Marsh defense: Travel was integral to company success

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Without membership in certain international business organizations, Don Marsh says he could not have built his grocery chain into a billion-dollar company.

His frequent trips overseas were so integral to the success of Marsh Supermarkets Inc., he claimed in testimony Thursday morning, that when his lawyer in his civil trial asked him to rate the meetings on a scale of 1 to 10, Marsh didn’t hesitate when replying “10.”

“I couldn’t have run the company without them,” he said.

Marsh’s testimony on cross-examination in his civil trial revealed part of his lawyers’ strategy to convince jurors that the frequent trips the former CEO of the locally based grocery chain took on the company jet were for business and not pleasure.

Marsh Supermarkets is suing Marsh, 75, alleging that he used company funds to pay more than $3 million in personal expenses during part of his time as CEO until after the company he led was acquired in 2006.

Don Marsh belonged to several global organizations, including the World Presidents Organization, Chief Executives Organization, World Economic Forum, American Arbitration Association and American Management Association.

One such organization took him to Berlin for a speech he gave in 1989 at the time the Berlin Wall fell, he told the jury.

While Marsh Supermarkets never operated stores outside of Indiana, Ohio or Illinois, Don Marsh traveled around the world to such wide-ranging destinations as Cuba, India, Libya, Russia and Venezuela in hopes that the Marsh brand could gain market share in those countries.

In Russia, for instance, Marsh private-label products were sold in Russian grocery stores for a short time until Don Marsh said he “pulled the plug” after he couldn’t compete with cheaper, Chinese products.

Russia is where he met the director of the Russian ice ballet, with whom he had an affair. Marsh put her up in a New York City apartment as he considered sponsoring the tour in the United States.

When asked by his lawyer what bearing his physical relationship had on his idea to bring the ballet to the United States, Marsh replied: “None.”

The affair was one of four extra-marital relationships Marsh has admitted to during this week's ongoing testimony.

He also flew to Libya a handful of times in an attempt to open a distribution center in the country to serve “mom and pop” stores, he said. Marsh’s sale to Sun Capital Partners in 2006 interrupted the project, which Don Marsh said had the support of former U.S. Sen. Richard Lugar.

Florida-based Sun Capital Partners terminated Don Marsh’s contract “without cause” after it took over, then stopped paying his $4.2 million severance in early 2008, after it claims it discovered personal expenses charged to the company.   
Don Marsh is countersuing Sun Capital, claiming it still owes him about half of his severance.

Meanwhile, Don Marsh’s attorney, Andrew McNeil, presented evidence Thursday morning regarding the various condominiums either Don Marsh or the company owned or leased.

A rental agreement for a condominium in the Dominican Republican, documented in a 1996 company directors meeting, showed the condo registered to the company.

Marsh said he used it as motivation for employees who “hit certain incentives” to vacation there. He also would take workers, as well as customers, who won contests, on cruises to tropical destinations such as Tahiti.

Less glamorous were plane flights to his condo in Saugatuck, Mich., along the eastern shore of Lake Michigan, where he would take various employees every year to pick their brains about the company in a relaxed atmosphere.

“I would try to get information from the bottom up,” Marsh told the jury. “Every company should do it. Instead they go from the top down. It was so effective it was unbelievable.”

Marsh was one of Indiana’s highest-profile executives for decades and frequently appeared in the company’s TV advertising. Proud of his community involvement, Marsh told the jury that in Indianapolis only Eli Lilly and Co. gave more to charity.

Don Marsh is expected to continue testifying on cross-examination Thursday afternoon.

The trial in federal court is expected to last two weeks and feature 40 witnesses.



  • seem proper
    I know it sounds crazy, but if he was a member of these organizations and spoke as chairman of Marsh then they would be reasonable. If this is true, he will probably prevail.
  • where you a shareholder?
    You can only complain if you were a shareholder and you were forced not to sell Marsh stock. We both know neither are true. Don built value in the company and gave huge ROI's. Before you roast a rich man look at the venture capitalist company that is suing the little guy. Put things in perspective?
  • I Stand Corrected
    You all are correct as to the ownership. Thanks. As to his behavior, there is no excuse for that, irrespective of company ownership, or anything else.
    I think you are a little confused...prior to sun capital's purchase, it was don marsh's company. Marsh had SHAREHOLDERs of which don marsh was ONE OF THEM but not the only one. His actions were personal in nature and in my opinion at the cost to his other shareholders. If it were a private company with 100% ownership...then have at it. But it was not. His desicions/actions were on the backs of the company's shareholders.
    • Marsh went public in 1953
      For the record, Marsh became a publicly help corporation in 1953; Don became President in 1968. So, it was always a publicly held company (while he was in charge). Apparently Don just ran it as though he owned it (rather than in the best interests of the shareholders).
    • Wrong is always wrong
      Even if Don Marsh owned the company, his selfish, gluttonous habits did not keep his customers/stakeholders' best interests first. I've always thought Marsh had higher prices than Kroger - guess that's why. Was he the sole stock-holder? And even now, he has no sense of inpropriety other than his affairs and that was only because he got caught (or he wouldn't have had four!) You can't make a silk purse out of this sow's ear.
      • Old Habits Hard To Change
        When Don owned the company, he could do whatever he wanted with it -- there's nothing wrong with that -- it's his and he probably had personal guarantys out there for every dime of debt. But when he cashed out and Sun capital bought it, the rules changed. But he didn't. It is surprising it took Sun so long to see waht was going on. If they didn't have someone on the inside keeping an eye on things it's their fault. It sounds like Sun's partners/shareholders are unhappy with the investment decision so Sun is trying to cover by trying to claw back money from the guy who sold it to them. Poor due diligence on Sun's part, not fraud by Marsh.
        • What a piece of work!
          I can hardly wait each day to see the IBJ's update on this case. Could Don Marsh be any more full of it (or himself)? This is like waiting for Dallas (or another soap opera) to come on each week! My heartfelt sympathy to his wife & family (and tossed-aside mistresses) though.
        • Shame on him...
          What a descpicable person he has been shown to be. So much to learn from his fall from grace...You only have one reputation in this life. Protect it by not conducting yourself in the manner he has! Randall Tobias would have benefited from heeding that advice as well. Poor choices by fellow Hoosiers!
        • Same defense as John Clark at the Indy Airport!
          Sounds like those two might have traveled together!
        • Not the right choice of words
          After admitted to four extra-marital affairs, I don't think I would say this, Don, “I would try to get information from the bottom up.” Just saying

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