PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

PATIPAN NAKKHUMPUN, 

individually and on behalf of all 

others similarly situated, 

 Plaintiff - Appellant, 

 v. No. 14-1060 

DANIEL J. TAYLOR; CARL E. 

LAKEY; KEVIN K. NANKE; JOHN 

R. WALLACE, 

 

 Defendants - Appellees. 

Appeal from the United States District Court 

for the District of Colorado 

(D.C. No. 1:12-CV-01038-CMA-CBS) 

Stuart W. Emmons, Federman & Sherwood, Oklahoma City, 

Oklahoma (William B. Federman, Federman & Sherwood, Oklahoma 

City, Oklahoma, with him on the briefs) for Appellant. 

Eric Landau, Jones Day, Irvine, California (Erica L. Reilley, Jones 

Day, Irvine, California, and Kevin H. Logan, Jones Day, Washington, 

D.C., with him on the brief) for Appellees. 

Before TYMKOVICH, HOLMES, and BACHARACH, Circuit 

Judges. 

BACHARACH, Circuit Judge. 

FILED 

United States Court of Appeals 

Tenth Circuit 

April 7, 2015

Elisabeth A. Shumaker 

Clerk of Court
2 

Mr. Patipan Nakkhumpun, the lead plaintiff in this securities 

class action, represents investors who purchased securities in Delta 

Petroleum Corporation between March 11, 2010, and November 9, 

2011 (the class period). The defendants are former officers and a 

board member of Delta who allegedly violated § 10(b) of the 

Securities Exchange Act of 1934 (15 U.S.C. § 78j(b)) and Rule 10b51

 of the Securities and Exchange Commission by misleading 

investors through statements about (1) a proposed transaction with 

Opon International, LLC and (2) Delta’s financial condition. 

 The district court granted the defendants’ motion to dismiss, 

holding that Mr. Nakkhumpun had failed to allege (1) loss causation 

regarding the statement about the Opon deal and (2) falsity regarding 

the statements about Delta’s financial condition. Mr. Nakkhumpun 

moved for leave to amend, and the district court denied the motion on 

the ground of futility. 

 On appeal, the parties dispute whether Mr. Nakkhumpun has 

adequately pleaded 

 falsity, scienter, and loss causation as to the statement 

 about the Opon transaction, and 

 

1

 In district court, Mr. Nakkhumpun also invoked § 20(a) of the 

Securities Exchange Act. But, he does not appeal the disposition of 

his § 20(a) claims. 
3 

 falsity and scienter as to the statements about Delta’s 

 financial condition. 

We conclude: 

1. Mr. Nakkhumpun has adequately alleged falsity, scienter, 

and loss causation on the statement about the Opon 

transaction. 

2. Mr. Nakkhumpun has failed to adequately allege falsity 

or scienter for each statement about Delta’s financial 

condition. 

Thus, we affirm in part and reverse in part. 

I. Standard of Review 

 In this appeal, we engage in de novo review of both orders by 

the district court: a dismissal under Federal Rule of Civil Procedure 

12(b)(6) and a denial of leave to amend under Rule 15.2

 Dismissals under Rule 12(b)(6) are reviewed de novo. Slater v. 

A.G. Edwards & Sons, Inc., 719 F.3d 1190, 1196 (10th Cir. 2013). 

 

2

 Upon dismissal of the action, Mr. Nakkhumpun filed a 11⁄2-page 

motion for vacatur and reconsideration of the judgment, contending 

that entry of judgment was premature until the district court decided 

whether to allow amendment of the complaint. Appellant’s App., vol. 

6, at 1428-31. After Mr. Nakkhumpun moved for vacatur and 

reconsideration, the district court considered whether to allow 

amendment, concluding that it would be futile. Appellant’s App., vol. 

7, at 1857. With that ruling, the motion for vacatur and 

reconsideration became moot: Mr. Nakkhumpun wanted the court to 

consider the proposed amendment, and the court did so. As a result, 

the court denied the motion for vacatur or reconsideration on the 

ground of mootness. Id.

 Mr. Nakkhumpun states that he appealed this ruling, but does 

not give any reason to question the district court’s determination 

based on mootness. Appellant’s Opening Br. at 1-3. 
4 

Typically, we review denial of leave to amend for abuse of 

discretion. Gohier v. Enright, 186 F.3d 1216, 1218 (10th Cir. 1999). 

But, we exercise de novo review when a court denies a request to 

amend on the ground that amendment would be futile. Merida 

Delgado v. Gonzales, 428 F.3d 916, 921 (10th Cir. 2005). Because 

the district court deemed Mr. Nakkhumpun’s proposed amendment to 

be futile, we engage in de novo review for both the dismissal and the 

denial of leave to amend. 

 In conducting de novo review, we accept the well-pleaded 

allegations of the complaint and construe them in the light most 

favorable to the plaintiff. In re Gold Res. Corp. Sec. Litig., 776 F.3d 

1103, 1108 (10th Cir. 2015). We consider the complaint as a whole, 

along with the documents incorporated by reference into the 

complaint or publicly filed with the Securities and Exchange 

Commission. Slater v. A.G. Edwards & Sons, Inc., 719 F.3d 1190, 

1196 (10th Cir. 2013). 

II. Heightened Pleading Requirements 

 To plead securities fraud under § 10(b) of the Securities 

Exchange Act and Rule 10b-5 of the Securities and Exchange 

Commission, a plaintiff must plausibly allege that a defendant made 

statements that 

1. contained false or misleading statements of material fact, 
5 

2. related to the purchase or sale of a security, 

3. were made with intent to defraud investors or conscious 

disregard of a risk that shareholders would be misled 

(scienter), 

4. led to reliance by the plaintiff, and 

5. caused the plaintiff’s loss (loss causation). 

Adams v. Kinder-Morgan, Inc., 340 F.3d 1083, 1095 (10th Cir. 

2003); see City of Philadelphia v. Fleming Cos., 264 F.3d 1245, 1260 

(10th Cir. 2001) (defining recklessness). 

 On the first element (falsity), a plaintiff must plead the fraud 

with particularity. Fed. R. Civ. P. 9(b). To satisfy this requirement, 

Mr. Nakkhumpun had to specify each fraudulent statement, explain 

why the statement was misleading, and allege with particularity his 

basis for believing that the statement was false. 15 U.S.C. § 78u4(b)(1). 

 On the third element (scienter), a plaintiff must allege facts 

that create a strong inference that the defendants acted with the 

intent to deceive shareholders or in reckless disregard of a risk that 

shareholders would be misled. Adams, 340 F.3d at 1096. These 

alleged facts must be susceptible to an inference of scienter that is 

“at least as compelling as” any competing inference. Tellabs, Inc. v. 

Makor Issues & Rights, Ltd., 551 U.S. 308, 324 (2007). 
6 

III. Opon Transaction 

In March 2010, Delta issued a press release announcing a 

preliminary agreement with Opon International, LLC. Opon would 

pay $400 million to Delta for a 37.5% non-operating interest in 

Delta’s core assets, known as the Vega Area assets. The defendants 

anticipated closing by June 1, 2010. 

