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Since Public Benefit Corporations (PBCs) — i.e., for-profit, mission-driven corporations—were first authorized under the Delaware General Corporation Law (the DGCL) in 2013, Delaware PBCs have gone from niche legal curiosity to mainstream. Initially popular among startups and mission-driven private companies, PBCs are now prevalent in industries ranging from personal finance banking to consumer products to artificial intelligence systems, with nearly two dozen Delaware PBCs trading (or planning to trade in the near future) on public securities markets, and more expected. Delaware case law considering the fiduciary duties of PBC directors and officers, however, has remained scarce.

In a recent case of first impression, Drakes Landing Associates, L.P. v. Tilden Park Capital Management, L.P., C.A. No. 2025-0898-NAC, the Delaware Court of Chancery addressed the fiduciary duties of PBC directors in a change of control transaction arising from a distressed financing that substantially diluted existing stockholders. In this Alert, we briefly discuss Delaware PBCs, review the Drakes Landing decision, and provide key takeaways for PBCs, their boards, and other companies that may want to explore becoming a PBC.

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