By Justin Wingerter, BusinessDen
A niece of billionaire cheese magnate James Leprino, who unsuccessfully sued him for hundreds of millions of dollars last month, is taking her case to a higher court. After a two-week trial last month, a Denver District Court jury ruled that Nancy and Mary Leprino had not been wronged by their uncle or the Denver company he runs, Leprino Foods.
On Thursday, Nancy Leprino — but not her sister, Mary — asked the Colorado Court of Appeals to consider whether jurors got it wrong. The court now will decide whether to hear the case. It’s a case that pits a millionaire against a reclusive billionaire and has opened up bitter family drama. At stake in last month’s trial was up to $900 million the nieces said they were owed.
James Leprino and his daughters own 75 percent of Leprino Foods. His brother, Mike Leprino, owned the other 25 percent before his death in 2017. At that point, the 25-percent stake was passed down to Mike Leprino’s three daughters: Nancy, Mary and Laura. At the time of Mike Leprino’s death, he was feuding with James Leprino, who believed Mike had cheated him in business.
As a result, James pushed his nieces out of the company — even briefly barring them from its Denver headquarters — in favor of his descendants. At the trial, which lasted from Nov. 28 to Dec. 9, James Leprino, 84, testified via video that he and his daughters changed the bylaws of Leprino Foods’ board to ensure that shareholders would not receive dividends from the company, beyond a one-time payout.
In place of dividends, Leprino and his daughters loaned their $400 million from the one-time payout back to Leprino Foods in the form of 20- and 30-year loans, which will generate $165 million in eventual interest for Leprino, his children and his grandchildren. But his three nieces — Mike Leprino’s daughters — were not allowed to loan their payout to the company.
Because they cannot generate cash flow from Leprino Foods through dividends or loan interest, his nieces’ 25-percent share is virtually worthless, James Leprino testified.
Nonetheless, a jury of three men and three women deliberated for less than three hours on Dec. 9 before determining that the defendants — James Leprino, his two daughters and Leprino Foods — did not breach their fiduciary duty to Nancy and Mary Leprino.
In appealing that verdict, Nancy says jurors didn’t have the information they needed.
“Legal rulings allowed jurors to consider only the tip of the iceberg,” her appeal states.
She accuses Judge Stephanie Scoville of barring jurors from seeing evidence that Leprino Foods funneled payments to James Leprino and his daughters through a shell company.
“Having hidden so much from jurors, who were told that nothing below the surface was wrong, the court entered judgment on a verdict rejecting plaintiffs’ challenges,” Nancy Leprino wrote. She is now represented by Sean Connelly of Connelly Law in Denver, who did not represent her during the trial but is handling her appeal. Connelly declined to comment.
James Leprino, his daughters and Leprino Foods are represented by Michael Hofmann and Kaitlin M. DeWulf with the Denver office of Bryan Cave Leighton Paisner, along with Cliff Stricklin, Jared Lax and Desi Hamilton with the Denver office of King & Spalding. They did not respond to requests for comment about the appeal.
An attorney for Mary Leprino, Anthony Leffert with the Denver firm Robinson Waters & O’Dorisio, did not respond to questions about why she isn’t appealing the jury’s verdict.
Leprino Foods, which grew out of a grocery store that James and Mike Leprino’s parents operated in north Denver, is the largest maker of mozzarella in the world and provides cheese for the country’s largest pizza chains. Its headquarters at 1830 W. 38th Ave. in the Highland neighborhood sits on the same corner as the former family store.