Market Basket’s board of directors has filed a comprehensive 35-page complaint against the company’s former CEO, Arthur T. Demoulas, following his termination. The complaint, submitted to the Delaware Chancery Court, details accusations of “stonewalling” and “bullying tactics” employed by Demoulas, reflecting a deepening rift within the company.
The document, lodged by Demoulas Supermarkets Inc. and several board members including Steven Collins, Michael Keyes, and Chair Jay Hachigian, outlines a troubling pattern of behavior attributed to Demoulas. The board alleges that he consistently exercised unilateral control over key decisions while disregarding the board’s authority.
In their complaint, the directors stated that after joining the board, they sought to diverge from previous members who had either capitulated to Demoulas’s influence or acted in his favor. The board’s efforts to assert its oversight responsibilities reportedly led to resistance from Demoulas, who allegedly responded with hostility to their attempts at governance.
The complaint specifically mentions that Demoulas had actively refused to provide the board with essential information, such as the annual budget and significant capital expenditures. Moreover, it claims that he barred board members from accessing the company’s headquarters in Tewksbury, Massachusetts, forcing them to conduct meetings at a nearby hotel.
The board also highlighted that Demoulas had “hijacked the process” of selecting his successor, opting to install his children without allowing the board to evaluate their qualifications. This disregard for governance principles raised significant concerns among the directors, who felt sidelined in the decision-making process.
This conflict escalated further following Demoulas’s suspension on May 28, 2025. The board contends that he orchestrated a “scorched-earth campaign” to undermine company operations and intimidate employees into supporting him. The complaint alleges that he used media appearances by former associates, including Joseph Schmidt and Tom Gordon, to publicly criticize the board and rally support against the company’s leadership.
In one notable incident, Schmidt and Gordon are accused of illegally trespassing at multiple Market Basket locations, a move that prompted the company to seek an injunction against their actions. The board claims these events were part of a broader strategy by Demoulas to regain control following his suspension.
The complaint further alleges that Demoulas was behind a public call for a boycott of Market Basket, as expressed in an op-ed published in the Boston Globe. The board argues that Demoulas’s behavior has consistently contravened the best interests of the company and its stakeholders, prioritizing his own power over the organization’s wellbeing.
Demoulas previously faced a similar situation in 2014 when he was ousted from his position, leading to significant employee walkouts and customer boycotts. He was reinstated after negotiating a $1.6 billion buyout of the company from his cousins, an event that underscored the ongoing family and corporate tensions.
The board’s complaint also notes attempts to enhance governance since 2019, with the election of directors intended to provide independent oversight. This shift came after the board identified a lack of accountability and control over Demoulas’s actions during his tenure.
As the situation develops, the board seeks a declaration affirming the validity of Demoulas’s termination. While it remains uncertain whether he will file a countersuit, the outcome of this legal battle could have long-lasting implications for the future of Market Basket and its governance structure.
