The second-gen chief executive of US family firm Market Basket has taken court action to block a $300 million dividend payout approved by the board of directors last week.
In a lawsuit filed 5 September in Suffolk Superior Court, Arthur T DeMoulas said the payment should be blocked until problems surrounding the make up of the board are resolved.
He said chairman Keith Cowan, although being nominally independent, was biased in favour of his opponents, including DeMoulas’s cousin and rival Arthur S.
A 1998 court order ruled at least three of the seven-member board should be independent – representing both the A-class shareholders of Arthur S's faction and the B-class shareholders of Arthur T's supporters.
Cowan was appointed chairman of the board in 2012 representing A-class shareholders, but in June he was designated an independent board member after a reshuffle of the board, and therefore obliged to equally represent the interests of both parties.
Arthur T said in the lawsuit that Cowan's role had only been "rebranded", and he was continuing to act purely in the interests of A-class shareholders.
The family feud has been running since the death of one of the founding brothers, George DeMoulas, in 1971, with his heirs – Arthur S and his siblings – claiming they had been cheated out of the majority of their shares by their uncle and his family.
Successive court rulings have managed to maintain an uneasy peace between the two factions, allowing Market Basket to continue as a family-controlled business.
The date of the hearing concerning the board and dividend payment is set for 19 September.