 Between March 2010 and June 2010, the defendants issued 

additional statements reiterating the $400 million price, disclosing 

that Opon and Delta were trying to get financing and explaining that 

an extension of time would be needed to close the deal.3

 Then, in a 

July 2010 Delta press release, Mr. Daniel Taylor (Delta’s Chairman 

of the Board) announced termination of the Opon deal: 

While Opon was unable to arrange financing for a 

transaction on terms acceptable to us, we remain 

confident in the value of our Vega Area asset, and intend 

to further delineate that value as we consider the 

Company’s other strategic alternatives. 

Appellant’s App., vol. 7, at 1679-80. 

 

3

 Mr. Nakkhumpun brought additional claims based on these 

statements, and the district court dismissed the claims based on a 

failure to allege scienter or loss causation. On appeal, Mr. 

Nakkhumpun has made only cursory arguments about the falsity of 

these statements. By failing to develop these arguments, Mr. 

Nakkhumpun waived appellate review concerning the falsity of these 

statements. See Utahns for Better Transp. v. United States Dep’t of 

Transp., 305 F.3d 1152, 1175 (10th Cir. 2002) (“[I]ssues will be 

deemed waived if they are not adequately briefed.”). 
7 

 Mr. Nakkhumpun alleges that Mr. Taylor’s July 2010 statement 

misled investors about the true reason for termination of the Opon 

deal. According to Mr. Nakkhumpun, the deal failed because Opon 

refused to pay $400 million after its further study had led to a lower 

valuation. Based on this new valuation, Opon tendered a new offer 

for less than $400 million. As a result of Mr. Taylor’s statement, Mr. 

Nakkhumpun alleges that investors were misled into believing that 

Opon had remained willing to pay $400 million for the 37.5% 

interest. 

 The district court agreed that the statement contained false or 

misleading statements of material fact. But, the court concluded that 

Mr. Nakkhumpun had failed to allege loss causation. 

 In reviewing the subsequent motion for leave to amend, the 

district court concluded that Mr. Nakkhumpun’s proposed 

amendments adequately pleaded loss causation. But, the district court 

regarded amendment as futile because Mr. Nakkhumpun had failed to 

allege scienter. 

 On appeal, Mr. Nakkhumpun argues that he has alleged all of 

the required elements for securities fraud under § 10(b) and Rule 

10b-5. The defendants challenge the allegations involving falsity, 

scienter, and loss causation. Because we conclude that Mr. 

Nakkhumpun has adequately alleged these elements, we reverse and 
8 

remand on the claim involving Mr. Taylor’s July 2010 statement 

about termination of the Opon deal. 

 A. Falsity 

At oral argument, the defendants argued for the first time in 

this appeal that Mr. Taylor’s statement was true. Oral Arg. at 31:20-

31:40. But, Mr. Taylor’s statement would have been false if a 

reasonable person would have understood it to be “inconsistent with 

the facts on the ground.” In re Level 3 Commc’ns, Inc. Sec. Litig., 

667 F.3d 1331, 1343 (10th Cir. 2012). 

 We conclude that Mr. Nakkhumpun has adequately pleaded 

falsity. In the complaint, he alleged that Mr. Taylor had 

attributed the termination of the Opon deal to Opon’s 

lack of financing when the actual facts were that Opon 

determined the assets to be worth far less than $400 

million. As explained by [Opon’s former CEO], the deal 

was terminated not because of Opon’s lack of financing 

but because Opon determined that the 37.5% interest in 

the Vega Area assets was not worth $400 million. 

Appellant’s App., vol. 7, at 1680. According to Mr. Nakkhumpun, 

Opon retracted its $400 million offer and replaced it with a lower 

offer, leading Delta’s Board to tell Opon “to ‘take a hike.’” 

Appellant’s App., vol. 6, at 1648 (quoting Confidential Informant 3). 

Together, these factual allegations entail a false statement when Mr. 

Taylor attributed the impasse to Opon’s inability to obtain financing. 
9 

 The defendants argue that the July 2010 statement was not false 

because 

 Mr. Taylor’s July 2010 statement was consistent with the 

Opon CEO’s characterization of why the deal had 

terminated, and 

 Mr. Nakkhumpun’s allegations were limited. 

We reject these arguments because they are waived and would fail on 

the merits. 

 The arguments are waived because they were raised for the first 

time in oral argument. See Corder v. Lewis Palmer Sch. Dist. No. 38 ̧ 

566 F.3d 1219, 1235 n.8 (10th Cir. 2009) (noting that arguments 

made for the first time at oral argument are considered waived).

 The arguments would also fail on the merits. The defendants 

assert that Mr. Taylor’s July 2010 statement would have alerted 

investors that the “real estate [did]n’t support the price.” Oral Arg. at 

34:04-34:15. After all, if the deal failed because of an inability to get 

financing, lenders might have been valuing the assets at less than 

$400 million. And, if lenders were wary of that price, shareholders 

should have been on notice that at least one third-party had valued 

the Vega Area assets at less than $400 million. 

 The defendants’ new contention is misguided. Lenders might 

have declined financing for many reasons. As the defendants say, 

lenders might have stayed away based on their low valuation of the 
10 

Vega assets. But, there are other possible reasons, such as problems 

with Opon’s creditworthiness. 

 The existence of multiple explanations is what made Mr. 

Taylor’s statement misleading. The Opon CEO’s explanation was 

unambiguous: He said the deal had fallen apart because Opon offered 

Delta a lower price after valuing the Vega assets at less than $400 

million. Investors might have reacted differently if they had known 

of Opon’s revaluation of the assets, eliminating the need to speculate 

on why Opon had been unable to obtain financing. 

 The defendants also challenge the falsity element by focusing 

on allegations that Mr. Nakkhumpun didn’t make.4

 But, the question 

is the adequacy of the allegations that were made. Those were 

sufficient on the element of falsity. 

 

4

 At oral argument, the defendants pointed to four allegations 

that were absent from Mr. Nakkhumpun’s complaint but would have 

supported the falsity element: 

1. “Plaintiffs do not attack any of the financial statements.” 

2. “Opon is not alleged to have made any contemporaneous 

 statements in 2010.” 

3. “Even after four years, the Opon CEO never says that Mr. 

 Taylor was wrong . . . or that financing could have been 

 arranged.” 

4. “Opon’s CEO never says that he communicated the 

 results of the internal diligence to Mr. Taylor.” 

Oral Arg. at 31:30-34:16. 
11 

 B. Scienter 

 Mr. Nakkhumpun also adequately alleged scienter. 

