Leprino Foods CEO James Leprino leaves the Denver City and County Building on Wednesday, Dec. 7, 2022. (BusinessDen file)
Another court in Denver has sided with the reclusive billionaire James Leprino in his nine-figure dispute with a niece that he tried to exclude from their family business.
The Colorado Court of Appeals on Thursday determined that Denver District Court Judge Stephanie Scoville did not make mistakes that led a jury to side with Leprino at a December 2022 trial and did not err when she refused to dissolve Leprino Foods.
“These circumstances do not constitute the kind of extreme conduct that could warrant the dissolution of a (company),” the appeals court ruled, “much less one worth $5 billion and employing thousands of people.”
James Leprino’s father, an Italian immigrant, ran a small grocery store in Sunnyside until 1958, when large grocers put it out of business. James Leprino then turned Leprino Foods into a cheese company with an emphasis on pizza cheese. Leprino Foods now dominates the U.S. pizza cheese market and is the largest mozzarella producer in the world.
Signage on Leprino Foods’ headquarters along 38th Avenue. (BusinessDen file)
The company remains headquartered in Sunnyside and remains family-owned. James Leprino, 86, and his children own 75 percent of Leprino Foods. The other 25 percent is owned by the three daughters of Mike Leprino, James’ brother who died in 2018.
In the years before his death, James Leprino feuded with his brother, who he believed had cheated him in business. So, James and his children removed Mike from the board of Leprino Foods and later limited his daughters’ roles with the company after Mike’s death.
The dispute came to a head when, in 2018, James Leprino told his nieces to tell the Internal Revenue Service that their stock in Leprino Foods was worth zero dollars. Because the stock can’t be traded and Leprino had decided to stop paying out dividends, the shares were worthless, he told his brother’s daughters, despite a valuation of $340 million.
Two of the three nieces, Nancy and Mary Leprino, sued their uncle and Leprino Foods in 2020, accusing them of rendering their shares worthless. They called for the company to be dissolved and asked jurors to award them $600 million to $900 million during a 10-day trial downtown.
Attorneys for James Leprino and Leprino Foods acknowledged that their client had called the shares worthless but argued that they were not worthless. They noted that Mike Leprino and his daughters had received $135 million in dividend payments in 2017 and tens of millions of dollars each year between 2013 and 2016 — proof that their stock had value.
Scoville ruled before the trial that the company should not be dissolved. Jurors sided with James Leprino after only three hours of deliberation, finding that he and Leprino Foods did not breach fiduciary duties or wrongfully withhold information from his nieces.
One of those nieces, Nancy, asked the Court of Appeals to take a look at the case and determine that Scoville had erred by not dissolving Leprino Foods, by preventing jurors from seeing some executive compensation figures and by giving jurors bad instructions.
On Thursday, a unanimous three-judge panel of the appeals court sided against the niece.
“Plaintiffs highlight Jim’s statement that the minority shares should be valued at zero for estate tax purposes, which they characterize as an admission that the shares were in fact worthless,” Judge Karl Schock wrote, using James’ Leprino preferred name. “But no one — and certainly not plaintiffs — actually believed the shares were worthless.
“Jim’s declaration that the shares are worthless does not make them so.”
James Leprino is worth an estimated $2 billion, according to Forbes. He was not photographed in public between 1978 and late 2022, when he was captured leaving the courthouse.
Lawyers for him, Nancy Leprino and Leprino Foods all declined to comment Thursday.
James Leprino and Leprino Foods were represented by attorneys Michael Hofmann and Kaitlin DeWulf in the Denver office of Bryan Cave Leighton Paisner, along with Cliff Stricklin, Jared Lax and Desi Hamilton from the Denver office of King & Spalding.
Nancy Leprino was represented by Sean Connelly of Connelly Law in Denver.
Leprino Foods CEO James Leprino leaves the Denver City and County Building on Wednesday, Dec. 7, 2022. (BusinessDen file)
Another court in Denver has sided with the reclusive billionaire James Leprino in his nine-figure dispute with a niece that he tried to exclude from their family business.
The Colorado Court of Appeals on Thursday determined that Denver District Court Judge Stephanie Scoville did not make mistakes that led a jury to side with Leprino at a December 2022 trial and did not err when she refused to dissolve Leprino Foods.
“These circumstances do not constitute the kind of extreme conduct that could warrant the dissolution of a (company),” the appeals court ruled, “much less one worth $5 billion and employing thousands of people.”
James Leprino’s father, an Italian immigrant, ran a small grocery store in Sunnyside until 1958, when large grocers put it out of business. James Leprino then turned Leprino Foods into a cheese company with an emphasis on pizza cheese. Leprino Foods now dominates the U.S. pizza cheese market and is the largest mozzarella producer in the world.
Signage on Leprino Foods’ headquarters along 38th Avenue. (BusinessDen file)
The company remains headquartered in Sunnyside and remains family-owned. James Leprino, 86, and his children own 75 percent of Leprino Foods. The other 25 percent is owned by the three daughters of Mike Leprino, James’ brother who died in 2018.
In the years before his death, James Leprino feuded with his brother, who he believed had cheated him in business. So, James and his children removed Mike from the board of Leprino Foods and later limited his daughters’ roles with the company after Mike’s death.
The dispute came to a head when, in 2018, James Leprino told his nieces to tell the Internal Revenue Service that their stock in Leprino Foods was worth zero dollars. Because the stock can’t be traded and Leprino had decided to stop paying out dividends, the shares were worthless, he told his brother’s daughters, despite a valuation of $340 million.
Two of the three nieces, Nancy and Mary Leprino, sued their uncle and Leprino Foods in 2020, accusing them of rendering their shares worthless. They called for the company to be dissolved and asked jurors to award them $600 million to $900 million during a 10-day trial downtown.
Attorneys for James Leprino and Leprino Foods acknowledged that their client had called the shares worthless but argued that they were not worthless. They noted that Mike Leprino and his daughters had received $135 million in dividend payments in 2017 and tens of millions of dollars each year between 2013 and 2016 — proof that their stock had value.
Scoville ruled before the trial that the company should not be dissolved. Jurors sided with James Leprino after only three hours of deliberation, finding that he and Leprino Foods did not breach fiduciary duties or wrongfully withhold information from his nieces.
One of those nieces, Nancy, asked the Court of Appeals to take a look at the case and determine that Scoville had erred by not dissolving Leprino Foods, by preventing jurors from seeing some executive compensation figures and by giving jurors bad instructions.
On Thursday, a unanimous three-judge panel of the appeals court sided against the niece.
“Plaintiffs highlight Jim’s statement that the minority shares should be valued at zero for estate tax purposes, which they characterize as an admission that the shares were in fact worthless,” Judge Karl Schock wrote, using James’ Leprino preferred name. “But no one — and certainly not plaintiffs — actually believed the shares were worthless.
“Jim’s declaration that the shares are worthless does not make them so.”
James Leprino is worth an estimated $2 billion, according to Forbes. He was not photographed in public between 1978 and late 2022, when he was captured leaving the courthouse.
Lawyers for him, Nancy Leprino and Leprino Foods all declined to comment Thursday.
James Leprino and Leprino Foods were represented by attorneys Michael Hofmann and Kaitlin DeWulf in the Denver office of Bryan Cave Leighton Paisner, along with Cliff Stricklin, Jared Lax and Desi Hamilton from the Denver office of King & Spalding.
Nancy Leprino was represented by Sean Connelly of Connelly Law in Denver.
