Clean Dishes and Dirty Laundry

What would you do with $300 million?
If you were a member of the feuding Magness clan, you might decide to build a casino in Black Hawk or even launch a new career as a caterer. Never mind that much of the money from the estate of cable pioneer Bob Magness hasn't even been dispersed yet--a soaring stock market and the sale of TCI have made Magness's heirs even richer than they expected after a nasty legal battle over the estate was abruptly settled last year.

Connoisseurs of loutish behavior among the rich could hardly mask their disappointment when Magness family members agreed to drop their lawsuits against each other and a host of other Denver movers and shakers ("Dynasty: The Lost Episode!" January 15, 1998).

In June 1997, Bob's widow, Sharon Magness, contested his will, which left most of the $1 billion estate to his sons, Kim and Gary. They in turn sued TCI and its chairman, John Malone, as well as the executors of the estate--including University of Denver chancellor Daniel Ritchie--claiming they had been shortchanged by up to $200 million when the executors sold $529 million worth of TCI stock back to the company.

There were smiles all around in January 1998, however, when an agreement was announced. Many of the financial details were sealed by the court, but it was widely believed that Sharon got more than the $35 million Bob had originally left her; Kim and Gary reclaimed most of the TCI stock the executors had sold; and Malone was able to keep his control of the company.

When the $48 billion sale of TCI to AT&T closed in April, the Magness estate became worth even more than it had been in 1998. While neither Sharon nor her former stepsons are talking to the press, behind the scenes there is reportedly still a flurry of out-of-court negotiations under way to settle the estate.

The Magness family quickly dropped out of the headlines when they left the courtroom, but they have continued to work on a variety of very public projects. When Sharon Magness contested her late husband's will, she said she intended to give her share of the estate to charity--and judging by her busy schedule on the society fundraising circuit, she's a woman of her word. She shows up at a dizzying number of charity events, including benefits for Volunteers of America and the Denver Art Museum. Last month she attended the glamorous opening gala for Ocean Journey, where she bid $150,000 to win the right to hold a New Year's Eve party at the aquarium.

In April Sharon entered the business world--through the kitchen door. She is a minority owner and vice president for business development of Epicurean Catering, the largest catering company in Denver and a favorite at society feeds. With her help, Epicurean's owner, Larry DiPasquale, hopes to conduct a multi-million-dollar expansion. He now has ambitious plans to open a lavish banquet hall in Denver and extend the company's operations to Beaver Creek and out of state.

DiPasquale says doing business with Sharon Magness was easy because he knows her well. "She's been one of the company's best customers for the past ten years. She was very familiar with us." Magness's years of experience organizing charity fundraisers (the company catered the Ocean Journey gala) and her fondness for parties are both invaluable to Epicurean, he adds. Increasingly, caterers are being asked to coordinate events, and DiPasquale says that Magness can help his staff understand what's involved in organizing a huge party. Her celebrity is also an advantage. "Anytime you add someone who enhances the reputation, it helps," says DiPasquale. Many in the catering world agree, adding that the Magness connection will give Epicurean a leg up on other high-end caterers.

"I certainly think her stature would be favorable for that company and take clients away from their competitors," says Tom Stansfield, owner of Cruisin' Cuisine, a Denver caterer that doesn't do the "white glove" parties Epicurean specializes in. "Her social status would have a big impact on people using that service--it would have to."

But most caterers in Denver report that they already have more business than they can handle. Epicurean's competitors say they haven't noticed a difference since Magness joined the company.

"It hasn't had an effect on us," says Sandra Tenenbaum, owner of Occasions by Sandy, which caters many high-end parties. "We're swamped." Tenenbaum says there are many prominent society people in Denver besides Magness, and Occasions by Sandy gets a "fair share" of that business.

"It did cross my mind--'What kind of edge does this give them?'" says JoAnne Katz of Three Tomatoes Catering. "But our sales are up. Denver is a happening city, and there's lots of business for everybody."

While Sharon Magness has settled into a role as an active Denver philanthropist and businesswoman, her former stepsons, Kim and Gary Magness, have gone gambling, investing in a casino now under construction in Black Hawk. However, the two brothers' past brushes with the law may complicate their effort to win a gaming license from the state.

The $60 million Mardi Gras Casino is scheduled to open next winter. With 700 slot machines, it will be among the five largest casinos in Colorado. Under state law, casino owners must be licensed by the Colorado Division of Gaming, which investigates the criminal histories and financial background of potential owners.

More than twenty years ago, Kim Magness, 47, was arrested in Garfield County and charged with selling heroin to an undercover agent for the Colorado Bureau of Investigation. In exchange for his guilty plea to narcotics possession, charges of drug-pushing were dropped, and he was fined $5,000 and received a five-year suspended sentence.

Gary Magness, 45, has been arrested several times for driving under the influence of alcohol and once for disorderly intoxication. His most recent arrest came in 1994 in Cherry Hills Village, when police said he was speeding down East Quincy Avenue in a red Ferrari and refused to pull over when an officer hit his lights and siren. According to the police report, Gary failed the roadside sobriety test after he finally stopped at the driveway to his home, a 4,100-square-foot abode across from the Cherry Hills Country Club, then launched into an angry tirade when officers handcuffed him. The drunken tizzy concluded at the jail, where authorities reported that Magness shouted obscenities at police officers. Charges of resisting arrest were dropped after he pleaded guilty to driving while impaired. He was sentenced to nine months' probation and had to undergo alcohol counseling; he also performed 24 hours of community service by working as a laborer at the South Suburban Golf Course.

None of these offenses necessarily disqualify Bob Magness's sons from operating a casino in Colorado, but the Division of Gaming's investigation of their backgrounds will continue for several months, says spokesman Don Burmania. Under Colorado law, only those who've spent time in prison during the past ten years or committed a felony involving gambling, fraud, theft or deception are automatically disqualified from obtaining a gaming license.

"We pretty much find out everything about you when you apply for a gaming license," Burmania says. "We have a reputation for being fairly strict but fair." Burmania says investigations can take up to a year to complete. Agents for the division have been calling business associates and others who worked with Kim and Gary Magness in the past, researching their backgrounds.

Colorado's gaming law was primarily intended to keep organized crime out of local casinos. However, the law gives the gaming division wide discretion to determine who is fit to own a casino, allowing disqualification based on "moral turpitude."

"The legislative declaration was clear that even any hint of impropriety would not exist in the gaming industry," says Burmania.

But don't look for Epicurean to be catering any events at the Mardi Gras Casino. Sharon doesn't speak to Kim and Gary, sources say, and the two sides have reportedly been arguing over possession of Bob Magness's cherished Arabian horses.

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Stuart Steers
Contact: Stuart Steers