EFiled: Oct 01 2025 01:13PM EDT

Transaction ID 77209814
Case No. 2025-1020-JTL
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

DSM HOLDCO, INC.; DEMOULAS )

SUPER MARKETS, INC.; and JAY K. )
HACHIGIAN, STEVEN J. COLLINS, )
and MICHAEL KEYES, in their )
capacities as Directors of the Board of )
DSM HoldCo, Inc. and the Board of )
Demoulas Super Markets, Inc., )
)
Plaintiffs / Counterclaim ) C.A. No. 2025-1020-JTL
Defendants, )
)
v. )
)
ARTHUR T. DEMOULAS,
)
Defendant / Counterclaim )
Plaintiff. )

DEFENDANT’S ANSWER TO VERIFIED COMPLAINT

PURSUANT TO 8 DEL. C. § 225(a) AND VERIFIED COUNTERCLAIM

Defendant Arthur T. Demoulas (“Mr. Demoulas” or “Defendant”), by and

through his undersigned counsel, hereby (i) answers the Verified Complaint

pursuant to 8 Del. C. § 225(a) (the “Complaint”), filed on September 9, 2025 by

plaintiffs DSM HoldCo, Inc., (“DSM”), Demoulas Super Markets, Inc., (“OpCo”

and, together with DSM, “Market Basket” or the “Company”), and Jay K.
Hachigian, Steven J. Collins, and Michael Keyes (collectively, the “Director-

Plaintiffs”) (together, “Plaintiffs”), and (ii) asserts Mr. Demoulas’s verified

counterclaim for improper removal and reinstatement as President and CEO,

pursuant to 8 Del. C. § 225(a), as follows:

INTRODUCTION

As set forth further below in his verified counterclaim, Mr. Demoulas’s

removal from his positions as President and CEO of DSM Holdco, Inc. (“DSM”)
was effectuated by the Director-Plaintiffs in breach of their fiduciary duties.
The Director-Plaintiffs’ unlawful actions were not motivated by any rational

business purpose or to advance the Company’s best interests, but instead were

taken at the behest of Mr. Demoulas’s three sisters and their family members

(the “Sisters”), who together own ~60% of DSM and to whom the Director-

Plaintiffs are beholden, to further the Sisters’ goals in their family infighting

with Mr. Demoulas and the family’s trust litigation pending in Massachusetts.

As explained below, all of the Director-Plaintiffs were appointed by the Sisters

and have family and/or business connections with them. As a result of these

conflicts, the beholden Director-Plaintiffs purged the Company’s renowned

management team using two false pretexts without first implementing a plan

for the succession of leadership of the highly successful multibillion-dollar

enterprise.

Mr. Demoulas acknowledges that it is rare to challenge a board of

directors’ decision about to whom it delegates day-to-day management.

However, the systematic actions of the Director-Plaintiffs at the Sisters’

direction for personal rather than business reasons make this case unique.

Those unlawful actions include:

• The Sisters spent years packing DSM’s board of directors (the
“Board”) with loyalists whose primary qualification was that they
would do the Sisters’ bidding and removing any directors who would
stand in the way of their personal goals.
• The Board created an unlawful shadow “Executive Committee” to
box out the one director remaining at the time who was not subject
to the Sisters’ control, Bill Shea, who had served on the Board mostly
as Chairman for decades, and purported to endow the Executive
Committee with virtually the full authority of the Board.
• The Executive Committee then initiated a pretextual investigation
into Mr. Demoulas to justify his improper termination, which was
preordained by the Sisters, and later asked the lone remaining
independent director to ratify the decision without providing him
with any information about the decision. The Sisters then used these

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 developments to support their positions in unrelated Massachusetts
trust litigation they were supporting against Mr. Demoulas.
• The Executive Committee hired a purported “independent” law firm,
Quinn Emanuel Urquhart & Sullivan, LLP (“Quinn Emanuel”), to
conduct the sham investigation, even though Quinn Emanuel also
purports to -- then and now -- represent the Executive Committee,
the Board, and the Sisters.
• The Director-Plaintiffs rebuffed former-director Shea’s informal and
formal requests for books and records under 8 Del. C. § 220(d)
concerning the Executive Committee and its purported basis for
launching the sham investigation.
• The Executive Committee, made up of the Director-Plaintiffs, wasted
substantial corporate resources by causing Quinn Emanuel to
conduct the pretextual investigation, including requiring that
numerous Market Basket employees be interviewed, in search of a
sham justification to terminate Mr. Demoulas.
• The Sisters removed Mr. Shea from the Board following his latest
demand for books and records to the Director-Plaintiffs relating to
the removal of Mr. Demoulas and his management team from the
Company.
• The Director-Plaintiffs placed six of DSM’s top executives, including
Mr. Demoulas’s oldest daughter, Madeline, and son, Telemachus
(T.A.), on administrative leave pending the outcome of the so-called
investigation without any basis, creating a void at the Company
without a plan for interim replacement executives.
• The Director-Plaintiffs immediately orchestrated a media campaign
to damage Mr. Demoulas’s reputation in the New England
community by falsely portraying him throughout the region as an
uncooperative “dictator.”
• The Director-Plaintiffs permitted one of the Sisters’ sons, who had
previously misappropriated corporate assets for his personal
business endeavors, to assume the de facto leadership role in Mr.
Demoulas’s absence.
• The Director-Plaintiffs engaged in a campaign to manipulate and
falsify the minutes of Board meetings, including modifying minutes
over the objection of the corporate Secretary -- and then barring the
Secretary from attending Board meetings after she refused to
whitewash the minutes to omit evidence that the Board lacked any
business rationale to remove Mr. Demoulas.
• Employees aligned with the Sisters’ goals reportedly deleted relevant
text messages in the days immediately following Mr. Demoulas’s

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 placement on administrative leave and initiation of the pretextual
investigation.
• Following the conclusion of the investigation, the Director-Plaintiffs
terminated Mr. Demoulas on September 9, 2025, just minutes after
the 10:00 p.m. conclusion of an unsuccessful mediation between the
parties before The Honorable Joseph R. Slights III, then filed this
pre-prepared lawsuit at 10:37 p.m.

By way of background, before his purported termination, Mr. Demoulas

was the President and Chief Executive Officer (“CEO”) of DSM since its

inception in 2014. He has been involved in managing Market Basket for more

than 50 years. Under Mr. Demoulas’s leadership, Market Basket has

generated higher Retailer Preference Index (“RPI”) scores than Costco, Trader

Joe’s, Sam’s Club, and Publix. In fact, Market Basket has the second highest

RPI score among 71 companies nationwide.1

Given the Company’s exceptional performance and Market Basket’s

vibrant culture, it came as a surprise to Mr. Demoulas when three members of

DSM’s Board purportedly formed the illicit Executive Committee, which

proceeded unlawfully to put Mr. Demoulas and his management team on leave

for an indefinite period. The limbo in which the Executive Committee placed

Mr. Demoulas lasted nearly three-and-a-half months until the Board finally

terminated Mr. Demoulas on September 9, 2025, late in the evening, at the

conclusion of an unsuccessful mediation, and immediately filed this pre-

prepared baseless lawsuit. As detailed below in the verified counterclaim, the

process that led to Mr. Demoulas’s termination was riddled with conflicts,

trickery, deceit, and pervasive breaches of DSM’s Bylaws and the Director-

Plaintiffs’ fiduciary duties.

1 https://www.dunnhumby.com/resources/reports/retail-trends/en/eighth-annual-
retailer-preference-index-rpi-for-u-s-grocery/.

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 Accordingly, Mr. Demoulas denies each and every allegation in the

Complaint, including those contained in structural headings, except as

expressly admitted herein, and specifically denies that Plaintiffs are entitled

to the relief sought in their prayer for relief. Except when noted otherwise, the

capitalized terms appearing hereunder shall refer to the capitalized terms

defined in the Complaint. Mr. Demoulas does not admit the accuracy or

completeness of any terms defined in the Complaint. Further, Mr. Demoulas

reserves the right to amend and/or supplement this Answer. Finally, Mr.

Demoulas herein asserts his affirmative defenses and Section 225

counterclaim for improper removal and reinstatement as President and CEO.

ANSWER

1. Plaintiffs DSM HoldCo, Inc., a Delaware corporation (“DSM”);

Demoulas Super Markets, Inc., a Massachusetts corporation and a wholly-
owned subsidiary of DSM (“OpCo” and, together with DSM, “Market Basket”
or the “Company”); and Jay K. Hachigian, Steven J. Collins, and Michael
Keyes, the latter in their capacities as the three Directors of Plaintiffs DSM
HoldCo, Inc. and OpCo; by and through their undersigned counsel, hereby
bring this Verified Complaint as follows:

ANSWER: The allegations in Paragraph 1 purport to state that

Plaintiffs bring their Complaint, to which no response is required. To the

extent a response is required, Mr. Demoulas denies the allegations in

Paragraph 1, except admits that Plaintiffs purport to bring the Complaint, that

DSM is a Delaware corporation, that OpCo is a Massachusetts corporation,

and that Jay K. Hachigian, Steven J. Collins, and Michael Keyes currently

make up the entirety of the Board of Directors for both DSM and OpCo, even

though DSM’s Bylaws explicitly state that there must be a minimum of five

directors seated on the Board—and the Sisters unlawfully removed the two
independent directors.

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 NATURE OF THE ACTION

2. DSM Holdco, Inc. is a Delaware corporation that is well known

in New England for its operation, through its wholly-owned subsidiary OpCo,
of an iconic group of ninety supermarkets now named Market Basket. For more
than a century, customers and communities throughout New England have
relied on Market Basket to deliver the highest quality fresh meats, produce
and other grocery products at the lowest possible prices. It is fair to say that
Market Basket has one of the best known and most beloved brands in New
England.

ANSWER: Mr. Demoulas admits the allegations in Paragraph 2.

3. Plaintiffs Hachigian, Collins, and Keyes (the “Plaintiff
Directors”) are the members of the Board of Directors of Market Basket,2 with
Collins the longest serving member of the three (since 2019) and Keyes the
most recently elected (since 2023). The Plaintiff Directors are charged with the
fiduciary responsibility of overseeing the Company’s operations on behalf of
the Company and all its stockholders.

ANSWER: Mr. Demoulas admits the allegations in the first sentence

and footnote 2 of Paragraph 3. The second sentence of Paragraph 3 states legal

conclusions to which no response is required. To the extent a response is

required, Mr. Demoulas denies the allegations in the second sentence of

Paragraph 3, except admits that the Director-Plaintiffs have a fiduciary duty

to act in the best interests of the Company and all of its stockholders in their
management of the Company’s business and affairs.
4. Up through his recent termination on September 9, 2025,
Market Basket’s then-CEO and President, Defendant Arthur T. Demoulas
(“Defendant” or “Mr. Demoulas”), had a long-standing history of exercising his
own unfettered discretion as to virtually every important decision at the
Company—while ignoring and stonewalling the Market Basket Board. After
joining the Board, the Plaintiff Directors decided to depart from the path of the

2The Board of Directors of each of DSM and OpCo is composed of the same individuals
and similarly constituted. For the sake of efficiency and convenience, the Board of
Directors of each of DSM and OpCo typically convene and hold joint meetings. Except
as otherwise expressly provided herein, and unless the context clearly provides
otherwise, references to the “Board” should be construed to be references to the Boards
of Directors of both DSM and OpCo.

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prior Board members, who either had capitulated to Mr. Demoulas’s bullying
tactics or, like the recently removed fourth Board Member Bill Shea, willingly
did Mr. Demoulas’s bidding. The Plaintiff Directors decided to put their foot
down and, in the words of an immortal football coach in New England, “Do
Your Job”—which they began to try to do several years ago by seeking to
discharge their fiduciary responsibilities of oversight over Mr. Demoulas and
the Company’s operations. This did not sit well with Mr. Demoulas, who fought
the Plaintiff Directors every step of the way.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 4,

except that he oppoadmits being the President and CEO of DSM and OpCo

until he was improperly placed on administrative leave by the Executive

Committee on May 28, 2025, and that the Director-Plaintiffs purported to

officially terminate Mr. Demoulas as President and CEO of the Company on

September 9, 2025.
5. As Mr. Demoulas has said, “[t]here’s only one boss in the
company. There’s not two. There’s not three. There’s not five.”3 Even
though he is only a minority stockholder, owning just 28.4% of DSM’s
outstanding stock, for years Mr. Demoulas has acted as if he were the sole
owner of the Company and rejected any form of even the most basic oversight
by the Board. Contrary to Delaware law and basic principles of corporate
governance, he has refused to provide the Board with basic information about
the Company and its plans or to comply with basic, lawful directives of the
Board He also insisted that he, and not the Board, would select his successor,
stating to the Board that he would unilaterally install his children into the top
positions in the C-suite following his eventual departure—without regard for
the Board’s views on the matter. Under Delaware law, Mr. Demoulas—like all
CEOs and other corporate officers—has a fiduciary duty, at minimum, to keep
the Board informed of operational and other significant matters and to follow
the lawful directives of the Board. But not according to Mr. Demoulas, who
acknowledged no one’s authority but his own.

ANSWER: The first sentence of Paragraph 5 purports to attribute

statements from a news article to Mr. Demoulas, and Mr. Demoulas

respectfully refers the Court to that news article for a complete description of

3Welker, Grant, Market Basket CEO Power Struggle: What You Need to Know, BOS.
BUS. J. (May 29, 2025), https://www.bizjournals.com/boston/news/2025/05/29/market-
basket-demoulaspower-struggle-explained.html, attached as Ex. A.

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its contents and denies any allegations in the first sentence of Paragraph 5

that are inconsistent with its contents. By way of further response, Mr.

Demoulas states that the quote is taken out of context and that in context the

statement was: “I’m running this company in the best interest of this

organization. I’m running this company with the philosophy, very strong

philosophy there’s only one boss in the company. There’s not two. There’s not

three. There’s not five.” Mr. Demoulas denies the allegations in the second

sentence of Paragraph 5, except admits that he controls approximately 28.4%

of DSM’s outstanding stock. The third and fifth sentences of Paragraph 5 state

legal conclusions to which no response is required. To the extent a response is

required, Mr. Demoulas denies the allegations in the third and fifth sentences

of Paragraph 5. Mr. Demoulas denies the remaining allegations in Paragraph

5.
6. When it started with a single store at its founding in 1917, the
Company was run almost single-handedly by Mr. Demoulas’s grandfather. The
same was true for Mr. Demoulas’s father, Mike Demoulas, who took over when
Mr. Demoulas’s grandfather died. The present Mr. Demoulas for years
exercised the same centralized power as his forebears. But today, thanks to the
contributions of many stakeholders, Market Basket has grown into a ninety-
store powerhouse, with revenues of almost $8 billion per year, employing over
30,000 dedicated associates, and providing groceries at “More For Your Dollar”
prices to its customers and dozens of underserved communities in New
England. A company of Market Basket’s size, operational structure, and
importance to so many stakeholders simply cannot tolerate the risks of
consolidating all decision-making authority and power in a single individual—
particularly one who outright refuses any attempt at oversight.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 6,

except admits that the first Market Basket store was founded in 1917, and

Market Basket grew under the leadership of Mr. Demoulas’ grandfather, under

the leadership of Mr. Demoulas’ father, and under Mr. Demoulas’ leadership.
Mr. Demoulas further admits that Market Basket has grown to 90 stores,

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nearly $8 billion in revenue, and approximately 30,000 associates thanks to

the combined efforts of company leadership and, most importantly, the

associates at each store working to make the customer experience special all

across New England.

7. The Plaintiff Directors repeatedly tried to work with Mr.
Demoulas for years to gain his cooperation. Mr. Demoulas would have none of
it. For example, despite numerous requests, Mr. Demoulas never gave the
Board an annual budget, did not give the Board advance notice (let alone seek
input) about significant capital outlays, and never permitted the Board to meet
with a single officer or senior manager of the Company, other than the
Company’s CFO. Mr. Demoulas even forbade the Board from entering the
Market Basket headquarters in Tewksbury, Massachusetts; the Board had to
hold its meetings at a local hotel. Mr. Demoulas at one point openly dared the
Plaintiff Directors to fire him rather than submit to meaningful Board
oversight, apparently banking on an employee walkout and customer boycott—
like the one that followed his temporary ouster in 2014, discussed below.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 7,

except admits that the Board holds its meetings at a nearby local hotel in

Andover, Massachusetts as has been Market Basket’s practice for decades.

8. In addition, recognizing that one of the principal responsibilities
of any board of directors is overseeing management and ensuring that the
Company at all times has appropriate senior leadership in place to safeguard
the long-term health of the business, the Board sought to engage in discussions
with the now 70-year-old Mr. Demoulas about succession planning. But Mr.
Demoulas hijacked the process, thwarting the Board’s efforts to identify and
evaluate successors, thereby impeding the Board’s ability to discharge one of
its most fundamental duties. He categorically refused to participate in any
substantive discussions with the Board about a succession plan, other than his
unilateral plan to install his own children upon his eventual departure. He
dictated this plan without even permitting the Board to meet his children,
denying the Directors a meaningful opportunity to assess whether Mr.
Demoulas’s children would have the baseline qualifications and experience to
manage a business of this size, let alone determine whether they would be the
best candidates. Mr. Demoulas treated the decision as his and his alone and
expected the Board and the Company’s owners simply and blindly to rubber
stamp it.

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 ANSWER: Mr. Demoulas denies the allegations in Paragraph 8. Mr.

Demoulas expressly denies that he “dictated” succession planning to the Board.

To the contrary, Mr. Demoulas has stated clearly to the Board on multiple

occasions that if there were an immediate or unexpected need for a new CEO

he would recommend Madeline and T.A. But he recognizes that it is the Board’s

duty to evaluate qualified potential candidates to succeed him as President and

CEO and to choose the right successor who is in the best interests of the

Company and its stockholders. Mr. Demoulas has also told the Board that the

most qualified people to succeed him as CEO are Madeline and T.A. Demoulas,

that if the Board did not appoint them to succeed him, it should consider the

elevation of only inside candidates who understood the culture of the Company,

and, if it could not find a qualified internal candidate, only then should it

consider candidates from outside the Company.

9. Finally, having gotten nowhere with Mr. Demoulas, in August
2024, the Plaintiff Directors adopted a formal resolution directing Mr.
Demoulas to comply with basic requirements of Board oversight, including: (1)
providing the Board with an annual budget and periodic budget updates
during the course of the year; (2) giving the Board advance notice of and
obtaining approval for all capital expenditures (“CapEx”) in excess of $10
million, and informing the Board of any material events at the Company; (3)
requiring senior management of Market Basket to attend and present at Board
meetings, so that the Board could assess their roles and performance and form
functional relationships with them; and (4) directing Mr. Demoulas to work
together with the Board on a mutually satisfactory succession plan. Despite
the Plaintiff Directors’ persistent requests that Mr. Demoulas comply with
these straightforward directives, months and months went by without Mr.
Demoulas even beginning to perform a single one of them.

ANSWER: The allegations in the first sentence of Paragraph 9 purport

to characterize resolutions from August 2024, and Mr. Demoulas respectfully

refers the Court to the document entitled, “Minutes of Executive Session”, and
dated August 22, 2024, for a complete and accurate description of its contents

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and denies any allegations that are inconsistent with its contents. Mr.

Demoulas further states that Mr. Demoulas understood the items listed in the

document to be topics for discussion only—which topics were discussed

productively at the August 22, 2024, meeting—not a list of resolutions or

directives. All matters were discussed and it was left that some of these

discussion items were unresolved and no directive was given. Mr. Demoulas

denies the allegations in the second sentence of Paragraph 9. Mr. Demoulas

further responds that Plaintiffs’ rendition of events is misleading and that, in

reality: (1) Company management has historically provided the Board with

budgets through 2021, which were later replaced with forward-looking cash

flow statements, among other financial statements, at each Board meeting and

explained to the Board that it was open to changing the format of that

reporting to formal budgets if the Board so desired; (2) Company management

provided CEO updates of the status of all CapEx projects at every Board

meeting and was willing to work with the Board on a process to provide notice

of capital expenditures in excess of some dollar value to be agreed upon, while

safeguarding the secrecy of potential new real estate acquisitions for store

locations given the potential for information of that sort to be leaked in a

closely held family corporation in which the stockholders enjoy extensive

information rights; (3) Company management was willing to attend Board

meetings at the request of the Board to report on specific topics and interact

with the Board; and (4) Mr. Demoulas was open to discussing long-term

succession planning with the Board.

