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David Marsh defends trips he took at company's expense

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Don Marsh's son David, who served under his father as president of Marsh Supermarkets Inc, traveled widely, often on the company jet, just as his father did.

And like his dad, David Marsh defended most of those travels around the United States — and to such far-reaching locations at Cambodia, South Africa, Tahiti and Vietnam — as essential to the business of Marsh Supermarkets.

“Every time I used [the plane] I had a time constraint, and my time was valuable to the company,” David told jurors late Tuesday afternoon.

Called as a witness for Marsh Supermarkets, David Marsh testified for about an hour in the civil trial of Don Marsh before Judge Sarah Evans Barker ended proceedings for the day.

But not before she scolded him for elusive answers. He often responded that “it’s not my area of responsibility” when pressed on various matters by Marsh Supermarkets lawyer David Herzog.

“You’re a smart man,” Barker told him. “You can hear.”

David Marsh is expected to be the final witness called by Marsh Supermarkets in its suit against his father. The locally based supermarket chain is seeking to recoup more than $3 million in what it alleges are personal expenses Don charged to the company.

David Marsh served as president and chief operating officer of Marsh Supermarkets from 2002 until February 2006, about seven months before Florida-based Sun Capital Partners bought the company.

While working for the grocery chain, David Marsh traveled the globe, sometimes with his wife and children, to attend organizational meetings or business outings that Marsh Supermarkets claims had no benefit to the company.

He also had Marsh Supermarkets pick up the tab for a lease on a new BMW and $25,500 in financial planning services because he believed his contract with the company allowed for it.

“It’s an open-ended clause,” David Marsh said after pointing out a section in his contract that he thinks entitled him to the perks.

David Marsh said he and his father often discussed business while on hunting and fishing trips to Alaska and South Dakota. When Herzog asked why they didn't instead go to an Arby's across the street from company headquarters, David said, "It’s not the same as getting out of town.".

Marsh Supermarkets launched a legal fight against David in 2006 after he sued the company, alleging it shorted him $102,000 on his $2.1 million severance package. The company shot back that he had used the company “as his personal checkbook,” submitting expenses from family trips, and should have to repay more than $750,000. The parties reached a confidential settlement in 2007.

In earlier testimony Tuesday, jurors heard from Patrick Calhoun, a former IRS special agent hired by Marsh Supermarkets to investigate Don Marsh's expenses. His job was to identify business and non-business expenses from 1999 to 2006, to determine whether they were "ordinary and necessary."

Cahoun found more than $3.3 million in expenses he said had no benefit to the company.

Here’s a sample:

—$927,210 for “nondeductible outings” that included taxidermy services and hunting licenses.

—$397,616 for professional organization costs that included trips to Young Presidents’ Organization and World Presidents’ Organization meetings.
 
—$625,776 for Marsh family travel expenses.

—$159,169 for “cultural” expenses that included hotel charges for Nadia Kovarskaya, the head of a Russian ice ballet with whom Don Marsh had an affair.

—$315,415 in estate planning services.

—$120,640 in nondeductible credit card expenses that included the purchase of several pairs of boots at an Alaskan boot store.

—$135,468 in “other” nondeductible expenses, such as gifts for weddings.

—$64,871 in daily per-diem charges that Marsh Supermarkets says Don Marsh collected while also billing expenses to the company.

—$21,500 for cash advances Don Marsh took to spend on trips to such places as Cuba, where credit cards aren’t accepted.

The trial is expected to conclude Friday.

This story originally ran in IBJ Daily, a sister publication of Indiana Lawyer.

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  1. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

  2. As a lawyer who grew up in Fort Wayne (but went to a real law school), it is not that hard to find a mentor in the legal community without your school's assistance. One does not need to pay tens of thousands of dollars to go to an unaccredited legal diploma mill to get a mentor. Having a mentor means precisely nothing if you cannot get a job upon graduation, and considering that the legal job market is utterly terrible, these students from Indiana Tech are going to be adrift after graduation.

  3. 700,000 to 800,000 Americans are arrested for marijuana possession each year in the US. Do we need a new justice center if we decriminalize marijuana by having the City Council enact a $100 fine for marijuana possession and have the money go towards road repair?

  4. I am sorry to hear this.

  5. I tried a case in Judge Barker's court many years ago and I recall it vividly as a highlight of my career. I don't get in federal court very often but found myself back there again last Summer. We had both aged a bit but I must say she was just as I had remembered her. Authoritative, organized and yes, human ...with a good sense of humor. I also appreciated that even though we were dealing with difficult criminal cases, she treated my clients with dignity and understanding. My clients certainly respected her. Thanks for this nice article. Congratulations to Judge Barker for reaching another milestone in a remarkable career.

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