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Market Basket's Greek tragedy: From start to finish

New Hampshire Union Leader

August 30. 2014 9:13PM
Joey Salerno, produce manager brings out fresh watermelon slices and has spent 15 years of his 30 years employed at Market Basket as Market Basket gets back to the grocery business, on Elm Street in Manchester on Friday. (Thomas Roy/Union Leader)

Ask yourselves how many people have suffered through such family drama resulting in rotting fish, stuffed giraffes, discarded eggs, picketing workers, boycotting customers, the involvement of two governors and enough twists and turns to fill a dozen John Grisham novels?

Welcome to Market Basket - a privately-owned company cleaved apart by dueling Demoulas cousins named Arthur fighting over control of a multi-billion dollar empire.

Caught in the middle were 25,000 employees and 2 million customers waiting week after week for stores to return with happy workers and shelves full of fresh vegetables.

Couldn't the cousins have just hugged it out?

No, it took a reported $1.5 billion or so for Arthur T. Demoulas to settle the standoff with his cousin, Arthur S. Demoulas.

Word finally came late Wednesday that ousted CEO Arthur T. Demoulas would regain power, paving the way for boycotting customers and idled part-time workers to return.

Addressing workers Thursday, Demoulas praised the workers and said this "was not about a family conflict or a Greek tragedy" but "more about fairness, justice and a solid moral compass" that unites the human soul.

Workers - who adopted the giraffe as their mascot for sticking their necks out for their beloved boss - picketed stores and convinced more than 9 in 10 customers to boycott, leaving deserted parking lots to be converted into makeshift driver's ed courses.

Dozens of food pantries and homeless shelters benefited from donated food otherwise left unsold. Other food, including fish and eggs, got tossed away because of approaching expiration dates and no buyers.

Arthur T. made it clear in 2012 that there wasn't room for two Demoulas to operate the business.

"I'm running this company with the philosophy, very strong philosophy, that there's only one boss in the company," he said, according to minutes of a company board meeting. "There's not two. There's not three. There's not five. There's only one boss in the company."

At another board meeting in 2011, when board members raised questions about a $45 million investment loan, Arthur T. accused them of "nitpicking."

That led then-Director Nabil El-Hage to reply: "In my religion, only the Pope is infallible."

Long-standing feud

A family feud began after the death of George Demoulas in 1971. He and his brother, Telemachus Demoulas, had already built the chain, known then as Demoulas Market Basket, into a successful business, according to previous accounts in the Union Leader.

Heirs of the two brothers began a fight over control that continued until last week.

A Massachusetts Superior Court judge ruled in the 1990s that heirs of George Demoulas had been cheated out of millions by Telemachus Demoulas and his heirs. Telemachus Demoulas died in 2003, before the lawsuit and subsequent appeals were settled.

In 2011, the descendants of George Demoulas again sued the descendants of Telemachus Demoulas, including his son, Arthur T. Demoulas. The dispute centered on a profit-sharing plan Arthur. T. had introduced.

Last summer, the board voted to distribute $250 million in company operating funds to shareholders, a decision Arthur T. had opposed.

Then on June 23 of this year, the board fired him and named Felicia Thornton and James Gooch as the chain's co-CEOs.

Workers became concerned that their cherished profit-sharing plan and the company's family culture were in jeopardy with their new bosses.

Series of rallies

On July 18, workers held the first of about a half-dozen rallies in Tewskbury, Mass., demanding the return of Arthur T. Some warehouse workers and drivers loyal to him began disrupting deliveries to stores, resulting in more than a half-dozen employees receiving termination letters.

Company executives several times asked workers to return to work and threatened to replace some of them, even holding a three-day job fair.

"The perils of family business," said Neil Niman, chair of the economics department at the University of New Hampshire.

Hassan gets involved

On Aug. 17, Gov. Maggie Hassan and Massachusetts Gov. Deval Patrick met with both Arthur cousins for four to five hours in Springfield, Mass. and followed up with phone calls.

Asked about the demeanor of the two cousins, Hassan said: "Everybody was professional and constructive. Clearly, this has been a long dispute."

Niman said families should create a pre-nuptial agreement just like some married couples do.

"You try to avoid destroying family wealth or the mental health of your children," Niman said.

As for who came out on top of the Demoulas family feud, "I would think Arthur T. wins in the end," Niman said. "The family feud is essentially over."

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