NOBLESVILLE, Ind. – Marsh Supermarkets Inc. says it is being audited by the Internal Revenue Service over former CEO Don E. Marsh’s use of company funds and the corporate jet.
The grocery chain filed a lawsuit against the former executive on March 25 in Hamilton Superior Court saying it was under IRS investigation over Marsh’s “misbehavior,” which it contends included bankrolling vacation homes and lavish travel for himself, family members and female employees with whom he had personal relationships.
The lawsuit, first reported by the Indianapolis Business Journal Tuesday in a story on its Web site, accuses Marsh of spending tens of thousands of dollars for personal use and allowing vendors to provide him and his family with perks including trips to the Olympics, Wimbledon and the Grammy Awards.
It says he tried to hide his use of the money by giving assistants lavish gifts and severance packages.
A telephone message seeking comment was left at his Carmel home by The Associated Press on Tuesday night.
Earlier, Marsh issued a statement through an attorney saying he was disappointed by what he called “extreme misrepresentations.”
“The allegations are false and it is clear the out-of-state, venture capitalist group ownership is looking for someone to blame for their own poor business practices which have severely impacted the company I once proudly led,” the statement said.
The attorney who filed the case for Marsh Supermarkets, David K. Herzog of Baker & Daniels LLP, declined to comment.
The lawsuit seeks unspecified damages from Don Marsh, as well as the return of more than $1 million it has been paying him in salary continuation, medical insurance and other benefits.
Marsh left the supermarket chain in 2006 after 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.
