The billionaire CEO and millionaire heiresses of Leprino Foods, a Denver corporation that makes mozzarella for national pizza chains, will convene in a downtown courtroom today.
Once there, their attorneys will debate whether two heiresses are owed as much as $900 million.
Twenty-eight months ago, two of James Leprino’s nieces sued the company, their reclusive uncle and his daughters. The nieces alleged they and their late father — James’ brother Mike — were shut out of the privately owned family company to their financial detriment.
Leprino Foods, James Leprino and his daughters deny there was any financial harm. A jury chosen Monday will decide over the next two weeks which side is right.
“It is a very sad situation. It should have never gotten to this,” said Mike Burg, an attorney for the nieces and head of the Englewood-based firm Burg Simpson Eldredge Hersh Jardine.
“A bunch of rich people fighting over money always is kind of ugly,” he added.
Since Nancy and Mary Leprino, the nieces, first sued in July 2020, judges have pared back the litigation. The case was first heard by Denver District Court Judge Michael Vallejos before his retirement earlier this year. It is now being heard by Judge Stephanie Scoville.
On Nov. 9, Scoville rejected an argument by Nancy and Mary Leprino that Leprino Foods must be dissolved because the actions of James Leprino and his daughters were so egregious. Scoville found no reason to resort to “the extreme remedy of judicial dissolution.”
So, jurors will only be left to decide whether the nieces are, as they claim, owed between $600 million and $900 million or, as the defendants claim, owed nothing. To do so, they will need to unravel Leprino Foods’ ownership structure.
Ownership of Leprino Foods is divided between 650,000 shares of stock, all held by members of the Leprino family. The nieces own 17 percent. The defendants — James Leprino and his daughters Terry Leprino and Gina Vecchiarelli — collectively own 75 percent. A third niece, Laura Leprino, owns the remaining stake and is not a party in the litigation.
Mike Leprino was involuntarily removed from the company’s board in 2014. His daughters and their 17 percent of the company haven’t had a say in Leprino Foods’ affairs since.
In 2017, Leprino Foods changed its corporate structure and all shareholders, including the nieces, received a one-time payout from the company. The majority shareholders — James Leprino and his daughters — loaned their payout back to Leprino Foods, generating millions of dollars in interest. But Mike Leprino and his daughters weren’t offered that opportunity, according to court records.
After Mike Leprino died in 2018, Nancy and Mary Leprino say James Leprino told them that their 17 percent of stock is worthless due to the way he restructured Leprino Foods.
“He is the one who has said it is worth zero and said that he has this scheme that has made it worth zero, so they (the nieces) are not going to get any benefit out of the stock,” Burg said of James Leprino. “So, we take him at his word that it’s worth zero.”
Attorneys for James Leprino, meanwhile, say the only benefit that the minority shareholders were denied — the opportunity to loan their combined $90 million payout back to the company at a modest 2.7 percent interest rate — wasn’t really a benefit at all, since the nieces instead invested that money in something that resulted in a higher return than 2.7 percent.
“Plaintiffs did not suffer any financial losses,” the attorneys wrote in a brief Nov. 16.
James and Mike Leprino’s father immigrated from southern Italy to North Denver as a teenager in the 1910s and later opened a grocery store specializing in Italian ingredients. When large grocers forced it out of business in the 1950s, James turned it into a cheese company.
By the 1960s, Leprino Foods was selling its cheese to Pizza Hut and then to Domino’s, Papa John’s and Little Caesars. Its headquarters at 1830 W. 38th Ave. in Sunnyside sits on the same corner as the former Leprino family grocery store that started it all.
James Leprino, 84, is now worth $2 billion, according to Forbes. He hasn’t been photographed in public since 1978 and gives very few interviews. When Forbes spoke to him in 2017, he told a reporter, “It’s hard for me to believe I agreed to this. I really like to keep my privacy.”
Requests for comment from attorneys representing James Leprino and his daughters were not answered. They are Clifford Stricklin, Desi Hamilton and Jared Lax with the Denver office of King & Spalding, plus Kaitlin DeWulf and Michael Hofman with the local office of Bryan Cave.
“Jim Leprino has a lot to say about the fact that he doesn’t have to follow the rules, he doesn’t like to pay any taxes, and that he can do whatever he wants,” Burg alleged of the Leprino Foods CEO. “We have those clips and those clips will be played throughout this trial.”
This story was reported by our partner BusinessDen.
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