Former Market Basket CEO Arthur T. Demoulas sought to regain his job in court this week, denying claims from the popular supermarket chain that he had stonewalled the company board of directors.
Testimony in a three-day trial in Delaware, where the company is incorporated, wrapped up on Thursday. While a judge is not expected to make a ruling until next year, according to the Boston Globe , the outcome of the case will determine the future of Market Basket's leadership after Demoulas' removal in September .
Demoulas and other company executives , including his children T.A. and Madeline Demoulas, were placed on leave in May at the same time that the board launched an investigation, which Demoulas called "contrived" and a "witch hunt" in his lawsuit. Shortly after his suspension, Demoulas denied the board's claims , calling it a facade for a "hostile takeover" of the grocery store chain.
The former CEO's attorneys claimed in court documents that Demoulas' three sisters removed his allies from the board and instead stacked it with their own allies because of their resentment over his success and recognition as the head of the company .
The company filed a lawsuit against Demoulas on Sept. 9, the same day he was officially fired, asking the Delaware court to uphold the decision. Demoulas filed his own suit a few weeks later, asking the court to reinstate him .
Market Basket named CFO Donald Mulligan as interim CEO on Sept. 15.
The company's explanation for Demoulas' removal has been that he was uncooperative with the board of directors, refusing to share financial information and even conspiring to lead an employee walkout and customer boycott similar to one that lasted two months in the summer of 2014.
The 2014 demonstrations were prompted by Demoulas being fired after his cousin, Arthur S. Demoulas, took control of the board. The boycotts ended when Demoulas and his three sisters, Caren, Frances and Glorianne, bought out the other side of the family for $1.6 billion. The company finished paying off the debt from the purchase in December 2024.
Market Basket executives also claimed that Demoulas refused to work with the board on succession planning for when he was ready to step down from his position and would only consider passing the responsibility to his two children.
The former CEO said in court that he had not provided financial reports to the board because he had not been asked to prior to an August 2024 meeting, according to the Boston Globe . Demoulas has also previously said he was willing to discuss alternatives to T.A. or Madeline Demoulas to succeed him, though he maintained in court this week that they would be the best candidates for the job.
During the same August 2024 meeting, the board presented Demoulas with several directives, including regularly providing financial updates, engaging in succession planning and not doing anything to celebrate the 10-year anniversary of the 2014 walkouts. A week later, Demoulas authorized a distribution of $15 million in bonuses to employees in honor of the anniversary.
Board Chair Jay Hachigian said in court that in April, he heard from Michael Kettenbach Jr., Demoulas' nephew and a manager with the company, that two executives loyal to Demoulas were pressuring employees to side with him, according to the Boston Globe .
The company hired an outside firm to investigate, around the same time that Demoulas was suspended in May.
When he was asked why the board also suspended Demoulas' children even though there was no evidence they were involved, Hachigian said he was "thinking about protecting the jobs of 30,000 people," the Globe reported.
"I had to weigh the alternatives ... A boycott would have been disastrous for this company," he said.
Demoulas himself took the stand Wednesday and Thursday, and told the court that in the years since the 2014 buyout, his relationship with his three sisters had deteriorated, in part because of disagreements over who should sit on the board of directors, the Globe reported.
He also claimed that his sisters, who together hold about 60% of shares in Market Basket, were trying to push him out due to separate disagreements about a family trust to benefit all of their children.
Two of the sisters, Caren and Glorianne, said in deposition testimony played in court that they had no intention of selling the company, according to the Globe. Any sale would need sign-off from Arthur Demoulas, who is the single largest shareholder in the company.
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