10. Worse still, when Mr. Demoulas saw the proverbial writing on
the wall—that he would not be able to continue skirting the Board’s directives
and just get his way—he apparently began plotting with his closest lieutenants
to sabotage the Company in an effort to pressure and exert leverage over the
Board.

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 ANSWER: Mr. Demoulas denies the allegations in Paragraph 10. Mr.

Demoulas further responds that there is no basis for this false narrative, which

was manufactured by the Director-Plaintiffs as a pretext to form the Executive

Committee and initiate the allegedly independent investigation.

11. In a meeting of the Board in March 2025, it was decided that
Plaintiff Hachigian would replace Bill Shea as Chairman of the Board. Mr.
Demoulas, who was present at the meeting, reacted angrily at the replacement
of his last hand-picked Director, going on a half-hour tirade against the
Plaintiff Directors and then cutting the meeting short. Later that month, the
Board learned that Mr. Demoulas appeared to have a secret plan: If the Board
were to take disciplinary action against him for refusing to comply with its
directives, he would instigate through his closest lieutenants a disruptive
employee work stoppage and customer boycott, attempting to repeat what
occurred in 2014 during a dispute between him and his cousin, Arthur S.
Demoulas, over Mr. Demoulas’s termination at that time for insubordination.
As Mr. Demoulas (and the Board) knows, that 2014 work stoppage cost the
Company hundreds of millions of dollars and only ended when Mr. Demoulas
and his three siblings were collectively able to borrow $1.6 billion to buy out
his cousins. Now, ten years later, Mr. Demoulas was planning to run the same
playbook again if the Board did not stand down. Fortunately, the Plaintiff
Directors got wind of his plans, which would have been extremely harmful to
the Company.

ANSWER: Mr. Demoulas admits the allegations in the first sentence of

Paragraph 11. Mr. Demoulas denies the remaining allegations in Paragraph

11, except he admits that in 2014, Market Basket customers conducted a

boycott and employees conducted a work stoppage that led to Mr. Demoulas

and the Sisters borrowing $1.6 billion to buy out their cousins.
12. In response to learning of these plans, the Board suspended Mr.
Demoulas and several of his top lieutenants with pay on May 28, 2025. Since
that time, Mr. Demoulas, directly and through various proxies, has engaged in
a scorched-earth campaign to disrupt Company operations, threaten and
intimidate Company associates to stay loyal to him, and smear the Board and
the other stockholders of the Company in the media—all in his own self-
interest to return to power. For example, Mr. Demoulas has been behind
numerous television and radio appearances, as well as interviews in the press,
by his top two lieutenants, Joseph Schmidt and Tom Gordon, who were
terminated from the Company in July 2025 for misconduct, blasting the Board

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and other Company stockholders. He was also behind, among other things:
Schmidt and Gordon’s illegal trespassing at twenty-six stores in a matter of
days and Schmidt’s unlawful after-hours entry into the Market Basket
headquarters in an effort to intimidate associates, necessitating the Company
to obtain an injunction against their continuing trespass; inducing a third
party named David D’Alessandro, former CEO of John Hancock and a close
friend of the head of Mr. Demoulas’s public relations firm, to “write” an op-ed
in The Boston Globe calling for a boycott, despite acknowledging that he was
unfamiliar with the facts; and causing then-Board member Bill Shea to leak to
The Boston Globe a confidential letter to the Board under his signature, but
which he admittedly did not write, containing numerous untruths,
accompanied by various confidential Market Basket documents that were also
provided to the media and which the media then used in their published
reports.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 12,

except admits that on May 28, 2025, the Board suspended Mr. Demoulas and

several key members of the Company’s management team, including two of

Mr. Demoulas’s children, Madeline and T.A. Demoulas, and that the supposed

basis for the suspensions was the false narrative that Mr. Demoulas was not

cooperating with the Board and planning an employee walkout and a customer

boycott.
13. Lest there be any doubt about Mr. Demoulas’s role in these
activities, at any time since his suspension Mr. Demoulas could have put the
word out publicly or privately to stop his side’s media attacks. Instead, Mr.
Demoulas has done the opposite. He issued a public statement in support of
his lieutenants and their actions, and he (directly and through his designated
spokesperson) has targeted the Board and the majority stockholders, trying to
paint them as villains who would ruin the Market Basket culture and sell the
company to private equity firms (despite the fact that the Company’s Charter
effectively requires his consent to any such sale).

ANSWER: Mr. Demoulas denies the allegations in Paragraph 13,

except admits that during his suspension he generally refrained from

commenting on the sham investigation or the circumstances of the suspensions

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other than to show support for his Market Basket colleagues who the Board

unfairly made into pariahs without any basis.

14. No company, no matter how successful, can tolerate this type of
behavior from a corporate officer, let alone the President and CEO. Mr.
Demoulas’s actions interfered with the Board’s ability to fulfill its fiduciary
responsibilities to set the strategic direction of the Company and oversee the
Company’s management, and to ensure the Company’s continued success for
the long term—for all its stockholders, customers, associates, and the New
England communities it serves. And Mr. Demoulas revealed his true colors,
that he cared more about getting his own way than about the Company and its
constituents’ best interests and future—just the opposite of the carefully
cultivated public persona that Mr. Demoulas portrays to the outside world.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 14.

15. Accordingly, Mr. Demoulas forced the Board to choose between
accepting his autocratic control of Market Basket or terminating him in order
to protect a vibrant and growing business that cannot flourish over the long-
term under the leadership of a dictator. As is its right, the Board therefore
terminated Mr. Demoulas as President and CEO of the Company effective
September 9, 2025. The Plaintiff Directors were duty-bound to act in the best
interests of the Company and all of its stockholders and took this step to ensure
a solid long-term future for Market Basket, its associates and customers.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 15,

except admits that the Plaintiff Directors purported to terminate Mr.

Demoulas on September 9, 2025, in breach of their fiduciary duties to Market

Basket.
16. Mr. Demoulas contests his termination. Accordingly, Plaintiffs
now bring this proceeding under 8 Del. C. § 225(a) for a judicial declaration
that the resolution adopted at the September 9, 2025 special meeting of the
Board of DSM removing Mr. Demoulas as CEO and President of DSM is valid
and effective. Plaintiffs also seek a judicial declaration that the resolution
adopted at the September 9, 2025 special meeting of the Board of OpCo
removing Mr. Demoulas as CEO and President of OpCo is also valid and
effective.

ANSWER: Mr. Demoulas admits the allegation in the first sentence of

Paragraph 16. The remainder of Paragraph 16 purports to summarize

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Plaintiffs claims and states legal conclusions, to which no response is required.

To the extent a response is required, Mr. Demoulas denies the remaining

allegations in Paragraph 16 and specifically denies that Plaintiffs are entitled

to the relief they seek in this action.

PARTIES

17. Plaintiff DSM HoldCo., Inc., is a Delaware corporation with its

principal place of business in Tewksbury, Massachusetts. DSM is a family-
owned Delaware corporation that, through Plaintiff OpCo, a wholly-owned
subsidiary incorporated in the Commonwealth of Massachusetts, operates
ninety stores in Massachusetts, New Hampshire, Maine, and Rhode Island,
known familiarly as Market Basket. Market Basket employs more than 30,000
associates throughout New England. The associates are provided with a
lucrative profit-sharing plan; they want stability and continued financial
success for a company whose bottom line they believe and share in.

ANSWER: Mr. Demoulas admits the allegations in Paragraph 17.

18. Plaintiff Jay K. Hachigian has served as a Director of
Market Basket since 2021, and he currently serves as the Chairman of the
Board and of the Board’s Executive Committee (defined below). Mr. Hachigian
is a prominent New England attorney who recently, for example, was involved
in a major transaction for the region’s beloved Boston Celtics. He is a name
partner of the law firm Gunderson Dettmer Stough Villeneuve Franklin &
Hachigian, LLP and a founding partner and leader of that firm’s Boston office.
During his forty years of practice, Mr. Hachigian has provided advice to
hundreds of companies, both public and private, including advice about
corporate governance issues such as those posed by Mr. Demoulas here.

ANSWER: Mr. Demoulas admits the first sentence of Paragraph 18,

except denies that the Executive Committee was ever properly formed, and

therefore, states that the Executive Committee cannot have a Chairman

appointed to it. Mr. Demoulas is without knowledge as to the remainder of the

allegations in Paragraph 18 and therefore denies them, except admits that Mr.

Hachigian is a named partner at the law firm Gunderson Dettmer Stough

Villeneuve Franklin & Hachigian, LLP.

15
 19. Plaintiff Steven J. Collins has served as a Director of Market
Basket since 2019 and is a member of the Board’s Executive Committee. Mr.
Collins is a founding member and Managing Director of Boston-based Exeter
Capital. Before that he was a partner in the prestigious firm Advent
International in Boston. Mr. Collins is a very experienced director, having
served on the boards of various consumer and retail companies, both public
and private, throughout his long career.

ANSWER: Mr. Demoulas admits the first sentence of Paragraph 19,

except denies that the Executive Committee was ever properly formed, and

therefore, states that the Executive Committee cannot have members. Mr.

Demoulas is without knowledge as to the remainder of the allegations in

Paragraph 19 and therefore denies them, except admits that Mr. Collins is a

founding member and a Managing Director of the Boston-based private equity

firm Exeter Capital.

20. Plaintiff Michael Keyes has served as a Director of Market Basket
since 2023 and is a member of the Board’s Executive Committee. Mr. Keyes is
a Senior Director and member of the Investment Committee at
Intercontinental Real Estate Corporation, a major Massachusetts real estate
investment management company. One of the unique attributes of Market
Basket that separates it from its competition is that it typically owns the real
estate on which its stores are located; Mr. Keyes therefore brings his strong
expertise in real estate to bear as a Director of Market Basket.

ANSWER: Mr. Demoulas admits the first sentence of Paragraph 20,

except denies that the Executive Committee was ever properly formed, and

therefore, states that the Executive Committee cannot have members. Mr.

Demoulas is without knowledge as to the allegations in the second sentence of

Paragraph 19 and therefore denies them, except admits that Mr. Keyes is a

Senior Director of acquisitions at Intercontinental Real Estate Corporation,

where he is an Investment Committee member. Mr. Demoulas further states

that on one occasion in 2022 Mr. Keyes and his employer competed against
Market Basket in an effort to purchase one of DSM’s most successful store

16
locations and the underlying real estate from an entity owned by Joseph

Pasquale, a stockholder and the husband of Caren Demoulas. Thus, what

Plaintiffs describe as an attribute that Mr. Keyes brought to the DSM Board

was actually a demonstrated conflict. Mr. Demoulas denies the allegations in

the third sentence of Paragraph 20, except admits that Market Basket owns

much of the real estate on which its stores are located.

21. Defendant Arthur T. Demoulas is a resident of Lowell,
Massachusetts. Mr. Demoulas is a minority stockholder of Market Basket,
owning 28.4% of DSM’s outstanding stock. Prior to his removal, Mr. Demoulas
served as the CEO and President of Market Basket. Since DSM’s incorporation
in 2014, Mr. Demoulas has not served as a member of the Market Basket Board
of Directors

ANSWER: Mr. Demoulas denies the allegations in Paragraph 21,

except admits that he is a resident of Lowell, Massachusetts, that he has not

served as a member of the Market Basket Board of Directors, and that he has

control over approximately 28.4% of DSM’s outstanding stock. Mr. Demoulas

further states that he was improperly placed on administrative leave on May

28, 2025, but that he remains the President and CEO of Market Basket

because his purported termination was done in breach of DSM’s Bylaws and

the Director-Plaintiffs’ fiduciary duties to Market Basket.

JURISDICTION

22. This Court has jurisdiction under 8 Del. C. § 225(a), as relevant

here, to hear the application of any director to determine the validity of any
removal of an officer of any Delaware corporation and to make such order or
decree as may be just and proper in connection therewith.

ANSWER: The allegations in Paragraph 22 are legal conclusions to

which no response is required.

23. This Court also has subject matter jurisdiction pursuant to 10
Del. C. § 341 because Plaintiffs seek equitable relief as alleged herein.

17
 ANSWER: The allegations in Paragraph 23 are legal conclusions to

which no response is required.

FACTUAL BACKGROUND

I. Market Basket Was Incorporated In 2014 By The Demoulas

Family, Which Intentionally Chose A Non-Family Board To
Oversee The Company’s Management And Operations
24. Market Basket is an iconic company, operating ninety
supermarkets across New England, with its headquarters in Tewksbury,
Massachusetts. The Company originated from a single store started in 1917 by
Athanasios Demoulas, who had immigrated from Greece to Lowell,
Massachusetts.

ANSWER: Mr. Demoulas admits the allegations in Paragraph 24.

25. The progeny of Athanasios Demoulas includes (in birth order)
Francis [sic] Demoulas Kettenbach, Glorianne Demoulas Farnham, Arthur T.
Demoulas, and Caren Demoulas Pasquale, all the children of Athanasios’s son,
Mike Demoulas. On December 10, 2014, these four siblings incorporated
Market Basket in Delaware, under the name DSM HoldCo, Inc.

ANSWER: Mr. Demoulas admits the allegations in Paragraph 25,

except to note that his father, who was referred to by many as “Mike,” was

formally named Telemachus Arthur Demoulas.

26. The creation of DSM followed a major dispute in 2014 regarding
the management and ownership of the business between two sets of
Athanasios’s descendants: the four siblings, and the then-majority owner of the
predecessor company, Arthur S. Demoulas (“Arthur S.”), and his immediate
family. Arthur S. had been awarded majority ownership of what is now Market
Basket back in 1994 by a Massachusetts Superior Court Judge, after a finding
that Arthur T. Demoulas, the Defendant here, had taken corporate
opportunities and engaged in self-dealing transactions to the detriment of the
Arthur S. family. See Demoulas v. Demoulas Super Markets, Inc., 424 Mass.
501 (1997). The two sides of the family had no love lost between them, and
when Arthur S. removed Mr. Demoulas as CEO in 2014, Mr. Demoulas and his
lieutenants orchestrated a retaliatory “walkout,” inducing Market Basket
associates to walk off the job, suppliers to refuse to fulfill shipments, and
customers to boycott the stores. Mr. Demoulas’s walkout had its intended effect
and brought Market Basket to its knees, causing approximately three-quarters
of a billion dollars in lost sales in just a few weeks. Ultimately, the dispute was

18
resolved when the four siblings together bought out Arthur S. and his family’s
majority share of the business for $1.6 billion, and incorporated DSM. All four
siblings have since collectively repaid the $1.6 billion of debt that was
undertaken as part of the 2014 buyout.

ANSWER: Mr. Demoulas admits the first sentence of Paragraph 26.

The second sentence of Paragraph 26 purports to characterize the opinion of

the Massachusetts Superior Court, to which no response is required. To the

extent a response is required, Mr. Demoulas refers the Court to the

Massachusetts Superior Court opinion, cited as Demoulas v. Demoulas Super

Markets, Inc., 424 Mass. 501 (1997), for a complete and accurate description of

its contents and denies any allegations that are inconsistent with its contents.

Mr. Demoulas denies the remaining allegations of Paragraph 26, except admits

that Mr. Demoulas’ removal in 2014 caused employees to walk out and

customers to boycott Market Basket stores in support of Mr. Demoulas, which

cost Market Basket millions of dollars, and which ended after Mr. Demoulas

was reinstated as President and CEO, and Mr. Demoulas and the Sisters

bought out Arthur S.’s side of the family for $1.6 billion. Mr. Demoulas further

admits that the $1.6 billion in debt that Market Basket undertook to buy out

Arthur S.’s side of the family has since been paid off by the Company and that

it is the Company’s longstanding practice to operate without debt, instead

reinvesting excess cash flow back into the business and Market Basket’s

employees.
27. Shares of DSM were issued to the Demoulas family as follows:
The Demoulas sisters collectively own 61.3%; Mr. Demoulas owns 28.4%; and
the remaining 10.3% is held in a trust for the fourteen children of the four
Demoulas siblings.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 27,

except admits that shares of DSM were issued consistent with the ownership

19
of the Massachusetts corporation, which was the predecessor entity. Mr.

Demoulas further responds that the current ownership breakdown of DSM is

as follows:
Stockholder Name Percent Owned Number of Shares
Arthur T. Demoulas Revocable Trust .04% 1.00

The Arthur T. Demoulas Family Trust 28.27% 692.50

(2020)

Maureen Demoulas .12% 3.00

T.A.D. Family Trust 10.29% 252.00

Frances I. Demoulas Revocable Trust .04% 1.00

The Frances Demoulas Family GST 14.25% 349.03

Exempt Trust

The Frances Demoulas Family GST 6.22% 152.47

Non-Exempt Trust

Glorianne Demoulas Revocable Trust .06% 1.50

Glorianne Demoulas Family Trust 20.45% 501.00

(2020)

Caren L. Demoulas Revocable Trust .08% 2.00

Caren L. Demoulas 2020 Irrevocable 7.08% 173.58

Trust-GST Exempt Trust

Caren L. Demoulas 2020 Irrevocable 5.93% 145.34

Trust-GST Non-Exempt Trust

Caren L. Demoulas 2020 Irrevocable 7.08% 173.58

Trust-Flex Trust

Joseph B. Pasquale .08% 2.00

100% 2,450.00

20
 28. Although Market Basket has been and continues to be a family-
owned enterprise, consistent with Delaware law, DSM’s organizational
documents—which were negotiated and agreed to by all four of the Demoulas
siblings (including Mr. Demoulas)—provide that the business and affairs of the
Company shall be managed under the direction of the Board of Directors,
where each Director is elected annually by the stockholders, acting by a
plurality vote. Since 2014, the stockholders of DSM have elected an outside,
independent Board (i.e., a board that does not include any Demoulas family
member) so as to provide third-party and professional oversight of the
Company’s management and operations and to foster impartial, unbiased
decision-making.

ANSWER: The first sentence of Paragraph 28 purports to characterize

DSM’s organizational documents, and Mr. Demoulas respectfully refers the

Court to DSM’s organizational documents for a complete and accurate

description of their contents and denies any allegations that are inconsistent

with their contents. Mr. Demoulas denies the allegations in the second

sentence of Paragraph 28, except admits that the Board does not consist of

Demoulas family members. Mr. Demoulas further states that DSM’s Bylaws

require a five-member minimum Board, but that the Sisters have purged the

Board in recent years, leaving only the three Director-Plaintiffs, who are

beholden to the Sisters.

29. Specifically, and consistent with Section 141(a) of the Delaware
General Corporation Law, DSM’s Charter provides, in Section 5.1, that “[t]he
business and affairs of the [Company] shall be managed under the direction of
the Board of Directors. The Board of Directors shall have the authority to
delegate or assign to appropriate officers of the [Company] the authority and
duty to manage the day-to-day operations of the [Company].”4

4 Amended and Restated Certificate of Incorporation of DSM HoldCo, Inc. (the “DSM
Charter”), attached as Ex. B, § 5.1. The operative bylaws of OpCo contain a similar
provision. See Amended and Restated By-Laws of Demoulas Super Markets, Inc., Oct.
2017 (“OpCo Bylaws”), attached as Ex. C, § 2.1. As noted above, however, OpCo is a
wholly-owned and controlled subsidiary of DSM. Therefore, the Board of DSM, subject
to the provisions in OpCo’s Articles of Organization, is the sole stockholder entitled to
vote in an election of OpCo directors.

21
ANSWER: The allegations in Paragraph 29 purport to quote from and

describe DSM’s Charter and Opco’s Bylaws, and Mr. Demoulas respectfully

refers the Court to DSM’s Charter and OpCo’s Bylaws for a complete and

accurate description of their contents and denies any allegations that are

inconsistent with their contents. The allegations in Paragraph 29 further

consist of legal conclusions with respect to Section 141(a) of the Delaware

General Corporation Law, to which no response is required. To the extent a

response is required, Mr. Demoulas respectfully refers the Court to the

Delaware General Corporation Law for a complete and accurate description of

its contents and denies any allegation inconsistent with its contents. Mr.

