IRAC: Ariel, Sebastian, Flounder andEric each own 20% of the outstanding shares of the common stock ofOcean, Inc., a profitable retailer of sea-life themed hairaccessories,and they are the corporation’s four directors. Arieland Sebastian are Ocean’s officers. The remaining 20% of theoutstanding shares are divided among 10 individuals, includingGuppy, who is a 5 % shareholder. Ocean, Inc., has only one class ofshares.At a board meeting six months ago, Ariel announced that shehad negotiated a contract to have Ocean’s stores cleaned nightly byTriton Cleaning Services, a partnership owned by Ariel andSebastian. Ariel disclosed that she and Sebastian owned TritonCleaning, but neither she nor Sebastian disclosed that the priceTriton Cleaning would charge Ocean under the contract would bedouble the market rate. The board approved the contract byunanimous vote of all directors. Triton Cleaning began cleaningservices and has been receiving payment under the contract. Afterrecently finding out about the Triton Cleaning contract, Guppy hasbrought a shareholder derivative lawsuit against all fourdirectors, individually, seeking a judgment rescinding the TritonCleaning contract and for damages to Ocean, Inc., arising from theapproval of the contract by the directors. What should be theresult? Discuss.