 For scienter, a defendant must act with “‘a mental state 

embracing intent to deceive, manipulate, or defraud,’ or 

recklessness.” Adams v. Kinder-Morgan, Inc., 340 F.3d 1083, 1105 

(10th Cir. 2003) (quoting City of Phila. v. Fleming Cos., 264 F.3d 

1245, 1259 (10th Cir. 2001)). To plead scienter, Mr. Nakkhumpun 

had to allege that 

1. Mr. Taylor knew about the “‘danger of misleading buyers 

and sellers’” or 

2. the danger was “so obvious that [Mr. Taylor] must have 

been aware of it.” 

Dronsejko v. Thornton, 632 F.3d 658, 665 (10th Cir. 2011) (quoting 

City of Phila., 264 F.3d at 1258). 

 To determine if Mr. Nakkhumpun has adequately alleged 

scienter, we compare the “inferences urged by the plaintiff” with 

“competing inferences rationally drawn from the facts alleged.” 

Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 314 

(2007). In comparing the inferences, we accept Mr. Nakkhumpun’s 

factual allegations as true and assess them holistically. Id. at 326. 

With these factual allegations, we must decide whether “a reasonable 

person [would] deem the inference of scienter at least as strong as 

any opposing inference.” Id.
12 

 We conclude that a reasonable person would consider the 

inference of scienter at least as compelling as the defendants’ 

alternative inference. Thus, Mr. Nakkhumpun has adequately alleged 

scienter. 

 1. The Inference of Scienter 

 In denying leave to amend, the district court concluded that 

Mr. Nakkhumpun’s way of proving scienter would actually disprove 

scienter. We disagree.

a. Consistency with Scienter 

Mr. Nakkhumpun’s scienter inference is that the defendants 

“misstated the reason that the Opon negotiations [had] broke[n] down 

in order to ‘signal[] to potential strategic partners—and, 

consequently, to mislead shareholders—that the announced $400 

million price accurately reflected the value of those assets.’” 

Appellant’s App., vol. 7, at 1851. The district court concluded that 

this inference cut against scienter: If the false statement was 

designed to attract a buyer and maximize shareholder value, the 

district court thought the intention would have been to help 

shareholders rather than to deceive them. Id.

In our view, this rationale is flawed. Scienter is not limited to 

situations in which a defendant acted with the primary purpose of 

misleading shareholders; scienter also exists when a defendant acted 
13 

with a reckless disregard of a substantial likelihood of misleading 

investors. In re Level 3 Commc’ns, Inc. Sec. Litig., 667 F.3d 1331, 

1343 n.12 (10th Cir. 2012); see Anixter v. Home-Stake Prod. Co., 77 

F.3d 1215, 1233 (10th Cir. 1996) (“This circuit still maintains that 

recklessness . . . is sufficient scienter for finding civil § 10(b) 

primary violations.”). 

 If Mr. Taylor mischaracterized the impasse in order to entice 

prospective buyers, he should have realized the obvious risk that 

existing and potential shareholders would also be misled and that 

they might rely on the mischaracterization to their detriment. 

Therefore, Mr. Nakkhumpun has pleaded facts indicating that 

Mr. Taylor was at least reckless in disregarding the risk that his 

statement would mislead existing and potential shareholders. 

b. Facts Supporting an Inference of Scienter 

Mr. Nakkhumpun’s inference of scienter is supported by the 

facts alleged in the complaint. 

i. Mr. Nakkhumpun’s Allegations 

Mr. Nakkhumpun adequately pleaded four facts: 

1. Opon retracted the $400 million offer because Opon 

executives decided that the assets were not worth $400 

million. 

2. Mr. Taylor knew that the transaction had fallen apart 

because Opon valued the assets at less than $400 million. 
14 

3. Mr. Taylor conditioned the market to believe that Opon 

had agreed that the assets were worth $400 million. 

4. Mr. Taylor knew that his July 2010 statement had implied 

that Opon continued to value the assets at $400 million. 

Together, these alleged facts create a plausible inference that Mr. 

Taylor recklessly disregarded the likelihood that his statements 

would mislead existing and prospective shareholders. 

First, Mr. Nakkhumpun adequately pleaded that the deal had 

fallen apart because Opon retracted its $400 million offer. These 

allegations are largely based on statements by Confidential Informant 

3, the President and Chief Executive Officer of Opon. He said that 

after conducting due diligence, Opon determined that a 37.5% 

interest in the Vega Area assets was not worth $400 million. As a 

result, Opon retracted the $400 million price and “the deal to 

purchase the assets for $400 million ‘fell apart in the spring.’” 

Appellant’s App., vol. 6, at 1647 (quoting Confidential Informant 

3).5

 Opon offered Delta’s Board a lower price for the assets in the 

spring of 2010. We do not know what the lower price was or 

precisely when it was made. But, Opon’s CEO recalled that the new 

 

5

 Opon’s withdrawal of the $400 million offer is also recounted 

by Mr. Nakkhumpun’s Confidential Informant 5, who was a 

Controller at Delta from 2002 to 2012. See Appellant’s App., vol. 7, 

at 1649-50. 
15 

offer “‘was a much tougher deal than what [Opon had] proposed 

originally.’” Id. (quoting Confidential Informant 3). 

Second, Mr. Nakkhumpun alleged that Mr. Taylor had known 

that the deal fell apart because Opon retracted its $400 million offer. 

These allegations are based on statements attributed to Opon’s CEO 

and Delta’s former Vice President of Corporate Development and 

Investor Relations. Opon’s CEO stated he had dealt directly with 

Mr. Taylor when Opon retracted the $400 million offer, adding that 

Delta’s Board further rejected Opon’s new offer and told Opon “to 

‘take a hike.’” Id. at 1648 (quoting Confidential Informant 3). In 

addition, Confidential Informant 1, Delta’s former Vice President of 

Corporate Development and Investor Relations, stated that the new 

offer had offended Mr. Taylor. Id. at 1643. 

 Third, Mr. Nakkhumpun alleged that Delta executives had 

conditioned the market to believe that Opon remained committed to 

the $400 million price. Delta, Mr. Taylor, and the other defendants 

had allegedly conditioned the market by repeatedly announcing that a 

$400 million price was a part of the proposed transaction: 

 On March 18, 2010, Delta issued a press release, 

announcing that it had entered a non-binding letter of 

intent with Opon. The letter announced Delta’s proposed 

sale to Opon of a 37.5% non-operating working interest 
16 

in the Vega Area assets for $400 million. The deal was 

expected to close around June 1, 2010.6

 On May 10, 2010, Delta released an earnings press 

release, quoting Defendant John Wallace, Delta’s thenPresent and Chief Operating Officer: “We continue to 

work with our potential partner, Opon International, in 

moving toward the signing of definitive agreements and 

closing of the transaction.” The press release added that 

“[t]he consummation of the transaction [was] contingent 

upon Opon’s ability to arrange financing and [was] 

subject to customary due diligence, negotiation and 

execution of definitive binding agreements.” According 

to the press release, the parties were continuing with the 

transaction and Delta understood that Opon’s financing 

efforts were ongoing.7

 On May 10, 2010, Mr. Taylor and Mr. Wallace 

participated in a conference call with market participants, 

discussing Delta’s financial results for the first quarter of 

2010. In the call, Mr. Taylor said: “As we announced in 

March we have signed a letter of intent with Opon 

International to sell a 37.5% [sic] of working interest in 

our properties in the Vega area of the Piceance Basin 

along with warrants to purchase Delta Common stock for 

$400 million in total. We continue to work with Opon in 

their financing efforts and are working towards signing a 

definitive purchase and sale agreement.”8

 On June 1, 2010, Delta issued a press release, announcing 

“an extension to the expected time frame to sign a 

definitive Purchase and Sale Agreement with [Opon].” 

