BOSTON — A Delaware judge has ruled against former Market Basket CEO Arthur T. Demoulas, who filed a lawsuit against the company over his termination and sought reinstatement.
Demoulas was removed as president and CEO of the Tewksbury-based grocery store chain, months after he was suspended over allegations that he had been considering leading a work stoppage.
“Arthur had the burden at trial to prove that a majority of the Current Directors acted in bad faith. He failed to carry his burden. The business judgment rule protects the Current Directors’ decisions to suspend Arthur and his allies and subsequently to terminate Arthur,” the judge said in their ruling.
“The court will enter judgment determining that Arthur’s removal as President and CEO was valid.”
Demoulas was seeking reinstatement as CEO but not any compensation.
In a statement, the Market Basket Board of Directors said:
“Today, Vice Chancellor J. Travis Laster of the Delaware Chancery Court issued a 125-page opinion after evaluating the testimony of 14 witnesses and over 500 exhibits and written submissions. He found that the Board was independent and acted in good faith in upholding our suspension of Mr. Demoulas in May 2025 and his subsequent termination in September 2025. After a failed mediation, we filed suit in Delaware to confirm the validity of our actions; Mr. Demoulas counterclaimed for reinstatement.
With this behind us, we’re looking forward to continuing to focus on everything that makes Market Basket so important to our communities. As the Board has said repeatedly, the Company is not for sale. Market Basket will continue to be a family-owned and operated business, offering the lowest prices and best value for customers, creating good jobs with profit sharing for associates, and supporting its customers and communities—well into the future. We’re excited about all of that.
The Board thanks Mr. Demoulas for his many years of service and anticipates working with him productively into the future as one of the company’s important shareholders."
— Market Basket Board of Directors
In response to the judge’s ruling, a spokesperson for Demoulas said, “Arthur T. Demoulas filed his response to the Board’s lawsuit knowing there were high hurdles given the broad latitude Delaware courts give to Boards of Directors. Market Basket is an incredible success by every measure. As his father before him, the late Telemachus A. Demoulas, Arthur T. has devoted his entire working life to building and growing Market Basket in a way that has brought benefit to all stakeholders – its Associates, its customers, the communities that Market Basket serves, and its shareholders.”
Several other executives loyal to Demoulas were also fired in the wake of his removal, including Joseph Schmidt and Tom Gordon, who were both banned from setting foot on the grocery store chain’s property.
Schmidt and Gordon called their firings a “pre-planned coup” spearheaded by the Demoulas sisters, who are majority shareholders in Market Basket.
Demoulas’ suspension and ultimate firing came 10 years after he was fired by a board controlled by Arthur S. Demoulas, his cousin and rival. After being sacked, store workers staged a walkout in support of Arthur T. that lasted six weeks.
Customers began to shop elsewhere because they couldn’t find fresh food at Market Basket, while others stayed away in a show of support for workers and Arthur T. The usually crowded stores turned into ghost towns, with only a trickle of customers coming in.
After weeks of pressure from suppliers suffering lost revenue, and the governors of Massachusetts and New Hampshire getting involved in work negotiations, the company announced that an agreement had been reached for Arthur T. to pay $1.6 billion for the 50.5 percent share of the company owned by Arthur S. and other family members.
Market Basket has 90 store locations in New England and employs tens of thousands of people.
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