As usual with my paper, the villain is the hero and vice-versa:
"Arthur S. Demoulas shows generosity and resolve" by Shirley Leung | Globe Staff August 22, 2014
Detractors portray Arthur S. Demoulas as combative and money grubbing, but that is not how former Boston police commissioner Ed Davis and local powerbroker Kevin Phelan see him, and far from being stingy, they say, he is hugely generous with his time and connections, helping to raise more than $100,000 or so over the past year for the foundation, which assists officers and the department.
“He is a gentleman,” said Phelan, cochairman of commercial real estate giant Colliers International’s Boston office. “There is nothing bad I can possibly say.”
But in the current chapter of the decades-long Market Basket saga, Arthur S., 56, has been relegated by most to the role of “Bad Arthur” while his cousin, Arthur T., is “Good Arthur.” Dig deeper, and you’ll find neither is that good nor that bad, and that their famously litigious family might be bringing out the worst in each of them. The differences between the two men — said to loathe each other — are stark.
Arthur T. seems to bask in the adulation of 25,000 Market Basket employees who speak of him in terms usually applied to saints. Since he was ousted as company president in June, they have protested or stopped showing up for work, vowing to answer to no one but their former leader. Customers have shown their solidarity by staying away from the poorly stocked stores and business has ground to a virtual halt.
There’s another important difference, from the employees’ perspective. Arthur S. favored sending more of the profits to shareholders, while Arthur T. has wanted to give more to employees through profit sharing.
Arthur S., who closely guards his privacy, has remained more reclusive than his cousin. He has eschewed a public relations campaign to make known his strategy for the chain. When confronted outside his Newbury Street office by a WHDH-TV Channel 7 reporter recently, Arthur S. came across as testy in what appears to be his only media interview during the Market Basket standoff.
“Would you please excuse me so I can go to work?” he said to reporter Byron Barnett last month before a meeting of the chain’s board.
When Barnett asked whether Arthur S. wanted to deliver a message to employees and customers worried about the future of the company, he snapped.
“I’m not gonna answer any questions,” he said. “You can ask as many as you want. I’m not gonna comment.” He did not respond to requests for an interview for this story.
That doesn’t mean Arthur S. and his side of the family don’t care about saving the troubled company, according to those close to him. They say he doesn’t feel the need to prove anything publicly.
“Artie,” as he likes to be called, will defend himself when needed, and fights for what he believes in, said Carol Cohen, a former attorney who worked for him for nearly three decades.
It was Arthur S. who organized the 1990 lawsuit against Arthur T.’s father Telemachus “Mike” Demoulas and the rest of his family, alleging they defrauded Arthur S., his siblings, and mother, of their shares in Demoulas Super Markets.
“He was the leading factor in the suit against his uncle,” said Cohen. “He was the one who came into our office and asked for our help. He definitely knew something was wrong and wanted to be vindicated.”
Arthur S.’s father, George Demoulas, built the Market Basket empire with his brother Mike. In the early 1960s, they made a pact. If one died, the survivor would take care of the other’s family. In 1971, while vacationing in Greece, George Demoulas, 51, suffered a fatal heart attack.
At the time, Arthur S. was just 12, the youngest of George and Evanthea’s four children. He was already working in the family business, retrieving stray shopping carts in the parking lot. He thought he would follow his father’s footsteps into the business, which his grandfather Arthur started with a single store in 1917 in Lowell.
After his father’s death, Arthur S. kept working in the grocery stores, even throughout college. He attended the University of Maine in Orono, where he was a defenseman on the hockey team, and later transferred to Babson College, graduating in 1985 with a business degree.
He worked at Demoulas Super Markets until 1990, rising to assistant produce director of the chain. He wanted to stay involved in day-to-day operations, but as the litigation against his uncle became nastier, his uncle sued to fire him, Cohen recalled. The court ruled it would be best for Arthur S. to go on paid leave.
When the trial opened in January 1994 in Middlesex Superior Court, Arthur S. was the first witness called by the plaintiffs. His voice choked with emotion when he recounted his trust in Mike Demoulas, who handled the family’s finances.
“He said, ‘I’ll take care of you,’ ” Arthur said. “I believed he’d take care of us, just like my dad did.”
Mike Demoulas, however, figured the millions of dollars he lavished on his brother’s family was plenty. He thought their lawsuit was based on greed.
After a five-month trial, a jury found that Arthur T.’s father had systematically defrauded Arthur S.’s family of hundreds of millions of dollars in stock and real estate holdings over 16 years. Ultimately, Judge Maria Lopez awarded Arthur S.’s family control of the company with 50.5 percent of the shares. There would be years of appeal, and during that period, Arthur T.’s side of the family remained in charge.
