Former Owners of Village Pantry Sue ex-CEO, Cite IRS Audit

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Former Owners of Village Pantry Sue ex-CEO, Cite IRS Audit

NOBLESVILLE, Ind. -- Marsh Supermarkets Inc., the Midwest-based grocery chain that owned convenience store retailer Village Pantry before its acquisition by Sun Capital in late 2006, filed a lawsuit late last month against former CEO Don E. Marsh.

According to a report by the Chicago Tribune, Marsh said it is currently being audited by the Internal Revenue Service over the former CEO’s use of company funds to bankroll vacation homes and lavish travel for himself, family members and female employees with whom he allegedly had personal relationships.

The lawsuit, first reported by the Indianapolis Business Journal, 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. The suit also charges he tried to hide these activities by giving assistants lavish gifts and severance packages.

Although Marsh didn’t respond to a telephone message left at his home by the Associated Press earlier this week, he did issue a statement through a lawyer that 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, according to the Tribune.

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.

In 2006, the new owners charged that company founder, David Marsh, Don Marsh’s father, also misused company funds, spending about half a million dollars on family trips to New Zealand and Africa. Those charges, however, were made after the elder Marsh sued the company for $34,000 severance pay he said it owed him.

Related News:

-- Village Pantry Sets New Path with Acquisition

-- Former Marsh President Accused of Misspending

-- Sun Capital Closes Marsh Acquisition