NORTH ANDOVER — Arthur “Artie T” Demoulas is out as leader of the 90-store supermarket chain.
Delaware Chancery Court’s post-trial opinion Monday morning ruled against Demoulas’ challenge to his suspension last May and firing in September.
“The directors acted in good faith when initially suspending and later terminating the CEO,” stated Vice Chancellor J. Travis Laster, the judge who presided over the three-day court case in December, .
The business judgment protects the directors’ decisions, the court stated in a sharp rebuke of the ousted CEO.
“Here, the three directors rationally concluded— one could say reasonably or fairly concluded—that the CEO’s longstanding resistance to board oversight, imperious manner, and refusal to compromise with his sisters threatened the company,” the opinion, in part, stated.
A spokesperson for Demoulas is aware of the decision and will have a statement later today.
Going back to last May, Market Basket’s board of directors — Jay Hachigian, Steven Collins and Michael Keyes — held that Demoulas and others were planning a work stoppage.
They also alleged Demoulas had failed to share company budget and capital purchase information with them, and that he attempted to steer leadership succession to two of his children.
Meanwhile, Demoulas said his leadership had been recognized by the board as highly successful for customers, employees and ownership; and the board’s work stoppage claim was a ploy designed to funnel more company profits to his sisters, Frances, Glorianne and Caren.
Arthur Demoulas is a 28% minority owner in Market Basket, and his sisters, combined, hold a 60% majority share.
The remaining 12% of the company is held in trust for future generations.
The Delaware court decision Monday ruled “the record does not support a finding that the directors were beholden to the sisters. To be sure, they consulted with the sisters, took their concerns into account, and considered the stockholder-level disputes between the sisters and the CEO, but directors can legitimately do that.”