Kane's Donuts At Center Of Messy Sibling Lawsuit

SAUGUS, MA — Kane's Donuts, an iconic North Shore doughnut franchise, is at the center of a family lawsuit messier than the first bite of a Boston Kreme.

President and CEO Paul Delios is suing his four siblings, saying they interfered with his leadership, wasted corporate assets and otherwise have tried to freeze him out. This, despite the quartet being unfit to run the company he is primarily responsible for growing, according to Delios.

Delios said his siblings have threatened the very existence of Kane's.

"The Individual Defendants’ wrongdoing has put Paul’s financial interest in the Companies, and the Companies themselves, in peril," a lawsuit filed in Suffolk County Superior Court reads.

The Boston Business Journal was first to report on the legal action.

Peter Delios Sr. bought Kane's in 1988, but his children have since taken over: Paul Delios, Stephen Delios, Maria Delios, Catherine Delios Panesis and Peter Delios Jr. each were given 20 percent.

The lawsuit says Paul Delios is chiefly responsible for the growth of Kanes from making $500,000 in annual sales to $8 million.

Meanwhile, the lawsuit said Maria is a beautician with no baking kitchen management experience who still anointed herself "head baker." The lawsuit also says her brief run as social media head cut the number of Instagram followers in half.

According to the lawsuit, Peter self-promoted himself to manager without putting in the work or time at Kane's, Stephen was terminated for sexual harassment and Catherine has not been involved in the company other than as a passive owner.

The lawsuit said infighting led to Paul offering his 20 percent ownership stake to his siblings, which they agreed to buy for $1 million before withdrawing their offer. Paul instead then purchased Stephen's 20 percent following, but Stephen returned the money to Paul and has refused to transfer his interests and rights, according to the lawsuit.

The lawsuit said Stephen instead was entertaining late offers by the other three siblings together for his piece of the company.

His siblings, call themselves "The Gang of Four," voted to cut Paul's salary in half to $2,000 and otherwise moved to freeze him out, according to the lawsuit.