In resolving a significant issue of first impression, the Delaware Court of Chancery held today that directors of public benefit corporations approving a change-of-control transaction are not required to maximize stockholder value.  Drakes Landing Assocs., L.P. v. Tilden Park Cap. Mgmt., L.P., C.A. No. 2025-0898-NAC (Del. Ch. July 29, 2026).  As the PBC statute makes clear, PBC directors instead can and must balance stockholders’ pecuniary interests alongside the best interests of those materially affected by the corporation’s conduct and the corporation’s specified public benefit.

The case arose from a challenge to a financing transaction approved by the board of MPower Financing, a Delaware PBC whose mission is to provide international students with access to financing for postsecondary education.  In 2025, MPower’s board approved a debt-for-equity conversion that would increase two of its existing lenders’ combined ownership stake from 25% to nearly 85%, substantially diluting the other stockholders.  The transaction was approved by a disinterested special committee, which, advised by independent legal and financial advisors, evaluated alternatives.  Stockholders sued, claiming that the committee breached its fiduciary duties by not pursuing alternatives that allegedly would have maximized stockholder value.

In rejecting the stockholders’ claim, the Court refused to extend the Revlon duty to maximize value in the corporate sale context to a PBC and confirmed the substantial protection afforded by the PBC statute’s safe harbor.  Under that safe harbor, a PBC director “will be deemed to satisfy such director’s fiduciary duties…if such director’s decision is both informed and disinterested and not such that no person of ordinary, sound judgment would approve.”

The Delaware PBC, while relatively new compared to the Delaware corporation, has become an important corporate form for private and public companies seeking to express their mission and stakeholder interests.  But choosing a PBC is not a free pass.  PBC directors should identify with clarity those interests, including the company’s public-benefit purpose.  Their decisions should include a clear record that the relevant interests were considered.

Today’s decision affirms that Delaware’s PBC statute provides substantial protections for directors leading today’s mission-driven companies, large and small.

This post is based on a Wachtell, Lipton, Rosen & Katz memorandum, “Delaware Court of Chancery Reaffirms Core
Principles of the Public Benefit Corporation,” dated July 29, 2026.