Demoulas admits that Exhibit B to the Complaint purports to be the Amended

and Restated Certificate of Incorporation of DSM, and that Exhibit C purports

to be an undated version the Amended and Restated By-Laws of OpCo. Mr.

Demoulas denies the remaining allegations in Paragraph 29, except admits

that OpCo is a wholly owned and controlled subsidiary of DSM.

30. Similarly, consistent with Section 216 of the Delaware General
Corporation Law, DSM’s Bylaws provide that directors are elected by a
“plurality of the votes cast” at each annual stockholders’ meeting. 5 Vacancies
on the Board may be filled only by “affirmative vote of the holders of at least a
majority in voting power of the issued and outstanding capital stock of” the
Company.6 And consistent with Section 141(k) of the Delaware General
Corporation Law, Directors may be removed with or without cause by the
affirmative vote of stockholders representing a majority of the issued and
outstanding shares entitled to vote.7

ANSWER: The allegations in Paragraph 29 consist of legal conclusions with

respect to Sections 141 and 216 of the Delaware General Corporation Law, to

5 Amended and Restated By-Laws of DSM HoldCo, Inc. (the “DSM Bylaws”), attached
as Ex. D, § 3.1.
6 Id. § 3.3.
7 Id. § 3.7.

22
which no response is required. To the extent a response is required, Mr.

Demoulas respectfully refers the Court to the Delaware General Corporation

Law for a complete and accurate description of its contents and denies any

allegation inconsistent with its contents. The allegations in Paragraph 29

further purport to describe DSM’s Bylaws, and Mr. Demoulas respectfully

refers the Court to DSM’s Bylaws for a complete and accurate description of

their contents and denies any allegations inconsistent with their contents. Mr.

Demoulas admits that an undated version of DSM’s Bylaws purports to be

attached as Exhibit D to the Complaint.

31. The organizational documents of OpCo reflect arrangements
pursuant to which internal governance matters would be addressed principally
at the holding company level. For example, Section 6.16 of the Articles of
Organization of OpCo provides that “the directors of [OpCo] shall at all times
be the individuals who are then serving as directors of DSM Holdco, Inc., a
Delaware corporation and the sole shareholder of the Corporation” and that
“[e]xcept as may be provided in the Bylaws, vacancies and newly created
directorships shall be filled only by the shareholders [i.e., DSM] and not by the
Board of Directors [of OpCo].”8

ANSWER: The allegations in Paragraph 31 purport to describe the

organizational documents of OpCo, and Mr. Demoulas respectfully refers the

Court to the organization documents of OpCo for a complete and accurate

description of their contents and denies any allegations inconsistent with their

contents. Mr. Demoulas admits that a purported version of the OpCo Articles

of Organization is attached as Exhibit E to the Complaint.

32. After the Company was incorporated in 2014, the stockholders
of DSM elected directors to the Board, including Terrence Carleton and then-
Chairman Bill Shea. It was intentional that none of the four Demoulas
siblings, including Mr. Demoulas, has been appointed to or served on the DSM
Board, although there is no prohibition on stockholders serving as directors in

8 Restated Articles of Organization, Demoulas Super Markets, Inc., Oct. 11, 2017
(“OpCo Articles of Organization”), attached as Ex. E, § 6.16.

23
DSM’s Charter or Bylaws.9 It was also important that the Board operate
independently by majority vote—and that no individual director could thwart
the will of a majority. Section 3.8 of the DSM Bylaws therefore implements the
default rules under Section 141(b) of the Delaware General Corporation Law,
specifying that a majority of the total number of directors (currently three, with
two vacancies) will constitute a quorum for the transaction of business at a
meeting of the Board and that the Board may take action by the affirmative
vote of a majority of the Directors present at a meeting of the Board at which
a quorum is present. OpCo’s corporate organizational documents are to the
same effect.10

ANSWER: Mr. Demoulas admits the allegation in the first sentence of

Paragraph 32. Mr. Demoulas denies the allegations in the second sentence of

Paragraph 32, except admits that DSM’s Charter and Bylaws do not strictly

prohibit a stockholder from being a member of DSM’s Board of Directors. Mr.

Demoulas denies the allegations in the third sentence of Paragraph 32, except

admits that the Board of Directors operates by majority vote. The remaining

allegations in Paragraph 32 purport to describe DSM’s Bylaws, OpCo’s

corporate documents, and Delaware General Corporation Law, and Mr.

Demoulas respectfully refers the Court to DSM’s Bylaws, OpCo’s corporate

documents, and Delaware General Corporation Law for a complete and

accurate description of their contents and denies any allegation inconsistent

with their contents. Mr. Demoulas admits that the current Board consists of
the Director-Plaintiffs and has two vacancies, and further states that the

vacancies are in violation of DSM’s Bylaws.

33. The stockholders of DSM—again, including Mr. Demoulas—also
ensured that the Company’s officers would be answerable to the Board, and
specified that they did not have to be family members. Section 4.1 of the DSM
Bylaws provides that “[t]he officers of the Corporation shall be chosen by the

9 See DSM Bylaws § 3.1 (providing that “Directors need not be stockholders,” an
implicit recognition that they could be).
10 See OpCo Bylaws §§ 2.11-2.12.

24
Board of Directors . . . [and] need not be stockholders of the Corporation.”11
Section 4.2 further provides that the officers elected by the Board “shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors….”

ANSWER: The allegations in Paragraph 33 purport to characterize and

describe the DSM Bylaws, and Mr. Demoulas respectfully refers the Court to

the DSM Bylaws for a complete and accurate description of their contents and

denies any allegation inconsistent with their contents.

34. Particularly important for purposes of this Complaint is the fact
that the stockholders (including Mr. Demoulas) specified that officers are
removable by the Board at will: Section 4.2 of the DSM Bylaws provides: “Any
officer elected by the Board of Directors may be removed at any time by the
Board of Directors; provided, that in the event of the removal of an officer for
cause, such officer shall be entitled to prior notice of the alleged basis therefor
and an opportunity to be heard by the Board of Directors in respect thereof.”12

ANSWER: The allegations in Paragraph 34 purport to characterize and

describe the DSM Bylaws and the OpCo Bylaws, and Mr. Demoulas

respectfully refers the Court to the DSM Bylaws and OpCo Bylaws for a

complete and accurate description of their contents and denies any allegation

inconsistent with their contents.

11 DSM Bylaws § 4.1. Similarly, Section 4.1 of the OpCo Bylaws provides that OpCo
“shall have a President, a Treasurer and a Secretary,” and Section 4.2 of the OpCo
Bylaws provides that the “officers shall be appointed by the Board of Directors,” each
of whom “has the authority and shall perform the duties set forth in these By-laws or,
to the extent consistent with these By-laws, the duties prescribed by the Board of
Directors or by direction of an officer authorized by the Board of Directors to prescribe
the duties of other officers.”
12 DSM Bylaws § 4.2. Section 4.6 of the OpCo Bylaws includes a corresponding

provision, stating that the OpCo Board “may remove any officer at any time with or
without cause; provided, that in the event of the removal of an officer for cause, such
officer shall be entitled to prior notice of the alleged basis therefor and an opportunity
to be heard by the Board of Directors in respect thereof.”

25
II. Mr. Demoulas Fought All Attempts By The Board To Collaborate
With Him Or Exercise Any Meaningful Oversight

35. When DSM was incorporated in 2014, the new Board permitted
Mr. Demoulas to resume his role of President and CEO. For the next several
years, Mr. Demoulas unilaterally decided what information the Board would
receive and when, almost always after major Company actions were taken, and
the Board provided little to no oversight.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 35, except

admits that he has been the President and CEO of DSM since it was

incorporated until his purported termination.

36. Beginning in 2019, three of the four siblings (i.e., the Demoulas
sisters) decided to professionalize the Board and began to elect Directors who
would truly exercise independent oversight over the Company—and over Mr.
Demoulas. Mr. Demoulas voted against each of the Plaintiff Directors because
he viewed them as a threat to his unfettered autonomy who would not simply
rubber-stamp his decisions, no questions asked.

ANSWER: Mr. Demoulas lacks knowledge or information sufficient to form

a belief about the truthfulness and accuracy of the allegations in the first

sentence of Paragraph 36 and therefore denies them. Mr. Demoulas denies the

allegations in the second sentence of Paragraph 36, except admits that he did

not support the election of the Director-Plaintiffs, each of whom is beholden to

the Sisters, to the Board because it was clear that their loyalties lay with the

Sisters personally and not with Market Basket.

37. As they settled into their positions as Directors of Market Basket
and learned more about the business, the Plaintiff Directors were surprised by
the lack of oversight and control that had historically been exerted over Mr.
Demoulas’s actions. As Mr. Demoulas put it, “my style is not to come back
to this board and ask for permission. I’m going to do it.”13

ANSWER: Mr. Demoulas denies the allegations in the first sentence of

Paragraph 37. The second sentence of Paragraph 37 purports to attribute

13 Welker, supra n.2.

26
statements from a news article to Mr. Demoulas, and Mr. Demoulas

respectfully refers the Court to that news article for a complete and accurate

description of its contents and denies any allegations in second sentence of

Paragraph 37 that are inconsistent with its contents. By way of further

response, Mr. Demoulas denies the accuracy of the quote that is attributed to

him, which is both dated and, in the sense that previous iterations of the Board

endorsed management’s autonomy on many matters, taken out of context.

38. The Plaintiff Directors became increasingly concerned that,
under Mr. Demoulas’s leadership, they could not fulfill their obligations,
recited in the DSM Charter and OpCo Bylaws, to oversee the management of
the business and affairs of the Company. Whenever they tried to exercise
oversight and satisfy their fiduciary obligations, Mr. Demoulas rebuffed them,
tried to bully them, or completely ignored them. Illustrating Mr. Demoulas’s
unrelenting efforts to keep the Board at arm’s length from the business, Mr.
Demoulas insisted that Board meetings be held at local hotels, rather than the
Company’s offices and did not maintain an email account, making it very
difficult for the Board to communicate with Mr. Demoulas outside of scheduled
board meetings.

ANSWER: Mr. Demoulas lacks knowledge or information sufficient to form

a belief about the truthfulness and accuracy of the allegations in the first

sentence of Paragraph 38 and therefore denies them. Mr. Demoulas denies the

allegations in the second sentence of Paragraph 38. Mr. Demoulas denies the

allegations in the third sentence of Paragraph 38, except admits that Board
meetings are held at a local hotel as they have been for decades, and that he

does not maintain an email account.

39. As Mr. Demoulas continued to rebuff their efforts to do their
jobs, the Plaintiff Directors also became increasingly concerned about the lack
of an appropriate succession plan. Over time, it became clear that Mr.
Demoulas—who had concentrated power in his own hands and those of a small
group of key lieutenants, including Joseph Schmidt and Tom Gordon—
intended to unilaterally appoint his children to succeed him, tying the Board’s
hands and preventing the Directors from pursuing or implementing properly
vetted succession plans. Yet Mr. Demoulas refused even to introduce his

27
children to the Board, denying the Board a meaningful opportunity to assess
whether the children would be qualified, prepared, or even wanted to lead an
$8 billion company like Market Basket—not to mention preventing the Board
entirely from identifying and selecting the candidates that they believed would
be best suited to lead the Company.

ANSWER: Mr. Demoulas lacks knowledge or information sufficient to form

a belief about the truthfulness and accuracy of the allegations in the first

sentence of Paragraph 39 and therefore denies them. Mr. Demoulas denies the

remainder of Paragraph 39, except admits that he recommended to the Board

that Madeline and T.A. Demoulas be considered as candidates to succeed him

as President and CEO of Market Basket and recommended to the Board that

they were the best candidates to take on such a role with the support of the

existing leadership team.

III. Mr. Demoulas Defied Board Resolutions Requiring Basic
Corporate Oversight
40. By the summer of 2024, it had become clear that the Board
members’ attempts to obtain Mr. Demoulas’s cooperation had reached a
stalemate. On August 8, 2024, Directors Hachigian and Shea met to discuss a
path forward, resulting in a list of four basic requirements that, they agreed,
at least as a start, were the bare minimum any board of a company the size
of Market Basket would require of a CEO and President.

ANSWER: Mr. Demoulas denies the allegations in the first sentence of

Paragraph 40. Mr. Demoulas lacks knowledge or information sufficient to form

a belief about the truthfulness and accuracy of the allegations in the first

sentence of Paragraph 40 and therefore denies them.

41. On August 22, 2024, the Board convened for a meeting with Mr.
Demoulas in attendance and reviewed their requirements of him going
forward:

ANSWER: Mr. Demoulas denies the allegations in Paragraph 41, except

admits that he attended a Board meeting on August 22, 2024.

28
 42. First, Mr. Demoulas would be required to provide annual and
quarterly budgets to the Board that included a balance sheet, income
statement, and cash flows, and that provided a detailed CapEx budget by
project, which the Board could review and approve as appropriate.

ANSWER: The allegations in Paragraph 42 purport to characterize a

document entitled, “Minutes of Executive Session,” from August 22, 2024, and

Mr. Demoulas respectfully refers the Court to that document for a complete

and accurate description of its contents and denies any allegations that are

inconsistent with its contents. Mr. Demoulas further responds that the items

listed in the document were for discussion at the August 22, 2024, meeting and

thereafter, and those topics were productively discussed with the expectation

(reflected in the document) of follow-up conversations initiated by the Board.

That follow-up never occurred. Mr. Demoulas further responds that Company

management has historically provided the Board with budgets through 2021

which were later replaced with forward-looking cash flow statements, among

other financial statements, at each Board meeting and that Company

management explained to the Board that it was open to changing the format

of that reporting to formal budgets if the Board so desired.

43. Second, Mr. Demoulas would present for approval by the Board
any CapEx project with an anticipated total cost of $10 million or more before
committing to any new projects. Mr. Demoulas and senior management would
also inform the Board of any material events at the Company, including, but
not limited to, new store openings; any anticipated performance that deviated
from the approved budget; any material changes to Company policies or its
profit-sharing plan; and any advertising or promotional activities outside the
ordinary course of business.

ANSWER: The allegations in Paragraph 43 purport to characterize a

document entitled, “Minutes of Executive Session,” from August 22, 2024, and

Mr. Demoulas respectfully refers the Court to that document for a complete
and accurate description of its contents and denies any allegations that are

29
inconsistent with its contents. Mr. Demoulas further responds that the items

listed in the document were for discussion at the August 22, 2024, meeting,

and those topics were productively discussed with the expectation (reflected in

the document) of follow-up conversations initiated by the Board. That follow-

up never occurred. Mr. Demoulas further responds that Company

management provided CEO updates of the status of all CapEx projects at every

Board meeting and was willing to work with the Board on a process to provide

notice of capital expenditures at some dollar level to be agreed upon, while

safeguarding the secrecy of potential new real estate acquisitions for store

locations given the potential for information of that sort to be leaked in a

closely held family corporation in which the stockholders enjoy extensive

information rights and thereafter used by a supermarket or real estate

competitor.
44. Third, Mr. Demoulas would make senior management and heads
of key functional areas of the Company available to meet with and present to
the Board on a regular basis, so the Board could build relationships with the
Market Basket management team and perform customary oversight activities.

ANSWER: The allegations in Paragraph 44 purport to characterize a

document entitled, “Minutes of Executive Session,” from August 22, 2024, and

Mr. Demoulas respectfully refers the Court to that document for a complete

and accurate description of its contents and denies any allegations that are

inconsistent with its contents. Mr. Demoulas further responds that the items

listed in the document were for discussion at the August 22, 2024, meeting,

and those topics were productively discussed with the expectation (reflected in

the document) of follow-up conversations that would be initiated by the Board.

That follow-up never occurred. Mr. Demoulas further responds that Company

30
management was willing to attend Board meetings at the request of the Board

to report on specific topics and interact with the Board.

45. Fourth, Mr. Demoulas would work together with the Board to
prepare an appropriate succession plan and to identify a qualified leader for
the future; Mr. Demoulas could not unilaterally appoint his children as his
successors.

ANSWER: The allegations in Paragraph 45 purport to characterize a

document entitled, “Minutes of Executive Session,” from August 22, 2024, and

Mr. Demoulas respectfully refers the Court to that document for a complete

and accurate description of its contents and denies any allegations that are

inconsistent with its contents. Mr. Demoulas further responds that the items

listed in the document were for discussion at the August 22, 2024, meeting,

and those topics were productively discussed with the expectation (reflected in

the document) of follow-up conversations initiated by the Board. That follow-

up never occurred. Mr. Demoulas further responds that he advised the Board

to look for a qualified member of the family; if no one fit the bill, then to look

inside the company; and only after ruling out people within the company

should they look outside.

46. Fifth, Mr. Demoulas would not produce, promote, or participate
in content or activities celebrating the 2014 walkout—which had severely
harmed the Company and threatened the livelihood of its associates—on its
upcoming ten-year anniversary that year.

ANSWER: The allegations in Paragraph 46 purport to characterize a

document entitled, “Minutes of Executive Session,” from August 22, 2024, and

Mr. Demoulas respectfully refers the Court to that document for a complete

and accurate description of its contents and denies any allegations that are

inconsistent with its contents. Mr. Demoulas further responds that the items
listed in the document were for discussion at the August 22, 2024, meeting,

31
and those topics were productively discussed with the expectation (reflected in

the document) of follow-up conversations initiated by the Board. That follow-

up never occurred. Mr. Demoulas further responds that he inquired of the

Board during the meeting why it would decline to celebrate the momentous

events that precipitated Market Basket’s meteoric growth since 2014, and

decline to show appreciation to Market Basket’s employees, customers, and

communities for their trust in and loyalty to the Market Basket brand.
47. Three of the Company’s then-five Directors voted to deliver these
basic requirements to Mr. Demoulas and to seek his affirmative cooperation in
allowing the Board to perform its fiduciary duties and oversight
responsibilities. True to form, after initially supporting the requests, Mr.
Demoulas’s hand-picked Director, Mr. Shea, did an about-face and voted
against these basic obligations, including requiring Mr. Demoulas to even
submit a budget to the Board. Subsequently, Mr. Shea went on a PR campaign
to help bolster Mr. Demoulas’s authoritarian regime, even leaking confidential
letters and various corporate and Board documents to The Boston Globe and
other media outlets. As a consequence of Mr. Shea’s blind loyalty to Mr.
Demoulas and his inability to act as an independent director serving the
interests of all stockholders, by majority vote, the Demoulas sisters removed
Mr. Shea from the Board on August 7, 2025.

ANSWER: The allegations in the first two sentences of Paragraph 47 purport

to characterize a document entitled, “Minutes of Executive Session,” from

August 22, 2024, and Mr. Demoulas respectfully refers the Court to that

document for a complete and accurate description of its contents and denies

any allegations that are inconsistent with its contents. Mr. Demoulas further

responds that the items listed in the document were for discussion at the

August 22, 2024, meeting, and those topics were productively discussed with

the expectation (reflected in the document) of follow-up conversations initiated

by the Board. That follow-up never occurred. Mr. Demoulas denies the

remaining allegations of Paragraph 47, except admits that Bill Shea was
removed as a director by the Sisters on August 7, 2025, after Mr. Shea

32
requested books and records from the Director-Plaintiffs under 8 Del. C. §

220(d) about the Executive Committee, its basis for the investigation, and the

changes the Director-Plaintiffs were making to the Company.

IV. Mr. Demoulas And His Lieutenants Were Suspended For
Misconduct Allegations
48. By the next Board meeting in January 2025, not only had Mr.
Demoulas not cooperated with the Board on a single one of its requests, two
weeks after specifically directing Mr. Demoulas not to engage in any
celebration of the 2014 walkout that so badly damaged Market Basket, in
defiance of the Board’s directive Mr. Demoulas rolled out a full-blown media
campaign—complete with articles in local press including the Boston Globe
and over a dozen video testimonials from associates who were “asked” to
participate.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 48.

49. At the January Board meeting, the Board spent literally hours
with Mr. Demoulas reviewing what items he would and would not agree to
comply with voluntarily. But Mr. Demoulas was so defiant and so
uncooperative that at one point he dared Board members to fire him.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 49, except Mr.

Demoulas admits that the topics from the August 2024 memo and meeting

were further discussed at length.

50. Mr. Demoulas made clear by his words and conduct that he was
never going to cooperate with the Board to make any meaningful changes to
his role as President and CEO. Rather, his clear intention was to continue side-
lining the Board and acting in his own self-interest to keep power in his own
hands, the future of Market Basket be damned.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 50.

