A new round in the Demoulas family feud

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Arthur T. Demoulas (left) and Arthur S. Demoulas.
Arthur T. Demoulas (left) and Arthur S. Demoulas.

The dueling Demoulases are at it again.

Just when it seemed like the sale of the Market Basket grocery store chain had ended an epic family feud for good, a new lawsuit has emerged, and the rival cousins, both named Arthur, are once again locked in battle.

Arthur S. Demoulas, a former shareholder and board member at Demoulas Super Markets, Inc., sold his stake in the company in 2014. But both he and his sister-in-law Rafaela Evans now claim in a civil suit in Suffolk County Superior Court that they have been blocked from any involvement in an audit of the supermarket chain by the Internal Revenue Service and demand to be included.


The audit's outcome could potentially affect the pair because, as former shareholders, they say they were responsible for paying taxes on the company's stock.

The lawsuit alleges that the defendants "are obstructing and frustrating the Plaintiffs' 'right to participate.'"

"Declaratory and equitable relief from this Court is urgently needed," it adds.

The filing triggered a sharp response from Arthur T.'s camp Friday:

"There he goes again. Filing litigation on an IRS audit that has barely even begun is a new level of being litigious, even for Arthur S. Demoulas," said Justine Griffin, a spokesperson for Demoulas Super Markets Inc. "Frankly this is ridiculous."

Griffin added that the audit is managed by an independent firm that was originally hired during the time when Arthur S. Demoulas controlled most of the board.

The IRS notified the supermarket of the audit on April 4 of this year, according to the lawsuit. Arthur S. Demoulas and Evans filed suit a little more than a month later, on May 19.

"The plan was always to include Arthur S. Demoulas in the process," Griffin said. "We were not surprised to find that rather than discuss the proposal he went directly to Superior Court."


Thomas S. Fitzpatrick, lawyer for Arthur S. Demoulas, declined to comment.

However in the lawsuit, lawyers for Arthur S. said there were occasions where they were rebuffed or challenged in their efforts to participate in the audit process or in a meeting with the IRS.

As part of their lawsuit, Arthur S. Demoulas and Evans have asked the judge to issue a "binding declaration" allowing them to participate in all communication between the company and the IRS.

Long before the public upheaval nearly two years ago, the rival cousins fought for decades over real estate and financial matters.

The simmering problems exploded in 2014, when the board of the company, then under the control of Arthur S.'s side of the family, fired Arthur T. as head of the Tewksbury-based chain. That prompted employees loyal to Arthur T. to walk off the job and customers to boycott stores, where shelves went bare for weeks.

After days of tense negotiations the two sides announced a deal in late August, 2014. Arthur T. and his sisters agreed to buy out shares owned by Arthur S. and other relatives on his side of the family for $1.6 billion. The plan also returned Arthur T. to president of the chain.

Evans, the sister-in-law who is also part of the most recent lawsuit, had once voted her company shares in solidarity with Arthur T. She later changed sides, a dramatic development that enabled Arthur S. to gain control of the company and fire his cousin.


Her lawyer, Jillian Hirsch, could not be reached for comment.

Megan Woolhouse can be reached at Follow her on Twitter @megwoolhouse.