Delaware Chancery Ruling Addresses Public Benefit Corporation Directors’ Price-Maximization Duty

In an article published by the Columbia Law School Blue Sky Blog, Sidley lawyers Ian M. Ross and Vincent J. Margiotta examine the Delaware Court of Chancery’s decision in Drakes Landing Associates, L.P. v. Tilden Park Capital Management, L.P., which addresses for the first time how the Revlon enhanced-scrutiny framework applies to public benefit corporations (PBCs) in change-of-control transactions. The authors discuss the court’s conclusion that PBC directors do not have a single-minded duty to maximize stockholder value and instead must balance the interests required under Section 365(a) of the Delaware General Corporation Law, as well as key considerations for PBC boards, investors, and transaction planners.