The press release reiterated the $400 million price and 

stated that “Delta [was] continu[ing] to work with Opon 

in its financing efforts and both parties [were] working 

 

6

 Appellant’s App., vol. 7, at 1671. 

7

 Appellant’s App., vol. 7, at 1673. 

8

 Appellant’s App., vol. 7, at 1675. 
17 

towards signing a definitive Purchase and Sale 

Agreement.”9

 

Mr. Taylor’s May 10, 2010, statement showed he knew Delta had 

conditioned the market to believe that Opon remained willing to pay 

$400 million for a 37.5% interest in the Vega assets. 

 Fourth, Mr. Nakkhumpun alleged facts that would have made 

Mr. Taylor’s statements misleading. After Delta had conditioned the 

market to believe Opon was continuing to offer $400 million, Mr. 

Taylor said in July 2010 that the deal had fallen apart because Opon 

was unable to obtain financing on the agreed terms. Here, factfinders could reasonably infer that someone in Mr. Taylor’s situation 

would have recognized the risk of deceiving investors, who 

presumably would have attributed the impasse to Opon’s inability to 

obtain a loan rather than its unwillingness to pay $400 million for a 

37.5% interest in the assets. Based on the prior announcements, 

investors could have believed that Opon continued to value the 

37.5% interest at $400 million. With this belief, investors would 

presumably expect offers from other potential buyers with better 

credit than Opon. The risk of misleading investors would have been 

obvious. 

 

9

 Appellant’s App., vol. 7, at 1678. 
18 

 Based on these four facts alleged in the complaint, Mr. 

Nakkhumpun has adequately pleaded that Mr. Taylor acted with 

scienter when he announced termination of the Opon deal. 

ii. The Defendants’ Challenges to the Scienter Inference 

 The defendants contend that Mr. Nakkhumpun has not 

adequately alleged an inference of scienter for three reasons: 

1. Mr. Nakkhumpun did not allege that Mr. Taylor was 

motivated to engage in securities fraud. 

2. We should not credit the Opon CEO’s view of why the 

Opon deal terminated. 

3. Mr. Taylor had no duty to disclose Opon’s counteroffer. 

We reject each argument. 

 First, the defendants argue that Mr. Taylor lacked a motive to 

engage in securities fraud because his interests and Delta’s were 

aligned with the interests of shareholders. This argument would fail 

on the merits, legally and factually. Legally, the argument is invalid 

because scienter allegations may suffice even without a motive. 

Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 325 

(2007). Factually, the argument is invalid because Mr. Taylor’s 

motives were not aligned with all class members. The class includes 

investors who purchased Delta stock after the misleading 

announcement in July 2010. Their interests were not aligned with the 
19 

interests of Mr. Taylor, the Chief Executive Officer of a company 

facing the prospect of bankruptcy. 

 Second, the defendants argue that Mr. Nakkhumpun’s “only 

allegations that supposedly cast doubt on Delta’s explanation derive 

from the confidential witness statement of the opposing party in the 

failed negotiations.” Appellees’ Resp. Br. at 22. Thus, the defendants 

suggest that we should not credit Opon’s version of events. But, a 

court cannot dismiss a complaint by assessing the credibility of an 

informant. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 

308, 322 (2007). 

 Third, the defendants argue that Mr. Taylor had no duty to 

disclose the counter-offer. For the sake of argument, we can assume 

that Mr. Taylor could have chosen to say nothing or announce 

termination of the Opon deal without saying what had gone wrong. 

But, rather than stay silent or decline to say what had gone wrong, 

Mr. Taylor chose to explain to the market why the deal had fallen 

apart. Once Mr. Taylor made that choice, he could not give an 

explanation that would mislead investors. See Matrixx Initiatives, 

Inc. v. Siracusano, __ U.S. __, 131 S. Ct. 1309, 1321-22 (2011) 

(stating that disclosure is necessary “‘to make . . . statements made, 

in light of the circumstances under which they were made, not 

misleading’” (quoting 17 C.F.R. § 240.10b-5(b))). Thus, Mr. Taylor 
20 

incurred a duty to disclose when he chose to explain why the deal 

had fallen apart. See United States v. Gordon, 710 F.3d 1124, 1142 

(10th Cir. 2013) (stating that when a party without a duty of 

disclosure elects to disclose material facts, he or she must speak 

fully to provide information that is complete and is not misleading). 

 Accordingly, we reject the defendants’ three challenges to the 

inference of scienter. 

2. At Least as Strong as a Competing Inference 

The inference of recklessness is at least as strong as a 

competing inference. The defendants contend that “the most plausible 

inference to be drawn from Delta’s explanation of why the 

negotiations ended was that [Delta] was trying to maximize 

shareholder value.” Appellees’ Resp. Br. at 23. But, this inference is 

consistent with scienter. 

 The defendants urge that 

 they were under a fiduciary duty to obtain the highest

 price for the Vega Area assets, and 

 Mr. Taylor was carrying out his fiduciary duty when he 

 explained the impasse in July 2010. 

According to the defendants, “[a]ny inaccuracy in the [July 2010] 

statement ‘was only a side-effect of Defendants’ efforts to obtain the 

best outcome for . . . shareholders.’” Id.
21 

 This argument implies that the defendants intended to mislead 

strategic partners rather than shareholders. But, scienter does not 

require the defendants to act with the primary purpose of deceiving 

shareholders. Scienter would also exist if Mr. Taylor recklessly 

disregarded a likelihood of misleading shareholders even if he did so 

out of an effort to fulfill his fiduciary duties. See pp. 12-13, above. 

Thus, even if Mr. Taylor was trying to maximize shareholder value, 

he would have been acting recklessly in disregarding the risk of 

misleading actual and prospective shareholders. 

 The defendants’ explanation does not preclude a reasonable 

inference of recklessness. According to the defendants, they were 

attempting to entice potential strategic partners to consider a 

partnership with Delta. Because the defendants knew that strategic 

partners would conduct their own due diligence and would not 

ultimately rely on a $400 million valuation, the defendants imply that 

they did not intend to mislead anyone. 

 But, the press release was directed to the public, not just to 

strategic partners. And, shareholders might not have the benefit of 

due diligence to assess Opon’s $400 million valuation. Therefore, 

Mr. Taylor’s statement created a risk of misleading shareholders to 

believe that at least one potential buyer had valued the 37.5% interest 

in the Vega assets at $400 million. This risk was readily apparent, 
22 

creating an inference of scienter that was at least as strong as an 

inference of innocence. 

