George Demoulas

Children

George and Evanthea Demoulas had four children; Fotene (1954–), Angelo "Evan" (1955–1993), Diana (1956–), and Arthur S. (1958–). Evanthea Demoulas died on February 8, 2008, in Westwood, Massachusetts.

Evan Demoulas

Angelo "Evan" George Demoulas was born on April 17, 1955. He graduated from Dracut High School and attended Bridgton Academy and Bentley College. At Dracut High, Demoulas was a standout running back on the school's football team.

Demoulas attended meat cutting school and was given a job in DeMoulas' meat department. He was also appointed to the company's board of directors. He eventually left the supermarket business to become a racecar driver. In 1988 he raced for Pacific Racing in British Formula 3.

On June 13, 1993, Demoulas was in Quebec to watch the Canadian Grand Prix. After the race, he and his friend and former Pacific teammate JJ Lehto were driving from the Circuit Île Notre-Dame to downtown Montreal when Demoulas' car was hit by a driver who had run a red light. Lehto survived, but Demoulas died at the scene.

He was survived by his wife, Rafaele Evans Demoulas, who was pregnant with their daughter at the time.

In October 1989, Evan Demoulas was notified that the Commonwealth of Massachusetts was seeking back taxes on $1 million worth of stock he had sold three years earlier. Demoulas was confused by the call, as he had never sold any stock. He investigated and found that his uncle, Mike Demoulas, had purchased much of his and his family's shares in Demoulas Super Markets without their knowledge.

In 1990, the widow and children of George Demoulas sued Mike Demoulas, alleging that they had been defrauded out of their shares in the company. They claimed they had trusted Mike to take care of the family after George's death and that he exploited this trust in order to have them sell all of George's real estate and 84% of his shares in Demoulas Super Markets to members of his own family pennies on the dollar. Mike Demoulas contended that his brother's heirs had willingly sold their shares in the company because they wanted money and their stock in Demoulas did not pay dividends. According to Mike Demoulas, Evanthea, asked him to sell her shares so she could have money to raise her children, Evan sold his shares so he could begin his auto racing career, and Diana and Fotene sold their shares after they saw how much money their brother received. However, once the company began paying dividends in 1988, the family saw how much money they could have made if they had kept their shares and sought to "rewrite history" in order to regain what they had sold. George's children acknowledged that they had signed many of the documents authorizing the sales and transfers, but stated they were not aware of what they were signing because they were too young to understand and trusted their uncle to take care of them. A jury found in favor of George's family.

A few weeks after the decision, George's son Arthur S. Demoulas filed a second suit, this time alleging that Mike Demoulas had diverted assets from the jointly owned family company, Demoulas Super Markets, to ones controlled by him and his children, including Market Basket. After an eighty-four-day bench trial, judge Maria Lopez found in favor of the plaintiffs. Lopez awarded George's family about $206 million for dividends on stock that had been improperly diverted and 50.5% of the company. She also ordered that all of the assets of Market Basket and the other companies controlled by Mike Demoulas and his family be transferred to Demoulas Super Markets and that Mike Demoulas be removed as president of the company.

In early September 1990, six bugs were found at the headquarters of DeMoulas Super Markets. It was alleged that Arthur S. Demoulas had planted the bugs in order to listen to the legal strategy of the other side of the Demoulas family. Michael Kettenbach, the son-in law of Mike Demoulas, sued Arthur S. Demoulas, claiming that Demoulas had "invaded his privacy rights by having listening devices planted at DSM headquarters." In 1994, a jury found in favor of Arthur S. Demoulas. However, a new trial was granted after a woman came forward with new evidence – a recording of her boyfriend admitting to bugging the office for Arthur S. Demoulas. The case was damaged though when the woman admitted to being a crack cocaine addict who received about $500,000 in housing and other expenses from the family of Telemachus Demoulas and the man on the tape testified that he had been lying during the recorded conversation. On August 4, 1997, Arthur S. Demoulas was again cleared of wiretapping charges by a federal jury.

In 1991, George Demoulas' family sued Mike Demoulas, Arthur T. Demoulas, and Demoulas Super Markets, Inc. chief financial officer D. Harold Sullivan, alleging that the three violated the Employee Retirement Income Security Act of 1974 by using their positions as the trustees of the company's employee profit-sharing plan to make fiscally irresponsible real estate loans to friends and business associates. The United States Department of Labor filed a similar complaint six months later. On May 31, 1994, the Department of Labor announced that they had reached a settlement in which the trustees agreed to sell $22 million of the loans by July 11 or purchase them themselves as well as pay the plan $750,000 to make up for the dropped interest rates on the loans (unless the loan recipients paid the money instead). The trustees also agreed not to make any similar investments. The trustees admitted no wrongdoing in the case. Despite the heavy investment in risky real estate loans, the plan never posted a loss. In the civil case, Judge Rya W. Zobel ruled that the trustees' actions were "wrong but not corrupt" and that the settlement with the Department of Labor was "an adequate remedy". Therefore, she denied the request to have them removed.

In 1997, the Massachusetts Supreme Judicial Court upheld a lower court's ruling that Arthur T. Demoulas had presented the Demoulas Super Markets Board of Directors with “misleading, inaccurate, and materially incomplete” information in order to receive a rejection and keep his cousins from receiving any of the profits from Lee Drug, a pharmacy chain he started after the board rejected his proposal to start a pharmacy division of Market Basket.

In a 2010 memo to the Board of Directors, Arthur S. Demoulas accused Arthur T. Demoulas of "plundering" millions by paying millions in excessive real estate prices for new Market Basket store locations. One example cited in the memo alleged that Arthur T. had recommended that the company pay $20.9 million to purchase a property in Bourne, Massachusetts, owned by an entity in which he was a major investor. After the sale, Arthur S. had the property appraised by a Boston real estate executive, who valued the property at $9 million. He also accused Arthur T. of paying "grossly excessive fees" to Retail Development and Management Inc., a real estate firmed owned by his brothers-in-law Michael Kettenbach and Joseph Pasquale that oversaw Market Basket's real estate and helped it develop new stores. He and his attorneys argued that the 7.5% of the total development costs "was far in excess" of the prevailing market rate of 2% to 3%. Arthur T. denied his cousin's claim. He argued that Arthur S. trumped up the charges in order to take control of the company and pay himself and the other shareholders more money. Attorneys for Arthur T. noted that Cushman & Wakefield later appraised the Bourne property at $25.5 million. Arthur T. also defended his arrangement with Kettenbach and Pasquale, which he said allowed Market Basket to purchase properties without alerting its competitors, thus avoiding a bidding war and saving the company money. The Board of Directors hired Mel L. Greenberg, a retired judge, to investigate Arthur S.' claims. Greenberg found that there was no wrongdoing by Arthur T. in the purchase of real estate (including the Bourne property) that the fees paid to Retail Development and Management were not excessive. However, he did find that Arthur T. and the Board of Directors had neglected their fiduciary duties by not looking into whether or not the company would have been better off if it had exercised its option to purchase its store in Somersworth, New Hampshire, instead of renting it from a company in which Arthur T. and his family owned a 55% stake.