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INDIANPOLIS - Marsh Supermarkets here is alleging that its former president David Marsh spent about a half a million dollars worth of company money for personal use, including family trips to New Zealand and Africa, before he was dismissed from the chain in February.
The company made these allegations in response to a lawsuit filed by David Marsh in which he claimed company miscalculated his severance pay. Marsh Supermarkets in a court filing asked a judge to compel David Marsh to pay damages that could reach $1.5 million, according to local news reports. A company spokesperson told Progressive Grocer the chain cannot comment on pending litigation.
Marsh, who held the president's post for over three years, had been dismissed by his former family-chain's board of directors amid the financially strapped company's search for a new owner. Marsh filed a suit in September against the chain, charging it with shortchanging his six-figure severance package by about $34,000.
In a legal filing this week in U.S. District Court in Indianapolis, the company said it had terminated David Marsh "subject to further investigation that might result in the termination being treated as one" for justifiable cause, and that a subsequent investigation turned up evidence of "improper acts" including taking money from the petty cash fund for personal expenses and not paying that money back.
"Had Marsh Supermarkets known of his conduct, it would have terminated Mr. Marsh for cause" at the time, the company said in the filing. It said it is seeking three times its actual total damages, which it estimated at $500,000.
Marsh, 43, who earned a salary of $440,000 as president and c.o.o., had an employment agreement that called for annual severance payments of $738,000 for three years if he was fired for cause, according to published reports. He filed his suit just days after his estranged wife, Jodi D. Marsh, sued the company for $2.16 million, claiming she had received no severance. Jodi Marsh, who resigned in January as v.p. of community relations, also is seeking a divorce from David Marsh.
In September, Marsh shareholders approved the company's nearly $88 million sale to investment fund MSH Supermarkets Holding Corp., an affiliate of the private investment fund Sun Capital Partners Inc. of Boca Raton, Fla. Today, the company operates 67 Marsh Supermarkets, 31 LoBill Foods, 6 O'Malia's Food Markets, and 148 Village Pantry convenience stores in Indiana, Ohio, and Illinois.