Artie T burner phone data compelled in Market Basket case

A Delaware Chancery court judge overseeing a suit between Market Basket’s Board and former CEO Arthur T. Demoulas had to compel the ousted leader’s legal team to provide burner phone evidence during a November hearing.

According to testimony recently made public from a Nov. 14 court date, Judge J. Travis Laster made Demoulas’ council turn over a full forensic image of a burner phone allegedly used by the defendant following his September termination.

Council for the Market Basket board filed a motion to compel the evidence after the existence of two burner phones, one which is broken, was revealed on Nov. 7, several weeks into the discovery process.

The judge questioned why the phones were not disclosed sooner, as both parties prepared for depositions and a December trial over Demoulas’s termination that will take place in Delaware, where the New England supermarket company is incorporated.

“It seems like something where if you asked Demoulas and he’s being honest, he’s going to say ‘I’ve got two burner phones.’ So it’s weird to me that it took a while for us to get to the point where we knew these phones existed,” Laster said during the hearing, according to the court transcripts.

When asked by Laster why the identification of the phones was delayed, one of Demoulas’ lawyers Kevin Regan said, “I’m afraid I do not have a good explanation for that, other than we asked the questions we typically ask and we didn’t get the answer that indicated that this phone exists.

“Now, in fairness to plaintiffs, they did raise the prospect of the existence of a burner phone. We did ask about it, but it took us a very long time to pin down the information,” Regan added.

Demoulas’ team said that although the timing of the disclosure was “not ideal,” after identifying the phones, they worked as quickly as they could to have the devices processed for evidence, something that proved difficult because one of the phones was damaged.

“I am bothered by the fact that the phones weren’t identified right off the bat. It’s a bad way to say hello to start out with your first disclosure being a seemingly misleading one,” Laster said.

“I’m not blaming counsel. I’m accepting that counsel accurately represented what they were told,” he went on. “I’m actually talking about the human who somehow couldn’t recall that he had flip phones or didn’t think he had to identify them.”

Laster required the Demoulas team to provide the board’s lawyers with the whole forensic image from the unbroken phone, which is a compilation of data from the device, within 24-hours. He also required them to permit a physical inspection of both phones.

The board’s lawyers had also asked the judge to urge Demoulas to provide more documentation from his handwritten notes, as well as information on payments and gifts from Demoulas to individuals who may be deposed or testify during the trial.

According to Demoulas council, they had 175 pages of handwritten documents for the plaintiffs.

But the board’s lawyers said they were doubtful that all Demoulas had.

From Demoulas’ office, “there were boxes and boxes that were packed into a van,” following his dismissal, one of the plaintiff lawyers Aliki Sofis said. “And our understanding is that most of those boxes included notebooks.”

“The guy probably had a lot of stuff in his office, and some of those documents have nothing to do with the case,” Laster said. Still, he asked Demoulas’ council to probe the defendant on where other pertinent information may be located.

“Have him try to recall. Not burner phone recall, but actual, ‘I’m really trying to think where this stuff might be’ recall,” Laster said. “Because what I don’t want is for him to get in deposition, for skillful counsel to explore his recollection, and then for him to say, ‘Oh, gosh, yes. Yeah, up in the attic there are, there’s four more notebooks of stuff.’”

“That would just be bad,” the judge said. “So, let’s try to get to the bottom of this right now.”

Laster also agreed that the information about payments and gifts to persons who will be involved in the case was relevant and needed a response from Demoulas’ team, but asked both sides to work together to come up with a “manageable and realistic list” of who those people are.

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The board and former CEO of Market Basket have been embroiled in a lawsuit since the former fired the latter in September and filed a suit against him in Delaware.

The director-plaintiffs in the case argued in their filing that Demoulas had a history of “ignoring and stonewalling” the board and alleged that he was trying to stir up a worker walk up in the lead up to his termination.

Demoulas denied those claims in a counter-suit, saying that the board had been installed by his three sisters, who combined own a majority of Market Basket stock — about 60%.

Demoulas himself owns about 28.4% of the company, while another 10.3% of the stock is held in a trust for the 14 children of the four siblings. The company rakes in about $8 billion in revenue annually, according to court filings.

An attempt at mediation earlier this summer failed to resolve to the current dispute.

Both parties are set to face each other at trial later this month.

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