Pillsbury Realty attorney Daniel Luker filed a “Motion For Protective Order Concerning Michael Kettenbach Testimony” on Tuesday, July 22, in Merrimack Superior Court regarding a lawsuit by Pillsbury against DeMoulas Super Markets Inc., for failure to honor signed contracts regarding construction of an access road from Nashua to Pillsbury roads.
Kettenbach is married to DeMoulas shareholder Frances Irene DeMoulas, and DeMoulas Super Markets, Inc. (DSM) had ordered both Frances DeMoulas and Kettenbach to sign confidentiality agreements.
The July 22 filing seeks a protective order that would allow Kettenbach to testify on behalf of Pillsbury’s claims against DSM.
“DSM has recently demanded that Frances and Michael Kettenbach each sign a confidentiality agreement that would essentially deprive Michael Kettenbach of the ability to present relevant evidence to this Court pertaining to the dispute between Pillsbury and DeMoulas Super Markets,” the filing states. “Pillsbury believes that the requested confidentiality agreements are an attempt by DSM to prevent (Kettenbach) from testifying about DSM’s plans to sell or encumber its real estate.”
The confidentiality agreement would include any information disclosed to Frances DeMoulas including “information disclosed to (her) or her Representatives by the SASC or its Representatives that relates to any Transaction and is confidential or non-public, including the fact that discussions or negotiations are taking place concerning a possible Transaction, including the status thereof or the termination of discussions or negotiations with respect thereto. The term ‘Transaction’ shall mean any negotiated sale of shares of the Company to any third party, any tender offer for outstanding shares of the Company, any potential sale of control of the Company, any sale/leaseback of real estate or other financing of the Company or any transaction related to the foregoing.”
Last month, Chief Executive Officer Arthur T. DeMoulas was fired from his post and Arthur S. DeMoulas installed James Gooch, formerly president of RadioShack Corp., and Felicia Thornton, formerly finance chief for Albertson’s, as co-CEOs.
According to Londonderry Town Attorney Michael Ramsdell, permits were given to DMS to build a new and larger Market Basket on Garden Lane on condition that it work with Pillsbury Realty in creating an access road from Nashua to Pillsbury roads. That cooperation, according to a letter sent to DSM by Ramsdell, has not occurred.
In its filing against DSM regarding the road, dated March 28, 2014, Pillsbury Realty requested to be able to attach all New Hampshire real estate held by DSM.
“The attachment of DSM’s New Hampshire real estate is necessary to preserve Plaintiff’s ability to collect the judgment it is likely to recover against DSM because, upon information and belief, the current DSM Board is in the process of encumbering or selling a substantial amount of DSM’s real estate and other assets, and may vote at any time as it has in the past, to distribute all or most of DSM’s remaining cash reserves, which are primarily in Massachusetts banks or otherwise beyond the jurisdiction of this Court,” that earlier complaint stated. “Given the long and very public history of infighting among DSM shareholders over the control of the company, there is also absolutely no certainty that DSM will exist when Plaintiff’s damage claims are reduced to final judgment. The requested attachment is the only assurance this Court can provide that there will be assets available in New Hampshire for Plaintiff to levy upon at the conclusion of this litigation.”
Kettenbach had asked DSM to include in his proposed confidentiality agreement a provision that would permit him to provide testimony to the court, subject to the court’s entry of a protective order that would maintain the confidentiality of whatever information DSM is seeking to protect, this week’s filing said.
The filing also said DSM has rejected Kettenbach’s proposal, and has proposed, instead, a modification under which he must first notify DSM of his intent to provide testimony to the court and provide the substance of that testimony, so that DSM may seek a protective order “or other remedy.” The proposed DSM revision also requires Kettenbach to agree, in advance, not to oppose whatever action DSM may take without knowing what information DSM may seek to protect or what “other remedy” DSM may seek.
“This process would clearly limit Kettenbach’s ability to present pertinent evidence to this Court,” the new filing states. “Pillsbury now seeks the Court’s intervention to resolve this issue by entering a protective order that maintains the confidentiality of the information DSM is seeking to protect while permitting Kettenbach to present to this Court evidence that supports Pillsbury’s claims.”
Kettenbach, as principal of Retail Management and Development, Inc., and other entities, has overseen DSM’s real estate projects for decades, the filing notes.
The filing said “time is of the essence,” as recent employee actions after the firing of Arthur T. DeMoulas as CEO could move the DMS board to take action.
“Since the removal of Arthur T. DeMoulas as President of DSM in June 2014, DSM management and its business operations have been in turmoil,” the court filing states, referencing recent news articles. “The upheaval at DSM, together with uncertainty as to the future of the enterprise, makes it all the more necessary for Pillsbury to obtain the attachment and/or preliminary injunction it has requested,” the filing states.
The filing notes that a sale of DSM real estate and other assets could be contractually committed to or completed within 30 to 45 days, “in which event there may be no New Hampshire real property subject to attachment or other recourse available to Pillsbury within this Court’s jurisdiction, and less prospect that DSM would honor its contractual commitments to Pillsbury and the Town of Londonderry to engineer and build the Access Road.”
As the filing applies to Market Basket employees’ fears of the company selling off the business, they may be correct.
“In other words, they’ve been lying to the rank and file,” Kettenbach said.