Schoon v. Smith
Delaware Supreme Court
953 A.2d 196 (2008)
Schoon (plaintiff), a director but not a stockholder of Troy Corporation, was elected by Steel Investment Company, which owned voting stock in Troy. Schoon brought a derivative suit against CEO Smith and other Troy directors (defendants), alleging they were beholden to Smith, letting him entrench himself in control and block transactions beneficial to Troy and its stockholders. Meanwhile, Steel, as an actual shareholder, separately sued Troy in Delaware Chancery Court over other matters and sought Troy's books and records. The chancery court dismissed Schoon's suit for lack of standing since he wasn't a shareholder, and Schoon appealed.
Whether directors who are not shareholders lack standing to bring a derivative action unless the state of incorporation has conferred it by statute.