Clamsplainer: Market Basket’s Storied History of Crazy

Most of you are probably aware, unless you live under a rock or in West Gloucester (same difference), that there’s some upheaval going on at our beloved local discount grocery chain. But why, you ask? OH, LET’S DISSECT THIS SHIT. It’s a soap opera of epic fucking proportions. IT’S GOING TO TAKE TWO FUCKING DAYS. FASTEN YOUR SEATBELTS AND CRACK OPEN A BEER OR EIGHT.

Back in my first Business Law class (I actually graduated from college with a business degree, to the surprise of myself and everyone around me), discussing the Demoulas case took up more than one full week of class. And this was years before this current drama. At the end, half the class still walked out whispering “what the fuck even happened? Is there some kind of elaborate flowchart regarding this case? Where do JFK and the stripper fit in?

Let’s turn the Clam Time Machine back to 1916 to start this bullshit off, shall we? So back then, a Greek immigrant named Athanasios “Arthur” Demoulas and his wife start a tiny grocery in Lowell selling fresh lamb. American dream, y’all!

 

O.G. Demoulas store, Lowell.

“Native Lamb” was the metal band I played bass for in high school, coincidentally.

 

They do this forever, and being a family business eventually pass it off to two of their sons Telemachus (or Mike, because no one can pronounce Telemachus) and George.  The brothers expand the business to a supermarket chain of more than a dozen stores in the 50s and 60s. It’s going well, right? Until George dies of a heart attack on vacation in Greece in 1971. Then shit starts getting real.

Mike (left) and George (right), before shit hits the fan.

Mike (left) and George (right). Notice no one has changed the floor design in a Market Basket since 1956. Not pictured: Sawdust.

Mike now owns this huge empire. And although the brothers had promised to take care of each others’ families in the event one of them died, Mike slowly went full asshole instead. Although at first he bought George’s widow and children things every kid loves, like condos and liquor stores, he eventually sneakily had them signing paperwork that gave himself more control of the company.

George’s family didn’t really have the business experience their father had, and trusted their uncle to handle things like he promised. Mike explained to George’s family that he had opened the Market Basket chain to circumvent the laws limiting liquor licenses to one company. He had George’s widow removed from the board of directors over her involvement with another man. Eventually, he left George’s family with a fucking pittance compared to what the chain’s worth should have been at that point – by moving assets into secondary companies owned by only his side of the family (including Lee Drug, a chain he sold to Walgreens for major dollars).

Some Vintage Crazy

Some Vintage Crazy

In 1990, George’s family gets tax notices about their sale of company stock. This immediately sets off their bullshit detectors, because to their knowledge, they hadn’t sold any stock. So the family figures out what’s going on and sues Mike. It takes years and it’s an insane court battle worthy of a goddamn Lifetime special. Cousins punch each other in the back of courtrooms and eventually a state policeman has to be present at every hearing to limit the punchings. George’s son dies and family members are barred from the funeral. Six lawsuits span the 1990’s. Every lawyer in the state seemed to be involved – Mike’s family had 19 lawyers at one point involved with the case.

Someone paid a stripper to testify against her ex-boyfriend. A juror offered to change his decision if he was given $220,000. Two of the lawyers for Mike’s family, with the approval and knowledge of his son, Arthur T Demoulas, secretly tape record a law clerk saying incriminating things under the guise of a job interview to prove the judge overseeing the case has already decided the outcome prior to hearing the arguments and is prejudiced against Mike. The clerk finds out it’s a setup and the FBI gets involved. The clerk is wired. The lawyers -one a freakin’ former assistant US attorney, another a former advisor to JFK – say incriminating things themselves while wired.

Oh my god, my fucking head hurts trying to explain this because it can’t even be real, but it is. Two of the lawyers end up being disbarred at the end of the suit, and George’s family is successful: Mike is found to have defrauded them out of $500 MILLION and the judge forces 51% of the company to be turned over to George’s heirs. Is the Benny Hill theme playing in your head yet? Even while his assets were supposed to be frozen, Mike was subjected to another lawsuit after it was found that he’d diverted another $68M into his own holdings from mutual family holdings. You gotta admit, the guy’s got tenacity.

