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Demoulas board squabble leads to new suit

The Class A directors of Demoulas Super Markets has filed suit against Class B directors, alleging that the minority board faction has been obstructing business by failing to appear at meetings, most recently a board meting scheduled Monday.

The Class B directors are appointees of Market Basket president Arthur T. Demoulas, who lost control of the board to Class A directors led by his rival cousin, Arthur S. Demoulas, last summer. The estranged cousins are descendants of the brothers who founded the Tewksbury, Mass.-based company, and have been battling one another in court for years.

Demoulas management in a statement provided Wednesday said it had not seen the lawsuit, "but it is clear that management is in complete conflict with the new majority of the board."


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The suit, filed Tuesday in Superior Court Tuesday, alleges that Class B directors William Shea and J. Terence Carleton purposefully prevented a quorum at board meetings “as an improper means of thwarting business decisions and policy changes with which they and Arthur T. disagree.” The same directors recently lost a court battle that challenged the composition of the Class A board and its member Keith Cowan, who has subsequently been named chairman.

The two sides of the board have been divided on issues including the payment of a dividend to shareholders; changes in the company’s profit-sharing program; and the potential sacking of Arthur T. as president. The suit seeks a court order compelling the directors to attend the next board meeting, scheduled for April 28, or the suspension of quorum rules for that event.

A similar suit against the Class B directors last summer led to a July board meeting during which a motion to remove the president was on the agenda but ultimately not pursued. Plaintiffs’ evidence includes a letter from an attorney representing Class B directors to Cowan alleging that Cowan has prevented them from introducing items to add to the agenda and withholding information from board committees. The attoney said he intended to file suit on that matter this week and that Class B directors would not be attending meetings until their concerns were addressed.


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