TEWKSBURY — The firing of Market Basket CEO Arthur T. Demoulas by the corporate’s board of administrators has come alongside a 35-page criticism filed by the board in opposition to the now former CEO within the Chancery Courtroom in Delaware, the place a long-awaited mediation session befell final week and the place Market Basket’s holding firm relies.
The criticism, filed by Demoulas Supermarkets Inc. and board members Steven Collins, Michael Keyes and Chair Jay Hachigian, alleges Arthur T. “had a long-standing history of exercising his own unfettered discretion as to virtually every important decision at the Company—while ignoring and stonewalling the Market Basket Board.”
“After joining the Board, the Plaintiff Directors decided to depart from the path of the prior Board members, who either had capitulated to Mr. Demoulas’s bullying tactics or, like the recently removed fourth Board Member Bill Shea, willingly did Mr. Demoulas’s bidding,” the criticism learn. “The Plaintiff Directors decided to put their foot down and, in the words of an immortal football coach in New England, ‘Do Your Job’—which they began to try to do several years ago by seeking to discharge their fiduciary responsibilities of oversight over Mr. Demoulas and the Company’s operations. This did not sit well with Mr. Demoulas, who fought the Plaintiff Directors every step of the way.”
Shea, seen as an ally to Arthur T., was faraway from his chairmanship of the board in March after which faraway from the board altogether final month. One other Arthur T. ally, Terry Carleton, had been faraway from the board in January. The criticism alleges Arthur T. was on the assembly the place Shea was eliminated as chair, and that he “reacted angrily” to the transfer.
The criticism alleges the board had tried to work with Arthur T. “for years to gain his cooperation.”
“Mr. Demoulas would have none of it. For example, despite numerous requests, Mr. Demoulas never gave the Board an annual budget, did not give the Board advance notice (let alone seek input) about significant capital outlays, and never permitted the Board to meet with a single officer or senior manager of the Company, other than the Company’s CFO,” the criticism learn. “Mr. Demoulas even forbade the Board from entering the Market Basket headquarters in Tewksbury, Massachusetts; the Board had to hold its meetings at a local hotel. Mr. Demoulas at one point openly dared the Plaintiff Directors to fire him rather than submit to meaningful Board oversight, apparently banking on an employee walkout and customer boycott—like the one that followed his temporary ouster in 2014, discussed below.”
The board claimed the 70-year-old Arthur T. “hijacked the process” of selecting his successor.
“He categorically refused to participate in any substantive discussions with the Board about a succession plan, other than his unilateral plan to install his own children upon his eventual departure,” the criticism stated. “He dictated this plan without even permitting the Board to meet his children, denying the Directors a meaningful opportunity to assess whether Mr. Demoulas’s children would have the baseline qualifications and experience to manage a business of this size, let alone determine whether they would be the best candidates. Mr. Demoulas treated the decision as his and his alone and expected the Board and the Company’s owners simply and blindly to rubber stamp it.”
Final summer time, the criticism claimed the board had adopted a decision to compel Arthur T. “to comply with basic requirements of Board oversight,” like offering an annual funds, notifying the board of impending capital expenditures, requiring senior Market Basket officers to attend board conferences and dealing collectively for a succession plan.
Within the wake of Arthur T. and a few of his allies within the firm being suspended on Might 28, the board claims he led a “scorched-earth campaign to disrupt Company operations, threaten and intimidate Company associates to stay loyal to him, and smear the Board and the other stockholders of the Company in the media—all in his own self-interest to return to power.”
“For example, Mr. Demoulas has been behind numerous television and radio appearances, as well as interviews in the press, by his top two lieutenants, Joseph Schmidt and Tom Gordon, who were terminated from the Company in July 2025 for misconduct, blasting the Board and other Company stockholders,” the criticism stated. “He was also behind, among other things: Schmidt and Gordon’s illegal trespassing at twenty-six stores in a matter of days and Schmidt’s unlawful after-hours entry into the Market Basket headquarters in an effort to intimidate associates, necessitating the Company to obtain an injunction against their continuing trespass.”
