INDUSTRY NEWS | ANALYSIS
Judge: Market Basket board was right to dismiss CEO Arthur Demoulas was fired after board heard he was organizing a work stoppage
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. Demoulas’s three sisters control the board, which voted to suspend and remove him as CEO. Demoulas countersued, saying his sisters were “fueled by greed and envy.” The board then fired many of Demou - las’s allies, including three store managers and executive Susan Dufresne. In all, the company dismissed seven of its top eight executives. Donald Mulligan, a 42-year company veteran, became interim CEO in September 2025. He had served as Market Basket’s CFO since 1999. The ruling caps months of tense exchanges between Demoulas and the board. During a three-day trial in Chan- cery Court in Delaware in December, Demoulas denied trying to organize a work stoppage, and his lawyer said the board used secondhand rumors as a pretext for his termination. Testimony revealed details of the family dispute, including disagreements over the company’s distribution of $230 million in profits to shareholders in recent years and $15 million in bonus payments to workers in 2024 to mark the 10th anniversary of Demoulas and his sisters’ buyout of the company. The board alleges that it instructed Demoulas not to make the bonus payments, but he did so anyway. Another disputed issue was whether the board directed Demoulas to comply with requests for greater oversight at meetings last year. He testified that he believed those demands—including notifying the board of large expenses, budgets, store opening plans and other matters—were not formally enacted and remained under discussion. —Bill Wilson
The judge said Demoulas failed to prove that most current directors acted in bad faith.
A FORMER MARKET BASKET CEO did not prove his case for reinstatement as the grocer’s chief, a judge ruled. Delaware Court of Chancery Vice Chancellor J. Travis Laster said the Market Basket board of directors was right to suspend Arthur Demoulas. Laster said Demoulas failed to prove that most current directors acted in bad faith. “With this behind us, we’re looking for- ward to continuing to focus on everything that makes Market Basket so important to our communities,” the board said in a statement Monday. “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 suspended Demoulas in May 2025 after reports surfaced that he was planning a work stoppage. Arthur Demoulas filed his response to the board’s lawsuit knowing there were high hurdles given the broad latitude Del- aware courts give to boards of directors,” said Justine Griffin, spokesperson for Demoulas. “Market Basket is an incred- ible success by every measure. As his father before him, the late Telemachus A. Demoulas, Arthur T. has devoted his
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