51. At a subsequent Board meeting in March 2025, Mr. Demoulas’s
conduct was so egregious that the Plaintiff Directors believed if they did not
forego their demands and allow him to continue to act at his will, he would
take affirmative action to harm the Company.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 51.

33
 52. At virtually the same time that the Board was trying to obtain
Mr. Demoulas’s cooperation, the Board began to receive information from
credible sources that Mr. Demoulas and his closest lieutenants, Schmidt and
Gordon, were intimidating and pressuring associates at Market Basket to
“choose sides” and to be prepared to follow others in a Company “walkout.”
These threats harkened back to the 2014 walkout, which paralyzed and
severely harmed the Company. The Plaintiff Directors were highly concerned
that Mr. Demoulas and his lieutenants were going to run that same playbook,
preparing the ground for another work stoppage, which they would use to force
the Board into submission. Such a disruption, if executed, could devastate the
Company and jeopardize the livelihoods of over 30,000 Market Basket
associates, to say nothing of the disruption to the Company’s cherished
shoppers who rely on Market Basket (and who drive its revenues) or the severe
destruction in stockholder value.

ANSWER: Mr. Demoulas lacks knowledge or information sufficient to form

a belief about the truthfulness and accuracy of the allegations in Paragraph 52

and therefore denies them and specifically denies that he or anyone on his

behalf was involved in an effort to intimidate or pressure associates to “choose

sides” or engage in a “walkout.”

53. On May 25, 2025, Board Chairman Hachigian sent a notice by
email for a special meeting of the Executive Committee of the Board (the
“Executive Committee”) scheduled for May 27, 2025. The Executive Committee
is a committee consisting of the three Plaintiff Directors and was formed in
large part to allow for confidential discussion and deliberation over corporate
matters involving the conduct of Mr. Demoulas and his key lieutenants without
the risk that Mr. Shea— who was completely allied with Mr. Demoulas, in
disregard of his fiduciary responsibility to act in the best interests of the
Company—would funnel confidential information back to Mr. Demoulas and
to the media, and thus thwart efforts at responsible planning over personnel
matters and corporate strategy. The Executive Committee retained Richards,
Layton & Finger, P.A., to advise it as to fiduciary and corporate matters. The
meeting notice was given via e-mail to all Directors (including Mr. Shea) and
all stockholders (including Mr. Demoulas), as contemplated by the notice
provisions in the Company’s Bylaws. In the same email, Mr. Hachigian
directed the Secretary, Andrea Batchelder, to provide notice to Mr. Demoulas,
who does not use email, through such means as she customarily used to give
him notice, and Mr. Demoulas received notice of the meeting.

34
ANSWER: Mr. Demoulas lacks knowledge or information sufficient to form

a belief about the truthfulness and accuracy of the allegations in the first

sentence of Paragraph 53 and therefore denies them. Mr. Demoulas denies the

allegations in the second sentence of Paragraph 53, except admits that the

Board purported to form an illicit Executive Committee that excluded a

member of the Board, Bill Shea. Mr. Demoulas lacks knowledge or information

sufficient to form a belief about the truthfulness and accuracy of the remaining

allegations in Paragraph 53 and therefore denies them, except admits that Mr.

Demoulas received notice of the Executive Committee meeting scheduled for

May 27, 2025.

54. At the May 27, 2025 meeting, the Executive Committee
unanimously voted to approve placing Mr. Demoulas and several members of
senior management on paid administrative leave. None of those individuals’
positions and/or employment was terminated at the time, and all continued to
receive their full pay and benefits.

ANSWER: Mr. Demoulas lacks knowledge or information sufficient to form

a belief about the truthfulness and accuracy of the allegations in the first

sentence of Paragraph 54 and therefore denies them, except admits that he

and most key members of the Company’s management team were placed on

paid administrative leave the day after the May 27, 2025, Executive

Committee Meeting. Mr. Demoulas further states that the actions of the

purported Executive Committee are null and void because the Executive

Committee was formed in breach of the Plaintiff Directors’ fiduciary duties to

Market Basket.
55. On May 28, 2025, Plaintiff Directors Hachigian and Collins went
to Market Basket’s Tewksbury headquarters and hand-delivered letters to Mr.
Demoulas, his two children Madeline Demoulas and T.A. Demoulas, and
Messrs. Schmidt, Gordon, and a third individual Gerard Lewis (Mr.
Demoulas’s brother-in-law), confirming that they were on paid administrative
leave. Contrary to some of these individuals’ subsequent false statements to

35
the press, there were no “armed guards” present, and nobody was asked to
clean out their desks.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 55, except

admits that Messrs. Hachigian and Collins were present at the Market Basket

headquarters in Tewksbury to deliver notice that Mr. Demoulas and several

members of the Company’s management team were placed on paid

administrative leave on May 28, 2025, and that security personnel were both

inside and outside the building. Mr. Demoulas further admits that Messrs.

Hachigian and Collins delivered the letters notifying Mr. Demoulas, his two
children Madeline Demoulas and T.A. Demoulas, and Messrs. Schmidt,

Gordon, and Gerard Lewis of their paid administrative leave.

56. On May 30, 2025, the Board held a previously scheduled regular
meeting. All Directors were present and participated, including Bill Shea.
Upon a motion duly made, a majority of the Directors, including all three
Plaintiff Directors, voted to ratify the suspension of Mr. Demoulas. Mr. Shea
abstained from that vote.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 56, except

admits that on May 30, 2025, the Board voted to ratify the placement of Mr.

Demoulas on paid administrative leave, and that Bill Shea abstained from that

vote.
57. After being placed on paid administrative leave, Mr. Demoulas
began to retaliate against the Board, including by using his lieutenants
Schmidt and Gordon and his Director Bill Shea to initiate a smear campaign
in the press. Specifically, and among other things, Mr. Demoulas engaged a
hired spokesperson to prepare various statements for Schmidt, Gordon, and
Shea for issuance to the press, even though those statements were knowingly
untrue and concerned matters about which these individuals had no personal
knowledge.14 Mr. Demoulas’s spokesperson and his allies similarly made a

14See, e.g., Date, Terry, A Culture in Limbo: Suspended Market Basket Execs Just
Want to Remain ‘Part of Something Greater’, EAGLE TRIB. (June 21, 2025),
https://www.eagletribune.com/news/merrimack_valley/market-baskets-suspended-
execsand- a-culture-in-limbo/article_ef526377-1a8a-4165-a9e9-1718fbbfb7af.html,
attached as Ex. F.

36
number of false and damning statements to the media. Those untruths
included, among others, that Mr. Demoulas and his children were forced to
clear out their desks and were escorted off the premises of the Market Basket
headquarters by “armed guards”15; that the Board and the majority of the
Market Basket stockholders planned to “sell” the Company to private equity
firms and “giv[e] shares of the company to outsiders” by promising “big
dividends”; that Mr. Demoulas’s removal was part of a “coup” by his siblings to
“extract cash from the company”.16 Mr. Demoulas and his team apparently
were also behind another employee signing her name to a letter to the Board—
which appears to have been ghostwritten by Mr. Demoulas’s PR team—
complaining about alleged “concerns” she had at the Company, which would
continue until Mr. Demoulas, Schmidt, and Gordon were reinstated. After the
associate sent the letter, Mr. Demoulas’s PR team apparently caused her to
leak the letter to the media and go on a press tour.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 57. By way of

further response, Mr. Demoulas states that Messrs. Hachigian, Collins, and

Keyes, acting with the aid of several public relations firms and their legal

counsel, launched a scorched earth public relations campaign to smear the

reputations of Mr. Demoulas and those who had been placed on administrative

leave within hours of placing the members of the management team on leave

on May 28, 2025.

58. Through it all, Mr. Demoulas sought to remain above the fray
and hide his involvement through the use of proxies, when in fact he was the
proverbial “man behind the curtain,” orchestrating the entire public relations
campaign. He revealed himself when, on July 22, 2025, the Board was forced
to terminate the employment of Schmidt and Gordon for their continued
insubordinate and unlawful conduct. Despite Schmidt’s and Gordon’s weeks-
long public campaign of falsehoods against the Company, the Board, and its
stockholders, Mr. Demoulas issued a press statement, in his own name, fully
supporting and vouching for them: “To Market Basket, Tom and Joe are part
of the heart and soul of the company and key executives in its immense success

15 Currier, Peter, Against Our Culture: Ousted Market Basket Officials Speak Out
About ‘Pre-Planned Attack’, LOWELL SUN (June 29, 2025),
https://www.lowellsun.com/2025/06/29/completely-against-our-culture-ousted-
marketbasket-officials-speak-out-about-pre-planned-attack/, attached as Ex. G.
16 Rea, Dan, The Market Basket Drama Continues, NIGHTSIDE WITH DAN REA

(July 14, 2025), https://podcasts.apple.com/us/podcast/the-market-basket-

dramacontinues/ id440308136?i=1000717286925.

37
to date. They are men of integrity and honor and belong on the Market
Basket team, and we will use all efforts to reverse this heartless and
unwarranted decision.”17

ANSWER: Mr. Demoulas denies the allegations in Paragraph 58, except

admits he issued a press statement, which stated: “In addition to being men of

strong character, these are two of the brightest and best grocery store operators

in the business, and their extraordinary work has been key to building this

company and its culture. This is among the worst decisions that could be made

by this board. To them, Tom, after 50 years with the company, and Joe after
39 years, are easily cast aside. They are just collateral damage in this pre-

planned coup. To Market Basket, Tom and Joe are part of the heart and soul

of the company and key executives in its immense success to date. They are

men of integrity and honor and belong on the Market Basket team, and we will

use all efforts to reverse this heartless and unwarranted decision.”

59. Mr. Demoulas’s campaign of guerilla warfare against the
Company through Schmidt and Gordon continued, and actually accelerated,
even after they were terminated. Despite repeated, express instructions to stay
off Market Basket property, during just a six-day period from August 4 through
9, 2025, Schmidt and Gordon made the rounds to twenty-six Market Basket
stores in three states—upon information and belief at Mr. Demoulas’s
direction, and certainly with his approval—as an open show of defiance against
the Board. They wore suits and ties, as they used to do when still employed,
defiantly waved to surveillance cameras, and spoke to numerous on-the-job
associates, sending the clear message that, no matter what the Board said,
they and Mr. Demoulas were still in charge and would be back—and they were
watching which associates were loyal to Mr. Demoulas.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 59, except

admits that Mr. Demoulas has learned that Messrs. Schmidt and Gordon

17 Chesto, Jon, Market Basket Board Fires Two Top Lieutenants of Arthur T.
Demoulas, Accusing Them of Insubordination, THE BOS. GLOBE (July 22, 2025),
https://www.bostonglobe.com/2025/07/22/business/market-basket-fires-
executivesdemoulas/ (emphasis added), attached as Ex. H.

38
traveled to various Market Basket store locations to visit longtime friends and

associates in August 2025.

60. That same week, Mr. Schmidt (who, again, had been terminated)
unlawfully entered the Company’s corporate headquarters through a side door
after regular business hours, marching past multiple signs stating that entry
was for employees and authorized personnel only, and lingering out of view of
security cameras in the private corporate offices. At this time, Mr. Schmidt had
retained a master key which would let him into all Market Basket properties
and offices, which he had refused to return. Mr. Schmidt also left his locked
Company car in the headquarters parking lot on that occasion, with pictures
of Mr. Demoulas taped to the inside of the windows (apparently to send a
message), and then took the car keys with him.

ANSWER: Mr. Demoulas lacks knowledge or information sufficient to form

a belief about the truthfulness and accuracy of the allegations in Paragraph 60

and therefore denies them, except admits that Mr. Demoulas was made aware

that Mr. Schmidt returned to Market Basket headquarters to return his

Company vehicle.
61. If there was any doubt that Mr. Demoulas was in charge and
calling the shots on this conduct, the doubt was removed when Market Basket
was forced to take legal action on August 11, 2025, to stop Messrs. Schmidt
and Gordon’s campaign of public defiance. In response to the Company’s legal
complaint laying out the indisputable evidence, including photos, of their
trespassing at Market Basket’s stores and headquarters, Mr. Demoulas’s
personal spokesperson issued a public statement on their behalf trying to
explain away their behavior and lashing out at the Board, claiming that “they
are lying.” When a Massachusetts Superior Court judge found that Schmidt
and Gordon had committed “continuing trespass” and granted a preliminary
injunction against them on August 14, 2025, forbidding them from entering
Market Basket properties, Mr. Demoulas’s spokesperson again was front-and-
center in their defense, even sitting with the two men in open court and
orchestrating a courthouse-steps press conference for them. And Mr. Demoulas
has never retracted his prior public statements supporting Schmidt and
Gordon and saying that they were “men of integrity and honor” who should be
brought back to the Company—even after the judge in the case found that they
had “ignored” “clear and unambiguous instructions” and “numerous notices
prohibiting them from entering” Market Basket property and, at one location,
had “caused an employee to feel frightened, pressured, intimidated, and

39
distracted with respect to their workplace experience.”18 Mr. Demoulas has
given every indication that he approves of such conduct.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 61, except

admits that a Massachusetts Superior Court judge ruled on Messrs. Schmidt’s

and Gordon’s alleged trespasses and granted a preliminary injunction against

them on August 14, 2025, as outlined in Demoulas Super Markets, Inc. d/b/a

Market Basket, Inc. v. Schmidt et al., No. 2581CV01952 (Mass. Super. Ct.

Middlesex Cnty. Aug. 14, 2025), which purports to be attached as Exhibit I to

the Complaint. The allegations in Paragraph 61 purport to describe the opinion

of the Massachusetts Superior Court, and Mr. Demoulas respectfully refers the

Court to the Massachusetts Superior Court opinion attached as Exhibit I to

the Complaint for a complete and accurate description of its contents and

denies any allegation inconsistent with its contents.

62. Through it all, Mr. Demoulas and his allies have suggested that
Market Basket could not possibly function without him and his lieutenants at
the helm. The record shows that is simply untrue. Since Mr. Demoulas’s
suspension on May 28, 2025, Market Basket’s same store sales have increased;
it successfully celebrated the grand re-opening of one of its stores in a larger
footprint; and, on August 11, 2025, an open letter from Market Basket
associates working at the Tewksbury headquarters was issued, strongly
rebutting the false statements made by Mr. Demoulas’s allies in the press, and
stating that, “[I]n many ways the culture [at Market Basket] is better
today than it was before the suspensions in May. The managers and
supervisors running Market Basket today have been with the company for
many decades, [and] they are trusted mentors and friends.” Referring to the
statements of Mr. Demoulas’s terminated lieutenants and allies in the press,
the letter continued, “We do not understand how these lies, horrible images
and insults, about the owners and leaders of our company achieve anything.
These people do not speak for us.” Since being issued, dozens of Market
Basket associates have signed on to this letter.

18 Order, Demoulas Super Markets, Inc. d/b/a Market Basket, Inc. v. Schmidt et al.,
No. 2581CV01952 (Mass. Super. Ct. Middlesex Cnty. Aug. 14, 2025), attached as Ex.
I.

40
ANSWER: Mr. Demoulas denies the allegations in the first two sentences of

Paragraph 62. Mr. Demoulas lacks knowledge or information sufficient to form

a belief about the truthfulness and accuracy of the allegations as to whether

Market Basket’s same store sales have increased and therefore denies it. Mr.

Demoulas admits that Market Basket celebrated the reopening of one of its

stores in a larger footprint since he was placed on administrative leave. Mr.

Demoulas denies the remaining allegations in Paragraph 62, except admits

that a small number of Market Basket associates signed a prepared letter

which purports to report on the working conditions at Market Basket’s

corporate office.
V. The Board Terminated Mr. Demoulas’s Employment At Market
Basket
63. Mr. Demoulas’s outright resistance to any oversight, and his
attacks on the Board, the majority stockholders, and virtually everyone else
associated with the Company apart from himself, were the last straw. Mr.
Demoulas’s conduct has been at all relevant times contrary to the best interests
of Market Basket and all its constituents, and is directed only at preserving
his own power. That is not how the leader—the President and CEO—of an
iconic company like Market Basket is supposed to or required to act.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 63, except to

say that Market Basket is an iconic company.

64. On September 9, 2025, a duly noticed special meeting of the
Board was held at which the Board unanimously voted to remove Mr.
Demoulas from the positions of Market Basket’s CEO and President.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 64, except

admits the Director-Plaintiffs voted to remove Mr. Demoulas from his positions

as President and CEO in violation of their fiduciary duties to Market Basket.

41
 CAUSES OF ACTION
COUNT I
(Declaratory Judgment)

65. Plaintiffs repeat and re-allege each of the foregoing paragraphs

as if fully set forth herein.

ANSWER: Mr. Demoulas re-alleges and incorporates by reference his

answers to Paragraphs 1-64 as if fully set forth herein.

66. Until September 9, 2025, Mr. Demoulas was an officer of DSM,
holding the position of President and CEO. Mr. Demoulas was also an officer
of OpCo, holding the same positions.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 66 insofar as

they insinuate that Mr. Demoulas was effectively removed as an officer, the

President, or the CEO of DSM and OpCo. Mr. Demoulas further states that he

still holds the titles of President and CEO at DSM and OpCo because his

alleged termination was invalid and improper.

67. At a duly called and convened meeting of the Board of DSM and
OpCo held on September 9, 2025, at which all Directors (constituting a
quorum) were present, the Directors unanimously adopted resolutions
terminating Mr. Demoulas and removing him as President and CEO of both
companies.

ANSWER: Mr. Demoulas denies the allegations in Paragraph 67, except

admits the Directors convened on September 9, 2025, at which time the

Directors purported to terminate Mr. Demoulas and remove him as President

and CEO of DSM and OpCo; however, that termination was invalid and

ineffective because it was in violation of DSM’s Bylaws and the Director-

Plaintiffs’ fiduciary duties to DSM and OpCo.

68. The DSM Board was authorized to take this action pursuant to
Delaware law, which provides that Delaware corporations like Market Basket
are “managed by or under the direction of a board of directors.” 8 Del. C. §
141(a); see also Unanue v. Unanue, 2004 WL 5383942, at *15 (Del. Ch. Nov. 9,
2004) (“It is well settled that officers of a corporation serve at the pleasure of

42
the board of directors” and that terminations of officers by a corporate board
are “appropriate in the exercise of their business judgment.”). Further, DSM’s
Bylaws in Section 4.2 allow the Board to remove an officer of the Company at
“any time,” with or without cause. Similarly, the OpCo Board was authorized
to take this action under Massachusetts law, which provides, in relevant part,
that “[a]ll corporate power shall be exercised by or under the authority of, and
the business and affairs of the corporation shall be managed under the
direction of, its board of directors.” Mass. Gen. Laws c. 156D, § 8.01. Section
4.6 of the OpCo Bylaws also provides that the “Board of Directors may remove
any officer at any time with or without cause.”

ANSWER: The allegations in Paragraph 68 purport to state legal conclusions

to which no response is required. To the extent a response is required, Mr.

Demoulas denies that the Director-Plaintiffs were entitled to remove Mr.

Demoulas under the circumstances here.

69. Accordingly, DSM and the Plaintiff Directors are entitled to a
declaration pursuant to 8 Del. C. § 225(a) that Mr. Demoulas’s removal was
valid, that he is no longer the President or CEO of DSM, and that he has no
right to hold or continue to hold such office or any other office of DSM.
Similarly, OpCo and the Plaintiff Directors are entitled to a declaration that
Mr. Demoulas’s removal was valid, that he is no longer the President or CEO
of OpCo, and that he has no right to hold or continue to hold such office or any
other office of OpCo.

ANSWER: The allegations in Paragraph 69 purport to state legal conclusions

to which no response is required. To the extent a response is required, Mr.

Demoulas denies the allegations in Paragraph 69. Mr. Demoulas specifically

denies that Plaintiffs are entitled to the relief they request in this action.

RESPONSE TO PRAYER FOR RELIEF

Mr. Demoulas denies that Plaintiffs are entitled to the relief requested

in their Prayer for Relief, or to any other relief. Mr. Demoulas requests that

the Court deny the requests sought in Plaintiffs’ Prayer for Relief; dismiss the

Complaint with prejudice; award Mr. Demoulas his attorneys’ fees and other
expenses; and award Mr. Demoulas such other and further relief as the Court

43
deems just and proper, including the relief sought in the verified counterclaim

set forth below.