Tomorrow: I’ll explain what this convoluted-as-fuck backstory has to do with why the Basket has no fucking produce this week. It’s just as nutty. I guarantee it. 

More Market Basket coverage from The Gloucester Clam:

Part 2: Market Basket is Freakin’ Out

Part 3: Update: Shit’s Like the Titanic

Part 4: The Resolution Will Be Televised

About KT Toomey

Local business owner, mom, snarknado.
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70 Responses to Clamsplainer: Market Basket’s Storied History of Crazy

  1. While others have Candy Crush or knitting as a distraction from pressing realities, I have my obsession with mishaps and dramas of corporate governance. MB’s story line is truly amazing, nauseating, shocking and as complex as any brightly colored video game. In this case though, reality is very much present in the game. So glad to get the Clamspective on it all.

    Like

    • lydifeline says:

      I just posted this story on Facebook exactly for the reasons that you describe in your very first sentence thank you Patricia for saying what I was thinking but probably much better than what I would have said! — This is an amazing article! — Thank you so much lady Toomey! :)

      Like

  2. Maureen says:

    This is actually very helpful information. I am eager to read the next post!
    PS your blog is now on my regular rotation as it is funny as hell and spot on

    Like

  3. Stan says:

    It sounds like a great movie could be made from this story.

    Like

  4. 60sSurfer says:

    Now that Game of Thrones is on hiatus, I need something like this to keep me on the edge of my seat! Come on 2nd installment!

    Like

  5. colleen apostolos marsh says:

    KT xo

    Like

  6. Jacquelyn Lovasco says:

    I have asked all kinds of people “Don’t you remember the Demoulas fight about ten years ago ?” Everybody must have been in a coma then. Crickets were heard. You could not make this stuff up.
    Jeez , this brought (again) greed to another level. Shameless.

    Like

    • MelissaJane says:

      I remember! I remember!

      Like

    • lydifeline says:

      I started shopping at the one in Bellingham, MA about 15 years ago, when that shopping center got so big with Walmart and all of the other stores. I was raving to people in Franklin what a great store it was, so reasonable and filled with unusual stuff! — Someone told me at that time, don’t get used to it, (so me too, I remember that remark well) Market Basket is going to hell in a hand basket some day! Guess they knew something, that’s for sure! :)

      Like

  7. the leftkneekid says:

    yup.. poor heirs of george they only got $500 MILLION and 51% of the stock…just sayin..

    Like

  8. sandra j. smith says:

    I’m a part-time cashier at the Basket and I am eternally grateful for this article. Instead of all the idiotic crap that’s posted up or handed out at work I wish that I could just print up a million copies of your article out and hand them out to employees and customers alike when they start questioning my desire to “not get involved in another family’s politics”

    Like

  9. Pingback: Clamsplainer: Market Basket Is Freakin’ Out | The Clam

  10. Larz Neilson says:

    I was aware of much of this story, but (a.) you really work in some major details and (b.) you’re absolutely on the money about the poisonous roots of this feud and (c.) your telling of the story is truly a piece of gifted writing. . . I’m from Wilmington, the site of their first out-of-Lowell store. When the DeM boys built Wilmington Plaza 55 yrs. ago, there was an urban renewal proposal that would have placed a competing supermarket nearby. But it was shot down in town meeting after a selectman delivered a nukuler-bomb speech. The next day, a Sunday morning when the store was closed, that selectman was seen going to the new DeMoulas store, where he met with Mike, for about 15 minutes.

    Like

  11. I am so glad I live in a world where this person writes. I laughed, I cried, I pondered the meaning of life, kudos, this is magic. Cant wait to read more.

    Like

  12. Tom says:

    Truly an interesting story…can’t wait to read more on this.

