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Heirs to US supermarket chain keep family feud going

The feuding family behind multi-billion dollar US supermarket chain Market Basket is set to take their battle to the boardroom this Thursday, with the current president facing a leadership coup led by his cousin.

The feuding family behind multi-billion dollar US supermarket chain Market Basket is set to take their battle to the boardroom this Thursday, with the current president facing a leadership coup led by his cousin.

The New England-based business, with annual revenues of more than $4 billion (€3.1 billion), has been led by Arthur T DeMoulas for the last five years, but he has been accused of refusing to listen to the board and spending money recklessly.

Meanwhile, DeMoulas accuses family members, including his cousin Arthur S DeMoulas, of greed and destabilising the company for their personal gain.

Heirs from two branches of the family make up the board, and DeMoulas has had enough support from the board until now to retain control; however, according to reports, a family member has switched sides and joined Arthur S's camp – giving him the influence he needs to potentially oust his cousin.

A court has ordered the seven-member board to meet on 18 July to try and come to an agreement.

The leadership challenge represents the latest twist in the DeMoulas family feud, which has spanned five decades.

Blair Trippe, an adviser with Massachusetts-based Continuity Family Business Consulting, believes the board needs a structure that allows it to hold executives accountable to objective performance measures.

She was sceptical of how effective the court's intervention would be in the long-term.

"With regard to the family conflict, it is identity based and thus intractable. No amount of lawyering up will put an end to it and no court order will stop the ill will that currently exists," she reckoned.

She added: "If it cannot be resolved it must be managed. Neither legal force nor negotiation will do this, as this type of conflict does not respond to these. If the family members will look to the future and the potential role of the next generation leaders, they can develop a succession plan that will allow them to stop fighting in the present."

The DeMoulas Saga
The company has operated under a cloud since 1971 with the death of one of the chain's founders, George DeMoulas.

Brother's Telemachus – "Mike" – and George DeMoulas took over their parent's small grocery store in 1954 and transformed the business into a chain of 15 stores. Following George's death, Mike was left as sole head of the business.

Each brother had agreed to provide for the other's family, but in 1990 George's heirs brought a lawsuit against Mike claiming he had cheated them out of all but 8% of the company's stock by dividing the chain's assets into a web of shell corporations and arguing these companies were separate from the main Market Basket company.

In 1994 a judge finally ruled Mike DeMoulas had defrauded his brother's family out of nearly $500 million and transferred 51% of Market Basket's stock to George's family.

Mike died on 2003 at the age of 82, but his heirs are making sure the family feud is kept alive and well. Mike's son, Arthur T DeMoulas, was elected president of the company in 2008.   

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