FIRST AFFIRMATIVE DEFENSE

Mr. Demoulas asserts that the Director-Plaintiffs’ removal of Mr.

Demoulas from his roles as President and CEO was improper because the

creation of the unlawful Executive Committee, to which the Board purported

to delegate indefinitely all authority of the Board to manage the business and

affairs of the Company, was a breach of the Director-Plaintiffs’ fiduciary duties

and inequitable. The scope and duration of the power delegated to the

Executive Committee is inconsistent with the principle that the full board

manages a corporation’s business and affairs, and directors cannot be singled

out for exclusion from fulfilling their role. Because the formation of the

Executive Committee fundamentally contravenes Delaware law, no meeting of

the Executive Committee could have been properly convened, and all actions

purportedly taken by the rogue faction of Director-Plaintiffs masquerading as

the Executive Committee, including the removal of Mr. Demoulas and

initiation of the Investigation, are void ab initio.

SECOND AFFIRMATIVE DEFENSE

Mr. Demoulas asserts that his removal was improper under the DSM

Bylaws. Section 4.2 of the DSM Bylaws states that “in the event of the removal

of an officer for cause, such officer shall be entitled to prior notice of the alleged

basis therefor and an opportunity to be heard by the Board of Directors in

respect thereof.” Mr. Demoulas’s purported termination followed a months-

long administrative leave and an extensive investigation. Nevertheless, Mr.

Demoulas was not provided advance notice of the bases for his “for cause”
termination, nor was he afforded a reasonable “opportunity to be heard by the

44
Board” in response to the Board’s accusations prior to his removal. The

Director-Plaintiffs cannot deprive Mr. Demoulas of his rights under the Bylaws

in the event of a “for cause” termination by pretending that his termination

was not for cause, because doing so would obviate the “for cause” termination

provision of the Bylaws.

THIRD AFFIRMATIVE DEFENSE

Mr. Demoulas asserts that the justifications provided for removing him

are pure artifice and were contrived in bad faith by the Director-Plaintiffs in

dereliction of their fiduciary duties to the Company. Instead of exercising their

independent judgment to evaluate continuation of Mr. Demoulas’s service to

Market Basket as President and CEO of the Company, the Director-Plaintiffs

succumbed to the whims of the Sisters, to whom the Director-Plaintiffs

admittedly view themselves as beholden. The Director-Plaintiffs’ decision to

remove Mr. Demoulas was a conflicted one in which they placed their personal

interests in maintaining their Board seats and appeasing Mr. Demoulas’

sisters over the best interests of the Company. That action by the Director-

Plaintiffs was in breach of their fiduciary duty to Market Basket and should

be found invalid and ineffective.

FOURTH AFFIRMATIVE DEFENSE

Mr. Demoulas asserts that the Director-Plaintiffs breached the implied

covenant of good faith and fair dealing inherent in the DSM Bylaws by

exercising their discretion under Section 4.2 of the DSM Bylaws to remove Mr.

Demoulas unreasonably and arbitrarily, not for any rational business purpose,

but rather in bad faith and for the purpose of appeasing the Sisters’ personal

interests and maintaining their seats on the Board.

45
 FIFTH AFFIRMATIVE DEFENSE

Mr. Demoulas asserts that even assuming, arguendo, that he had been

properly removed from his President and CEO positions (he was not), the

Executive Committee has acted improperly and in contravention of the Bylaws

in filling Mr. Demoulas’s roles with a replacement officer during the

investigation. Section 3.11 of the DSM Bylaws prohibits the Executive

Committee from backfilling any officer positions in the leadership void that the

Director-Plaintiffs heedlessly created. And Section 4.5 of the DSM Bylaws

provides that, in the absence of a President, that office may be filled by either

the Company’s Secretary or its Treasurer. The Executive Committee

disregarded both Sections of the Bylaws by allowing Mr. Kettenbach, Jr.—who

is neither the Company’s Secretary nor its Treasurer—to assume the role of de

facto President and CEO in Mr. Demoulas’s absence, without conferring the

titles on him, during and after the time that Mr. Demoulas was on

administrative leave.

SIXTH AFFIRMATIVE DEFENSE

The claims in the Complaint are barred in whole or in part by the

doctrine of unclean hands. Among other misconduct, the Director-Plaintiffs

and the Sisters (as a majority stockholder block) have breached DSM’s Bylaws

by allowing the Board to exist for more than nine months with fewer than the

required five directors. Further, the Director-Plaintiffs intentionally withheld

material information about the Executive Committee, its investigation into

Mr. Demoulas, and the changes in management they were enacting from their

then and now former Board colleague, Bill Shea. The Director-Plaintiffs also

whitewashed Board minutes and barred the corporate Secretary from Board
meetings because she insisted on accurately reporting Board discussions in

46
minutes drafted by her. The Director-Plaintiffs did so to hide the record

demonstrating that they lacked any business purpose to terminate Mr.

Demoulas and that the Director-Plaintiffs were instead acting for ulterior

motives, namely because the Sisters instructed them to remove Mr. Demoulas.

RESERVATION OF RIGHTS

Mr. Demoulas reserves the right to raise any additional defense of which

he becomes aware through discovery or other investigation. In asserting these

defenses, Mr. Demoulas does not assume any burden of proof, persuasion, or

production with respect to any issue where the applicable law places the

burden upon Plaintiffs.

47
 VERIFIED COUNTERCLAIM

Counterclaim plaintiff Arthur T. Demoulas (“Mr. Demoulas” or

“Counterclaim Plaintiff”), by and through his undersigned counsel, hereby

brings this verified counterclaim (the “Counterclaim”) against DSM HoldCo,

Inc., (“DSM”), Demoulas Super Markets, Inc., (“OpCo” and, with DSM, “Market

Basket” or the “Company”) and Jay K. Hachigian, Steven J. Collins, and

Michael Keyes (the “Director Defendants,” and with the Company,

“Counterclaim Defendants”), as follows:

INTRODUCTION

1. This case concerns the dismantling of the management of a

thriving, family-owned supermarket business by the Director Defendants. The

actions of the Director Defendants were not motivated by a legitimate business

rationale—there is none. Instead, the Director Defendants acted at the behest

of a control group of stockholders to which the Director Defendants are

beholden to exact retribution in connection with intra-family disputes. The

result was the Board’s purging of the Company’s proven management team

without implementing a plan for the succession of leadership of the

multibillion-dollar enterprise.
2. That purge included the termination of Mr. Demoulas from his

positions as President and Chief Executive Officer (“CEO”) of Market Basket.

As a wrongfully terminated officer, Mr. Demoulas is the natural plaintiff to

bring an action under 8 Del. C. § 225 (“Section 225”). As discussed below,

Counterclaim Defendants’ initiation of this action minutes after terminating

Mr. Demoulas is further confirmation of what the record reveals: Mr.

Demoulas’s termination was a fait accompli and not a valid exercise of the

Director Defendants’ business judgment.

48
 3. Mr. Demoulas understands that the business and affairs of every

corporation organized under the laws of the state of Delaware are managed by

and under the corporation’s board of directors. The implicit check on that

entrusted authority is that directors of Delaware corporations must use their

powers consistent with their fiduciary duties. Unfortunately, that did not

happen here. Instead, the Director Defendants acted to further the personal

objectives of Mr. Demoulas’s three stockholder sisters and their families,

including their adult children (collectively, the “Sisters”)—who together

control about 60% of DSM stock and to whom the Director Defendants are

beholden—to Market Basket’s detriment.

4. The troubling sequence of actions by the Director Defendants and

the Sisters that led to Mr. Demoulas’s unlawful removal include:

• The Sisters spent years packing DSM’s board of directors (the
“Board”) with loyalists whose relevant qualifications were that they
would do the Sisters’ bidding, and removing any directors who would
stand in the way of the Sisters’ personal goals.
• The Director Defendants created an “Executive Committee” to box
out the one director remaining at the time who was not subject to the
Sisters’ control, Bill Shea, and purported to grant the Executive
Committee virtually the full authority of the Board.
• The Director Defendants caused the Executive Committee to initiate
a pretextual investigation into Mr. Demoulas and key members of
his management team (the “Investigation”) in an attempt to justify
his unlawful suspension in advance of his inevitable termination,
which was preordained by the Sisters, and later asked the lone
remaining independent director to ratify the suspension decision
without providing him with any information supporting the decision.
• The Sisters used the facts of Mr. Demoulas’s suspension and the
pretextual Investigation, which they had orchestrated through the
Director Defendants, to support their self-interested positions in
unrelated pending litigation in Massachusetts involving the
Demoulas family’s trust.
• The Executive Committee hired a purported “independent” law firm,
Quinn Emanuel Urquhart & Sullivan, LLP (“Quinn Emanuel”), to

49
 conduct the sham Investigation, even though Quinn Emanuel also
purports to represent the Executive Committee, the Board, and the
Sisters.
• The Director Defendants rebuffed Mr. Shea’s informal and formal
requests for books and records under 8 Del. C. § 220(d) concerning
the Executive Committee and its purported basis for launching the
Investigation.
• The Sisters removed Mr. Shea from the Board following his latest
demand for books and records relating to the Director Defendants’
scheme to remove Mr. Demoulas and his management team from the
Company.
• The Director Defendants, through the Executive Committee, wasted
substantial corporate resources by causing Quinn Emanuel to
conduct the pretextual Investigation, including requiring that dozens
of Market Basket employees be interviewed, in search of a
justification to terminate Mr. Demoulas.
• The Director Defendants placed six of DSM’s top executives,
including Mr. Demoulas’s oldest daughter, Madeline, and son,
Telemachus (T.A.), on administrative leave alongside Mr. Demoulas
and two of his most senior executives, Tom Gordon and Joe Schmidt,
pending the outcome of the Investigation without any basis, creating
a void at the Company without a plan for interim replacement
executives.
• The Director Defendants permitted one of the Sisters’ sons, who had
previously misappropriated corporate assets for his personal
business endeavors, to assume the role of de facto chief executive in
Mr. Demoulas’s absence during the Investigation.
• The Director Defendants refused to keep accurate minutes of Board
meetings, including by modifying Board minutes over the objection
of the corporate Secretary and then barring the Secretary from
attending Board meetings after she refused to whitewash the
minutes to omit evidence that the Board lacked any business
rationale to remove Mr. Demoulas.
• Members of management aligned with the Sisters’ goals reportedly
deleted relevant text messages in the days immediately following Mr.
Demoulas’s placement on administrative leave and initiation of the
pretextual Investigation.
• Following the conclusion of the investigation, the Director-Plaintiffs
terminated Mr. Demoulas on September 9, 2025, just minutes after
the 10:00 p.m. conclusion of an unsuccessful mediation between the

50
 parties before The Honorable Joseph R. Slights III, then filed this
pre-prepared lawsuit at 10:37 p.m.

5. For more than 50 years, Mr. Demoulas has been intimately

involved in managing DSM’s operating company subsidiary, Demoulas Super

Markets, Inc., a beloved New England area grocery store chain known as

“Market Basket.” In 2008, Mr. Demoulas became the President and CEO of

Market Basket, selected after a search firm process initiated by the Board that

was in place at the time, and in 2014, when DSM was formed, he also became

the President and CEO of DSM. Under Mr. Demoulas’s leadership, Market
Basket has generated higher Retailer Preference Index (“RPI”) scores than

Costco, Trader Joe’s, Sam’s Club, and Publix. In fact, Market Basket has the

second highest RPI score among 71 companies nationwide.19

6. Market Basket’s high performance—from $2.9 billion in revenue

in 2008 to a projected $8 billion in revenue for 2025—is no accident. Rather, it

is reflective of Mr. Demoulas’s business acumen and the people-over-profits

ethos that he has sought to instill at all levels of the organization. Notably, Mr.

Demoulas continued to grow Market Basket’s lucrative employee profit-

sharing plan that was initially implemented by his father. The plan,

which typically allocates 15% of employees’ annual income into investments

and has made millionaires out of many longtime Market Basket employees,
contributes to a familial culture deeply rooted in institutional pride and

staunch loyalty among Market Basket’s employees (referred to as “associates”)

and customers. The plan has also enhanced recruitment and retention,

ensuring that Market Basket employees are among the best and longest

tenured in the industry.

19 https://www.dunnhumby.com/resources/reports/retail-trends/en/eighth-annual-
retailer-preference-index-rpi-for-u-s-grocery/

51
 7. Given the Company’s exceptional performance and vibrant

culture, it came as a surprise to Mr. Demoulas when three members of DSM’s

Board purportedly formed the illicit Executive Committee, which proceeded

unlawfully to put Mr. Demoulas and his management team on indefinite leave.

8. The limbo in which the Executive Committee placed the Company

by suspending Mr. Demoulas and other executives lasted nearly three-and-a-

half months, until the Board finally terminated Mr. Demoulas on September

9, 2025. The process that led to Mr. Demoulas’s termination was riddled with

conflicts, trickery, deceit, and pervasive breaches of fiduciary duties.

9. The Executive Committee, formed on May 23, 2025, and

purportedly endowed with the ability to “exercise all the powers and authority

of the Board in the management of the business and affairs of the” Company,

is composed of the three Director Defendants. The Director Defendants were

handpicked by the Sisters, none of whom have ever worked at Market Basket,

but who together control about 60% of DSM. None of the Director Defendants

have relevant experience in the grocery store industry. Rather, the Director

Defendants were voted onto the Board (without Mr. Demoulas’s support)

because of one key quality that they share: personal loyalty to the Sisters and
their immediate families. As a few examples of the Director Defendants’

conflicts:
• Director Defendant Jay K. Hachigian, the current Chairman of the
Board and neighbor of one of the Sisters, Caren Pasquale, has
advised the Sisters and their families for years on personal estate
planning, investing, tax, and other legal matters.
• Director Defendant Steven J. Collins has a track record of doing the
Sisters’ bidding, even at the cost of wasting corporate resources. Mr.
Collins previously advocated for two of the Sisters’ husbands
(Michael Kettenbach, Sr. and Joseph Pasquale) to receive
unwarranted multi-million dollar payouts from Market Basket in
connection with the winddown of their personal real estate

52
 development firm that once did business with Market Basket. The
gratuitous payment to the Sisters’ husbands lacked a corporate
purpose and would have constituted a waste of Company resources,
but Mr. Collins advocated for the payment anyway because of his
close relationship with and subservience to the Sisters and their
families.
• Director Defendant Michael Keyes’ real estate firm, Intercontinental
Real Estate, was involved in a 2022 attempt to purchase the real
estate where one of Market Basket’s most successful stores is located
from an entity controlled by Joseph Pasquale, a stockholder and the
husband of Caren Pasquale, even though Mr. Demoulas had a prior
understanding with Mr. Pasquale for Market Basket to buy the
property. Mr. Pasquale attempted to sell the property to
Intercontinental without notifying Market Basket of his intention.
When Mr. Demoulas learned of the effort, he brought it to the
attention of the Board, and the matter was considered by the Board
and DSM’s stockholders. The effort by Intercontinental to purchase
the property had the effect of artificially raising the price Market
Basket had to pay for the real estate. Ultimately, the Board and the
Sisters voted to purchase the property, over the objection of Mr.
Demoulas due to the inflated price, and the Company bought the site
on July 28, 2022. Mr. Keyes was then added to the Board by the
Sisters fifteen months later, on October 5, 2023.
10. Improperly singled out for exclusion from the Executive

Committee was the former fourth Board member, Bill Shea, who served on the

Board since the Company’s 2014 incorporation and had been a director of

Demoulas Super Markets, Inc. for more than 15 years before then. See J. Travis

Laster & John Mark Zeberkiewicz, The Rights and Duties of Blockholder

Directors, 70 Bus. Law. 33, 60 (2015) (“If the director has been excluded for an

extended period of time, and if the committee has been tasked with the full

power of the board and is effectively carrying out the board’s role, then the

excluded director may have powerful equitable arguments in his favor.”). In

response to his exclusion from the Executive Committee, Mr. Shea asked his

Board colleagues for basic information surrounding the purpose, formation,

and authority of the Executive Committee, as well as the supposed bases for

53
the Investigation, including by serving multiple formal books and records

demands under 8 Del. C. § 220(d). Mr. Shea’s efforts were rebuffed by the

Director Defendants, and he was ultimately removed from the Board by the

Sisters for seeking information about their plans with the Director Defendants

to remove Mr. Demoulas.

11. On May 27, 2025, without notifying Mr. Shea or Mr. Demoulas of

any basis or details, the Executive Committee purportedly met and decided to

put Mr. Demoulas and certain members of the management team on indefinite

administrative leave while the Executive Committee conducted the internal

Investigation, which would prove to be a pretense to manufacture a reason to

justify permanently removing Mr. Demoulas as President and CEO. Among

those placed on leave alongside Mr. Demoulas were Madeline and Telemachus

(“T.A.”) Demoulas, two of Mr. Demoulas’ adult children who, like their father,

have devoted their working lives to Market Basket’s success and future.

12. The next day, the Executive Committee notified Mr. Demoulas by

letter of his administrative leave and immediately thereafter issued a letter to

Market Basket’s employees announcing that Mr. Demoulas was being stripped

of his executive role. See Exhibit 1 (May 28, 2025, Ltr. From Executive
Committee for Mr. Demoulas); Exhibit 2 (May 28, 2025, Ltr. From Executive

Committee for Market Basket Associates). The supposed justification for Mr.

Demoulas’s administrative leave and initiation of the Investigation was

“credible allegations that [Mr. Demoulas] ha[s] begun to plan a disruption of

the business and operations of Market Basket with a work stoppage.” The

Executive Committee then immediately began a media campaign to promote

this narrative. Based on information and belief, those “credible allegations”

were complete fabrications.

54
 13. The Director Defendants’ manufactured allegations that Mr.

Demoulas was planning a work stoppage or interference were informed by the

Company’s past. In 2014, Market Basket’s employees and community had

rallied behind Mr. Demoulas, staging a months-long walkout and boycott when

Mr. Demoulas was terminated by his cousin who controlled the Company at

that time. But no such business disruption or work stoppage has occurred since

Mr. Demoulas was put on leave, and the Director Defendants’ accusations that

Mr. Demoulas was pre-planning one are unfounded. Indeed, the Director

Defendants’ accusations that Mr. Demoulas would do anything to harm

Market Basket are not credible given that Mr. Demoulas is the long-term

leader who has devoted his professional career to the Company, and that he

controls more than 28% of DSM’s shares. Any insinuation that Mr. Demoulas

would intentionally inflict harm on the Company defies reason and is untrue

and defamatory.

14. In short, the Director Defendants, acting through the Executive

Committee, manufactured a reason for suspending Mr. Demoulas with the

predetermined plan that Mr. Demoulas would never return to his positions.

That reality has been confirmed by statements from employees; the Executive
Committee and its allies had been scheming to remove Mr. Demoulas for

months before he was placed on leave, with indifference to any negative impact

that removing Mr. Demoulas would have on Market Basket’s business.

15. In an attempt to humiliate Mr. Demoulas and the management

team and disrupt the Company’s culture, the Executive Committee

orchestrated an unnecessary spectacle during regular business hours by

forcing Mr. Demoulas and his team to leave the Company’s offices on May 28,

2025, while security guards were stationed inside and outside of the building.
Mr. Demoulas and his team were instructed not to return to Company property

55
or to communicate with employees until the Investigation was concluded. The

immediate aftermath of the suspensions saw the Company’s management

decimated:

16. One employee, store operations supervisor Valerie Polito,

published an open letter to the Board summarizing the collective mood at

Market Basket in response to the suspensions: “What was once a culture

grounded in mutual respect, integrity, and accountability has, in recent

months, devolved into one defined by fear, hostility, and lack of direction.” The

Director Defendants’ heedless actions caused that change.

17. The Investigation was overseen by the Executive Committee,

composed exclusively of the Director Defendants. The Executive Committee

hired Quinn Emmanuel to run the Investigation, even though Quinn Emanuel

56
has at various times since the start of the Investigation purported to represent

the whole Board, the Executive Committee, the Company, and the Sisters.

