Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—Del. Sup. Ct.: No pause in shareholder derivative suit to recover $191 million in penalties, (Dec 15, 2025)

By R. Jason Howard, J.D.

Interlocutory appeals should be exceptional because they disrupt the normal procession of litigation, cause delay, and can threaten to exhaust scarce party and judicial resources.

The Delaware Supreme Court has declined to certify an interlocutory appeal after concluding that the application for interlocutory review failed to meet the strict standards for certification under Supreme Court Rule 42(b), because exceptional circumstances that would merit interlocutory review of the Court of Chancery’s decision did not exist (Turner v. Brewer, No. 444, 2025 (Del. Sup. Ct. Dec. 15, 2025)).

Shareholder suit. A shareholder derivative suit was filed against Regions Bank after the Consumer Financial Protection Bureau (CFPB) issued an order requiring that the bank pay $50 million to the CFPB’s victims’ relief fund and refund at least $141 million to customers harmed by the bank’s manipulative processing methodologies, which it used to increase overdraft fees over three years beginning in August 2018 despite a whistleblower warning which alerted management to the fact that the bank was engaging in an illegal practice.

The complaint asserts claims against twenty-two current or former directors and five officers who held positions during the three-year period of wrongdoing. The primary theory alleges that the directors breached their fiduciary duties by failing to respond adequately to red flags concerning the bank’s unlawful practices. The court found that the most significant red flag was a draft complaint by a whistleblower, the company’s former Deputy General Counsel, which alleged that he was fired for calling attention to the illegal overdraft practices that violated federal regulation based on CFPB guidance. The court examined whether at least half of the fourteen-member demand board faced a substantial likelihood of liability, determining that nine directors who served during the period of wrongdoing and remained on the board when the complaint was filed met the threshold.

Chancery Court order. The Chancery Court’s order denying application to certify the interlocutory appeal explained that in a memorandum opinion dated September 29, 2025, the plaintiff had “adequately alleged particularized facts showing that a majority of the demand board faced a substantial likelihood of liability under plaintiff’s red-flags theory” and, therefore, demand was futile.

The defendants applied for certification of interlocutory appeal of the opinion and the Chancery Court explained that Supreme Court Rule 42 “permits certification of interlocutory appeal when the order of the trial court decides a substantial issue of material importance that merits appellate review before a final judgment.” Having determined that the court’s opinion resolved a substantial issue, the Chancery Court turned to a multi-factor evaluation to determine whether a substantial benefit outweighs the costs of an interlocutory appeal.

Rule 42 identifies eight factors to consider when conducting this balancing analysis, but the defendants relied on only three of the factors—(B), (G), and (H). Of the three, the court found that only factor (H), which asks whether “review of the interlocutory order may serve considerations of justice,” weighed in favor of granting the application.

The Chancery Court stated that while it was tempting to certify the appeal on the basis of factor (H) alone, “interlocutory appeals should be exceptional because they disrupt the normal procession of litigation, cause delay, and can threaten to exhaust scarce party and judicial resources.” The Chancery Court determined that, on balance, the court's soft support of one of the eight factors did not warrant certification of the interlocutory appeal.

Delaware Supreme Court order. After considering the notice of the appeal from an interlocutory order, the supplemental notice of appeal, exhibits, and the Court of Chancery’s order denying the application for certification of an interlocutory appeal, the Delaware Supreme Court explained that “giving due weight to the Court of Chancery’s analysis,” the application for interlocutory review did not meet the strict standards for certification under Supreme Court Rule 42(b).

In its order, the Delaware Supreme Court agreed with the Court of Chancery’s conclusion that soft support for only one of the eight factors did not warrant certification of an interlocutory appeal. The court stated that “exceptional circumstances that would merit interlocutory review of the Court of Chancery’s decision” did not exist in the case, and it concluded that the “potential benefits of interlocutory review do not outweigh the inefficiency, disruption, and probable costs caused by an interlocutory appeal.” Therefore, the interlocutory appeal was refused.

The case is No. 444, 2025.

Judge: Seitz, Jr., C.

Attorneys: Raymond J. DiCamillo (Richards, Layton & Finger, P.A.) for John M. Turner, Jr., Samuel A. Di Piazza, Jr., Zhanna Golodryga, John D. Johns, Ruth Ann Marshall, Charles D. McCrary, James T. Prokopanko, Lee J. Styslinger, III, Jose S. Suquet, Timothy Vines, Carolyn H. Byrd, Don Defosset and Eric C. Fast. Herbert W. Mondros (Rigrodsky Law, P.A.) for Katherine Richards Brewer, Regions Financial Corp. and Regions Bank.

Companies: Regions Financial Corp.; Regions Bank

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