Published on: August 11, 2014
There were some new developments over the weekend in the Market Basket controversy…
• Democratic Gov. Deval Patrick, after a period of keeping his distance from the dispute, has now offered to step in as a mediator between the two sides of the Demoulas clan.
“By any measure, the disruption caused by your recent change in CEO has gotten out of hand, and I am writing to urge you to find a prompt resolution,” Patrick in a letter to the company's board of directors. “Your failure to resolve this matter is not only hurting the company’s brand and business, but also many innocent and relatively powerless workers whose livelihoods depend on you."
Democratic Governor Maggie Hassan of New Hampshire had previously weighed in on the disagreement, expressing support for the employees who have been demonstrating on behalf of Arthur T. Demoulas, the deposed CEO who now is trying to buy the 50.5 percent of the company that he does not own from the side of the family represented by his cousin, Arthur S. Demoulas.
• The Boston Globe
reports that the part-time employees who have seen their hours cut down to almost nothing because of all the internal strife - management insists they have not been laid off, and will be given their hours back when business gets back to normal - are facing more than just a loss of regular wages.
Also at risk, the story says, is their profit sharing, which some reports say can be as much as 15 percent of their annual income. If the employee protests and customer boycotts against Market Basket stores continue, it likely would put any profits the company might make in 2014 in jeopardy. One four-decade employee of the company said this would be a highly unfamiliar scenario, since, in his experience, that has never happened before.
The irony, the Globe
reports, is that one of the reasons the employees have supported Arthur T. Demoulas is that he is seen as being far more protective of the existing profit sharing program than the other side of the family; he championed a large contribution by the company to the profit sharing plan during the financial crisis several years ago as a way of protecting the employees.
One of the core disagreements between the two sides of the Demoulas family has been over finances, with the Arthur S. Demoulas family saying that Arthur T. Demoulas has not spent wisely, and the Arthur T. Demoulas faction saying that the other side is more interested in taking money out of the business than investing in it.
• In a related story, the Massachusetts Department of Unemployment Assistance has said that the part-time workers who have lost virtually all their hours can apply to receive unemployment benefits, despite the claim by management that they have not been laid off and remain company employees.
• A spokesman representing former CEO Arthur T. Demoulas released a statement over the weekend in which he addressed the current situation, suggesting that the board has been haggling over unreasonable counterproposals and calling for negotiations over the sale of the company to be quickly concluded. The statement reads:It was Arthur T. Demoulas’ hope and intent that this matter not be negotiated in the press. He does not believe that a war of press releases and statements is helpful to this very serious situation. However, he cannot allow false information to have a negative impact on Market Basket Associates and other stakeholders and therefore I will clarify the following on his behalf.
1. Discussions continued today with representatives of the Board and their advisors.
2. Arthur T. Demoulas reaffirms his desire and good faith for completing the purchase of the 50.5% of DSM. Those terms include an offer at their asking price, at a valuation determined pre-crisis.
3. Thus far, his offers have been rejected, not on the basis of price, but with counterproposals that have been laden with onerous terms that are far beyond comparable transactions.
4. It is Arthur T. Demoulas’ hope that the Arthur S. Demoulas family will come to the table to reach a final agreement on reasonable terms before it is too late to save this company.
5. He further hopes that the next time either side is communicating in the press, it is to announce that his bid has been accepted and that he and his whole team are going in to stabilize the company.
Insiders allied with Arthur S. Demoulas and the board have suggested that Arthur T. Demoulas has been negotiating in bad faith, and that he could return to the company in a non-CEO role as a way of stabilizing things while negotiations proceed. Arthur T. Demoulas has dismissed this as a "negotiating ploy," saying that the board is holding the company "hostage."
• Here's a fascinating statistic. Last week, there were two crowdsourcing finds created online, one to support the victims of a tornado that hit Revere, Massachusetts, last week, and the other to support Market Basket employees.
Both were started Thursday. As of this weekend, the Market Basket fund had pulled in twice as much as the tornado fund.