A judge in Suffolk, Mass., Superior Court has ruled that Keith Cowan is an independent director of the Market Basket grocery chain, “striking a blow to the company’s CEO,” Arthur T. Demoulas,
the
Lowell Sun
reported.
Demoulas had filed a suit arguing that Cowan has voted “under the controlling influence” of Arthur S. Demoulas, who is Arthur T.’s cousin and leader of a rival family faction, the article said.
Cowan had voted in favor of paying a $300 million dividend to shareholders and for hiring an executive search firm.
Fabricant’s ruling said that Demoulas had not proved that Cowan failed to meet the standards for director independence in the company’s bylaws. Arthur T.’s complaint said that Cowan and Arthur S. had voted the same way in 19 of 22 votes, with one of the two abstaining in each of the other three votes, the
Sun
report said.
The seven-member board consists of two members of each side of the family or their nominees and three members elected by majority vote of all shareholders. Cowan had originally been appointed by Arthur S.’s side of the family in August 2012. In June 2013, he was appointed as one of the company’s three nonaffiliated directors, the article said.
The
Sun
article noted:
The judge ruled that examining interactions between directors and shareholders “for signs of excessive closeness” would be “a prescription for perpetual litigation.” Fabricant also disagreed that Cowan would be disqualified from becoming a nonaffiliated director after first being aligned with one particular side of the Demoulas family.
(Source:
Lowell Sun,
March 1, 2014.)
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