3. Summary 

Mr. Nakkhumpun has adequately alleged scienter on the part of 

Mr. Taylor. 

 C. Loss Causation 

The district judge initially dismissed the Opon-related claim 

for failure to allege loss causation. But, in reviewing Mr. 

Nakkhumpun’s request for leave to amend, the judge concluded that 

the proposed amended complaint contained adequate allegations of 

loss causation under a theory of “materialization of a concealed 

risk.” We agree. 

1. Particularity of Mr. Nakkhumpun’s Allegations 

 The parties debate whether Federal Rule of Civil Procedure 8 

or 9(b) applies to loss causation. We need not resolve this dispute 

because Mr. Nakkhumpun’s allegations of loss causation would 

suffice under either Rule 8 or 9(b). Mr. Nakkhumpun pleaded 

particular facts tying his financial loss to Mr. Taylor’s false 

explanation for termination of the Opon deal. Delta’s arguments 

involve legal sufficiency of the allegations rather than their 

particularity. 
23 

2. Sufficiency of the Plaintiff’s Allegations on Causation 

 The district court concluded that the July 2010 statement had 

concealed the risk that “the Vega Assets were not marketable at or 

near the $400 million price.”10 Appellant’s App., vol. 7, at 1848. This 

risk materialized in November 2011, when Delta announced it had 

been unable to secure a buyer. 

 The court expressed concern about the attenuated relationship 

between the false statement and materialization of the risk. But, the 

court concluded that the allegations of loss causation sufficed 

because the significance of intervening events created a fact issue 

that could not be resolved in a motion to dismiss under Rule 

12(b)(6). Id. at 1849-50. We agree. 

a. Mr. Nakkhumpun’s Pleading Burden 

 To plead loss causation, a plaintiff must allege facts showing a 

causal connection between the revelation of truth to the marketplace 

 

10 In his reply brief, Mr. Nakkhumpun argues that two additional 

risks existed: 

1. The Vega Area assets were not worth $400 million. 

2. Delta needed to sell the assets for a price high enough to 

avoid bankruptcy. 

By waiting until the reply brief, Mr. Nakkhumpun waived an 

appellate argument based on the two additional risks. See United 

States v. Jenkins, 904 F.2d 549, 554 n.3 (10th Cir. 1990) (stating that 

an issue is waived when it is raised for the first time in a reply 

brief). 
24 

and losses sustained by the plaintiff. In re Williams Sec. Litig.-WCG 

Subclass, 558 F.3d 1130, 1136-37 (10th Cir. 2009). Under a theory of 

materialization of a concealed risk, a plaintiff alleges loss causation 

by showing that the defendant’s misrepresentation concealed a risk 

that caused a loss for the plaintiff when the risk materialized. Lentell 

v. Merrill Lynch & Co., 396 F.3d 161, 173 (2d Cir. 2005). We have 

applied this theory in In re Williams Sec. Litig.-WCG Subclass, 

where we affirmed award of summary judgment to the defendants 

because the plaintiff’s expert could not say when the concealed risk 

had materialized. In re Williams, 558 F.3d at 1138. 

 For loss causation under this theory, a plaintiff must allege two 

facts: 

1. The risk that materialized was within the zone of risk 

concealed by the misrepresentation (foreseeability). 

2. The materialization of the risk caused a negative impact 

on the value of the securities (causal link). 

Lentell, 396 F.3d at 173. 

b. Foreseeability 

 The July 2010 statement concealed the risk that the Vega Area 

assets were not marketable for $400 million. A fact-finder could 

regard this risk as foreseeable to Mr. Taylor: If Opon decided (after 

conducting its due diligence) that a 37.5% non-operating interest in 
25 

the assets was not worth $400 million, Delta might not find any other 

potential buyers willing to pay $400 million. 

 But, this risk would not have been apparent to anyone 

following Delta’s progress reports and Mr. Taylor’s explanation for 

the impasse. Unaware that Opon had refused to pay $400 million, 

investors would have believed that at least one party continued to 

value a 37.5% interest in the Vega assets at $400 million even in the 

face of a volatile market. As a result, a shareholder could have failed 

to appreciate the risk that Delta would be unable to secure a buyer at 

the needed price. 

 The risk materialized on November 9, 2011, when Delta 

disclosed its inability to find a buyer: 

With respect to a potential sale of the company or its 

assets, [Delta] solicited offers from a significant number 

of potential purchasers, including domestic and foreign 

industry participants and private equity firms, and has 

engaged in substantive negotiations with several such 

potential purchasers. However, [Delta] has not received 

any definitive offer with respect to an acquisition of 

[Delta] or its assets that implies a value of the assets that 

is greater than its aggregate indebtedness. . . . During the 

three months ended September 30, 2011, [Delta] 

evaluated the fair value of its properties based on market 

indicators in conjunction with the progression of the 

strategic alternatives evaluation process. Delta has not 

received any definitive offer with respect to an 

acquisition of the company or its assets that implies a 

value of the assets that is greater than its aggregate 

indebtedness. 
26 

Appellant’s App., vol. 7, at 1720. At this point, investors learned that 

no other buyer had offered an adequate price. Thus, the market 

became aware that the 37.5% interest was not marketable at or near 

$400 million. 

 In sum, Mr. Nakkhumpun has adequately alleged that 

 Mr. Taylor’s statement in July 2010 concealed a risk that 

the assets were not marketable at or near $400 million, 

and 

 this risk materialized when investors learned that no one 

would pay close to $400 million for the assets. 

 The defendants make two arguments: 

1. Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 

(2005), forecloses Mr. Nakkhumpun’s theory because of a 

failure to show when the truth was revealed to the 

market. 

2. Delta did not conceal the risk that the 37.5% interest in 

the Vega assets was unmarketable at $400 million. 

We reject both arguments. 

 Unlike the plaintiffs in Dura, Mr. Nakkhumpun has pinpointed 

when the truth was revealed to the market. In Dura, the plaintiffs 

relied solely on allegations of an inflated purchase price and failed to 

identify how the market learned of the truth. Dura, 544 U.S. at 346-

47. The Supreme Court held that more was needed. Id. at 346. We 

have more here, for Mr. Nakkhumpun has identified precisely when 
27 

the risk materialized: November 9, 2011, as the marketplace learned 

of Delta’s inability to find any buyers. 

 The defendants argue that the risk about the marketability of 

the Vega assets had already been known, adding that investors knew 

that marketability depended on the price of gas, the cost of extracting 

gas, and the amount of reserves. According to the defendants, they 

revealed these risks in Delta’s 2009 10-K. The defendants point to 

four disclosures in Delta’s 2009 10-K that revealed this risk to 

investors: 

1. “Historically, the markets for natural gas and oil have 

 been volatile and they are likely to continue to be 

 volatile.” 

