Judge OK’s $300m Market Basket payout to shareholders
A Suffolk Superior Court judge has allowed Market Basket to proceed with a $300 million distribution to shareholders over the objections of the supermarket chain’s embattled president.
The ruling is a setback for Arthur T. Demoulas, who has been locked in long-running legal fight with family members over the management of the Massachusetts-based chain. All nine of its shareholders are members of the Demoulas family.
Judge Judith Fabricant denied a motion by Arthur T. Demoulas that sought to halt the distribution that had been authorized by Market Basket’s board of directors. A majority of the board was selected by allies of Demoulas’s first cousin and longtime nemesis, Arthur S. Demoulas.
Arthur T. had argued that one director, Keith O. Cowan, was improperly installed in his post and biased against his side of the family. He asserted the distribution would harm the company and asked that it be set aside pending a ruling on the bias claim.
But Fabricant found that Cowan, a former executive with Sprint Nextel Corp., was not wrongly installed or acting contrary to the interests of Market Basket at the behest of Arthur S. Demoulas.
The suit challenging Cowan’s directorship can still continue, but it appears to face an uphill battle. A spokeswoman for Arthur T. issued a statement expressing disappointment with the ruling. “Taking out 60 percent of the cash on hand from the company will break Market Basket’s proven business model, and forever change how the company operates and grows,” the statement said.
The company’s board of directors, which has considered removing Arthur T. as president, is scheduled to meet again sometime in October.