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Demoulas CEO Sues Over Board Dispute
TEWKSBURY, Mass. — Arthur T. Demoulas, chief executive officer of Demoulas Supermarkets, on Thursday asked a Massachusetts Superior Court judge to invalidate all actions of the company’s board of directors since July 18, alleging the deciding vote in matters since then was made by a board member that was not “disinterested and independent” as required by a previous court order.
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TEWKSBURY, Mass. — Arthur T. Demoulas, chief executive officer of Demoulas Supermarkets, on Thursday asked a Massachusetts Superior Court judge to invalidate all actions of the company’s board of directors since July 18, alleging the deciding vote in matters since then was made by a board member that was not “disinterested and independent” as required by a previous court order.
Those board decisions include payment of a dividend to shareholders and changes to the trustees overseeing profit-sharing at the parent of Market Basket stores. In court papers, Arthur T. Demoulas said the moves were designed to enrich the Class A shareholders controlled by his cousin Arthur S. Demoulas at the expense of Market Basket stores and its Class B shareholders.
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The Demoulas board is made up of seven members: Two Class A directors named by the family of Arthur S.; two Class B seats going to the Arthur T. Demoulas family; and three Class A/B directors who are supposed to be “disinterested and independent” according to a court ruling.
The lawsuit filed Thursday alleges that a newly elected A-B director, Keith Cowan, is not independent, but “is under the controlling influence of Arthur S. Demoulas.” Cowan was a former Class A board member but was reclassified as an A/B member when Arthur S. Demoulas’ family regained voting control of the company at its annual meeting in June.