2. “Declines in natural gas and oil prices . . . could in the 

 future have a material adverse effect on our financial 

 condition, results of operations, cash flows, and 

 reserves.” 

3. “There are numerous uncertainties inherent in estimating 

 quantities of proved reserves and cash flows from such 

 reserves, including factors beyond our control. Reserve 

 engineering is a subjective process of estimating 

 underground accumulations of oil and natural gas that 

 cannot be measured in an exact manner.” 

4. “If oil or natural gas prices decrease or exploration and 

 development efforts are unsuccessful, we may be required 

 to take further writedowns. . . . There is a risk that we 

 will be required to take additional writedowns in the 

 future, which would reduce our earnings and 

 stockholders’ equity. A writedown could occur when oil 

 and natural gas prices are low or if we have substantial 

 downward adjustments to our estimated proved reserves, 
28 

 increases in our estimates of development costs or 

 deterioration in our exploration and development results.” 

Appellant’s App., vol. 2, at 399-401. 

 But, Delta’s 10-K reported risks that existed as of December 

13, 2009―before Delta announced that Opon would be willing to pay 

$400 million for a 37.5% interest in the Vega assets. See Appellant’s 

App., vol. 2, at 400 (noting that the 10-K was for the fiscal year 

ending December 31, 2009).11 Thus, even with disclosures of the drop 

in gas prices, shareholders presumably would have continued to 

believe that Opon was willing to pay $400 million for a 37.5% 

interest in the Vega assets. 

 In these circumstances, Mr. Taylor could have foreseen that the 

eventual news (about termination of the Opon deal) would harm 

investors. After disclosing price drops in the 10-K, Delta continued 

to condition the market to believe that Opon remained willing to pay 

$400 million for the assets. 

c. Causal Link 

 For loss causation, Mr. Nakkhumpun had to allege not only 

concealment of the risk but also negative impact on the share price 

 

11 Delta reminded the marketplace of Opon’s $400 million offer 

on May 10, 2010 (in a conference call) and June 1, 2010 (in a press 

release). These statements post-dated the reporting date for the 2009 

10-K by five to six months. 
29 

based on materialization of the risk. Lentell v. Merrill Lynch & Co., 

396 F.3d 161, 173 (2d Cir. 2005). 

 Mr. Nakkhumpun alleged that the stock price had dropped after 

the November 2011 announcement, resulting in materialization of the 

risk. Appellant’s App., vol. 7, at 1716. Given the contents of the 

November 2011 disclosure, it is plausible that the stock price 

dropped at least partly because the market learned that Delta could 

not market the 37.5% interest in its Vega assets at or close to $400 

million. 

 The defendants point to the passage of time between the false 

or misleading statement (July 2010) and materialization of the risk 

(November 2011). In this sixteen-month period, other events might 

have disrupted the causal link. But, the defendants have not pointed 

to any intervening events that would show disruption of the causal 

link as a matter of law. 

 For purposes of Rule 12(b)(6), Mr. Nakkhumpun has alleged a 

causal link between the false or misleading statement and 

materialization of the risk. 

D. Separate Treatment of the Defendants 

 On the Opon-related claim, the parties have not differentiated 

between the various defendants. But, we must do so. 
30 

 In his opening brief, Mr. Nakkhumpun seems to confine his 

appellate argument to Mr. Taylor. See Appellant’s Opening Br. at 25 

(arguing that “Defendants (and specifically Defendant Taylor) 

misleadingly represented to investors” that Opon had terminated 

discussions after it was unable to obtain financing). 

 For Mr. Taylor, we conclude that in the proposed amended 

complaint, Mr. Nakkhumpun adequately alleged falsity, scienter, and 

loss causation for Mr. Taylor’s July 2010 statement. Therefore, we 

reverse the dismissal and denial of leave to amend on the claim 

against Mr. Taylor for his July 2010 statement concerning the Opon 

transaction. But, Mr. Nakkhumpun has not adequately pleaded 

culpability on the part of other defendants regarding the Opon 

transaction. Thus, we affirm the dismissal and denial of leave to 

amend on the Opon-related claims against all defendants other than 

Mr. Taylor.

IV. Financial Condition (Cash Flow and Liquidity) 

 Mr. Nakkhumpun also claims that the defendants made false or 

misleading statements about Delta’s financial condition through six 

statements between March 2010 and August 2011. On appeal and in 

the district court, the defendants challenged these claims based on 

failure to allege falsity or scienter. The district court granted the 

defendants’ motion to dismiss as to these statements on the ground 
31 

that they were not false. But, we may affirm the judgment on any 

ground supported by the record, so long as Mr. Nakkhumpun had a 

fair opportunity to address that ground. See Merrifield v. Bd. of Cnty. 

Comm’rs, 654 F.3d 1073, 1077 (10th Cir. 2011). 

 We affirm the dismissal and denial of leave to amend, 

concluding that the claims involving the six statements are missing 

necessary allegations of either falsity or scienter. 

A. Mr. Wallace’s Two Statements on March 11, 2010 

 Defendant John Wallace was Delta’s President and Acting 

Senior Executive Officer from May 2009 to July 2010. According to 

Mr. Nakkhumpun, Mr. Wallace misled the market on March 11, 2010, 

in two statements about Delta’s liquidity. Both statements address 

Delta’s earnings for the fourth quarter and full year of 2009. 

 Mr. Wallace’s first statement was made through a press release 

on behalf of Delta: 

Clearly, 2009 proved to be a very challenging year for 

Delta beginning with the drop in natural gas prices during 

the first half of the year, and further compounded by 

liquidity and bank covenant concerns for much of the 

year. Yet, I am very pleased with how far we have come 

and, from an operational and liquidity perspective, how 

much we improved during the latter half of the year. Cash 

flow provided by operating activities totaled $61.0 

million for the fourth quarter, which is up meaningfully 

over the third quarter. The fourth quarter of 2009 was the 

third consecutive quarter of substantial growth in 

EBITDAX (a non-GAAP measure), up 134% from third 

quarter levels. We have also been able to reduce our lease 
32 

operating expenses to $1.26 per Mcfe for the fourth 

quarter, down 14% from the third quarter 2009. More 

importantly, the EBITDAX for the fourth quarter is 

sufficient to be in compliance with the leverage ratio 

covenant of our senior credit facility. While we obtained 

waivers for the first quarter of 2010, under the current 

commodity price forward curve, our current financial 

projections suggest that we will be in compliance with 

our financial covenants for the remainder of 2010. 

Our liquidity situation has also improved 

materially, aided in no small part by the offshore 

litigation settlement proceeds received from the federal 

government at the end of the year, which netted 

approximately $48.7 million to Delta. . . . 

Appellant’s App., vol. 7, at 1666 (emphasis added). Mr. 

Nakkhumpun’s claim is based on the italicized portions of the 

statement. 

