INDIANAPOLIS -- The former COO of Marsh Supermarkets is suing the company, claiming it owes him thousands of dollars in severance and benefits.
David A. Marsh filed the lawsuit against the Fishers, Ind.-based grocery chain Wednesday in U.S. District Court in Indianapolis, said the Associated Press. Marsh, as reported in CSP Daily News, was ousted in February as Marsh president and CEO in a corporate shakeup.
On May 2, 2006, Marsh and MSH Supermarkets entered into a definitive merger agreement under which MSH Supermarkets would [image-nocss] acquire all of the outstanding shares of Marsh's Class A common stock and Class B common stock for $11.125 per share in cash.
The lawsuit says Marsh is entitled to receive severance pay based on his base salary and bonuses for three years after termination, totaling more than $700,000 annually. The eight-page complaint alleges that the company miscalculated his severance payments, underpaying him by more than $33,000 a year. It also alleges that the $31,000 Marsh is receiving to pay for life, medical, dental, accident and disability insurance is not enough to pay for coverage comparable to what he received as CEO.
The lawsuit is the latest in legal and financial troubles plaguing the company, AP said. A shareholder sued the company in federal court August 2, claiming Chairman Don E. Marsh and other directors mismanaged the company and squandered its capital before agreeing to a recent merger. The complaint seeks to block Marsh's pending, nearly $88 million acquisition by the private investment fund Sun Capital Partners Inc.
Shareholders are scheduled to vote on the merger today. In a separate announcement, Marsh Supermarkets said that independent U.S. proxy advisory firm Institutional Shareholder Services (ISS) has recommended that Marsh shareholders vote for the merger with MSH Supermarkets Holding Corp., an affiliate of Sun Capital.
Marsh Supermarkets on Monday asked a judge to dismiss the new lawsuit, claiming that plaintiff Irene Kasmer lacks legal standing to challenge the merger under Indiana law, said AP.
The grocery chain has stores in dozens of Indiana cities and has long been a high-profile family-run company. The company operates 69 Marsh supermarkets, 38 LoBill Foods stores, eight O'Malia Food Markets, 154 Village Pantry convenience stores and two Arthur's Fresh Market stores in Indiana, Illinois and western Ohio.
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