Story Summary

Don Marsh Trial

don marshThe founder and former CEO of Marsh Supermarkets is in a legal battle with the company after being accused of using company funds for his personal matters.

The company said the founder used company money and jets to pay for personal trips and expenses totaling $3 million.  Marsh is accused of flying in the jet to engage in extramarital affairs.

Marsh’s civil trial began on Tuesday, Feb. 12.

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Don Marsh has won a partial victory in his four-year federal court battle with the company that he once led.

Judge Sarah Evans Barker issued an order Monday allowing Marsh to keep nearly $2.2 million in severance paid by Marsh Supermarkets Inc., which had attempted to recover the payments from its former CEO.

More information is available at the Indianapolis Business Journal:

A judge will have to make the final decision in a severance lawsuit involving former grocery store CEO Don Marsh.

Court-requested settlement talks ended without a solution Monday.

The supermarket chain is fighting with marsh over $4 million in severance payments.

The payments stem from Marsh’s employment contract after he was terminated in 2006.

The company wants marsh to repay $2 million dollars in severance. Don Marsh says he is still owed two-million dollars.

A judge is expected to rule in the next several weeks.

UPDATE: A jury found Don Marsh guilty of fraud and breach of his employment agreement late Friday night, after more than six hours of deliberation.

Marsh was ordered to pay $2.2 million in restitution, in a civil lawsuit brought on by the company’s new owners. The jury found the former CEO made false statements to the company about money, committed fraud and caused damage to the company.

Marsh countered, saying the company submitted false income forms, but the jury denied his counterclaim.

The new owners of the supermarket chain wanted the former CEO to repay $7 million to the company.

Jury to decide Don Marsh’s fate Saturday

The civil trial of former Marsh Supermarkets CEO Don Marsh was expected to wrap up Friday, Feb. 15, but now the court proceedings have been postponed until Feb. 16.

Don and Marilyn Marsh walked out the door and down the steps of the federal courthouse.  Their next step will be waiting for a jury of nine to deliver its verdict in the former CEO’s civil case. That wait got a little longer.

The jury was given its instructions, then given the case around 5 p.m.  Late in the day Friday, federal judge Sarah Evans Barker continued the trial until Saturday.

During closing arguments, attorneys for the supermarket chain itemized Don Marsh’s alleged misuse of company money.  The attorneys said Marsh Supermarkets is owed $5.6 million.
Attorney for Marsh Supermarkets, David Herzog told jurors, “Mr. Marsh can’t be honest with himself, because the truth is too hard for him to swallow.”

The money includes trips on the company’s private jet to New York and Tennessee.  Flights to see two of his five mistresses, officials argue.  Marsh was in the air a lot:

“Is it a fact that you traveled so much you didn’t have time for real work?,” asked Herzog during the trial.

Marsh said no, “I worked that much.”

Marsh’s legal team contends he did not do anything wrong.  Attorney Andrew McNeil said flight records appeared in financial statements, and the money spent was approved. McNeil said Marsh was not hiding anything.

“It’s not even close,” McNeil told the jury.

The company says it wants its money back from the supermarket chain’s namesake.

“Mr. Marsh broke his contract,” said Herzog.  “He took what didn’t belong to him, and he took a lot.”

A jury will decide how much, if anything, gets paid back.  Along with the civil trial is a counter-suit.  Don Marsh wants $2 million paid back to him.  It’s money Marsh said the company never paid him after he was let go.

A decision on the counter-suit will come after the verdict in the civil case, expected first thing Saturday morning.

The former CEO of Marsh Supermarkets is in hot water.

“Yeah I would say it’s got a hint of scandal to it,” said Indianapolis Business Journal reporter Scott Olson.

And through it all, Marilyn Marsh continues to stand by her man, leaving court arm in arm after enduring some hurtful testimony in her husband’s civil trial.

Marsh Supermarkets said Don Marsh used company funds to pay for personal trips and expenses totaling $3 million.  However, that’s not all. Olson, who has been following the trial since the beginning, said the details are pretty juicy when it comes to the company jet.

“A lot of those travels include visiting several mistresses,” Olson said.

Marsh Supermarkets said its former CEO was using the company jet for his own personal flings.  They claimed he was going from Indiana to New York twice a month in the year 2000 to visit a mistress.

“A Russian woman who was involved in a Russian Ice Ballet,” Olson said.  “And he was thinking about sponsoring that in the U.S. Have Marsh Supermarkets sponsor it and he put her up in an apartment in New York City.”

There were also five trips to Tennessee to visit another woman.

“I guess what they’re calling a high school friend in Tennessee that he would also take the jet to,” Olson said.

Marsh admitted in court the friend was one of his five mistresses.

“He’s claiming that they were business related trips all around the world,” Olson said.  “Marsh Supermarkets says they’re personal.”

Don Marsh is fighting back.  He is suing Marsh Supermarkets, stating they stopped his retirement payouts and the supermarket chain owes him $2 million.

The trial is expected to wrap up by the end of the week.  Despite the scandal, Olson said this court battle and the embarrassing details that are coming out in the trial do not seem to be hurting the Marsh brand.

There is new information about the court documents which detail the extent of improper spending allegations against the former CEO of Marsh Supermarkets. Don Marsh is accused of using company money as his own and spending that money on extra-marital affairs. Marsh is being sued for fraud and breach of contract.

A 55-page court document lays out dozens of questionable expenses, with Marsh refusing to answer many of the questions. Among those expenses, trips to meet up with women and even providing them a place to live. “He even had the company pay for an apartment for her in New York City, complete with cable television,” the document reads.

It goes on to say: “Don also used the company plane to pursue a sexual relationship with a high school friend who lived in Smyrna, Tennessee. He used the plane for direct flights to visit the friend a half-dozen times.”

The company also claims Marsh bought gifts from the company budget, alleging that Marsh used $3,000 to purchase wedding gifts for company employees who had invited him and his wife to their weddings. The company says Marsh did not see it as his responsibility to pay for the gifts because that would be never ending.

Marsh is countersuing the company, saying they owe him millions in severence benefits after they fired him.

Marsh Supermarkets, Incorporated is suing Don Marsh and is attempting to recoup millions of dollars Marsh is accused of spending on vacations and other personal expenses. Marsh was the company’s chairman and chief executive officer until September 2006.

A lawsuit filed in Hamilton Superior Court last week claims Marsh “abused his position and often put his and his family’s interests above those of the entity that it was his duty to serve. Mr. Marsh used millions of dollars of the company’s funds to travel the world, to maintain vacation homes, and inappropriately to finance personal relationships (and in some cases to keep them hidden).”

Among the allegations in the lawsuit are claims Marsh charged the company $25,000 to send family Christmas cards, spending $60,000 on a family vacation to Africa and $89,000 on a trip to New Zealand.

The lawsuit also says Marsh misused the company jet, flying two plane-loads of family members to New York for the Macy’s Thanksgiving Day Parade and using it for “vague business trips to Chicago or New York City” with female employees.

Don Marsh issued this statement:

“I am extremely proud of the home-grown company that I worked so hard to build and am especially thankful for the talented employees I enjoyed working with everyday.

“It is very disappointing, now more than two years after my retirement, the new owner of Marsh Supermarkets would resort to such extreme misrepresentations.”