Arthur S.’s family prevailed on appeals and through other suits, but there was an unforeseen setback. Rafaele Demoulas Evans, a shareholder aligned with Arthur S. and the widow of his brother Evan (who died in a 1993 car accident), began voting with Arthur T. That allowed Arthur T. to stay in control, despite losing in court. She apparently was upset by the way Arthur S. handled her husband’s estate.
Evans’s switch paved the way for Arthur T. to become president of Market Basket in 2008. The legal victory gave Arthur S. a seat on the board, but he never returned to the company’s daily operations.
A few years ago, retired State Police detective and private investigator Bob Long asked Arthur S. to join the board of the Boston Police Foundation. Long has known Arthur S. since the 1990s, when Arthur S.’s lawyers hired him during the battle with Mike Demoulas. Long said Arthur S. doesn’t want recognition for his giving.
“The good things that Arthur T. does for his employees and charitable efforts – 50 cents of every dollar is coming from Arthur S.,” Long said.
Time to head for the checkout line.
Last summer, Evans switched her allegiance again, putting Arthur S.’s family back in the majority. She made the move, apparently, because Arthur S. promised to direct more Market Basket profits to her and the other shareholders.
To resolve the standoff between employees and management, Arthur T. has offered to buy out Arthur S. and his family. Arthur S. wants to sell, but despite the intervention of two governors and 25,000 jobs at stake, no agreement has been reached. Meanwhile, the chain is bleeding millions of dollars daily, bringing it closer to ruin.
The business has already been destroyed.
“He was so proud, and he talked so much about Demoulas Super Markets,” recalled Tom LeBlond, his former roommate and hockey teammate at the University of Maine.
“It was the kind of thing he really wanted to be part of. He saw that as being his life and carrying on for his father,” he said. “It just seems he was never let in.”
Poor Artie S.
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"Arthur T. Demoulas’s personal touch can cut both ways" by Callum Borchers | Globe Staff August 22, 2014
Arthur T. Demoulas, now 59, has been cast as a hero in the Market Basket drama pitting thousands of disgruntled workers against a new corporate management team controlled by his cousin, Arthur S. Demoulas, the youngest of George’s four children. Yet his management style — chronicled in court documents and transcripts of board meetings — also reveals a tougher side than his public image as a perpetually generous, kind-hearted executive.
Well, looks like the Globe has taken sides.
I can tell you how $ick I am of the corporate pos known as the Globe. F*** this.
Adept as he is at recalling names, birthdays, and milestones of even low-level employees, according to Market Basket workers, he also can cite the price of corn at a competitor off the top of his head. And his sharp wit — honed at Bentley University in Waltham — can morph into a sharp tongue the instant a colleague questions his decisions.
In one 2012 exchange among board members, Arthur T. summarized his view of corporate governance in a single sentence: “There’s only one boss in this company.”
Anyone who has followed this blog knows my feeling on failed corporate governance, and yes, the structure is very dictatorial.
Arthur T., who is trying to buy control of the Market Basket chain from his cousins, declined an interview request through a spokeswoman, citing confidentiality provisions of the negotiations.
So would I.
The grandson of the company founder, Arthur T. is the only son among the four children of Telemachus and Irene Demoulas. Brought up in the family business, Arthur T. is still remembered by longtime employees and customers as a young boy learning at the feet of his father.
He joined the company board in 1974, just a year out of high school, and rose to president in 2008, winning the affection and loyalty of workers who credit him with fighting tight-fisted relatives to preserve strong wages, bonuses, and a retirement plan, while keeping prices low for customers.
In one memorable gesture, Arthur T. authorized the company to make up a $46 million loss sustained by employees’ profit-sharing fund during the 2008 financial meltdown.
He $ure looks like a hero to me!
He lives in the same Lowell neighborhood where he was raised until adolescence.
Lowell is a bad place.
In keeping with Greek tradition, he named his first son, Telemachus, after his father. He and his wife, Maureen, also have three daughters, Madeline, Irene (after Arthur T.’s mother), and Mary.
Since Arthur T.’s dismissal as president at the end of June, employees have held rallies and promoted a customer boycott of the grocery chain’s 71 stores — all to demand his reinstatement. Some have resigned or gone on strike until Arthur T. is back in charge. Others have been fired for their roles in the demonstrations.
Talk to almost anyone on the picket line, and you’ll hear a story about Arthur T.’s famous personal touch — how he checks on ill workers, asks about kids and spouses, and offers comfort at funerals.
But?
