Trial Unfolds Over CEO Ouster in Family Feud at New England Grocery Chain

A long-standing family feud for control of the $8 billion-a-year Market Basket grocery chain in New England is set to take center stage in a trial that will determine whether the former chief executive officer was improperly ousted by his three sisters.

Arthur T. Demoulas, who served as CEO for 17 years, claims he was removed in a corporate coup orchestrated by his sisters. Meanwhile, board members accuse him of employing bully tactics and failing to keep them informed about key decisions. The Tewksbury, Massachusetts-based chain is incorporated in Delaware, where the trial is set to begin on Tuesday. This legal battle is the latest chapter in a saga of family infighting that has persisted for generations.

Known affectionately around Boston as “Artie T,” Demoulas owns 28% of Market Basket and is well-regarded by many employees for providing robust health-care benefits and profit-sharing. Some of his staff have even dubbed him “The People’s CEO.” Although the three sisters do not sit on the board, they control 60% of the shares and have voiced criticism regarding their brother’s management style.

A pivotal legal question in the trial will be whether board members—who are reportedly loyal to the sisters—acted in bad faith when they placed Demoulas and several managers on paid leave in May, following unsuccessful mediation efforts. In September, the board filed a lawsuit in Delaware Chancery Court, alleging that Demoulas refused to keep them informed about operations at its 90 stores and attempted to incite a work stoppage in response to his ouster. In October, Demoulas counter-sued, seeking reinstatement.

“Bad faith can be very hard to prove,” noted Charles Elson, a retired University of Delaware professor and founder of the Weinberg Center for Corporate Governance. “The case will hinge on whether Mr. Demoulas was dismissed due to personal grievances or if the board had legitimate reasons for his removal in the company’s best interests.”

A spokesperson for Demoulas declined to comment on the trial in Delaware Chancery Court, where cases are decided by a judge rather than a jury. Board members expressed confidence in a joint statement, asserting that their actions were justified.

“Regardless of the company’s success, a CEO cannot operate as a one-man show and withhold vital information from the board of directors, who are tasked under Delaware law with overseeing the company’s affairs,” the board stated. “Mr. Demoulas managed Market Basket as if it were solely his, despite being a minority shareholder, and excluded other shareholders and the board from meaningful participation.”

Market Basket stores across Massachusetts, New Hampshire, and Maine are praised by customers for their low prices and satisfied employees. However, the Demoulas family has been embroiled in dysfunction for generations, dating back to the two sons of Athanasios Demoulas, who emigrated from Greece in 1908 and founded the first store in Lowell, Massachusetts, in 1917.

Family members have repeatedly clashed in court over the company’s direction, reportedly leading to fistfights, secret recordings, and ongoing animosity.

“The whole situation is very sad,” said Sara Berman, an 89-year-old customer in Cambridge, who expressed her support for Artie T in the current legal battle.

In 2014, one of Artie T’s cousins, Arthur S. Demoulas, attempted to remove him from his position. However, a six-week work stoppage by employees in support of the CEO led to a settlement. As part of the agreement, Arthur S. sold his controlling shares to Artie T and his three sisters for over $1.5 billion, which included stock owned by other family members held in a trust.

Unfortunately, the peace was short-lived. The sisters, dissatisfied with what they perceived as their brother’s authoritarian management style, backed three independent directors and ousted board members who supported him. The board’s lawsuit claims that Demoulas kept them uninformed about budgeting, capital expenses, and the search for his successor.

In court filings, the board highlighted Demoulas’s assertion that “there’s only one boss in the company. There’s not two. There’s not three. There’s not five.” They also questioned his use of “burner phones” to communicate with supporters during the current conflict.

Demoulas counters that the process leading to his termination was “riddled with conflicts, trickery, and deceit,” claiming that his sisters had spent years filling the board with loyalists to execute their agenda. He further stated in court filings that the board’s investigation into his alleged misconduct was intended “to justify his improper termination, which was preordained by the sisters.”

The case is DMS Hold Co. v. Arthur T. Demoulas, 2025-1020, Delaware Chancery Court (Wilmington).

