M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Friday, August 15, 2014

Market Basket and minutes of board meetings

For those of you not from the Boston area, the whole Market Basket saga has not been a part of your summer.  Around here, it's been a huge story. The ten cent version: Market Basket is a regional grocery chain that happens to be family owned.  Here's the problem, the family is divided by bad blood over control of the business.  Until recently, the business was run by Arthur T. Demoulas.  He was popular with employees and by all account did well by them.  That was until he was ousted by his cousin, Arthus S.  Arthur S. and his group trimmed costs and seemed to be preparing the company for a sale.  There's been a public fight over control since then. Managers have walked out, store shelves have been left bare.  Today, employees are facing a return to work or be fired ultimatum.

To get a sense of the dysfunction at the company, the Boston Globe just published minutes of some board meetings.  How dysfunctional is the board at this point?  Well...their minutes take the form of a transcript taken by a professional stenographer.  Sheesh.  It's pretty clear that when you roll in the stenographer, no one trusts anyone in the room.  But it's thanks to the stenographer, that we can enjoy the board room repartee that goes on at Market Basket:

In October 2011, [Nabil] El-Hage asked Arthur T. whether he thought he had unlimited spending authority as chief executive.

“I do not know of any restriction that’s out there, and I do not care to have any restriction, quite frankly,” Arthur T. said.

“You’re not Catholic, are you, Arthur?” El-Hage said. “That’s a serious question. You’re Greek, so you practice Greek Orthodox.”

“Right,” Arthur T. replied.

El-Hage zeroed in on his point: “That explains it, because in my religion we believe only the pope is infallible.”

Yikes. This is the board room culture at Market Basket. It's a pretty good bet that this company will be sold at some point in the near future.  When it is, it's going to take a lot of TLC to put it back together again.

-bjmq

 

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