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Tuesday, June 24, 2014

Market Basket CEO ousted by board of directors

Market Basket stores might be going great guns but the saga of the family that owns the business got murkier Monday when the board of directors fired Arthur T. Demoulas, one of the two like-named cousins who have been fighting over control of the business for years.

What effect, if any, this will have on the four Market Basket stores in Greater Nashua is unclear. The board of directors, controlled by Arthur S. Demoulas and allies, issued a terse statement saying that Arthur T., as he is usually known, “was not re-elected president and will not retain any management responsibilities moving forward.” Two officials long associated with Arthur T. also were removed: Vice President Joseph Rockwell and Director of Operations William F. Marsden. ...

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Market Basket stores might be going great guns but the saga of the family that owns the business got murkier Monday when the board of directors fired Arthur T. Demoulas, one of the two like-named cousins who have been fighting over control of the business for years.

What effect, if any, this will have on the four Market Basket stores in Greater Nashua is unclear. The board of directors, controlled by Arthur S. Demoulas and allies, issued a terse statement saying that Arthur T., as he is usually known, “was not re-elected president and will not retain any management responsibilities moving forward.” Two officials long associated with Arthur T. also were removed: Vice President Joseph Rockwell and Director of Operations William F. Marsden.

As news of the firing leaked out Monday afternoon, from Facebook posts and The Lowell Sun newspaper’s website, managers and employees at area stores declined to comment officially. Off the record, several said they were nervously awaiting word.

Arthur T. Demoulas received an outpouring of support last summer from employees and many customers last summer when the previous round of
family battles over the Chelmsford, Mass.-based corporation became public. Several employees at the Hudson and Nashua stores collected signatures in support of Arthur T. on their own time, and “Defend Arthur T” T-shirts were distributed in July.

His supporters say Arthur T.’s work as company president is the main reason the company has expanded to 71 stores in the Northeast even as regional competitors in the grocery business have withered.

But Arthur T.’s fans received a setback in September of last year when a Massachusetts court OK’d the payout of $300 million in dividends to Demoulas family members. The issue was a major part of family fights over the future of the Market Basket corporation, battles that had been in Bay State courts so frequently that even judges have taken to referring to the two cousins by their first name and middle initial when writing rulings.

Market Basket is owned by the extended Demoulas family. In 1997, the courts ruled that heirs of George Demoulas had been cheated out of millions by Telemachus Demoulas (George’s brother) and his heirs, leading to a court-ordered balance of the board of directors between the sons of the two brothers – Arthur T. And Arthur S.

Arthur S. Demoulas and his supporters say Arthur T. Demoulas ignores the board of directors and has made it possible for his family to be involved in some questionable deals. Supporters of Arthur T. Demoulas argue that their opponents want to take money out of the company at the expense of employees and the stores’ operation.

In late July of 2013, the board of directors approved a $300 million payout to shareholders, who are mostly Demoulas family members, and replaced two of three trustees of the company’s profit-sharing program. On Sept. 5, Arthur T. sued the company, asking that the payout be blocked, a request that was denied by a Suffolk County, Mass., Superior Court judge.

David Brooks can be reached at 594-6531 or dbrooks@nashua
telegraph.com. Also, follow Brooks on Twitter (@granitegeek).