Copyright 2025 Bloomberg.

A long-standing family feud for control of the $8 billion-a-year Market Basket grocery chain in New England is set to take center stage in a trial that will determine whether the former chief executive officer was improperly ousted by his three sisters.

Arthur T. Demoulas, who served as CEO for 17 years, claims he was removed in a corporate coup orchestrated by his sisters. Meanwhile, board members accuse him of employing bully tactics and failing to keep them informed about key decisions. The Tewksbury, Massachusetts-based chain is incorporated in Delaware, where the trial is set to begin on Tuesday. This legal battle is the latest chapter in a saga of family infighting that has persisted for generations.

Known affectionately around Boston as “Artie T,” Demoulas owns 28% of Market Basket and is well-regarded by many employees for providing robust health-care benefits and profit-sharing. Some of his staff have even dubbed him “The People’s CEO.” Although the three sisters do not sit on the board, they control 60% of the shares and have voiced criticism regarding their brother’s management style.

A pivotal legal question in the trial will be whether board members—who are reportedly loyal to the sisters—acted in bad faith when they placed Demoulas and several managers on paid leave in May, following unsuccessful mediation efforts. In September, the board filed a lawsuit in Delaware Chancery Court, alleging that Demoulas refused to keep them informed about operations at its 90 stores and attempted to incite a work stoppage in response to his ouster. In October, Demoulas counter-sued, seeking reinstatement.

“Bad faith can be very hard to prove,” noted Charles Elson, a retired University of Delaware professor and founder of the Weinberg Center for Corporate Governance. “The case will hinge on whether Mr. Demoulas was dismissed due to personal grievances or if the board had legitimate reasons for his removal in the company’s best interests.”

A spokesperson for Demoulas declined to comment on the trial in Delaware Chancery Court, where cases are decided by a judge rather than a jury. Board members expressed confidence in a joint statement, asserting that their actions were justified.

“Regardless of the company’s success, a CEO cannot operate as a one-man show and withhold vital information from the board of directors, who are tasked under Delaware law with overseeing the company’s affairs,” the board stated. “Mr. Demoulas managed Market Basket as if it were solely his, despite being a minority shareholder, and excluded other shareholders and the board from meaningful participation.”

Market Basket stores across Massachusetts, New Hampshire, and Maine are praised by customers for their low prices and satisfied employees. However, the Demoulas family has been embroiled in dysfunction for generations, dating back to the two sons of Athanasios Demoulas, who emigrated from Greece in 1908 and founded the first store in Lowell, Massachusetts, in 1917.

Family members have repeatedly clashed in court over the company’s direction, reportedly leading to fistfights, secret recordings, and ongoing animosity.

“The whole situation is very sad,” said Sara Berman, an 89-year-old customer in Cambridge, who expressed her support for Artie T in the current legal battle.

In 2014, one of Artie T’s cousins, Arthur S. Demoulas, attempted to remove him from his position. However, a six-week work stoppage by employees in support of the CEO led to a settlement. As part of the agreement, Arthur S. sold his controlling shares to Artie T and his three sisters for over $1.5 billion, which included stock owned by other family members held in a trust.

Unfortunately, the peace was short-lived. The sisters, dissatisfied with what they perceived as their brother’s authoritarian management style, backed three independent directors and ousted board members who supported him. The board’s lawsuit claims that Demoulas kept them uninformed about budgeting, capital expenses, and the search for his successor.

In court filings, the board highlighted Demoulas’s assertion that “there’s only one boss in the company. There’s not two. There’s not three. There’s not five.” They also questioned his use of “burner phones” to communicate with supporters during the current conflict.

Demoulas counters that the process leading to his termination was “riddled with conflicts, trickery, and deceit,” claiming that his sisters had spent years filling the board with loyalists to execute their agenda. He further stated in court filings that the board’s investigation into his alleged misconduct was intended “to justify his improper termination, which was preordained by the sisters.”

The case is DMS Hold Co. v. Arthur T. Demoulas, 2025-1020, Delaware Chancery Court (Wilmington).

Copyright 2025 Bloomberg.