Milbank LLP recently prevailed on a motion to dismiss a lawsuit brought against the founder and former CEO of Mondee Holdings, Inc., a travel technology company, in the Delaware Court of Chancery. The company’s former CFO sued for breach of fiduciary duty, arguing that the CEO failed to remove certain restrictive legends from Mondee shares the plaintiff acquired when the company went public. The plaintiff originally argued that Mondee was contractually required to remove those legends, but the breach of contract claim became worthless because the company later filed for bankruptcy.
Milbank moved to dismiss under Rule 12(b)(6) on the grounds that the plaintiff’s entitlement to shares free of restrictive legends was governed by his contracts with Mondee, and did not arise from the CEO’s fiduciary obligations. Within hours of oral argument on April 17, 2026, Vice Chancellor Morgan Zurn granted the motion to dismiss, holding that “[W]here a dispute arises from obligations that are expressly addressed by contract . . . any fiduciary claims arising out of the same facts that underlie the contract obligations would be foreclosed as superfluous.” The Court acknowledged that the plaintiff could no longer recover from Mondee due to the company’s bankruptcy, but held that this was “not a reason to set aside comprehensive Delaware precedent, and disregard corporate separateness, to hold the fiduciary liable.” Vice Chancellor Zurn’s decision vindicates an important principle of Delaware law: where a contract governs an individual’s rights, that contract supersedes any fiduciary duties owed to the individual. This principle is not dependent on the availability of a viable contract claim.
The Milbank team was led by Litigation & Arbitration partner Grant Mainland with associates Alex Cogut and Elyse Hain.
