That's all totally besides the point. The suit argued that there was a verbal agreement on three equal shares and that the plaintiff was cut out of the deal when the other two co-founders went and created a new company split 60/40 between them.

I may be mis-interpreting all this but if that's true then that alone would likely be enough to give him a very credible claim.

You receive equity because you have agreed to receive that equity in return for something, whatever that something is. If after that the other party breaks that agreement in some way then you can sue them for breach of contract. If the agreement is only verbal then it will be an uphill battle but in these days of email, text messages and skype an awful lot of that stuff is logged to the point where it could be used to support the existence or non-existence of such a verbal agreement.

So whether to you he's 'not even close to being a co-founder' is not important, what mattered is that they apparently agreed that he was a co-founder and would get an equal share in the to be formed company.