Arthur T. Demoulas, the formerly longtime CEO of Market Basket, is challenging his firing in court.
Demoulas argued in a court filing that the company’s board of directors had no basis to terminate him and that the move was actually a coordinated campaign between board members and his three sisters to oust him from the company.
This campaign, he said, was “riddled with conflicts, trickery, deceit and pervasive breaches of… fiduciary duties.”
In a legal complaint early last month, the company’s board of directors said that Demoulas had an “autocratic” leadership style and that he had long refused to provide them with basic financial information, like annual budgets.
The board accused Demoulas of trying to mobilize an employee walkout to secure his job as they presented him with their mounting frustrations. He was placed on leave in May and fired after months of escalating tension and a few days of failed mediation.
The board selected Don Mulligan, the company’s chief operating officer for the last 26 years, as interim CEO.
In denying “each and every allegation,” Demoulas said the board had “had been scheming to remove Mr. Demoulas for months before he was placed on leave, with indifference to any negative impact that removing Mr. Demoulas would have on Market Basket’s business.”
Demoulas argued that his sisters wanted him out because they were threatened by the status he received due to the publicity of the 2014 boycotts, that they were hungry for greater profits to themselves and other shareholders and that they were looking gain control in a succession dispute.
Together, his sisters own 60% of company shares, while he owns 28%.
Market Basket board members characterized Demoulas’s attitude as “unfortunate” and reflective of the “the same old and tired accusations over and over, which are simply not true.”
“The Board has displayed respect for Mr. Demoulas’s accomplishments, but the Board simply could not do its job without Mr. Demoulas’s cooperation, which he has indicated throughout this process that he was unwilling to give,” the board said in its statement. “A CEO cannot stay at the helm of a company if he refuses to be accountable to the Board.”
The statement also said the company had been performing well and its employment remained stable during Demoulas’ suspension and since his departure.
The dueling legal complaints puts the Demoulas family and the future of the company bearing its name, not for the first time, in the hands of the courts.
Read filings from both sides below.