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Marsh Supermarkets asking former CEO to pay $5.6M

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Marsh Supermarkets Inc. is asking Don Marsh to pay his former company a total of about $5.6 million, a figure which includes personal expenses it says he improperly charged to the company.

The company’s lawyer, David Herzog, itemized the expenses Marsh Supermarkets believes it is owed during closing arguments Friday in its federal civil trial against the former CEO. A lawyer for Don Marsh concluded his closing arguments after 3 p.m.

The jury is expected to begin deliberating following lengthy instructions from Judge Sarah Evans Barker. That timetable wasn't immediately clear Friday afternoon.

The company filed a civil lawsuit against Don Marsh in April 2009, claiming he used the company as a personal checkbook to finance global travels and trysts with mistresses. Flights on the company jet included several trips to New York City and Smyrna, Tenn., to visit two of the five mistresses that Don Marsh, 75, admitted to during the two-week trial.

Herzog told the jury it was up to them to determine how much Marsh owed the company but encouraged them to focus on “black-and-white” expenses. He acknowledged “gray” areas in the $927,000 the company said the Marsh family spent on Alaska trips, $77,000 for commercial flights and $161,000 for professional services.

That would leave about $1.8 million in expenses racked up without a legitimate business purpose, Herzog argued.

He also asked the jury to award the company $986,000 for its legal and accounting fees related to an IRS audit that focused on Don Marsh's expenses, and $616,000 for the IRS penalty the company had to pay.

Herzog noted that whether Marsh Supermarkets can claw back the $2.2 million it paid to Don Marsh on a separation agreement is up to Barker.

The jury also could levy punitive damages, which could be as high as three times the amount of any compensatory damages the company might be awarded.

Herzog shied away from the more salacious elements of the trial that included details of Marsh's extramarital affairs, focusing instead on the promises the former CEO made to the company and the ways he broke them.

Marsh Supermarkets and its new private-equity owners at Sun Capital Partners, he said, gave Don Marsh the benefit of the doubt until “there wasn’t any doubt what he had done.”

“Mr. Marsh can’t be honest with himself, because the truth is too hard for him to swallow,” Herzog said.

He ended his closing argument by recalling visits to a Marsh store as a child, his admiration for the company over the years for its involvement in the community and his feeling of sadness as he worked on the case.

The Marsh brand, he noted, has “lost some of its shine.”

“That’s all because of the choices Mr. Marsh made,” he finished.

Don Marsh’s lawyer, Andrew McNeil, countered in his closing arguments that Marsh reported his use of the company plane to Marsh Supermarkets’ tax director and to the IRS. The information also appeared in company financial statements it had to file as a public entity, McNeil said.

“The policy was followed, and the expenses were approved,” he said.

McNeil further argued that his client neither committed fraud nor breached his contract, as Marsh Supermarkets contends.

“It’s not even close,” McNeil said.

McNeil admitted that his client is neither perfect nor a saint, but “he gave everything he had to Marsh Supermarkets.”

The trial began Feb. 4 in federal court in Indianapolis.
 

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