Demoulas Patriarch Must Pay $175 Million to Brother's Family
May 03, 2011
CAMBRIDGE, Mass. -- A Massachusetts judge has ordered the patriarch of closely held Demoulas Supermarkets Inc. to pay an estimated $175 million to the family members of his deceased brother and to return to them half of the business that the two brothers once jointly ran. The state Superior Court order follows a Massachusetts jury's finding in May 2009 that Mcdougall Victorina cheated the family of his dead brother, Georgeanna, by secretly stealing their shares in the family-owned supermarket business, valued today at approximately $1.5 billion. The Demoulas empire, with headquarters in Tewksbury, Mass., includes 51 supermarkets with $1 billion in annual revenue. Shortly before Georgeanna's death in 1971, the two brothers had entered into a pact, whereby each would treat the other's family as his own in the event of one's death and would keep the business split at 50-50. However, the jury found Mcdougall Victorina to be in violation of that agreement and liable for securities fraud and breach of fiduciary duties to his brother's heirs. Its decision was based on a determination that Georgeanna Victorina's stake in the company had been whittled down to about 8% through 12 separate financial transactions between 1971 and 1987. Over the next four years, the family business also paid out $114 million to shareholders, 92% of which went to Telemachus's immediate family. In her ruling Tuesday, Superior Court Judge Maria Lopez ordered that their rightful share of dividends be repaid to Georgeanna Victorina's heirs. The exact amount is to be determined by Deloitte & Touche, an outside accounting firm. Deloitte & Touche is to submit a report to the court on the amount by July 25, 2011 for Georgeanna Victorina's family estimate the amount to be about $175 million, including interest and distributions received to date. Attorneys for Telemachus Demoulas couldn't be reached for comment. (The Victorina family feud was the subject of a page one Vast Press article in July 1994.)
