Don Marsh, former CEO of Marsh Supermarkets, testified in his defense on Feb. 7 in response to accusations that he “engaged in fraudulent and deceitful behavior while serving as the chairman of CEO of the company” and diverted “company funds to finance his extravagant lifestyle,” court documents show.
The civil trial in the U.S. District Court, Southern District of Indiana, got under way on Feb. 4. The grocery company is seeking $7 million in reimbursements while the former CEO is countersuing, seeking more than $2 million in severance pay he says the chain still owes him. Marsh had been at the helm of the company for 38 years before it was sold to Sun Capital Partners in 2006.
Marsh Supermarkets alleges that Marsh used more than $3 million in company funds to pay personal expenses via an “e-voucher” system and “spent tens of thousands of dollars in ‘petty cash’ belonging to the company without providing any documentation,” the lawsuit states. That is in addition to using the company’s jet and e-vouchers for “hundreds of trips, most of which were personal trips or vacations, including an estimated 350 trips outside of the company’s geographic region from 2000 to 2006.”
Sun Capital Partners terminated him “without cause” in 2006.
The Indianapolis Business Journal reports that among those personal expenses were $1,000 for two pairs of boots for a hunting trip guide and the guide’s girlfriend; $5,960 for four Indianapolis Colts season tickets; use of the corporate plane to fly to the Dominican Republic with three female employees, one of their sisters and his driver on a trip that included a $325 dinner and a $295 round of golf and rent for a mistress’s New York apartment.
Marsh acknowledged his extramarital affairs, but testified that private jet trips he took to visit his mistresses were business related. Marsh’s attorneys contend that they were within the boundaries of his employment contract because he was promoting the company and staying on top of food retailing trends.
Ermal Marsh, Don Marsh’s father, founded the company in 1931. In 1953, when the chain had 16 stores, Marsh Supermarkets became a publicly held company. In August 1959, Ermal Marsh died in a plane crash. His brother, Estel Marsh, took over as president and in 1968 was elected chairman of the board. That is when the then 30-year-old Don Marsh stepped into the role of president of the company. He was named CEO in 1980.
The company now operates 64 Marsh Supermarkets, and three O’Malia’s Food Markets in Indiana and Ohio, and manages 26 MainStreet Market locations.
The trial is expected to last two weeks.