When Roger Berkowitz reads what’s going on with the Demoulas family at Market Basket, he can’t help but cringe. He’s been there, with his own family feud two decades ago when his brother took him to court over the future of Legal Sea Foods.
Everything is fine now, the lawsuit long settled, but Berkowitz, without taking sides in the battle between Arthur T. and Arthur S., has some advice for the bickering cousins.
“When the family takes care of the business, the business takes care of the family,” said Berkowitz, the CEO of Legal Sea Foods restaurant chain. “They are stewards of the brand. They can’t put themselves in front of it.”
That’s exactly what happened here. The Demoulases made this Greek tragedy about themselves. Rather this should be about how to get everyone back to work and saving what is left of the supermarket empire.
Berkowitz thinks the only way out is for one bitter faction to sell to the other. That’s how Berkowitz resolved the fight with his brother, Marc. Late Wednesday, Arthur T. offered to buy out his cousin Arthur S. and his supporters, which would allow the fired company president to triumphantly return.
Of course, that would require Arthur S. to let go of the multibillion-dollar company, something he might find difficult to do after decades of warring. Even the many millions of dollars he’d walk away with as consolation might not be enough. This has always been about more than money.
“Regardless who is right or wrong, it’s always wrong when it is blows up in public,” said Berkowitz. “It’s ego more than anything else. That’s when it is sad. That’s when participants have lost perspective.”
Eliot Tatelman, the CEO of Jordan’s Furniture, got started in the family business when he was 12, cleaning out ashtrays in the showrooms back when everyone smoked. At one time, there were three generations working together, and Tatelman recalls going to lunch nearly every day with his grandfather and father.
Were there ever any family spats?
“Of course, there was friction. If there was no friction and no difference of opinion, you don’t get anywhere,” said Tatelman. But his father also made something clear to him and his brother Barry, who also worked at Jordan’s. “Number one is family and getting along,” recalled Eliot.
Today, Jordan’s is no longer family-owned, though Eliot still runs it. The Tatelman brothers sold the chain to Warren Buffett in 1999. The money Buffet offered was good, but the chief reason they cashed out was that Barry and Eliot didn’t want their children to fight over the future of Jordan’s.
That’s what happens in family businesses, and it’s what happened to the Demoulases. Arthur S. and Arthur T.’s grandfather got the family into the grocery business, and for generations Demoulases have been at each other’s throats.
Unlike Berkowitz, Tatelman is taking sides on what should happen at Market Basket, even though he has no relationship with the Demoulases.
“Arthur T. absolutely has to come back,” said Tatelman. “With everything going on, if Arthur T. comes back, think about how much stronger the company will be. The employees will be even more motivated. They will be appreciated. If he doesn’t come back, it will always be a grind.”
This town has had its share of ugly blood feuds, often pitting brother against brother, spilling over into the courtroom and making headlines.
Donald and Roger Saunders went to war over a hospitality empire that included the Boston Park Plaza and Lenox Hotel. Peter and Paul Palandjian of Intercontinental Real Estate Corp. had a falling out over stolen art that threatened the family business. Sibling rivalry tore apart Alan and Hank Lewis, after a failed merger between their two firms, Grand Circle Travel and Vantage Travel. Friendly’s co-founders Prestley and Curtis Blake squabbled over Prestley’s attempt to push out a CEO, long after the brothers had sold the chain. The family that owns Ken’s Steak House and the family that runs Ken’s Foods, which makes Ken’s Steak House salad dressing, spent years suing each other.
A family feud “has the same characteristics of a divorce,” said Michael Laurano, the lawyer for Tim Hanna, owner of Ken’s Steak House in Framingham. “You have to take the emotions out of it. It has to be a business decision.”
You also can’t be greedy. That comes from 92-year-old Shirley Grossman, the matriarch of the fourth-generation Grossman Marketing Group, who still goes into the office in Somerville two days a week.
“Don’t ever fight about money. Everyone will lose,” Grossman liked to tell her children, including Steve, who served as the company’s chief executive until he became state treasurer (and is now a candidate for governor).
John Fish, who runs Suffolk Construction, is once again speaking to his older brother Ted, after time repaired their relationship. For years, however, they were fierce competitors, going head to head in the same industry.
But time doesn’t seem to be helping the Demoulases. In fact, Fish believes the company is running out of time, after a week of protests, empty store shelves, and bad press.
“Even if Arthur T. buys the company, there is no guarantee he can put the shine back on the brand,” said Fish. “They called each other’s bluff. It’s a game of Russian roulette.”
Peter and Paul Palandjian used to have 50-50 ownership of Intercontinental Real Estate, with Peter as chief executive and Paul as chief financial officer. But Peter bought Paul out in 2006, after the FBI began investigating his role in the attempted sale of stolen paintings. Paul, who was never charged, received immunity for his testimony in the case.
To this day, the brothers’ relationship remains strained.
“When shareholders are family and it’s a private company, things get muddied in terms of what is good stewardship for the company versus what is right for the family,” said Peter Palandjian. “I had no choice at the time -- investors and employees had to be protected. That was above all of us. But today I would trade everything that happened to have my brother back.”