Judge Called Market Basket CEO 'Imperious' in Ruling That Upheld His Firing (Boston Business Journal)

Market Basket’s longtime CEO, Arthur T. Demoulas, evokes such strong feelings with the grocery chain’s employees and shoppers that they famously rallied to his side in 2014. But when it came to whether Demoulas was rightfully fired by the Market Basket board, a Delaware judge was impassive. Market Basket’s board appears to have acted lawfully when it decided to fire Demoulas because of what it said was the CEO’s refusal to cooperate on budgetary, succession and other matters, according to Adam Slutsky, a partner at Goodwin who practices often in Delaware, where many corporate governance matters are argued. “The judge pretty clearly came out on the side of the board, that the board could honestly say it couldn’t discharge its duties because of the roadblocks that Arthur would put up time and time again,” Slutsky said. “Arthur tried to say it’s an unqualified success story, so the only explanation was that the firing was in bad faith, but that’s too simplistic. The evidence painted a much more nuanced picture,” he said. “The court didn't have any reason to say the directors were conflicted,” Slutsky added. “The baseline here is ‘I’m going to defer to what the directors did unless there’s bad faith,’ which is a high bar to reach.” After the ruling this past week, a spokeswoman for Demoulas said that Demoulas had known there would be “high hurdles” to winning in the Delaware court. Slutsky, who works in Goodwin’s Litigation department in Boston, said a potential appeal would be similarly difficult to win. It would be heard by the Delaware Supreme Court, which he said would defer to the lower court that already heard arguments and made a ruling. “An appeal here would be a major uphill battle for Arthur,” he said.

Read the Boston Business Journal article for more.