The criticism additionally alleged Arthur T. to be behind a Boston Globe op-ed by David D’Alessandro, who referred to as for a boycott of the corporate, and the leaking of a letter from Shea to the remainder of the board after the preliminary suspensions.
“Lest there be any doubt about Mr. Demoulas’s role in these activities, at any time since his suspension Mr. Demoulas could have put the word out publicly or privately to stop his side’s media attacks,” the criticism stated. “Instead, Mr. Demoulas has done the opposite. He issued a public statement in support of his lieutenants and their actions, and he (directly and through his designated spokesperson) has targeted the Board and the majority stockholders, trying to paint them as villains who would ruin the Market Basket culture and sell the company to private equity firms (despite the fact that the Company’s Charter effectively requires his consent to any such sale).”
When Arthur T. was fired in 2014, and the walkouts and boycotts of Market Basket shops adopted, he was reinstated as president and CEO after he and his three sisters, Frances Demoulas Kettenbach, Glorianne Demoulas Farnham and Caren Demoulas Pasquale, purchased out the corporate from their cousin’s aspect of the household in a $1.6 billion deal. In 2019, the criticism stated the Demoulas sisters took steps to “professionalize the Board,” and elected administrators that may “truly exercise independent oversight of the company” after the board stated Arthur T. “unilaterally decided what information the Board would receive and when” within the previous years.
“Mr. Demoulas voted against each of the Plaintiff Directors because he viewed them as a threat to his unfettered autonomy who would not simply rubber-stamp his decisions, no questions asked,” the criticism stated.
“As they settled into their positions as Directors of Market Basket and learned more about the business, the Plaintiff Directors were surprised by the lack of oversight and control that had historically been exerted over Mr. Demoulas’s actions. As Mr. Demoulas put it, ‘my style is not to come back to this board and ask for permission. I’m going to do it,’” the criticism continued.
In a timeline of occasions listed within the criticism, the board refutes various claims made by allies of Arthur T. because the suspensions in Might, together with the presence of armed guards when the suspension notices have been handed out on the Tewksbury headquarters.
“Mr. Demoulas and his team apparently were also behind another employee signing her name to a letter to the Board—which appears to have been ghostwritten by Mr. Demoulas’s PR team—complaining about alleged ‘concerns’ she had at the Company, which would continue until Mr. Demoulas, Schmidt, and Gordon were reinstated,” the criticism learn. “After the associate sent the letter, Mr. Demoulas’s PR teamapparently caused her to leak the letter to the media and go on a press tour.”
That seemingly refers to Valerie Polito, who described a number of incidents of alleged abusive habits by Market Basket executives promoted by the board after the preliminary suspensions and firings of Schmidt and Gordon.
Although Arthur T. himself has not made any public appearances since his suspension, which he’s recognized to not often do anyway, the board stated the media marketing campaign supporting him, largely by Schmidt and Gordon, was orchestrated by Arthur T. behind the scenes.
“Mr. Demoulas’s campaign of guerilla warfare against the Company through Schmidt and Gordon continued, and actually accelerated, even after they were terminated,” the criticism stated. “Despite repeated, express instructions to stay off Market Basket property, during just a six-day period from August 4 through 9, 2025, Schmidt and Gordon made the rounds to twenty-six Market Basket stores in three states—upon information and belief at Mr. Demoulas’s direction, and certainly with his approval—as an open show of defiance against the Board.”
Schmidt would additionally enter the Tewksbury headquarters in the course of the interval as he dropped off his firm automotive, and later that month each Schmidt and Gordon can be handed a restraining order by a choose in Lowell Superior Courtroom, who ordered them to stay away from Market Basket property.
“Mr. Demoulas’s outright resistance to any oversight, and his attacks on the Board, the majority stockholders, and virtually everyone else associated with the Company apart from himself, were the last straw,” the criticism learn later. “Mr. Demoulas’s conduct has been at all relevant times contrary to the best interests of Market Basket and all its constituents, and is directed only at preserving his own power. That is not how the leader—the President and CEO—of an iconic company like Market Basket is supposed to or required to act.”
Within the request for aid within the criticism, the board is asking for a declaration that Arthur T.’s termination from his roles within the firm was legitimate.
It’s unclear whether or not a countersuit may be filed by Arthur T.
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