 Mr. Wallace’s second statement was made during a conference 

call discussing the announced results with market participants. There, 

Mr. Wallace commented: 

As we all know, 2009 was a challenging year for our 

industry and for Delta in particular. Looking back I’m 

very pleased with how Delta weathered the storm, and I’m 

proud to present to our investors a company that is in a 

far better liquidity and financial situation than we were 

in at this time last year. 

Id. at 1667 (emphasis added). Again, Mr. Nakkhumpun bases his 

claim on the italicized portion of the statement. 

 Mr. Nakkhumpun claims these statements were inaccurate 

because Delta’s financial situation was deteriorating over this time-
33 

period. The district court rejected Mr. Nakkhumpun’s arguments. 

But, even if these statements were false, Mr. Nakkhumpun has not 

alleged scienter.12

 To plead scienter, Mr. Nakkhumpun must have alleged that Mr. 

Wallace acted with the intent to mislead shareholders or in reckless 

disregard of an obvious risk that shareholders would be misled. 

Adams v. Kinder-Morgan, Inc., 340 F.3d 1083, 1105 (10th Cir. 2003). 

The alleged facts must create an inference of scienter that is at least 

as strong as any competing inference. Tellabs, Inc. v. Makor Issues & 

Rights, Ltd., 551 U.S. 308, 326 (2007). 

 Mr. Nakkhumpun’s alleged facts are not susceptible to an 

equally strong inference of scienter. To support his scienter 

argument, Mr. Nakkhumpun relies on a number of confidential 

informants. Even when we view the informants’ statements in the 

light most favorable to Mr. Nakkhumpun, he has not alleged facts 

indicating that Mr. Wallace would have known that his statements 

would have misled investors. Mr. Wallace was speaking about indicia 

 

12 In reviewing the motion for leave to amend, the district court 

focused on three words in the March 2011 statements: “materially” 

(press release) and “far better” (conference call). Appellant’s App., 

vol. 7, at 1854-55. The court determined that these three words could 

not be considered false because they were incapable of objective 

verification. Because we affirm on the ground of scienter, we need 

not address the district court’s analysis.
34 

of liquidity in the publicly filed earnings data. Though Mr. 

Nakkhumpun’s confidential informants refer to cash flow problems, 

these references do not suggest that Mr. Wallace knew or should have 

known that his discussion of the publicly filed documents would 

mislead investors. 

 Confidential Informant 1 (who was responsible for budgeting 

and financial forecasting for Delta) provided general information 

about Delta’s poor financial condition in 2009 and 2010, recalling 

that 

 Delta’s financial position was dire for the years 2009, 

 2010, and 2011, 

 “red flags” were raised to Mr. Wallace, 

 Delta “‘couldn’t pay [its] bills’” and had to sell assets to 

 pay debts, 

 Delta’s leaders were urged to raise capital through sales 

 of equity in 2009, 2010, and 2011, and 

 the years 2009, 2010, and 2011 were “‘all about selling 

 assets and paying debts.’” 

Appellant’s App., vol. 6, at 1642-43. 

 Other informants (in Delta’s accounts payable department) 

stated that Delta had become increasingly slow in paying bills. For 

example, Delta’s Restructuring Officer stated that Delta’s liquidity 

problems had “‘bec[o]me more acute’” in early 2010 because of 

Delta’s inability to sell assets and recalled that Delta had defaulted 
35 

on its credit line in early 2010. Id. at 1638 (quoting Declaration of 

John T. Young, Jr., Chief Restructuring Officer of Delta Petroleum 

Corporation). 

 Notwithstanding the allegations based on these informants’ 

statements, an innocent inference is stronger than an inference of 

scienter because Mr. Wallace was discussing benchmarks of liquidity 

reflected in the publicly filed documents on earnings, and Mr. 

Nakkhumpun has not challenged the truthfulness of Mr. Wallace’s 

reporting on these benchmarks. A fact-finder might view Mr. 

Wallace’s report as overly rosy in light of Delta’s continued inability 

to pay its bills. But, none of the allegations suggest an intention to 

deceive investors or awareness of facts that would have alerted Mr. 

Wallace to a risk that his assessment would mislead anyone. 

Therefore, we affirm dismissal of the claims related to Mr. Wallace’s 

statements on March 11, 2010. 

B. Mr. Wallace’s Statement in May 2010 (Concerning 

 Improvement in Delta’s Liquidity) 

 Mr. Nakkhumpun also alleged that Mr. Wallace had made a 

misleading statement in May 2010 regarding Delta’s financial 

condition. In May 2010, Delta held a conference call to discuss the 

financial results for the first quarter of 2010. There, Mr. Wallace 

commented: 
36 

While the current gas prices and forward curve are more 

than adequate to provide solid returns on the completion 

capital we must be mindful of our liquidity position. We 

believe we are in a far better financial situation than we 

were a year ago and the preservation of our liquidity is 

essential to maintain and improve our balance sheet. 

Appellant’s App., vol. 7, at 1675 (emphasis added). Mr. Nakkhumpun 

complains about the italicized portion of this statement. 

The district court characterized this portion of the statement as 

an opinion, and Mr. Nakkhumpun does not challenge this 

characterization. An opinion is considered false if the speaker does 

not actually or reasonably hold that opinion. Omnicare, Inc. v. 

Laborers Dist. Council Constr. Indus. Pension Fund, __ U.S. __, __ 

S. Ct. __, 2015 WL 1291916, at *6 (2015); Va. Bankshares, Inc. v. 

Sandberg, 501 U.S. 1083, 1095 (1991). The district court concluded 

that Mr. Nakkhumpun had failed to allege falsity, reasoning that none 

of the alleged facts would cast doubt on Mr. Wallace’s belief in the 

truth of his statement in May 2010. We agree. 

 Mr. Nakkhumpun presents two factual allegations, stating they 

conflict with Mr. Wallace’s statement: 

 “[B]eginning in 2009 and continuing through the Class 

Period[,] Delta ‘had a liquidity issue’ and ‘couldn’t pay 

[its] bills.’” 

 “Delta had ‘cash flow problems’ and was experiencing a 

‘long slow demise that began in March 2009.’” 
37 

Appellant’s Opening Br. at 43-44. Mr. Nakkhumpun argues that he 

alleged discrete facts supporting these more general statements. 

 But, Mr. Nakkhumpun’s factual allegations do not suggest 

scienter. In expressing his opinion, Mr. Wallace focused broadly on 

Delta’s “financial situation.” Appellant’s App., vol. 7, at 1675. Mr. 

Nakkhumpun tries to poke holes in that opinion based on others’ 

accounts of worsening cash flow problems. But, Mr. Nakkhumpun 

has not alleged any facts that would cast doubt on the sincerity or 

reasonableness of Mr. Wallace’s statement of his opinion. See 

Omnicare, Inc. v. Laborers Dist. Council Constr. Indus. Pension 

Fund, __ U.S. __, __ S. Ct. __, 2015 WL 1291916, at *8 (2015) (stating 

that an issuer’s opinions do not become misleading simply because 

they are undercut by some facts known to the issuer). Thus, we 

uphold dismissal of this claim based on the failure to adequately 

allege falsity. 