18. The Investigation included interviews of dozens of Market Basket

employees. Mr. Demoulas was interviewed for more than three hours as part

of the Investigation. During Mr. Demoulas’s interview, the focus of the

questioning was on hypothetical future situations regarding Mr. Demoulas’

potential responses to events that have not happened—like what he would do

or say if an employee walkout were to occur. The interview did not address

“credible allegations” of the past actions that supposedly served as the basis

for placing Mr. Demoulas on administrative leave and initiating the

Investigation in the first place. The Investigation interview process further

confirmed that the Director Defendants had contrived the notion of an

impending work stoppage as a pretense for placing Mr. Demoulas on leave and

launching a witch-hunt for any justification to remove Mr. Demoulas.

19. Notwithstanding the impropriety of the Director Defendants’

actions, Mr. Demoulas sought to improve his relationship with the Board and

take responsibility for any perceived shortcomings on his part. To move

forward for the best interests of the Company, its stakeholders, and associates,
Mr. Demoulas and his children, Madeline and T.A., requested to engage in

formal mediation with the Sisters and the Director Defendants. The Director

Defendants agreed to conduct a mediation on September 3, 2025, in front of

The Honorable Joseph R. Slights III, but without the Sisters. Unfortunately,

the mediation process, which extended for two sessions over approximately a

week, was unsuccessful.

20. The mediation ended shortly after 10:00 pm ET on September 9,

2025. Afterwards, without Mr. Demlous present, the Board called a meeting,
which began around 10:30 pm ET. At the meeting, the Board terminated Mr.

57
Demoulas from his positions as President and CEO, without providing Mr.

Demoulas a reasonable opportunity to be heard, as is required under DSM’s

Bylaws. Then, at 10:37 pm ET, the Counterclaim Defendants filed their

Verified Complaint in this lawsuit against Mr. Demoulas.

21. The process of placing Mr. Demoulas and his management team

on leave, conducting the Investigation, and engaging in mediation was a

charade by the Director Defendants. The plan that the Sisters had instructed

the Director Defendant to carry out was to remove Mr. Demoulas from the

Company. The Sisters’ plan was not motivated by business rationale. Instead,

it was in furtherance of their positions in intra-family disputes about greater

liquidity, public recognition, and management of a family trust by Mr.

Demoulas who was the trustee.

22. The Director Defendants carried out the Sisters’ plan in conscious

disregard of the adverse consequences it would have on the Company, and

without regard for any legitimate business rationale for removing Mr.

Demoulas. In doing so, the Director Defendants abdicated their fiduciary

duties and improperly adopted the Sisters’ personal motivations as their own.

23. In recent years, the Sisters have vocalized desires for their
children to take more active roles in the Company, for T.A. and Madeline to be

excluded from the Company’s succession planning, and for Market Basket to

sacrifice its cherished people-first identity in favor of the pursuit of increased

stockholder distributions to benefit the Sisters personally.

24. On information and belief, in Mr. Demoulas’s absence during the

pendency of the Investigation, day-to-day management of the Company was

assumed by a group working with Michael Kettenbach, Jr., the son of one of

the Sisters, Frances Kettenbach. While at the helm, Mr. Kettenbach, Jr. and
others collaborating with him reshuffled the Company’s management,

58
promoted the Sisters’ loyalists, fired and demoted those who spoke up on Mr.

Demoulas’s behalf, curried favor with potential allies for the Sisters with pay

increases and financial incentives, changed Company policies and practices,

created uncertainty among Market Basket’s employees about the

organization’s future, and instilled fear of retaliation among employees if they

raised questions or concerns about the ongoing coup.

25. The Sisters’ focus on removing Mr. Demoulas and his family from

the Company, increasing the prominence of their immediate families, and

extracting cash from the Company is being implemented at Market Basket

through the Director Defendants. The Director Defendants’ actions to appease

the Sisters while ignoring Market Basket’s business, employees, culture, and

community is antithetical to everything that makes Market Basket unique and

successful within its industry. Those actions by the Director Defendants are

not based on the independent exercise of their business judgment or made with

regard for the best interests of the Company and all its stockholders. Instead,

the Director Defendants are following directions from the Sisters, who seek to

line their own pockets, advance their interests in pending litigations in

Massachusetts over a family spendthrift trust created by their father which

has for decades been presided over by Mr. Demoulas as Trustee, and strike at

Mr. Demoulas over petty family jealousies.

26. The Director Defendants’ own words confirm that they have

abandoned their fiduciary duties to the Company and are carrying out a

multistep scheme at the direction of the Sisters to obliterate Mr. Demoulas’s

influence at Market Basket. In response to a June 16, 2025, letter (Exhibit 3)

from Mr. Shea to the Director Defendants demanding information about the

unlawful Executive Committee’s actions and the Investigation, Director

Defendant Mr. Hachigian made the revealing statement that he views each

59
DSM director as “serv[ing] on the Board at the pleasure of the Demoulas

[S]isters” (Exhibit 4 ((June 19, 2025 Ltr. from Mr. Hachigian to Mr. Shea)).

Further, when previously questioned by Mr. Shea about the basis for putting

Mr. Demoulas on leave, Mr. Hachigian stated that the Director Defendants

were willing to take a 20% hit to the Company’s bottom line to unseat Mr.

Demoulas and satisfy the Sisters’ wishes.

27. The Board is currently comprised of only the Sisters’ handpicked

representatives, the Director Defendants. In derogation of the Amended and

Restated By-Laws of DSM Holdco, Inc. (“Bylaws,” Exhibit 5), the Sisters and

their Board proxies have failed to fill the vacant Board seats as required under

the Bylaws out of fear that filling them might disrupt the Sisters’

overwhelming control of the Board and its agenda. See Exhibit 5 § 3.1 (“The

Board of Directors shall consist of not less than five (5) and not more than

seven (7) members…”).

28. Through this Counterclaim, Mr. Demoulas seeks declarations

under Section 225 that his removal as President and CEO was wrongful and

invalid because the Director Defendants acted in breach of their fiduciary

duties and the Bylaws, and that Mr. Demoulas is reinstated as the President
and CEO of the Company.

PARTIES AND RELEVANT NONPARTIES

29. Counterclaim Plaintiff Arthur T. Demoulas worked in his family’s

grocery store business for most of his childhood and his entire adult life. In

1974, he joined Demoulas Super Markets, Inc.’s board of directors. Over the

ensuing years, Mr. Demoulas also held various employee positions within the

organization, including being appointed President and CEO of Market Basket

in 2008. Family infighting in mid-2013 resulted in Mr. Demoulas’s removal as

Market Basket’s President and CEO on June 23, 2014. In response to Mr.

60
Demoulas’s firing, multiple managers resigned, employees walked out, and

customers boycotted Market Basket’s stores. On August 27, 2014, after months

of protests by Market Basket employees and customers, the feuding factions

within the Demoulas family reached an agreement by which Mr. Demoulas

and the Sisters acquired control of Market Basket through their ownership of

DSM. Mr. Demoulas was the President and CEO of DSM from the time that

acquisition closed on December 12, 2014, until the Board terminated him on

September 9, 2025.

30. Director Defendant Jay K. Hachigian joined the Board in March

2021 after being nominated by the Sisters. He was appointed chairman of the

Board on March 13, 2025, by the Sisters’ other Board nominees. Mr. Hachigian

is a founding partner of the international law firm Gunderson Dettmer Stough

Villeneuve Franklin & Hachigian LLP. Mr. Hachigian has been the neighbor

and close friend of one of the Sisters and her husband, Caren and Joseph

Pasquale, for more than 20 years. Mr. Hachigian’s wife has known Caren

Pasquale for nearly 50 years. Mr. Hachigian has advised the Sisters and their

families for years on personal estate planning, investing, tax, and other legal

matters.
31. Director Defendant Steven J. Collins joined the Board in 2019

after being nominated by the Sisters. Mr. Collins is a founding team member

and a Managing Director of the Boston-based private equity firm Exeter

Capital. Over his career he has specialized in extracting cash for investors from

companies, often through the use of debt. He has served as a director of a

number of companies that have collapsed into bankruptcy under the weight of

excessive debt, including Party City and Charlotte Russe. The family of Mr.

Collins’s former business partner, David Mussafer, has close personal

61
connections to the family of one of the Sisters, Caren Pasquale, and the

Mussafer’s children are friends with the Pasquale’s children.

32. Director Defendant Michael Keyes joined the Board in 2023 after

being nominated by the Sisters. Mr. Keyes is a Senior Director of acquisitions

at Intercontinental Real Estate Corporation, where he is an Investment

Committee member. As detailed above at Paragraph 9, bullet 3,

Intercontinental Real Estate Corporation was involved with Joseph Pasquale,

the husband of Sister Caren Pasquale, in 2022 in real estate dealings that

resulted in Market Basket overpaying Joseph Pasquale’s real estate company

for a piece of real estate (over the objections of Mr. Demoulas), even though

Joseph Pasquale had originally agreed with Market Basket to sell the property

to Market Basket for a lower price.

33. DSM Holdco, Inc. is a Delaware corporation that was

incorporated on December 10, 2014. See Exhibit 6 (Amended and Restated

Charter). DSM was utilized by Mr. Demoulas and the Sisters to buy out their

cousins’ interest in Market Basket in 2014. Since that transaction, the

Company has been the 100% owner of its operating subsidiary, Demoulas

Super Markets, Inc. The ownership structure of DSM is as follows:

Controlling Stockholder Name Percent Number of

Faction Owned Shares
Arthur T. Demoulas Revocable Trust .04% 1.00

The Arthur T. Demoulas Family Trust 28.27% 692.50

Arthur T. (2020)
Demoulas
Maureen Demoulas .12% 3.00

T.A.D. Family Trust 10.29% 252.00

Frances I. Demoulas Revocable Trust .04% 1.00

62
 Frances I. The Frances Demoulas Family GST 14.25% 349.03
Demoulas Exempt Trust
(Demoulas
Sisters) The Frances Demoulas Family GST Non- 6.22% 152.47
Exempt Trust

Glorianne Demoulas Revocable Trust .06% 1.50

Glorianne
Demoulas Glorianne Demoulas Family Trust (2020) 20.45% 501.00
(Demoulas
Sisters)
Caren L. Demoulas Revocable Trust .08% 2.00

Caren L. Demoulas 2020 Irrevocable 7.08% 173.58

Trust-GST Exempt Trust

Caren L. Caren L. Demoulas 2020 Irrevocable 5.93% 145.34

Demoulas Trust-GST Non-Exempt Trust
(Demoulas
Sisters) Caren L. Demoulas 2020 Irrevocable 7.08% 173.58
Trust-Flex Trust

Joseph B. Pasquale .08% 2.00

100% 2,450.00
34. Demoulas Super Markets, Inc., d/b/a Market Basket, is a

Massachusetts corporation. It operates 90 supermarkets across

Massachusetts, New Hampshire, Maine, and Rhode Island. Market Basket

grocery stores are lauded by the local communities they serve for their

combination of low prices, high-quality products, and a strong sense of

community and employee loyalty. The chain’s commitment to its customers

and employees, along with its “no-frills” approach and focus on value, resonates

deeply with its constituents.

35. Non-party Bill Shea was an original Board member upon DSM’s

incorporation in 2014. Before that, Mr. Shea was a director of the predecessor
company, Demoulas Super Markets, Inc., for more than 15 years. Mr. Shea was

63
the long-serving chairman of the Board until he was supplanted on March 13,

2025, by Mr. Hachigian, who was appointed as chairman of the Board by the

Sisters’ other Board nominees. As a director and the longtime chairman, Mr.

Shea worked collaboratively for decades with Market Basket’s management

team to propel the organization’s growth and foster its unparalleled culture

and reputation. Mr. Shea was removed from the Board by the Sisters on

August 7, 2025, in apparent retribution for demanding books and records from

the Company under 8 Del. C. § 220(d).

36. The non-party Sisters are Glorianne Farnham, Caren Pasquale,

and Frances Kettenbach. The Sisters have never worked at Market Basket or

DSM. Over many years they have been motivated by their own self-interest

and that of their now adult children.

37. Non-party Madeline Demoulas is the oldest daughter of Mr.

Demoulas. Madeline began working at Market Basket during her childhood

and joined the Company on a full-time basis shortly after graduating from

college. She has held various management roles, with broad responsibilities on

the executive operations team, including, but not limited to, marketing, human

resources, logistics, and operating systems throughout the Company. Madeline

also is one of the two most senior female executives at Market Basket.

Madeline, together with her father, Mr. Demoulas, and brother, Telemachus

Demoulas, were placed on administrative leave on May 28, 2025. Madeline has

performed at an exceptionally high level during her career at the Company.

38. Non-party Telemachus (“T.A.”) Demoulas is the son of Mr.

Demoulas. T.A. has also worked at Market Basket since his childhood. Since

joining the Company full-time following his graduation from college, T.A. has

been instrumental in various executive roles, including overseeing the

management of the Company’s grocery procurement department, coordinating

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the opening of a Massachusetts liquor store division, and leading critical

aspects of the Company’s real estate operations. T.A., together with his father

and sister, was placed on administrative leave on May 28, 2025. T.A. has

performed at an exceptionally level high during his career at the Company.

39. Non-party Michael Kettenbach, Jr. is the son of Sister Frances

Kettenbach. Mr. Kettenbach, Jr. reportedly misappropriated many of the

functions of the Company’s President and CEO at the direction of the

Executive Committee while Mr. Demoulas was placed on administrative leave.

Mr. Kettenbach, Jr. was selected by the Director Defendants even though he

previously abused his authority over deli procurement by sourcing cheese for

Market Basket from a company of his own creation and in which he had a

substantial undisclosed equity interest. Mr. Kettenbach, Jr. did this at a

substantial profit to himself until the scheme was uncovered in 2017. This

incident was the subject of Board attention when it was discovered, and

Frances Kettenbach attempted to whitewash the corporate board minutes to

remove negative references to her son. Mr. Kettenbach, Jr. has proven himself

to be unfit to lead the Company.

JURISDICTION
40. The Court has personal jurisdiction over each of the Counterclaim

Defendants because they submitted themselves to the jurisdiction of this Court

for purposes of the matters addressed herein by filing the Complaint. The

Court also has personal jurisdiction over DSM because it is a Delaware

corporation, and over the Director Defendants because they are directors of

DSM.

41. This Court has subject matter jurisdiction over this case under,

inter alia, 8 Del. C. § 111, 8 Del. C. § 225, 10 Del. C. § 341, and 10 Del. C. § 6501,
et seq.

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 FACTUAL BACKGROUND

A. Market Basket’s History and Success Under Mr. Demoulas

42. Market Basket’s story began in 1917 when the Greek immigrant

progenitors of the Demoulas family, Athanasios and Efrosini Demoulas,

opened Demoulas Market in Lowell, Massachusetts. Over the ensuing century,

the grocery store chain expanded, as did the branches of the Demoulas family.

Periodic legal clashes between family factions resulted in several realignments

of control throughout the 1990s and 2000s.

43. By 2008, Arthur T. Demoulas was named President and CEO of

Demoulas Super Markets, Inc. Under Mr. Demoulas’s leadership from 2008

through 2014, revenues grew from $2.8 billion to $3.2 billion. Mr. Demoulas

oversaw the expansion of the grocery store chain during that time through

always enhancing the shopping experience, savvy real estate acquisitions, and

new store openings.

44. Beyond Market Basket’s quantitative successes under Mr.

Demoulas, the organization was enriched by his leadership philosophy. Mr.

Demoulas is renowned by Market Basket employees for his genuine concern

for their personal lives and success.

45. Mr. Demoulas’s business proficiency and devotion to Market

Basket and its personnel endeared him so much to his colleagues and the local

community that when Demoulas family infighting again threatened the

business in 2014, the entire community came out in support of Mr. Demoulas.

46. In July 2014, Mr. Demoulas and the Sisters submitted a bid to

acquire from their cousins the 50.5% of Market Basket that Mr. Demoulas and

the Sisters did not already own. On August 27, 2014, Mr. Demoulas and the

Sisters reached a deal to buy out their cousins’ interest in Market Basket for

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$1.6 billion. The acquisition was heavily funded by debt secured by the

Company’s performance and its real estate.

47. Upon completion of the 2014 acquisition, Mr. Demoulas became

the President and CEO of the newly formed DSM. With Mr. Demoulas’s return,

Market Basket’s success not only resumed, but accelerated. Revenues have

climbed every year since Mr. Demoulas’s leadership resumed; from $4.8 billion

in 2015 to a forecasted $8 billion in 2025. The number of Market Basket stores

increased from 75 stores in 2015 to 90 stores today. The Company’s $1.6 billion

acquisition financing debt was paid off by the end of 2024. Market Basket

continued its popular profit-sharing program, contributing more than $665

million to employees’ investments between 2015 and 2024. And Market Basket

has been routinely ranked as one of the best grocery store chains locally and

nationally.

B. Tensions Reemerge Within the Demoulas Family

48. In the years following the 2014 acquisition, the Sisters, who have

never worked at Market Basket or the Company in any capacity, grew

uncomfortable with the recognition Mr. Demoulas received as a result of the

2014 transaction and carrying the Company’s success into its new era. The
Sisters coveted greater control of and recognition at the Company, and desired

larger stockholder distributions and also were focused on limiting the

executive roles of Madeline and T.A. Demoulas within the Company.

49. The latest unrest at the Company was precipitated by accusations

from Sister Frances Kettenbach that the 2014 acquisition was somehow unfair

to her, even though she and every stockholder had their own independent

counsel at the time. To mitigate those concerns, Mr. Demoulas and the other

Sisters agreed to add to the Bylaws the robust information rights set forth in
Section 2.14 (which the Sisters ironically tried to deprive Mr. Demoulas of by

67
operating through the Executive Committee) with the intention that increased

transparency would prevent accusations of subterfuge in the future.

50. Tensions between Mr. Demoulas and the Sisters worsened when,

in 2018 and 2019, two of the Sisters’ spouses, Michael Kettenbach, Sr. and

Joseph Pasquale, sought to extract from Market Basket $10 million each as a

“buyout” when they decided to wind down a business that they owned (“RMD”)

which had provided real estate development services to Market Basket. While

the request was under consideration, on December 30, 2018, Mr. Pasquale fired

off to his industry contacts an email attacking Market Basket’s management.

51. Market Basket had no material interest in any assets remaining

in RMD and Mr. Demoulas initially refused to pay the spouses anything

considering they had chosen to shut down there own business, but later offered

to pay the two Sisters’ husbands $1 million each as a compromise. Michael

Kettenbach, Sr. and Joseph Pasquale rejected the lesser sum offered to them.

52. The Board then became involved due to the related party nature

of such a payment. Mr. Collins and fellow Board member, Terrence Carleton

(who was later removed from the Board by the Sisters), studied the matter over

a period of time. Ultimately, Mr. Carleton issued a report recommending a

payment of $3 Million to settle the matter. Mr. Collins advocated for a still

higher payment. The full Board took up the matter on December 5, 2019, and

voted on a motion to extend an offer from the Board to Messrs. Kettenbach and

Pasquale of $3M, conditioned on receipt of terms and releases typical of any

settlement agreement. The motion passed by a vote of three-to-two with Mr.

Collins casting a dissenting vote. Ultimately, Messrs. Kettenbach, Sr. and

Pasquale rejected the offer.

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 53. The rejection of the two Sisters’ spouses’ request for a $10 million

handout each and circulation of the ill-advised email deepened the divide

within the Demoulas family.

C. The Formation of the Current Board

54. As a result of the rising tensions, and despite Market Basket’s

strong growth and culture perpetuated by the Company’s leadership, the

Sisters set about replacing experienced, long-serving directors with the Sisters’

puppets, who had no relevant experience or connections to the Company or the

grocery store industry, but plenty of connections to the Sisters.

55. One at a time, the Sisters picked off the directors who had guided

the Company for decades, leading it through the tumultuous 2014 acquisition

period, and helping it attain its current profitability and prominence. The

excised directors possessed tremendous institutional knowledge and

experience that the Sisters cast aside in favor of obedient proxies for

themselves.

56. In 2019, the Sisters removed Robert Paglia from the Board and

replaced him with Mr. Collins. In 2021, the Sisters removed Charles Roazen,

who had served on the Board more than 20 years, from the Board and replaced
him with Mr. Hachigian. In 2022, Edward Pendergast voluntarily resigned. In

2023, Mr. Keyes was elected as a director. And on January 3, 2025, the Sisters

removed Terrence Carleton, whose tenure as a director of the Company and

Market Basket stretched over 20 years. Mr. Carleton was not replaced on the

Board, and his seat remains vacant.