    Like

  13. Judy says:

    Knew some of this, but the whole story takes the cake !

    Like

  14. betsy says:

    Fun fact – the judge in the Demoulas trial went on to be TV judge Maria Lopez http://en.wikipedia.org/wiki/DeMoulas_Market_Basket

    Like

  15. Connie says:

    You can’t make this stuff up – they spent more than $13M in their lawsuits!

    Like

  16. Never heard of this story ,as I live in Pa. Please write the next installment ASAP, I can hardly wait

    Like

  17. angela1313 says:

    Geez, exactly why I used to hammer on my clients about a succession plan for the family business Charles Dickens himself couldn’t have come up with one this convoluted. I haven’t been back to New England since the folks retired to Florida but I remember the Lee Drug sale. Your play by play on this is more like the stuff of great sports writers than a business story and just as exciting. I’m on to part two!

    Like

  18. Reblogged this on The Jon Welch Experience and commented:
    I want to write about the Market Basket debacle, but this is too great for words.

    Like

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  20. rose says:

    KT, I think I love you! Straightforward and genuine ♡

    Like

    • Irving Philips says:

      A true horror story, how greed and arrogance can ruin the lives of so many people. It is hard to believe that multi millionaires just want more and more.

      Like

  21. Boston Couch Dispatchee says:

    KT I didn’t know you were a writer, this is fucking genius; especially for someone who lives in Chicago.

    Like

  22. Anonymous says:

    Thank you Thank you for writing this! It is like all this corrupt business Telemachus and Artie T. created never happened. Boy how quick do we forget when it is convenient. I still theorize that he is paying off these supervisor that got fired, just like he has done in the past.

    Like

  23. Ma says:

    Question re. first paragraph of post- isnt Mike’s son arthur S demoulas and the one who participated in the scandals? Also, it was arthur t demoilas, son of george, who was the ousted ceo. Very confusing and Lifetime-esque o:-)

    Like

  24. My husband, a transplant to this area, kept getting lost when I asked him to run down the street to the DeMoulas as I referred to the store that had been renamed Market Basket….so yes I remember the battles of old that forced the name change. Great post by the way it’s excellent to have a broader historical view. On the plus side my nieces who worked there throughout HS were always treated well with an understanding that as HS students they would need to change schedules for sports events and even proms. My daughter on the other hand worked briefly at another store for her first job where I felt they were disrespectful and tried to take advantage of the kids esp when we got together and compared notes of the experiences. I would have preferred that she worked at MB. If that work atmosphere was created by Arthur T I applaud that, but the rest of this story you identified is a Greek tragedy.

    Like

  25. Can you please write a fictional “Part 3″ where it turns out that Demoulas is actually DeNomolos from “Bill & Ted’s Bogus Journey”, and Lil’ Bill and Lil’ Ted now have to go back in time (like their fathers did) to stop Artie T from being booted? You can call it “Bill & Ted 3: Basket Case”.

    Like

    • KT Toomey says:

      WE’RE ON IT

      Like

      • Lisa Munson says:

        KT Toomey: You have the most clever, witty engaging style of writing I’ve seen in years. You need to take the story and style of your column “Market Basket’s storied history” and turn it into a movie script. It’s engrossing, unbelievable, entertaining, scandalous, sensational and with your style of humorous writing, I guarantee you it’s a blockbuster.

        Like

      • paullillios says:

        Your color and candor is exceptional, I only wish I could have been reading your comments sooner. I was reeled in by the continuing saga of ASD and ATD. Your break down of early events is spot on. I’ve known ASD since 1981 and I remember having lunch with ASD in Andover sometime around 1989 or 1990 when he told of unfolding events relating to Uncle Mike and ATD. I was shocked as he detailed events that you described. My Grandfather, Uncle and Father w ere all in the grocery business and they had met and held the Demoulas brothers in high regard. What a model, quality product, great values and owned real estate to grow with etc…..To bad Uncle Mike and ATD had to get greedy. I hope for a reasonable solution. .

