TEWKSURY, Mass. — Members of the Demoulas family, which owns the Demoulas Market Basket chain here, are involved in a new legal battle over a failed investment.
Arthus S. Demoulas, who previously had been part of long-running battle over control of the company, is suing the supermarket chain and others involved with management of its profit-sharing plan, alleging that they violated the plan’s rules and lost more than $46 million during the financial meltdown of 2008.
The suit, which was filed in April and first reported Thursday in the Boston Herald, alleges that the plan’s trustees had invested $12.5 million in the Federal Home Loan Mortgage Corp. (Freddie Mac) and $33.75 million in the Federal National Mortgage Association (Fannie Mae) in late 2007 and early 2008, respectively.
These investments violated the plan’s rules by over-concentrating the funds, according to the suit, which also alleges that the Demoulas Super Markets board of directors failed to take action against the plan’s trustees for making the failed investment.