IBJNews

Marsh Supermarkets settles IRS issue in suit against ex-CEO

Back to TopCommentsE-mailPrintBookmark and Share

Marsh Supermarkets Inc. has reached a settlement with the Internal Revenue Service regarding nearly $5.3 million in personal travel and entertainment expenses reimbursed by the company to former CEO Don Marsh.

The settlement, signed on Tuesday, came to light in a court document filed Thursday by the grocery chain in its ongoing legal dispute with Don Marsh. The company claims he defrauded it of millions of dollars by using the grocer as his “personal piggy bank” to fund extramarital relationships.

In its 2-year-old lawsuit against Don Marsh, 73, Marsh Supermarkets has claimed before that he used the company to bankroll extravagant trips, maintain vacation homes and hide relationships with female employees.

But the allegations in Thursday’s filing provide additional, more salacious details.

Marsh Supermarkets said it agreed to pay the IRS “a negligence penalty in connection with the disallowed deductions” it submitted for the $5.3 million in personal expenses Don Marsh wracked up from April 2004 to September 2006, the period covered by an IRS audit.

Don Marsh was terminated in September 2006, just after Florida-based Sun Capital Partners bought the Indianapolis-based grocery chain for $88 million cash, plus the assumption of $237 million in debt.

Marsh Supermarkets said when it filed suit in April 2009 that Don Marsh’s expenses, including use of the company jet and petty cash, had become the subject of an IRS audit.

In a previous court filing, Marsh Supermarkets told the IRS that Don Marsh had earned $2.1 million more from 2004 through 2006 than the company previously reported. The extra income stemmed from expenditures Don Marsh wrongly categorized as reimbursable business expenses, the filing said.

Even though all of Marsh Supermarkets’ stores were located in Indiana, Ohio and Illinois, Don Marsh traveled globally at the company’s expense. From 2000 to 2006, according to the company, he took at least 25 international trips, visiting every continent except Antarctica. In total, he took more than 350 trips outside the region, Marsh Supermarkets alleges.

New details revealed in Marsh Supermarkets’ Thursday filing allege Don Marsh took a trip to Russia and decided he wanted the company to sponsor a Russian ice ballet tour in the United States.

Though the tour never occurred, Don Marsh used company funds to enter into two consulting agreements with a Russian woman who was to serve as the director of the ice ballet, according to the document.

The company alleges that Don Marsh had a sexual relationship with her for at least a few years and used the company plane to visit her in New York City, where she had an apartment paid for by Marsh Supermarkets.

Don Marsh also used the company plane a half-dozen times to pursue a sexual relationship with a high school friend who lived in Smyrna, Tenn., the court filing said.  

Yet, the company has documentation for just one flight to Tennessee, Marsh Supermarkets contends.

Don Marsh’s lawyer, Andrew M. McNeil of Bose McKinney & Evans LLP, said the allegations are an effort to smear his client and tarnish his reputation.

“The fact is the Board of Directors investigated these issues in 2006, and this information was available to Sun Capital before it bought the company and terminated Don’s employment without cause,” McNeil said in an e-mail to IBJ.

Don Marsh has a counterclaim pending against Marsh Supermarkets.

Marsh Supermarkets operates about 100 stores in Indiana and Ohio.

 

ADVERTISEMENT

  • Loser
    In my humble opinion of course, Don Marsh was a complete disaster for the chain and serves as a testament that family-run businesses should chose succesors VERY carefully. What a disgusting man - Sun should seriously consider changing the name of the stores given the legacy of the Marsh family.
  • Good Reputation?
    There is nothing that the new owners can do to "Tarnish" the reputation of Don Marsh. Don March has done an excellent job of that- All By Himself.

    Post a comment to this story

    COMMENTS POLICY
    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
     
    You are legally responsible for what you post and your anonymity is not guaranteed.
     
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
     
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
     
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
     

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by
    ADVERTISEMENT

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
     
    Subscribe to IBJ
    1. The Walgreens did not get a lot of traffic. It was not located on the corner of the intersection, and not really visible from Emerson. Meanwhile the CVS there is huge and right on the corner. I am guessing a lot of people drove by a million times and never knew the Walgreens was there. Although, with the new Walmart market going in, that area could really see a lot of increase in traffic soon.

    2. You folks don't have a clue. There is a legal way to enter this country and to get aid. This left unchecked could run us to ruin quickly. I also heard that 'supporters' were getting major $$ to take them in? Who's monitoring this and guess who pays the bill? I support charitable organizations... but this is NOT the way to do it!

    3. Apparently at some time before alcohol has been served at the fair. The problem is that beer or wine used to be a common drink for people before soft drinks and was not thought to be that unusual. Since many folks now only drink to see how much they can drink or what kind of condition they can end up in it becomes more problematic. Go to Europe and its no big deal just as if you had sodas of milk to drink everyday. Its using common sense that is lacking now days.

    4. To address the epic failure of attracting race fans to both the Indy 500 and Brickyard 400 would take too much of my time to write. Bottom line Boles is clueless and obviously totally out of touch with the real paying fan base. I see nothing but death spin coming for the Brickyard, just like Indy. Get somebody in a place of power that understands what race fans want.

    5. I am a race fan through & through. It doesn't matter if it's Indy cars or Nascar. I love a great race. I go to several other tracks each year and you can see the entire track. I know Indy has tradition, but fans want to see the entire race. I sit in the Penthouse, am almost 60 years old, and would like to see a better TV screen in turn 1 so you can see the entire race. Then I think Indy needs to install an escalator so us old folks can make it up to the Penthouse and down again if we want more options to purchase food and drinks. Just a race fans opinion. Lights won't make the race any better, but you might be able to see the TV better at night. Turn 1's screen needs replaced with a better and bigger screen.

    ADVERTISEMENT