$300M ruling due from judge in Demoulas case

Written By Unknown on Kamis, 19 September 2013 | 12.33

The latest legal tug-of-war in the Demoulas family feud over their Market Basket grocery chain hits a Boston courtroom today, where a judge could decide whether to temporarily block a $300 million shareholder payout.

Shareholder and director Arthur S. Demoulas yesterday fired back against his rival cousin, CEO Arthur T. Demoulas, calling the latter's lawsuit seeking to unseat the board's interim chairman — and set aside some board votes taken under his leadership — as "malnourished by a severe lack of factual allegations."

The CEO's legal move is a "perverse request to obstruct the proper, lawful management of the business and affairs of Demoulas Super Markets Inc. by its board," according to court documents filed by Arthur S. Demoulas, who's been trying to oust his cousin for alleged fiscal recklessness.

The CEO alleges Keith O. Cowan should be disqualified as an independent director because he's "controlled" by Arthur S. Demoulas — in violation of a 1998 court order that three of seven directors be independent. In addition to the $300 million payout — taken from a $500 million cash balance, court documents state — votes taken since Cowan's July election that the CEO wants set aside include formation of a committee to evaluate his performance and report back on whether he should be removed.

Cowan — an attorney and former Sprint executive who previously was an "A" director elected in 2012 by Arthur S. Demoulas and his backers — also filed court documents asserting his independence and painting him as the "latest casualty" of a litigious family feud dating to 1990.

Allegations against him are "replete with the innuendo, invective and ad hominem allegations — not to mention a healthy dose of conspiracy theory — that have come to typify disputes between the Demoulas factions," but devoid of facts, the documents state.

Arthur S. Demoulas and Cowan could not be reached. Spokespeople for the board and CEO declined comment.

Board members are scheduled to meet tomorrow morning in Boston, prior to the court hearing.


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