57. Most recently, the Director Defendants sought to diminish Mr.

Shea’s influence. During a March 13, 2025, Board meeting, Mr. Shea was

ambushed with a Board resolution removing Mr. Shea from his position as
chairman of the Board—a position he had held for more than two decades—

69
and replacing him with Mr. Hachigian. The vacancy of Mr. Carleton’s Board

seat at that time ensured that Mr. Collins and Mr. Keyes, the Sisters’

appointees, could vote Mr. Hachigian into the chairman position even over Mr.

Shea’s objections.

58. Subsequently, on August 7, 2025, the Sisters removed Mr. Shea

from the Board by consent of the stockholders after Mr. Shea sought books and

records under 8 Del. C. § 220(d). Mr. Shea has not yet been replaced.

59. Mr. Demoulas objected to the removal of each of the experienced

directors and their replacement with the Director Defendants because, among

other reasons, they had no experience in the grocery store industry and they

had no understanding of or exposure to the unique culture of the Company

before being handed the reins of the Company by the Sisters.

60. As it stands, the Board is now comprised of only three members:

Messrs. Hachigian, Collins, and Keyes. Each of the Director Defendants was

handpicked by the Sisters to consolidate their control and usurp their brother’s

influence at the Company.

61. In violation of the Bylaws, the Sisters and their Board proxies

have failed to fill the vacant Board seats left open by Mr. Carleton and now
Mr. Shea. See Exhibit 5 § 3.1 (“The Board of Directors shall consist of not less

than five (5) and not more than seven (7) members…”). Concerned that the

addition of another director might upset the carefully curated culture of

obedience to the Sisters exhibited by the Director Defendants, the Sisters

purposely have failed to use their controlling voting power to appoint another

director.

62. In circumstances like this where the Company’s stockholders

have not filled a vacancy within 90 days, the Bylaws provide that “such
vacancy may be filled by a majority of the directors then in office.” Exhibit 5 §

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3.3. Yet the Director Defendants, taking cues from the Sisters, have directed

their attention to dismantling the Company’s management, rather than

restoring the Board’s compliance with the Bylaws.

63. By the Spring of 2025, the Sisters had reconstituted the Board

with loyalist directors in control. The Director Defendants then set about

manipulating the corporate machinery for the benefit of the Sisters and

without regard for the Company’s best interests.

D. The Sisters Seek Personal Benefits

64. With the $1.6 billion debt from the 2014 acquisition fully repaid

by the end of 2024, control of the Company’s free cash flow became a greater

prize than ever before. Mr. Demoulas wishes to use the increase in

discretionary funds to grow Market Basket, improve its stores, invest in its

people, and make reasonable distributions to the stockholders. Meanwhile, the

Sisters wish to use the increase in discretionary funds principally to increase

the stockholder distributions they receive from the Company each year beyond

the $40 million, after tax, that each Sister already receives.

65. Accordingly, a driving factor for the Sisters’ actions to pad the

Board with directors loyal to them and to eliminate Mr. Demoulas from the
Company was to clear the path for the Board to approve larger distributions.

In addition to seeking larger distributions, the Sisters are also collaborating to

support litigation against Mr. Demoulas in Massachusetts over a spendthrift

trust created by their father, Telemachus A. Demoulas, that Mr. Demoulas has

served as trustee of for years. The Sisters and their families also seek to

decrease the level of public recognition that Mr. Demoulas has earned as the

long serving and dedicated leader of the Company.

66. To rewrite the public narrative, the Sisters have chosen to try to
erase Mr. Demoulas and his family from Market Basket. The Sisters’ desire to

71
tear down Mr. Demoulas and his family is apparent from the proposals that

the Sisters submitted to the Board through their beholden nominee, Mr.

Hachigian. During an August 22, 2024, Board meeting, Mr. Hachigian called

for an executive session during which he presented proposals that, among

other things, provided:

• The Company will not produce, promote or otherwise participate in
any activity (including offline or digital) that in any way recognizes,
celebrates, or thanks customers, employees or others in connection
with the 2014 walkout/buyout.20
• Leadership of the Company will not pass from the current CEO to
any of his children.
• The Board will undertake a search with the assistance of the CEO
for a qualified successor to be ready to assume leadership in the
future.
• No family member will report to the current CEO and the new
reporting structure will be approved by the Board.21
Exhibit 7 (August 22, 2024, Executive Session Minutes) (emphasis added).

67. In short, the Sisters’ actions to overtake the Board and expel Mr.

Demoulas from the thriving Company were fueled by greed and envy. The

Director Defendants were instrumental in bringing the Sisters’ misguided

desires to fruition, and the Director Defendants serviced the wishes of the

Sisters without regard for the best interests of the Company and its

stockholders at large.

20 This item concerns the Director Defendants’ refusal to celebrate the 10th
anniversary of the 2014 unified actions of Market Basket employees, customers, and
local communities that precipitated Mr. Demoulas and the Sisters buying out the
business.
21 This item was included despite the fact that four family members, Michael

Kettenbach, Jr., Madeline Demoulas, T.A. Demoulas, and Andrea Pasquale, were
already reporting directly and indirectly to the then-“current CEO.”

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E. The Director Defendants Begin Sanitizing Board Minutes to
Paper Over Their Scheming
68. Under the Bylaws, the Company’s Secretary, attorney Andrea

Batchelder, “shall attend all meetings of the Board of Directors and all

meetings of the stockholders and record all the proceedings thereat in a book

or books to be kept for that purpose.” Exhibit 5 § 4.6; see id. § 3.6 (“[T]he

Secretary of the Corporation shall act as secretary at each meeting of the Board

of Directors and of each committee thereof.”). Notwithstanding the explicit

responsibility appointed exclusively to the corporate Secretary, the Director

Defendants attempted to cause Ms. Batchelder to revise Board minutes to

reflect what the Director Defendants wanted them to say, rather than to reflect

actual Board discussions. The reason for that is clear: The Director Defendants

did not want an accurate record of the fact that they were trying for months to

contrive a pretext to remove and ultimately terminate Mr. Demoulas (at the

Sisters’ behest).

69. One example of this whitewashing is that the Company’s January

9, 2025, Board minutes were signed by Ms. Batchelder as the Secretary with

the annotation: “This version of the minutes was approved by the Board of

Directors on August 18, 2025, but I do not attest to their accuracy.” Exhibit 8

(January 9, 2025, Minutes). When Ms. Batchelder circulated the minutes to

the company’s stockholders (pursuant to their information rights in the

Bylaws), Ms. Batchelder included a cover letter explaining what the Director

Defendants forced her to remove from the minutes. In that cover letter, Ms.

Batchelder noted:
Enclosed please find copies of the following documents: Minutes
of the January 9, 2025 (I am not attesting to the accuracy of these
minutes as the statement “The CEO asked if there were any
negatives that the Board sees and there were none” was removed
from the minutes even though the question was asked numerous

73
 times).

Exhibit 9 (September 2, 2025 Cover Letter).

70. Even back in January of 2025, the Director Defendants knew they

had to hide the fact that Mr. Demoulas’s performance was beyond reproach

because they were scheming to manufacture a basis to remove him.

71. The Director Defendants evidently did not appreciate Ms.

Batchelder commitment to the truth. In violation of Section 4.6 of the Bylaws,

the Director Defendants prohibited Ms. Batchelder from acting as the

corporate Secretary during the following March 13, 2025, meeting. The
Director Defendants appointed a corporate attorney of their choosing, David

Klebanoff, to sign the Board-approved version of the March 13, 2025, meeting

minutes as the “Acting Secretary,” even though Ms. Batchelder was at the

meeting until she was told to leave before the start of the Executive Session.

Exhibit 10 (March 13, 2025, Minutes).

72. The Director Defendants effectively stripped the Secretary of her

duties under the Bylaws so they could manipulate the narrative and hide their

scheming to manufacture reasons to terminate Mr. Demoulas. The Director

Defendants’ actions were in bad faith and in direct contravention of the

Bylaws.
73. In a similar vein, Messrs. Hachigian, Collins, and Keyes

petitioned Ms. Batchelder to change the minutes from a December 14, 2023,

Board meeting to reflect that non-taxable stockholder distributions should be

renamed to “income distributions” rather than “extraordinary distributions”.

Exhibit 11 (April 3, 2024 Ltr. from Mr. Demoulas to Mr. Shea). The Company

had been calling non-taxable distributions “extraordinary distributions” for

multiple decades originally under the direction of Mr. Demoulas’ father. Id.

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After Mr. Hachigian made the request, Messrs. Collins and Keyes also

requested via email to change the designation of the distributions. Id.

74. On information and belief, Messrs. Hachigian, Collins, and Keyes

made the request to recharacterize the distributions in the Board minutes to

benefit the Sisters in the separate trust litigation because the issue had no

bearing on legitimate Company interests, and it was an issue which the Board

had no corporate purpose for intervening in or supporting.

F. The Director Defendants Form the Executive Committee

75. Given the powerful information rights afforded to Company

stockholders under the Bylaws (see Exhibit 5 § 2.14) and the presence on the

Board of Mr. Shea, the only director who was not in the pocket of the Sisters

at the time, the Director Defendants needed a way to carry out their scheme to

remove Mr. Demoulas in secret. Accordingly, the Director Defendants

purported to form the Executive Committee on May 23, 2025, excluding Mr.

Shea from the committee. But that plan was flawed from the start.

76. Mr. Shea was not provided with an explanation for why his Board

colleagues were forming an Executive Committee that excluded him before Mr.

Shea was asked to vote on the formation of the Executive Committee. The
Director Defendants’ secretive presentation of the matter to Mr. Shea flies in

the face of proper governance practice under Delaware law.

77. Given the lack of candidness from his Board colleagues and the

information deficit at which Mr. Shea was placed, Mr. Shea declined to approve

the formation of the Executive Committee. Formation of the Executive

Committee nevertheless ostensibly passed upon the affirmative vote of the

Director Defendants.

78. The resolutions that purport to memorialize the Board’s

formation of the Executive Committee provide that the Executive Committee

75
is imbued with “all the powers and authority of the Board in the management

of the business and affairs of the Corporation to the fullest extent permitted”

under the law and the Company’s governing documents for an indefinite period

of time. Exhibit 12 (May 27, 2025 Executive Committee Minutes and

Resolutions). But the purported scope of the Executive Committee’s authority

is impermissible under Delaware law, rendering its formation improper and

unenforceable. See J. Travis Laster & John Mark Zeberkiewicz, The Rights and

Duties of Blockholder Directors, 70 Bus. Law. 33, 60 (2015) (“If the director has

been excluded for an extended period of time, and if the committee has been

tasked with the full power of the board and is effectively carrying out the

board’s role, then the excluded director may have powerful equitable

arguments in his favor.”).

79. As conceived, the Executive Committee improperly divests the

Board of its statutory charge by delegating forever the powers and

responsibilities of the Board to a subset of directors without identifying the

actual scope and purpose of the Executive Committee. Such a delegation is

contrary to fundamental Delaware law and, therefore, the Executive

Committee never legally existed, nor could it validly hold a meeting, and all
actions that the Executive Committee has purported to take are unlawful and

void ab initio.

80. Further, even if the Executive Committee had been lawfully

formed (it was not) the Executive Committee is not a viable vehicle for

accomplishing the secrecy that the Director Defendants intended with its

creation. Under the Bylaws, all stockholders of the Company are entitled to

notice and the agenda and materials provided to directors before all Board

meetings or committee meetings if the committee is one to which the Board

“delegates final decision-making authority.” See Exhibit 5 § 2.14(a).

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Stockholders are further entitled to final minutes from any Board or committee

meeting for which they are entitled to materials under Section 2.14(a). See id.

§ 2.14(b). Clearly, the Director Defendants’ Board resolutions purported to

grant “final decision-making authority” to the Executive Committee. See

Exhibit 12 (May 27, 2025 Executive Committee Minutes and Resolutions).

81. The Director Defendants wrongfully failed to provide Mr.

Demoulas, a Trustee of multiple stockholders of the Company, with any

Executive Committee meeting materials or minutes. And the only Executive

Committee notice provided was on May 25, 2025, announcing the fateful May

27, 2025, meeting during which the Executive Committee unilaterally and

summarily put Mr. Demoulas on administrative leave from his positions as the

Company’s President and CEO. See Exhibit 13 (May 27, 2025 Executive

Committee Meeting Notice). The only agenda item stated in the inadequate

meeting notice was: “Discussion of various corporate matters;” a far-cry from

the clear intent of the Bylaws to provide informational transparency to DSM’s

stockholders.
G. The Executive Committee Puts Market Basket’s Management
Team on Administrative Leave and Initiates the Investigation
With the Predetermined Decision to Remove Mr. Demoulas
82. At the May 27, 2025, meeting of the Executive Committee, it was

purportedly determined that Mr. Demoulas would be placed on administrative

leave while the Investigation takes place. The Executive Committee issued

letters the following day to Mr. Demoulas (see Exhibit 1 (May 28, 2025, Ltr.

From Executive Committee for Mr. Demoulas)) and Market Basket’s

employees (see Exhibit 2 (May 28, 2025, Ltr. From Executive Committee for

Market Basket Associates)) announcing Mr. Demoulas’s leave and the

Investigation, and claiming that the basis for the Executive Committee’s

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actions was his alleged “failure to cooperate with and take directions from the

Market Basket Board” and “credible allegations that [Mr. Demoulas] ha[s]

begun to plan a disruption of the business and operations of Market Basket

with a work stoppage.” Mr. Demoulas, T.A. Demoulas, and Madeline Demoulas

were removed from their roles at the Company, along with Thomas Gordon and

Joseph Schmidt (two key executives) and Mr. Demoulas’s non-executive

supervisor and brother-in-law, Gerard Lewis. The Executive Committee

comprehensively purged most of Market Basket’s top managers and, as a

display of the Executive Committee’s motivation to advance the Sisters’

intentions, the removal of Gerard Lewis effectively wiped-out Mr. Demoulas’s

family from the Company.

83. Later, on May 30, 2025, the Director Defendants presented to the

Board resolutions that purportedly ratified the actions of the Executive

Committee to remove Mr. Demoulas and initiate the Investigation.

84. Mr. Shea was not provided at that time with any explanation of

what the Executive Committee had discussed, the supposed “credible

allegations” that justified Mr. Demoulas’s leave and the Investigation, or what

the scope and duration of the Investigation would be. Accordingly, Mr. Shea
opposed ratification of the Executive Committee’s actions. Ratification

supposedly passed nevertheless upon the affirmative vote of the Director

Defendants.

85. The Executive Committee’s actions were unlawful and deeply

troubling for multiple reasons.

86. First, the justifications provided for putting Mr. Demoulas on

leave were pure artifice and were contrived in bad faith by the Director

Defendants in dereliction of their fiduciary duties to the Company. As an initial

matter, it is untrue that Mr. Demoulas was planning a “work stoppage” prior

78
to his removal. It would be completely irrational for Mr. Demoulas to

intentionally inflict the existential harm of a work stoppage on the Company,

of which he owns 28%. Further, the farcical nature of the explanation for Mr.

Demoulas’s leave and the Investigation is evident from Mr. Hachigian’s

response to Mr. Shea’s June 16, 2025, demand for information. In his response,

Mr. Hachigian provided an entirely different (and equally inadequate) set of

reasons for Mr. Demoulas to be put on leave and for the Investigation. See

Exhibit 4 (June 19, 2025 Ltr. from Mr. Hachigian to Mr. Shea) (outlining

instances where the Board thought it was difficult to work with Mr. Demoulas).

It is also clear from the more than three-hour interview to which Mr. Demoulas

was subjected as part of the investigation that the supposed “credible

allegations” that Mr. Demoulas was planning a work interruption came from

whole cloth. Mr. Hachigian’s shifting explanations for putting Mr. Demoulas

on leave and the conspicuous absence of any “credible allegations” supporting

the Investigation reveals the truth that the Executive Committee had no

legitimate cause to put Mr. Demoulas on leave and conduct a witch hunt. That

was only done to buy time and manufacture a post hac basis for the Director

Defendants’ misconduct.
87. Second, the Executive Committee selected Quinn Emanuel,

which purported to conduct an “independent” and “unbiased” investigation

while simultaneously representing the Board, the Executive Committee, and

the Company. Quinn Emanuel has also recently spoken on behalf of the Sisters

to the media.

88. Third, to the extent Mr. Demoulas’ termination after the

Investigation into purported wrongdoing was for cause, the removal is

improper under the Bylaws. Section 4.2 of the Bylaws states that “in the event
of the removal of an officer for cause, such officer shall be entitled to prior

79
notice of the alleged basis therefor and an opportunity to be heard by the Board

of Directors in respect thereof.” But Mr. Demoulas was not presented with

prior notice of the “cause” for his removal. In fact, Mr. Demoulas still does not

know what “credible allegations” support the Director Defendants’

manufactured basis for removing him. Nor was Mr. Demoulas afforded a

reasonable “opportunity to be heard by the Board” in response to such “credible

allegations” prior to his removal. Rather, the Director Defendants’ removal of

Mr. Demoulas as an officer for supposed “cause” was a fait accompli initiated

secretly under the cover of the unlawfully convened Executive Committee and

executed by the Director Defendants after the pretextual Investigation.

89. Instead of exercising their independent judgment to evaluate

continuation of Mr. Demoulas’s service to Market Basket as President and

CEO of the Company, the Director Defendants demonstrated blind obedience

to the Sisters and followed their unlawful instructions without hesitation.

Indeed, Mr. Hachigian has put in writing his view that each DSM director is

“serv[ing] on the Board at the pleasure of the Demoulas [S]isters.” Exhibit 4

(June 19, 2025 Ltr. from Mr. Hachigian to Mr. Shea). And, prior to that, Mr.

Hachigian had stated to Mr. Shea that the Director Defendants are willing to
take a 20% hit to the Company’s bottom line to unseat Mr. Demoulas and

satisfy the Sisters’ wishes.

90. Only minutes after an unsuccessful mediation in front of The

Honorable Joseph R. Slights III concluded on September 9, 2025, the Director

Defendants executed their premeditated plan to terminate Mr. Demoulas

under the guise of the pretextual Investigation into purported wrongdoing that

never occurred, then they filed the present Section 225 lawsuit against Mr.

Demoulas.

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 91. The Director Defendants’ decision to initiate the Investigation

and remove Mr. Demoulas and his management team was a conflicted one in

which the Director Defendants placed their personal interests in maintaining

their Board seats and appeasing the Sisters over the best interests of the

Company. The Investigation was merely a smokescreen for a predetermined

decision by the Sisters and the Board to oust Mr. Demoulas as President and

CEO of the Company. Their process and actions are inconsistent with the law

and equity, and Mr. Demoulas’s removal cannot be substantiated.

H. The Executive Committee Scrambles to Insert New Management

92. In addition to the Director Defendants’ failures under the law and

equity to remove Mr. Demoulas, they also failed to establish a leadership

framework to support the Company in the absence of Mr. Demoulas and the

Company’s suspended management team.

93. In the disorganized morass that followed the Executive

Committee’s surprise announcement that it was putting Mr. Demoulas and his

management team on leave, employees throughout the organization expressed

concerns about who would be leading Market Basket and what the future of

the business looks like. The Executive Committee did not have answers.
94. Instead, the Executive Committee encouraged loyalists of the

Sisters to assume control of the Company and push the Sisters’ agenda with

impunity. In particular, Mr. Kettenbach, Jr., the son of one of the Sisters,

Frances Kettenbach, has assumed the functional roles of President and CEO

in Mr. Demoulas’s absence during the Investigation. There was no Board

action authorizing or approving Mr. Kettenbach, Jr.’s ascension. Even so, the

Director Defendants permitted Mr. Kettenbach, Jr. to act as the de facto

President and CEO despite his lack of experience and unfitness for the role

81
given his prior conflict of interest in connection with using his deli purchasing

power to unjustly enrich himself.

