to state a fraud claim" as to Chirico

2026 NY Slip Op 06382, at the official text

Projections of future performance not worded as guarantees are generally not actionable under the federal securities laws

2026 NY Slip Op 06382, at the official text