Market Basket board was justified in firing "imperious" CEO Arthur T. Demoulas, judge rules
The Market Basket Board of Directors was justified in firing longtime CEO Arthur T. Demoulas, a judge ruled Monday.
Delaware Court of Chancery Vice Chancellor J. Travis Laster said the board, controlled by Demoulas' three sisters, was "valid" to suspend and remove Demoulas from his position as president and CEO last year. Demoulas had countersued, arguing that his sisters were "fueled by greed and envy."
"Arthur had the burden at trial to prove that a majority of the Current Directors acted in bad faith," the judge wrote. "He failed to carry his burden."
The board suspended Demoulas, known as "Artie T" by loyal customers and employees, back in May 2025, saying there were credible allegations that he was planning a work stoppage. A spokesperson for Demoulas said at the time that board's investigation was "a farcical cover for a hostile takeover."
The 126-page ruling details the decades-long family struggle for power at the New England supermarket chain. The judge does not dispute that Demoulas ran a successful business, but says the board had reason to believe that his "longstanding resistance to board oversight, imperious manner, and refusal to compromise with his sisters threatened the company."
The judge said that Demoulas took a "passive-aggressive stance" with the board when they made specific requests for information about the Market Basket finances, and "the boardroom environment became toxic.
The judge also wrote that the board members believed "in good faith" that Demoulas might be planning a repeat of the 2014 Market Basket boycott that occurred after he was first fired by his cousin known as "Arthur S."
"They rationally feared that Arthur felt cornered and would run the same play in 2025," the judge wrote. "Each testified credibly to believing that Arthur was behind the 2014 walkout and that he would try it again."
In a statement to WBZ-TV, Demoulas's spokesperson Justine Griffin said he knew "there were high hurdles given the broad latitude Delaware courts give to Boards of Directors."
"Market Basket is an incredible success by every measure," the statement said. "As his father before him, the late Telemachus A. Demoulas, Arthur T. has devoted his entire working life to building and growing Market Basket in a way that has brought benefit to all stakeholders – its Associates, its customers, the communities that Market Basket serves, and its shareholders."
Don Mulligan, the company's chief financial officer for 26 years, was named interim CEO in September. Earlier this year, a ranking said Market Basket was the second-best grocery store chain in the country.
The Board of Directors issued a statement on Monday.
"With this behind us, we're looking forward to continuing to focus on everything that makes Market Basket so important to our communities. As the Board has said repeatedly, the Company is not for sale. Market Basket will continue to be a family-owned and operated business, offering the lowest prices and best value for customers, creating good jobs with profit sharing for associates, and supporting its customers and communities—well into the future. We're excited about all of that," the board said. "The Board thanks Mr. Demoulas for his many years of service and anticipates working with him productively into the future as one of the company's important shareholders."