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Beyond business, Arthur T. has overseen two family foundations that in the last six years have donated a combined $29.3 million to schools, hospitals, civic groups, and other charities, according to tax filings.
All thanks to Arthur S.
Ironically, Arthur T. appears to be at his worst in interactions with relatives....
One phrase sums the rest up: “Money changes people.”
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Leaving you with an empty Basket:
"Arthur T. Demoulas offers $1.5 billion for Market Basket; Arthur T. Demoulas’s $1.5b offer could lead to a deal by Sunday, Patrick and Hassan say" by Casey Ross | Globe Staff August 22, 2014
The end of the Market Basket saga appeared within reach late Friday after Arthur T. Demoulas offered to pay more than $1.5 billion to take control of the embattled company, and the governors of Massachusetts and New Hampshire expressed optimism an agreement was imminent.
The flurry of developments provided the first hope that warring members of the Demoulas family might be able to rescue the multibillion-dollar supermarket company wracked by employee walkouts and customer boycotts.
Although Arthur S. Demoulas did not respond publicly to the bid Friday, Governor Deval Patrick and Governor Maggie Hassan of New Hampshire said they had spoken with both sides and that a deal could be reached by Sunday.
“All parties report that they are optimistic that an agreement will be reached to sell the company to Arthur T. Demoulas and to restore him to operating authority on an interim basis until the sale closes,” a statement issued by Patrick and Hassan said. “We are hopeful that employees will return to work, and the stores will reopen, early next week.”
Arthur T.’s offer, outlined for the Globe by his advisers on Friday, removed a key stumbling block by providing a letter from a private equity firm prepared to lend more than $500 million to help buy the remaining half of the company. The identity of the firm was not disclosed.
Not going down a good road here.
That money would replace seller financing that previously would have been provided by Arthur S. and other opposing relatives to help make the deal work. The rest of the $1.5 billion would come from a cash payment by Arthur T. and his sisters, as well as a mortgage loan secured by the supermarket company’s real estate, his advisers said.
The debt structure will destroy the Market Basket model.
Mi$$ion accomplished!
“It’s time to complete this deal so we can all go back to doing what we love doing, and that’s running Market Basket,” Arthur T. Demoulas told the Globe on Friday. He added later in a statement that “there is nothing that stands in the way of getting this done this weekend.”
Neither the board nor Arthur S. Demoulas publicly commented Friday night. A person briefed on the board’s deliberations said a “constructive dialogue is underway’’ over the offer.
If an agreement is not reached soon, the financial consequences could be catastrophic for the supermarket chain.
Already has been.
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The bid would require Arthur T. to shoulder substantial borrowing costs. That could mean higher prices for customers or lower pay for employees.
Or BOTH!
But an industry expert said Demoulas is more likely to search for cuts in profits distributed to shareholders in the form of dividends, rather than tinker with Market Basket’s business model.
That is not going to make private equity happy. No wonder Artie T. is the villain.
“It’s likely to come from shareholder distribution,” said Kevin Griffin, the Duxbury-based publisher of the Griffin Report on Food Marketing. “It’s likely to come from capital expenditures, which might be put on hold for a little bit.”
The grocery chain has been paralyzed by an employee walkout that has prevented fresh food from getting to its supermarkets.
Damn bastards!
Many customers in recent weeks have stopped shopping at Market Basket, either because of the food shortage or because they want to support the protesting workers.
Several vendors also announced this week that they were breaking ties with Market Basket, citing payment problems or because of their support for Arthur T.
The crisis began in late June when Arthur T. was fired as Market Basket president by the company’s board, which is controlled by Arthur S. The two Demoulas cousins have been fighting about ownership and management of the company for more than two decades.
Negotiations for the sale have been extremely contentious, with the parties divided over the terms and financing of the deal, as well as when and under what conditions Arthur T. would return. Earlier this week, the two sides promised the two governors they would make an all-out effort to reach an agreement by Friday.
The Demoulas family has been fighting about the company since the 1990s, when Arthur S. and other relatives of the family won a protracted legal battle that gave them a slight majority ownership of the grocery chain. However, the ruling kept the company’s ownership and management evenly divided between two factions of the family that have continued fighting over it.
Despite the family feud, the company has prospered in recent years, earning more than $200 million in profit on annual revenue of more than $4 billion, according to company documents.
Say goodbye to those good old days, MB.
The recent standoff has not only affected the employees, but hundreds of growers and food vendors, as well as businesses that occupy commercial space adjacent to Market Basket stores.
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Related: Final Market Basket bid by Arthur T. Demoulas expected today
Also see: Market Basket Strike Broken
