Question: Richard Schoon was elected to the board of directors at the Troy Corporation, a private corporation in Delaware. There are three stock series of stock options. A series A share allows someone to elect four of fi ve directors on the corporation's board. A series B share allows a stockholder to elect the fifth member of the board. Anyone who has a series C share has no voting rights. The CEO of Troy, Daryl Smith, owns the majority of the A shares; thus, he elected four directors of the board.
Schoon was elected as the fifth director, although he owned no shares. Schoon claimed that Smith dominated the board because he elected the other four directors and they were compliant to his wishes. Schoon believed that in several instances, Smith took actions that benefited him personally yet harmed the corporation's finances. In 2008, Schoon filed a derivative suit that shareholders typically file. However, Schoon was not a shareholder and owned no stock in the company. Do you think the court accepted his suit? Why or why not?