        Like

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  27. Marie G says:

    As I read the article I could hear Cliff the postman from “Cheers” voice in my head. Weird.

    Like

  28. Jay says:

    Why not write a story about about how this is impacting all the business’s in the
    Market a Basket Plaza’s

    Like

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  30. Carl says:

    OMG, I can’t believe you left me hanging…. Thanks for putting this in perspective.

    Like

  31. Kathy says:

    Wow this is great. I will have my popcorn ready for next episode.

    Like

  32. Kratz Leatherman says:

    I know there’s between bad blood between the Arthur T. and the Arthur S. factions. And I understand that Arthur T. hasn’t always been goody two shoes, but that had changed from what I have observed. He has the loyalty of his workers, takes care of them. Where do you find employers who stay with one company for 30 + years? Not many places these days. It seems to me that the last thing you want to do is fire someone who has led such a successful company, is making money for everyone, all the stores are paid for, there is no debt, and 25K employees who love you. Fire Arthur T.? What other reason than greed?

    Like

    • Cyndi says:

      If Arthur T is such a wonderful guy & loyal to the workers, then he must be busy writing out payroll checks ( from his personal accts.) to those who got fired & those standing in picket lines ( who also probably won’t be able to pay their bills this month) to support his ass, right? I must of missed his ‘don’t put your job on the line for me because I sure wouldn’t do it for you’ speech. You the man Artie! LOL

      Like

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  34. scott says:

    mike should’ve been a fucking senator………….

    Like

  35. chris katsikas says:

    I have a comment, why is Arthur S. the bad guy in all of this? He didn’t defraud or steal anything from any one. Mike and his son Arthur T. are the theives! And whats really funny Arthur T. is trying to buy out Arthur S.with money that he and his father stole from him and his family. As far as the employees go, they are just grease for the wheels, what they don’t understand that like his father Arthur T. functions under the premise,never under estimate the stupidity of the american public.. He buys they’re loyalty with nickels and dimes so that they can make him millions, nothing wrong with that,just good business. In the end no matter what the outcome both Arthur T. and Arthur S. will have billions and the only negatively affected will be the men and women who have worked hard and have made MB what it is today. My recommendation SHUT UP go BACK TO WORK and let these two assholes do what they do, Clusterfuck one another.. In conclusion, lets remember that Arthur S’s family was not the only one Mike DeMoulas used abused and defrauded. The Burliss family( mikes sister), the Katsikas family ( Irene Demoulas’s sister), just to name a couple and the list goes on and on. I’m ashamed to be related to and worked so many years for Mike and his family, my uncle, aunt and cousins, only to watch them reduce and empire into a side show..What a shame, but of course they have no shame, just arrogance and tons of money….

    Like

    • Joe says:

      Chris. I’ve been asking the boycotters outside MB why they disregard the greed of the past and how George’s side of the family was obviously shit-canned. I was surprised to find they didn’t know much about it! The fact that they revere Arty T doesn’t change the fact that there’s poison at the roots and people have been seriously burned. This is one scenario where the past cannot be bygone and forgotten because the nature of it can’t help but manifest in the present. I am sorry your family has had to go through this all these years and I hope all the truth in this case comes to light.

      Like

      • chris katsikas says:

        Thanks Joe, it’s nice to know someone is starting to understands what’s really going on here, If you or I or any of the MB employee’s did what Arthur T. did we would be ,best case audited by the IRS worst case arrested. And now to top it off he has the balls to offer to buy out Arthur S. with the money he and his father stole from Arthur S.’s family, has he no shame??!!!!

        Like

    • Madelon Harper says:

      Well said, Chris!

      Like

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  39. Dianna says:

    Question: Where did you get that awesome Vintage Crazy photo? OMG! I love it.

    Like

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  41. Steven S says:

    i think Mike got the name Market Basket from this history http://www.marketbasketfoods.com/about-us/ so that not good is it

    Like

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