Market Basket Movement?

Three of 7 directors issue statement urging Arthur T. Demoulas to move on plan to return fired execs, but he wouldn’t become CEO

Breaking days of silence, a key block of directors of the parent company of the embattled Market Basket supermarket chain issued a statement Friday evening urging Arthur T. Demoulas to respond to a plan they’ve offered to “return to normal business operations” and reinstate fired executives – not make Demoulas CEO again.

Demoulas Supermarkets Inc. has a seven-member board of directors, two appointed by Arthur T.’s side of the family, two by his cousin-enemy Arthur S. Demoulas, and three elected by a majority of shareholders, who currently are backing the Arthur S. side of the family. Those three are Boston attorney Keith Cowan, who chairs the board, and New York financiers Eric Gebaide and Ron Weiner.

The three so-called independent directors issued their statement about 5 p.m. that they had presented Arthur T. Demoulas “several days ago” an agreement “to assist the company’s return to normal business operations” and restore 8 executives loyal to Arthur T. who were fired after his June 23 dismissal as CEO. But the statement made clear it would not involved Arthur T. returning as CEO “but would instead retain the current management’’ of co-CEOs Jim Gooch and Felicia Thornton.

“Mr. Demoulas gets his management team back in place, associates can get back to doing their job, customers can get back to shopping, and the company gets the breaking room needed to create an orderly and productive way forward.’’

Arthur T. Demoulas responded at 6:45 p.m.: “Five weeks ago these Board members voted to fire Arthur T. Demoulas and banned him from company property. Since that time, the company has spiraled downward and Arthur T. has worked feverishly to purchase the company. On three separate occasions since that time, including as recently as yesterday, Arthur T. has offered in writing and otherwise to try to bring back his entire management team to work to stabilize the company. Each offer was rejected. It is disingenuous to issue a press release at 5:30 on a Friday, from the “Independent Directors” all of whom were appointed by Arthur S. Demoulas’ side of the family, announcing that they have invited him to rejoin the company but not as CEO. This is an attempt to have him stabilize the company, while they consider selling it to another bidder. This is far too serious a situation for these games and attempts at window dressing. It is a serious issue that deserves a serious solution. Market Basket’s Associates, customers, vendors and communities deserve better than that. Arthur T. Demoulas has provided a serious proposal which should be accepted.’’

The dueling statements came hours after the company revealed that thousands of part-time workers at its 71 stores in Massachusetts, New Hampshire, and Maine will get no hours next week because sales are plunging in stores. That’s because many consumers are boycotting the stores in solidarity with employees’ calls for them not to shop there until and unless Arthur T. is restored as CEO. Also, many consumers are not shopping at the stores because the labor and management turmoil has broken the company’s supply chain and led to shortages of produce, meat, and other staples in stores.

Also Friday, Massachusetts Governor Deval L. Patrick – who earlier in the week had said he would steer clear of what he called a private dispute – issued a letter urging the two sides to work out a deal. Patrick stressed that he was not taking sides. (His wife, Diane, is a partner at Ropes & Gray, the powerhouse Boston law firm representing the Arthur S. side of the family, creating a complication for Patrick to get involved.)

In a letter to the board, Patrick wrote that "by any measure, the disruption that followed your recent change in CEO has gotten out of hand."

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