95. On information and belief, in the role Mr. Kettenbach, Jr.

assumed, he promoted employees loyal to the Sisters, demoted and fired

employees who spoke up on behalf of Mr. Demoulas or challenged the Sisters’

agenda, and incentivized employees in various ways to sway them to the side

of the Sisters. For example, the vacancies that were created when the

Executive Committee terminated longtime and loyal executives Thomas

Gordon and Joseph Schmidt, who had each been with Market Basket for

several decades, were filled by supporters of the new regime who are willing to

accede to the Sisters’ bidding—such as Chuck Casassa and Kevin Feole.

Additionally, Steve Paulenka, a loyalist to the Sisters, was promoted to a new

role in charge of strategic planning.

96. In stark contrast to the vibrant, people-first culture developed by

Mr. Demoulas, Mr. Kettenbach, Jr. and his cohort instilled an environment of

repression and fear of retaliation for even the slightest indication of support

for Mr. Demoulas, fracturing the Company’s culture.

97. The Executive Committee’s endorsement of Mr. Kettenbach, Jr.’s

seizure of the Company’s President and CEO roles are further violations of the

Director Defendants’ duties to the Company. Section 3.11 of the Bylaws

precludes any committee from backfilling officer positions. See Exhibit 5 § 3.11.

And Section 4.5 of the Bylaws establishes that in “the absence or disability of

the President, the Board of Directors may appoint the Corporation’s Secretary

or Treasurer as the acting President.” Id. § 4.5. Thus, under the Bylaws, the

Executive Committee has no authority to authorize anyone to step into the

roles of President and CEO, and Mr. Kettenbach, Jr.’s actions in those roles in
Mr. Demoulas’s absence are invalid and must be unwound.

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 98. On September 16, 2025, following Mr. Demoulas’s termination,

the Board appointed Don Mulligan, Market Basket’s longtime CFO and

Treasurer, to serve as interim CEO.

I. The Director Defendants Are Beholden to the Sisters

99. The Director Defendants’ complicity with the Sisters’ instructions

to remove Mr. Demoulas and upend Market Basket’s management is driven by

the Director Defendants’ desire to retain their Board seats and their deep

personal loyalties to the Sisters. Those relationships create conflicts of interest

which render the Director Defendants incapable of exercising independent and

disinterested business judgment on the matters of Mr. Demoulas’s removal

and instigation of the Investigation, which are initiatives pushed by the Sisters

for personal reasons unrelated to the Company’s best interests. By complying

with the Sisters’ instructions, the Director Defendants are damaging the

Company in pervasive and ongoing breach of their fiduciary duties.

100. Each Director Defendant has either a single debilitating conflict

or a constellation of connections that render them incapable of acting

independent of the influence of the Sisters with regards to Mr. Demoulas’s role

as the CEO and President of the Company.

101. Mr. Hachigian has advised the Sisters and their families for years

on personal estate planning, investing, tax, and other legal matters. It appears

that he is a fiduciary to the Sisters personally. Moreover, Mr. Hachigian is a

neighbor and close family friend of one of the Sisters, Caren Pasquale. Mr.

Hachigian has been the neighbor and close friend of Caren and Joseph

Pasquale for more than 20 years. Mr. Hachigian’s wife has known Caren

Pasquale for nearly 50 years. These loyalties are reflected in Mr. Hachigian’s

words professing his view that each of the directors are “serving on the Board
at the pleasure of the Demoulas [S]isters.” Exhibit 4 (June 19, 2025 Ltr. from

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Mr. Hachigian to Mr. Shea). He cannot act independently of the Sisters’

influence.

102. Mr. Collins’s former business partner, David Mussafer, has close

personal connections to the Pasquale family, and the Mussafer’s children are

friends with Caren Pasquale’s children. Further, as detailed at Paragraphs 50-

52 above, Mr. Collins previously advocated in 2019 for Michael Kettenbach, Sr.

and Joseph Pasquale (husbands of the Sisters) to receive increased special

payouts related to winding down a real estate development company, RMD.

Mr. Collins’s willingness to divert corporate assets to the Sisters’ families at a

higher level than that approved by the Board demonstrates a lack of

independence.

103. Mr. Keyes is a Senior Director of acquisitions at Intercontinental

Real Estate Corporation, where he is an Investment Committee member. Mr.

Keyes’ real estate firm, Intercontinental Real Estate, was involved in its

attempted purchase of real estate from an entity controlled by Joseph

Pasquale, a stockholder and the husband of Caren Pasquale. Mr. Keyes and

his employer competed against Market Basket in 2022 in an effort to purchase

one of DSM’s most successful store locations without Joseph Pasquale notifying
Market Basket of the intended sale, even though he had a prior understanding

with Mr. Demoulas for Market Basket to buy the property. The effort by

Intercontinental to purchase the property had the effect of artificially raising

the price Market Basket had to pay for the real estate. Ultimately, the Board

and the Sisters voted to purchase the property over the objection of Mr.

Demoulas due to the inflated price and the Company bought the site on July

28, 2022. Mr. Keyes was added to the Board by the Sisters fifteen months later

on October 5, 2023.

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 104. Messrs. Hachigian, Collins, and Keyes all participated in

petitioning Ms. Batchelder to change the minutes from a December 14, 2023,

Board meeting to reflect that non-taxable stockholder distributions should be

renamed to “income distributions” rather than “extraordinary distributions”.

Exhibit 11 (April 3, 2024 Ltr. from Mr. Demoulas to Mr. Shea). As explained

above, the Company had been calling non-taxable distributions “extraordinary

distributions” for multiple decades under the direction of Mr. Demoulas’ father.

Id. After Mr. Hachigian made the initial request, Messrs. Collins and Keyes

offered their support for the change via email. Id. On information and belief,

the Sisters requested Messrs. Hachigian, Collins, and Keyes make the request

to alter the name of the distributions in the Board minutes to benefit the

Sisters in separate Massachusetts trust litigation because the issue had no

bearing on legitimate Company interests, and it was an issue in which the

Board had no business.

105. The Director Defendants have also witnessed the Sisters’

systematic reconfiguration of the Board and their willingness to remove any

director for even the slightest perceived dissent. The most recent example is

the Sisters’ removal of Mr. Shea, whose only apparent “transgression” was
requesting information to understand why the Executive Committee was

formed and why it was dismantling Market Basket’s management. For asking

questions, the Sisters removed Mr. Shea from the Board. The Sisters also

recently removed Terrence Carlton in January 2025 for his perceived support

of Mr. Demoulas and his management team and his lack of support for the

Sisters agenda.

106. The Director Defendants’ decision making is both infected by

their subservience to the Sisters and compelled by their fear that they too will
be expelled from the Board by the Sisters unless they do the Sisters’ bidding

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without regard for the best interests of the Company. To preserve their own

Board seats, the Director Defendants obediently set about removing Mr.

Demoulas (unlawfully).

107. Further, the manner in which the Board went about following the

Sisters’ orders has exposed them to a substantial likelihood of liability. As

described herein, the Director Defendants have taken multiple actions in direct

contravention of the Company’s Bylaws and in violation of their fiduciary

duties to the Company, including their obligations to prioritize the best

interests of the Company above the interest of any stockholder and to deal

candidly with their Board colleague, Mr. Shea. Indeed, the Director

Defendants’ actions to remove Mr. Demoulas and his management team served

no rational business purpose, and the process was a wasteful use of Company

resources.

108. To summarize the actions that give rise to the substantial

likelihood of liability that the Director Defendants face:

• The Director Defendants permitted the Board to fall and remain
below the required five director minimum since January 3, 2025, in
violation of Sections 3.1 and 3.3 of the Bylaws.
• The Director Defendants sanitized Board minutes to prevent them
from accurately reflecting discussions that would demonstrate the
reality that the Board has no legitimate issues with the way Mr.
Demoulas was managing Market Basket’s day-to-day affairs. See
Exhibit 8 (January 9, 2025, Minutes); Exhibit 9 (September 2, 2025
cover letter).
• The Director Defendants prevented the corporate Secretary from
serving in the capacity delegated to her under the Bylaws, in
violation of Sections 3.6 and 4.6 of the Bylaws. See Exhibit 10 (March
13, 2025, Minutes).
• The Director Defendants caused the Board to form the Executive
Committee composed of just the Director Defendants and excluding
Mr. Shea and purported to delegate to the Executive Committee
virtually all powers of the Board for an indefinite period, in
contravention of Delaware law and policy.

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• The Director Defendants failed to provide stockholders, including
those for which Mr. Demoulas is the trustee, with adequate notice
and materials for meetings of the Board and the Executive
Committee, in violation of Section 2.14(a)-(b) of the Bylaws.
• Despite the Company’s success under Mr. Demoulas’s leadership, the
Director Defendants, through the secretive Executive Committee,
purported to initiate the Investigation into Mr. Demoulas on the
contrived basis that he was planning an employee work stoppage or
other business disruption, and retained Quinn Emanuel as the
supposedly independent investigator (despite Quinn Emanuel also
claiming to represent the Executive Committee, the Board, the
Company, and the Sisters) knowingly causing the Company to waste
corporate assets on a witch hunt.
• The Director Defendants grossly mismanaged the Company by
purging nine of its top executives, supposedly because it was
investigating whether Mr. Demoulas was planning a work stoppage,
without any succession plan, throwing Market Basket into turmoil.
• The Director Defendants permitted Mr. Kettenbach, Jr. to
functionally assume Mr. Demoulas’s role as President during the
nearly three-and-a-half months he has been on leave instead of
appointing the Company’s Treasurer or Secretary to that role in Mr.
Demoulas’s absence, in violation of Sections 3.11 and 4.5 of the
Bylaws.
• The Director Defendants exercised their discretion under Section 4.2
to remove officers unreasonably and arbitrarily by terminating Mr.
Demoulas while conducting a sham investigation into alleged
wrongdoing (none of which would withstand scrutiny), not for any
rational business purpose, but rather in bad faith and for the purpose
of appeasing the Sisters’ personal interests, in violation of the
implied covenant of good faith and fair dealing that inheres in the
Bylaws.
• The Director Defendants terminated Mr. Demoulas after conducting
the Investigation into purported wrongdoing, but deprived him of his
right to prior notice of the alleged basis for his termination, and a
reasonable opportunity to be heard by the Board on the matter, in
violation of Section 4.2 of the Bylaws.
• The Director Defendants terminated Mr. Demoulas on September 9,
2025, based on purported Investigation findings minutes after the
10:00 p.m. conclusion of an unsuccessful mediation between the
parties before The Honorable Joseph R. Slights III, then filed the
present lawsuit minutes later.

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 109. The Director Defendants’ actions breached their fiduciary duties

because, among other reasons, they violated the Bylaws, lacked a rational

business purpose for suspending and terminating Mr. Demoulas, and wasted

Company resources, which exposes the Director Defendants to a substantial

likelihood of liability.

CAUSE OF ACTION
COUNT I
(Declaration Under 8 Del. C. § 225)
110. Mr. Demoulas repeats and realleges each of the foregoing

paragraphs as if fully set forth herein.

111. Actual controversies exist concerning whether the Director

Defendants actions to remove Mr. Demoulas from his offices were invalid and

unenforceable.

112. Section 225(a) provides a mechanism for determining the validity

of the appointment or removal of any officer of a corporation before the Court

of Chancery. The statute states, in relevant part:

Upon application of any … officer whose title to office is contested,
the Court of Chancery may hear and determine the validity of any
… removal or resignation of any … officer of any corporation, and
the right of any person to hold or continue to hold such office …;
and to that end make such order or decree in any such case as
may be just and proper … .

113. Mr. Demoulas’s removal from his roles as President and CEO of

the Company and the assumption of those roles by Mr. Kettenbach, Jr. during

Mr. Demoulas’s administrative leave are wrongful and unenforceable for

multiple reasons.

114. First, the Director Defendants created the unlawful Executive

Committee, to which they purported to delegate indefinitely all authority of

the Board to manage the business and affairs of the Company. The scope and

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duration of the power delegated to the Executive Committee is inconsistent

with the bedrock principle that the business and affairs of every corporation

organized under the laws of the State of Delaware are to be managed by and

under the corporation’s board of directors. Because the formation of the

Executive Committee fundamentally contravenes Delaware law, no meeting of

the Executive Committee could have been properly convened, and all actions

purportedly taken by the rogue faction of Director Defendants masquerading

as the Executive Committee, including the removal of Mr. Demoulas and

initiation of the Investigation, are void ab initio.

115. Second, Mr. Demoulas’s removal was improper under the Bylaws.

Section 4.2 of the Bylaws states that “in the event of the removal of an officer

for cause, such officer shall be entitled to prior notice of the alleged basis

therefor and an opportunity to be heard by the Board of Directors in respect

thereof.” Mr. Demoulas was purportedly removed from his positions as

President and CEO because of “credible allegations” that he had “begun to plan

a disruption of the business and operations of Market Basket with a work

stoppage.” The Board and Quinn Emanuel conducted the months-long

Investigation into Mr. Demoulas’ purportedly wrongful conduct before

terminating Mr. Demoulas, but Mr. Demoulas was never presented with prior

notice of that “cause” for his removal. Indeed, Mr. Demoulas still does not know

what “credible allegations” support the Director Defendants’ manufactured

basis for removing him. Nor was Mr. Demoulas afforded a reasonable

“opportunity to be heard by the Board” in response to such “credible

allegations” prior to his removal. Rather, the Director Defendants’ removal of

Mr. Demoulas as an officer for supposed “cause” was a fait accompli effectuated

under the cover of the unlawfully convened Executive Committee.

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 116. Third, the Director Defendants exercised their discretion under

Section 4.2 of the Bylaws to remove officers unreasonably and arbitrarily, not

for any rational business purpose, but rather in bad faith and for the purpose

of appeasing the Sisters’ personal interests. In so doing, the Director

Defendants violated the implied covenant of good faith and fair dealing that

inheres in the Bylaws.

117. Fourth, the justifications provided for removing Mr. Demoulas

are unfounded and were contrived in bad faith by the Director Defendants in

dereliction of their fiduciary duties to the Company. Instead of exercising their

independent judgment to evaluate continuation of Mr. Demoulas’s service to

Market Basket as President and CEO of the Company, the Director

Defendants succumbed to the whims of the Sisters, to whom the Director

Defendants are beholden. The Director Defendants’ decision to remove Mr.

Demoulas was a conflicted one in which they placed their personal interests in

maintaining their Board seats and appeasing the Sisters over the best

interests of the Company. Equity cannot substantiate the actions of the

Director Defendants to place their own interests and the interests of their

perceived masters, the Sisters, ahead of the Company’s wellbeing.

118. Fifth, even assuming, arguendo, that Mr. Demoulas had been

properly put on leave from his President and CEO positions during the

pendency of the Investigation, the Executive Committee acted improperly and

in contravention of the Bylaws by allowing Mr. Kettenbach, Jr. to functionally

assume the roles of President and CEO. Section 3.11 of the Bylaws prohibits

the Executive Committee from backfilling any officer positions in the

leadership void that the Director Defendants heedlessly created. Section 4.5 of

the Bylaws further provides that, in the absence of a President, that office may
be filled by either the Company’s Secretary or its Treasurer. The Executive

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Committee disregarded both Sections of the Bylaws by endorsing Mr.

Kettenbach, Jr.—who is neither the Company’s Secretary nor its Treasurer—

taking over the Company’s President and CEO positions in Mr. Demoulas’s

absence. The Executive Committee could not have been empowered to backfill

as it did the officer positions in the leadership void that the Director

Defendants heedlessly created.

119. For each of these reasons individually and collectively, Mr.

Demoulas is entitled to declaratory judgments that:

• The Executive Committee’s formation was improper, and all actions
purportedly taken by the Executive Committee are void ab initio;
• Any appointments by the Executive Committee to fill officer
vacancies are prohibited by Section 3.11 of the Bylaws and are
therefore invalid and ineffective;
• The appointment of any person other than the Company’s Secretary
or Treasurer to the role of President of the Company in Mr.
Demoulas’s absence while he was on administrative leave is
improper under Section 4.5 of the Bylaws and therefore invalid and
ineffective;
• All actions by Mr. Kettenbach, Jr. acting as the de facto President
and CEO while Mr. Demoulas was on administrative leave are null
and void;
• The Director Defendants’ decision to remove Mr. Demoulas from his
officer positions was self-interested, at the behest of the Sisters, and
in contravention of the Director Defendants’ fiduciary duties, and is
therefore unenforceable as a matter of equity;
• The Director Defendants exercised their discretion under Section 4.2
of the Bylaws to remove officers unreasonably and arbitrarily, not for
any rational business purpose, but rather in bad faith and for the
purposes of maintaining their Board seats and appeasing the Sisters’
personal interests in contravention of the implied covenant of good
faith and fair dealing, and the Director Defendants’ removal of Mr.
Demoulas is therefore invalid and ineffective as a matter of equity;
• The Director Defendants’ termination of Mr. Demoulas from his roles
as President and CEO violated the terms of Section 4.2 of the Bylaws
because he was not given proper notice of the cause for his
termination or a reasonable opportunity to be heard by the Board in

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 response to the supposed cause, and the Director Defendants’
removal of Mr. Demoulas is therefore invalid and ineffective; and
• Mr. Demoulas was wrongfully removed from his President and CEO
positions and he is reinstated as the President and CEO of the
Company.
120. Mr. Demoulas lacks an adequate remedy at law.

PRAYER FOR RELIEF

WHEREFORE, Mr. Demoulas respectfully requests that the Court enter

an Order:

a. Granting judgment in favor of Mr. Demoulas and against the

Counterclaim Defendants;

b. Declaring that the Executive Committee’s formation was

improper, and all actions purportedly taken by the Executive Committee are

void ab initio;

c. Declaring that any appointments by the Executive Committee to

fill officer vacancies are prohibited by Section 3.11 of the Bylaws and are

therefore invalid and ineffective;

d. Declaring that the appointment of any person other than the

Company’s Secretary or Treasurer to the role of President of the Company in

Mr. Demoulas’s absence while he was on administrative leave is improper

under Section 4.5 of the Bylaws and therefore invalid and ineffective;

e. Declaring that actions by Mr. Kettenbach Jr. acting as the de

facto President and CEO while Mr. Demoulas was on administrative leave are

null and void;

f. Declaring that the Director Defendants’ decision to remove Mr.

Demoulas from his officer positions was self-interested, at the behest of the

Sisters, and in contravention of the Director Defendants’ fiduciary duties, and

is therefore unenforceable as a matter of equity;

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 g. Declaring that the Director Defendants exercised their discretion

under Section 4.2 of the Bylaws to remove officers unreasonably and

arbitrarily, not for any rational business purpose, but rather in bad faith and

for the purposes of maintaining their Board seats and appeasing the Sisters’

personal interests in contravention of the implied covenant of good faith and

fair dealing, and the Director Defendants’ removal of Mr. Demoulas is

therefore invalid and ineffective as a matter of equity;

h. Declaring that Director Defendants’ termination of Mr. Demoulas

from his roles as President and CEO violated the terms of Section 4.2 of the

Bylaws because he was not given proper notice of the cause for his termination

or a reasonable opportunity to be heard by the Board in response to the

supposed cause, and the Director Defendants’ removal of Mr. Demoulas is

therefore invalid and ineffective;

i. Declaring that Mr. Demoulas was wrongfully removed from his

President and CEO positions and he is reinstated as the President and CEO of

the Company; and

j. Granting Mr. Demoulas such other and further relief as the Court

deems just and proper under the circumstances.

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 MCDERMOTT WILL & SCHULTE LLP

/s/ Ashley R. Altschuler

OF COUNSEL: Ashley R. Altschuler (#3803)
Kevin M. Regan (#6512)
Mark W. Pearlstein Ryan D. Konstanzer (#6558)
Andrew C. Liazos Alexander T. Dickinson (#6780)
MCDERMOTT WILL & SCHULTE Taylor A. Christensen (#7029)
LLP The Brandywine Building
200 Clarendon Street, Floor 58 1000 N. West Street, Suite 1400
Boston, MA 02116-5021 Wilmington, DE 19801
mpearlstein@mwe.com (302) 485-3900
aliazos@mwe.com aaltschuler@mwe.com
kregan@mwe.com
rkonstanzer@mwe.com
adickinson@mwe.com
tchristensen@mwe.com

Attorneys for Defendant /

Counterclaim Plaintiff
Arthur T. Demoulas
Dated: October 1, 2025

94