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The new owners of Marsh Supermarkets has charged that David Marsh, the company’s former president and a member of the family that founded the company 75 years ago but eventually had to sell it, spent about a half-million dollars of company money for personal use.

Marsh reportedly spent the money on family trips to New Zealand and Africa – despite the fact that he was making an annual salary of $440,000 a year. The charges by the new owners were made after Marsh sued them, saying that they owed him $34,000 in severance pay. Marsh’s employment agreement called for annual severance payments of $738,000 for three years, according to the Indianapolis Star.

According to the legal filings by the new owners, MSH Supermarkets Holding Corp., an affiliate of Sun Capital Partners, Marsh would have been fired “for cause” had it known of his behavior. The company is asking that he pay damages of $1.5 million, or three times the money he is alleged to have spent.

This new turn of events is just the latest wrinkle in the company’s history. The family sold the company for $88 million last May for $88 million after the stores ran into trouble because of increased competition. In addition, analysts said that Marsh exacerbated its troubles when it went public and created a level of debt – more than $200 million by some reports - that some suggested would cripple the company's operations in the long term. And company management was subject to considerable criticism for questionable business practices, including the creation of exorbitant pay and benefit packages for members of the family who worked for the chain.

Back in March, the company’s board of directors decided to close nine stores and fire four family members - David Marsh, the company’s president, as well as Arthur Marsh, Don Marsh Jr., and Joseph Heerens. And David Marsh’s personal life was the subject of much speculation owing to his separation and pending divorce from Jodi Marsh – who was the company’s vice president of community relations until last January.

In addition to suing her husband for divorce, Jodi Marsh also is suing the company, for $2.16 million, claiming she received no severance.
KC's View:
From everything we hear from some well-connected sources, perhaps it shouldn’t have been such a surprise to the folks at MSH Supermarkets…since reportedly David Marsh wasn’t the only member of the family who liked to use the company’s assets and resources for personal reasons, acting like the company was a kind of fiefdom – even after the company went public.

That’s the thing about this story that doesn’t make sense – that suddenly David Marsh’s behavior came into question. Because the allegations being made against him don’t come as an enormous surprise to us…and we live almost 800 miles from Indianapolis.

Just to speculate, maybe David Marsh simply pushed the new management too far, got too greedy…and that the $34,000 he was looking for is going to end up costing him a lot more than that.

Shame on him. And shame on all of those at Marsh Supermarkets who looked out for themselves and not the company, the employees and the customers.

We trust that the new folks in charge - and we know some of them, and believe they are fine and principled people – will behave more honorably.

They could hardly behave less so.