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Don Marsh, the former CEO of the Indianapolis-based supermarket chain that bears his family name, has been ordered by a federal jury there to pay Marsh Supermarkets $2.2 million, the result of a trial that accused him of using corporate assets for personal gratification.

The charges specifically were that he defrauded the company by using corporate funds to finance extravagant trips to places like China, Russia and Cuba - allegedly to check out products and investigate the possibility of exporting his own private label products - as well as to hand out gifts to family and friends, including several mistresses that he was keeping on the side, including one in a New York City apartment.

Marsh got away cheap in the verdict - the plaintiffs were asking that he write a check for $7 million. However, as the Indianapolis Business Journal reports, the judge in the case still has to decide whether Marsh should receive his entire $4 million severance payment, or if he will have to return the $2 million in severance that he already has received.

It was revealed at the trial that Marsh also owes the Internal Revenue Service (IRS) more than a half-million dollars in back taxes.

According to the Journal story, "The company paid him roughly $2 million in severance before halting payments after it said an IRS audit found 'disallowed deductions' for personal expenses he racked up from April 2004 to September 2006. The company ultimately paid the IRS a $616,000 penalty.

"Don Marsh's attorneys insisted the trips were business-related and within the bounds of his employment contract, prompting the former CEO to countersue the supermarket chain. He claims the company wrongfully halted severance payments following its sale to Sun Capital Partners in September 2006, shorting him $2 million."

Marsh's attorneys argued during the case that Sun Capital bought the company, it established a code of conduct but never informed Marsh that they applied to him, and that he felt that, as CEO, the rules did not apply to him.

The severance ruling is expected to come fairly soon. Marsh's attorneys have left the door open for a possible appeal.
KC's View:
This is disgusting. No other way to describe the behavior of a guy who once had some measure of respect in the retail business, but who clearly squandered it because he felt that the business was there to serve him, rather than he being there to serve the business.

Disgusting. In so many ways.

Let's be clear about something. Most of the people I know who have run family businesses are good, decent, hard-working people for whom this kind of behavior would be anathema. I know people who own businesses who won't even take a water bottle off the shelf without paying for it, because they believe it is wrong, dishonest, and would set a bad example.

It also seems clear that Don Marsh simply doesn't get it. He continues his appeals and countersuits and protestations, ignoring the simple fact that in any legitimate organization, there is not one code of conduct for the CEO and another for everyone else. Leaders have to lead not from some sense of privilege, but one of responsibility, of service to the company, to the people who work there, and to the people who shop there.

It is hard for me to imagine that, considering the jury verdict, the judge will allow him to keep his severance pay or give him any more. But the law is a funny thing, so you never know.

At this point, it may have to be enough to know that Don Marsh's name has become synonymous with corrupt and self-aggrandizing leadership that, at the end of the day, has nothing to do with leadership at all.

Disgusting.