C. Mr. Lakey’s Statement in March 2011 (Concerning 

 EBITDAX and Cash Flow) 

 In March 2011, Delta issued a press release announcing its 

financial results for its fourth quarter and full year ending December 

2010. Mr. Nakkhumpun challenges the truthfulness of this press 

release, but he has not adequately alleged falsity. 
38 

 The press release touted Delta’s new cost-cutting measures and 

the results. Defendant Carl Lakey (Delta’s President and CEO as of 

July 2010) spoke about the fourth quarter results: 

We are very pleased with our results for the fourth 

quarter. Our EBITDAX [earnings before interest, taxes, 

depreciation, depletion, amortization, and exploration 

expenses] is 20% higher than the third quarter driven by 

lower operating and overhead costs, despite lower 

production related to asset sales and lower average Henry 

Hub gas prices in the quarter. We have been committed to 

reducing our operating and overhead costs, and I’m 

pleased to state that we have been able to deliver such 

results. We drove our LOE/Mcfe down by 38% compared 

to the third quarter. Additionally, our overhead costs are 

down 25% from the third quarter. We remain focused on 

sustaining costs at or near these levels for 2011. We’ve 

also had very positive results from the well completion 

activity performed in the fourth quarter and to date in the 

first quarter of this year. The larger frac design, which 

we call Gen IV, has increased our initial production and 

our estimated reserves per well. We have completed a 

total of 16 wells with the Gen IV frac design and all have 

performed better than we would have expected under 

prior completion designs. Thus, we expect first quarter 

production to increase 4% to 7% over the fourth quarter. 

These new cost control measures substantially improve 

our EBITDAX. 

Appellant’s App., vol. 7, at 1693 (emphasis added). Mr. Nakkhumpun 

bases his claim on the italicized portion of the statement. 

 The district court characterized this statement as an expression 

of fact rather than opinion.13 To allege falsity of this factual 

 

13 The defendants contend that this statement involved an opinion 

rather than a fact. We need not decide whether the defendants are 
39 

statement, Mr. Nakkhumpun had to explain why Mr. Lakey’s 

statement was misleading. See Adams v. Kinder-Morgan, 340 F.3d 

1083, 1097 (10th Cir. 2003) (stating that falsity is adequately 

pleaded when a plaintiff alleges a factual statement was misleading). 

 Mr. Nakkhumpun relies on allegations that Delta’s cash flow 

became a growing problem. Appellant’s App., vol. 1, at 21, 27, 108; 

Appellant’s App., vol. 6, at 1395-96. But, Mr. Nakkhumpun has not 

pleaded any facts suggesting that the cost control measures had failed 

to improve Delta’s cash flow. Thus, the allegations do not suggest 

that Mr. Lakey was misleading anyone about the impact of Delta’s 

cost-control measures. 

D. Mr. Taylor’s and Mr. Lakey’s Statements in August 

 2011 (Concerning Share Price and Trading Discount) 

 In August 2011, Delta held a conference call with market 

participants to discuss the financial results for the first quarter of 

2011. Defendants Daniel Taylor and Carl Lakey spoke during the 

call. Mr. Nakkhumpun challenges the truthfulness of their statements, 

but he has not adequately alleged scienter. 

 Mr. Taylor (who was then Delta’s Chairman of the Board) 

presented information about new results in the Vega Area assets: 

 

correct because the statement would not be actionable even if it 

involved a fact rather than an opinion. 
40 

[W]e’re very excited about what we are seeing in this 

[Vega Area] well, the potential it holds and what it means 

for Delta. . . . [W]e are pleased to have a flowing well 

that is in the process of confirming substantial quantities 

of economic reserves in the deeper shale formations of 

the Piceance Basin. 

* * * * 

 We fully believe that our total resource recently 

evaluated by Netherland Sewell, coupled with current 

market conditions, will be driving the valuations in the 

strategic alternatives process. Our current distressed 

market valuation levels should not be considered as 

constraints during the process. 

 Delta is currently trading at an amazing 50% 

discount to the lowest of these transactions at only $0.16 

per Mcfe of [its] 2P reserves from the Williams Fork 

alone. 

Appellant’s App., vol. 1, at 82 (emphasis added). Mr. Nakkhumpun 

alleged that the italicized portion of the statement was misleading. 

 In the same call, Defendant Carl Lakey (Delta’s CEO at the 

time) commented: “Dan [Taylor] earlier pointed out that our current 

share price is apparently not in alignment with the value of the asset 

and the company. I hope this helps you understand why we feel this 

way.” Id. at 84. Mr. Nakkhumpun characterized this conclusion as 

misleading. 

 The district court concluded that these statements involved 

opinions and were not false or misleading. We need not address this 

rationale because Mr. Nakkhumpun has not pleaded scienter. 
41 

 For scienter, Mr. Nakkhumpun’s allegations must create an 

inference that the defendants acted with the intent to mislead 

shareholders or in reckless disregard of the likelihood that 

shareholders would be misled. Adams v. Kinder-Morgan, Inc., 340 

F.3d 1083, 1105 (10th Cir. 2003). That inference must be at least as 

strong as an innocent inference. Tellabs v. Makor Issues & Rights, 

Ltd., 551 U.S. 308, 323 (2007). 

 Mr. Nakkhumpun has not adequately alleged scienter. He has 

made only general allegations that all defendants should have known 

that Delta’s financial situation was poor: 

 Delta could not pay its bills and was trying to sell assets 

to pay debts. 

 Confidential informants had encouraged leadership to 

generate capital through equity offerings. 

 The years 2009, 2010, and 2011 “were ‘all about selling 

assets and paying debts.’”14

 Delta’s accounts were aging. 

 Delta’s cash flow and liquidity problems got worse in the 

beginning of 2011. 

 By the spring of 2011, the defendants were aggressively 

attempting to sell assets. 

 

14 Appellant’s App., vol. 6, at 1643 (quoting Confidential 

Informant 1). 
42 

But, none of these allegations indicates that the defendants would 

have known that their comparison with other transactions would be 

misleading in the absence of discussion about Delta’s debts. As a 

result, these allegations are too broad to satisfy the heightened 

pleading requirements for scienter. In light of this shortcoming, we 

conclude that the allegations involving the August 2011 statements 

failed to state a valid claim. 

V. Conclusion 

For Mr. Taylor’s Opon-related statement in July 2010, the 

proposed amended complaint stated a valid claim. Thus, we reverse 

the dismissal of the claim against Mr. Taylor for a false or 

misleading statement concerning the Opon transaction. For all other 

defendants, however, we affirm the dismissal on the Opon-related 

statements. 

 Mr. Nakkhumpun has not adequately alleged a basis for 

liability involving statements about Delta’s financial condition. 

Thus, on these claims, we affirm the dismissal and denial of leave to 

amend.