Dandini, et al. v. First Eagle Funds, et al., N25C-05-224 KMM CCLD

Plaintiffs, mutual fund investors, alleged First Eagle and related defendants made misleading disclosures about the Funds' accounting for dividend and capital gains income as assets rather than liabilities. 1
Plaintiffs challenged disclosures in the prospectus and registration statement concerning NAV calculation, ex-dividend reductions, tax consequences, and management fees based on net assets. 2
Plaintiffs claimed the accounting method inflated NAV, causing overpayment, higher taxes and fees, and dilution, and asserted Sections 11, 12(a)(2), and 15 claims. 3
Defendants moved to dismiss, arguing the disclosures were accurate, the claims were untimely and inadequately pled, and plaintiffs lacked standing as to funds they never bought. 4
The court held the complaint failed to state any viable disclosure claim and granted dismissal. 5
The court dismissed with prejudice after finding plaintiffs failed to show good cause to amend under the new Complex Commercial Litigation Division rules. 6

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does Rule 9(b) apply? 7	Dandini says negligence, not fraud, so Rule 8 applies.	First Eagle says the complaint sounds in fraud and needs particularity.	Court treated claims as non-fraud but found dismissal proper under Rule 8. 8
Were the NAV/accounting disclosures misleading? 9	Dandini says First Eagle hid that income was always included in NAV.	First Eagle disclosed NAV may include undistributed income and capital gains.	No; the disclosures were not misleading. 10
Were income and capital gains misdisclosed as assets? 11	Dandini says accrued distributions were assets without offsetting liabilities.	First Eagle disclosed accrued interest and dividends as assets and no law required liability treatment.	No disclosure violation stated. 12
Were fee disclosures misleading? 13	Dandini says fees were inflated because net assets were inflated.	First Eagle disclosed fees were based on average daily net assets.	No; this claim failed with the NAV claim. 14
Did Form N-1A require the omitted disclosures and survive Section 15? 15	Dandini says Form N-1A required disclosure of accounting method and inflationary effects.	First Eagle says the cited items concern risks, pricing, dividends, taxes, and asset valuation, not this method.	No; Form N-1A imposed no such duty, and Section 15 failed with Counts I-II. 16

Delaware Human and Civil Rights Comm'n v. Welch, 2025 WL 2222967 (Del. Super. 2025) (Rule 12(b)(6) dismissal standard 17)
Surf's Up Legacy Partners, LLC v. Virgin Fest, LLC, 2021 WL 117036 (Del. Super. 2021) (pleading-stage factual inference and conclusory allegation limits 18)
Doe 30's Mother v. Bradley, 58 A.3d 429 (Del. Super. 2012) (documents integral to the complaint may be considered on a motion to dismiss 19)
Murray v. Mason, 244 A.3d 187 (Del. Super. 2020) (integral-document doctrine 20)
In re Facebook, Inc. IPO Securities and Derivative Litigation, 986 F. Supp. 2d 487 (S.D.N.Y. 2013) (risk disclosures cannot describe as contingent a risk that has already transpired 21)
Industriens Pensionsforsikring A/S v. Becton, Dickinson & Co., 620 F. Supp. 3d 167 (D.N.J. 2022) (disclosure of hypothetical risks can be misleading if the risk has already materialized 22)
In re Morgan Stanley Information Fund Securities Litigation, 592 F.3d 347 (2d Cir. 2010) (Form N-1A requires fund-specific risk disclosure and does not mandate every possible fact investors want 23)
Craftmatic Securities Litigation v. Kraftsow, 890 F.2d 628 (3d Cir. 1989) (material omissions must be disclosed when needed to make statements not misleading 24)
Duncan v. Vantage Corp., 2019 WL 1349497 (D. Del. 2019) (Section 15 liability fails when underlying Section 11 or 12 claims fail 25)