Leprino Lawsuit Will Not Melt Away

Nancy Leprino is hoping the third time’s the charm.

Her uncle, reclusive billionaire James Leprino, is the founder of Leprino Foods, a private, Denver-based company that produces 85 percent of the pizza cheese in the world and is the exclusive supplier for Pizza Hut, Domino’s and Papa John’s. He and his two daughters are the majority shareholders with 75 percent ownership, while his late brother’s daughters, Nancy and Mary, own the remainder.

In July 2020, the nieces sued the company alleging fiduciary misconduct by James Leprino and his two daughters, claiming they had been barred from the company’s headquarters and that a “no-dividend” policy had effectively rendered their minority shares in the $5 billion company worthless. At the same time, the plaintiffs said the majority shareholders came up with various schemes to funnel more than $130 million to themselves.

The two-week-long trial in December 2022 included emotional testimony, a secret recording, a dramatic motion for mistrial and a settlement request by the plaintiffs for $600 million to $900 million in damages. The jury took less than three hours to decide in favor of the defendants. Two months later, Nancy Leprino filed an appeal, which she lost.

But the story continues. On March 6, Nancy's lawyer, Sean Connelly of Connelly Law, filed a petition of appeal with the Colorado Supreme Court asking for a review of the Court of Appeals' decision to uphold the 2022 trial win for Leprino Foods Company.

The argument is extremely technical and buried in legalese, but broadly speaking, the petition asks the Supreme Court to reconsider two points that the appellate court used to make their decision.

The first is that the continuing violation doctrine, a legal principle that allows lawsuits beyond the statute of limitations and is typically used for workplace discrimination cases, should also appeal to breaches of fiduciary duty. The second is the argument that the appellate court took too narrow a view of what qualifies as “oppression,” stating that Nancy Leprino still derives some economic benefit from her shares, and so it did not “warrant the dissolution of [a company] — much less one worth $5 billion and employing thousands of people,” the decision says.

This latest petition says, "If courts allow a massive company to get away with massive misconduct, how can they remedy less extensive oppression in much smaller companies?”

It will most likely be several months before the Supreme Court makes a decision, so until then, the Leprino legal battle continues.