Market Basket

Market Basket Family Facing New Lawsuit

Arthur S. Demoulas sues Arthur T. over company audit

May 31, 2016, 03:21 pm

Nearly two years after a power struggle between cousins nearly put the Market Basket grocery store chain out of business, the Demoulas family, which founded the company, is in now embroiled in a new lawsuit.

Arthur S. Demoulas, cousin of CEO and owner Arthur T. Demoulas, filed suit in Suffolk Superior Court, in Massachusetts, on May 19, alleging he was blocked from involvement in an audit of the Tewksbury, Mass.-based company. Rafaela Evans, widow of Arthur S.’s brother Evan, is a co-plaintiff. Neither Arthur S. nor Evans have owned stock in Market Basket since late 2014, when Arthur T. and his family bought the company, ending a lengthy battle for control during which Arthur T. was ousted from the helm and later reinstated, with his once-and-future employees solidly behind him.

The current suit contends that Arthur S. and Evans weren’t permitted to take part in an Internal Revenue Service audit of the company. The former shareholders are seeking to participate in the audit, which began in April, because they were responsible for paying taxes on the company's income during the period leading up to the sale.

“Filing litigation on an IRS audit that has barely even begun is a new level of being litigious, even for Arthur S. Demoulas,” Justine Griffin, a spokeswoman for Demoulas Market Basket, told the Sun, in Lowell, Mass. “Frankly, this is ridiculous – this audit is being managed by the independent auditing firm that his board originally engaged.”

Added Griffin: “The plan was always to include Arthur S. Demoulas in the process, and the company did so. We were not surprised to find that rather than discuss the proposal, he went directly to Superior Court.”

Market Basket, meanwhile, has been busy expanding its New England footprint: The chain recently opened a new location in Plymouth, Mass., and is readying to open another in Rochester, N.H., this summer, with locations in Lynn and Fall River, Mass., also in the offing.