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Governors try to broker a Market Basket deal

Patrick, Hassan deliberate with feuding cousins, others

Governor Deval Patrick continued negotiations between factions of the Demoulas family into the night on Sunday.Jim Cole/Associated Press/File

In a last-ditch effort to rescue the Market Basket grocery chain, Governor Deval Patrick and Governor Maggie Hassan of New Hampshire brokered negotiations Sunday night aimed at ending the bitter family standoff that has left the 71-store chain on the brink of collapse and put thousands of people out of work.

After several hours of discussion, a deal remained elusive but the talks were said to be promising, and continued into the night. Arthur T. Demoulas is trying to buy the company from rival family members and return as president.

“The parties have made real progress on the terms of the sale and operating control of the company, and the governors are encouraged that a resolution may be within reach,” Heather Nichols, a spokeswoman for Patrick, said in a statement.

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The negotiations included the two feuding cousins at the center of the dispute, Arthur T. and Arthur S. Demoulas, as well as board chairman Keith Cowan, and Tina Albright, representing one of the shareholders, according to the statement. Neither Arthur S. nor Arthur T. offered a comment on the status of the negotiations.

The involvement of the two governors — an extraordinary step for a dispute at a private company — signals a final push to reach a deal after a weeks-long stalemate between rival factions of the Demoulas family. It also underscores the urgency of ending the dispute, which has put thousands of Market Basket’s part-time employees out of work and is threatening the jobs of thousands of full-time workers as well.

Patrick and Hassan began offering to help reach a deal several days ago — a bid that culminated in Sunday evening’s negotiations, held at Patrick’s office in Springfield.

A board meeting was scheduled to be convened on Monday in Boston, as the company faces a shrinking set of options for continuing to operate. It has lost tens of millions of dollars in recent weeks due to an employee walkout and customer boycott, and it is unclear how much longer it can keep stores open.

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Market Basket has more than 25,000 employees who work at stores and other facilities throughout Massachusetts, Maine, and New Hampshire. About 10,000 work in New Hampshire and a similar number work in Massachusetts.

The crisis began in late June, when Arthur T. was fired as president of the company by a board controlled by Arthur S. The cousins have been fighting over ownership and management of the company for more than two decades.

Arthur T. has offered to buy the 50.5 percent of the company owned by Arthur S. and other relatives on his side of the family. But the negotiations over the sale have been extremely contentious, with the parties divided over the terms and the financing, as well as over when and under what conditions Arthur T. would return.

The board has said that it is considering multiple offers for the company, although it was unclear Sunday how many of those offers were still in play, given the staggering losses suffered by Market Basket in recent weeks.

The company’s employees have rejected repeated demands to return to work from the co-chief executives hired to replace Arthur T. That has made it difficult for the company to stock store shelves and pay vendors, and it has left it facing a creeping financial problem that could lead to store closures and widespread employee terminations unless a deal is reached soon.

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Patrick at first expressed reluctance to intervene in the affairs of a private company, but ultimately offered to do so because of the company’s impact on thousands of workers and shoppers who rely on it for low-cost groceries.

“Your failure to resolve this matter is not only hurting the company’s brand and business, but also many innocent and relatively powerless workers whose livelihoods depend on you,” the governor wrote in a letter to the company’s board Aug. 8.

The Demoulas family has been fighting over the company since the 1990s, when Arthur S.’s side of the family won a lawsuit finding that Arthur T.’s father, Telemachus, had defrauded them out of their shares in the company.

The resulting judgment awarded Arthur S. and his relatives $500 million, but it kept the ownership of the company almost equally divided between the family factions fighting over it.

Despite the feud, the company has prospered in recent years. It is reported to have had revenue of $4.6 billion in 2013 and is ranked by Forbes as the 127th-largest private company in the United States.

The company’s meltdown in recent weeks has affected not only the employees, but hundreds of growers and food vendors, as well as businesses that occupy space in shopping plazas where Market Basket is the main draw.


Casey Ross can be reached at cross@globe.com.