Joey Mcleister, Star Tribune
Jeno Paulucci money in nasty court dispute
- Article by: ABBY SIMONS
- Star Tribune
- October 20, 2012 - 9:42 PM
In career and life, Jeno Paulucci never shied from conflict. Perhaps it shouldn't be surprising that he continues to provoke fights, even in death.
The estate of the Iron Range's famous food magnate is the focus of a complex probate battle spanning courtrooms from Minneapolis to Duluth to Florida and has pitted the Pauluccis' adult children against the men now in charge of their massive trusts.
Two children contend that Jeno and his wife, Lois, were manipulated on their deathbeds into firing the Minneapolis attorneys who had long helped to manage the $100 million trusts and replacing them with two Florida men -- one a businessman who still heads the Paulucci empire and the other a state senator.
The new trustees contend the Pauluccis appointed them simply because they wanted the assets well-managed.
The eight-month-old fight is once again on hold as the sides await a third decision on its venue -- Minnesota, where the Paulucci children contend it should happen, or Florida, where the trustees say most of the assets are located.
"I'm certain this is a fairly rare case in that it's not beneficiaries fighting amongst themselves," Jonathan Bye, an attorney for daughter Gina Paulucci, said during arguments in Hennepin County District Court this week. "This is a case of beneficiaries who want to get rid of these guys. If we can get to court and get that done, all of this will go away."
Paulucci, 93, died Nov. 24, just four days after his wife, Lois, 89. They were married for 64 years.
Built an empire
Jeno Paulucci is best known for founding the Chun King line of canned Chinese food products in the late 1940s, which he sold in 1966 for $63 million. He went on to launch Jeno's Pizza Rolls, sold to Pillsbury Corp. for $135 million, Luigino's frozen dinners and Michelina's Inc., the latter named for his mother.
Litigious as he was successful, the Hibbing native was known for fiery exchanges with those who crossed him, from journalists to city officials. He was also generous, spending several million dollars to lure business and development to Duluth and the Iron Range in projects that included skyways and the Paulucci Space Theatre, a Hibbing planetarium named for him. He provided thousands of jobs for Minnesotans, and took them away when he moved his companies out of state.
Jeno and Lois Paulucci established their trusts more than a dozen years ago. At the time of their deaths, the trusts had an estimated combined value of $100 million. Jeno Paulucci named the new trustees Oct. 8, 2011. Lois did the same for her trust Oct. 10. They died six weeks later.
In multiple court petitions in Minnesota and Florida, Mick Paulucci, Cynthia Selton and Gina Paulucci contend that, as beneficiaries of the trusts, they have the right to fire trustees David Simmons and Larry Nelson and replace them with the original trustees, William Berens and George Eck. Mick Paulucci and Selton further contend their parents were under "undue influence" and lacked the mental capacity to name the new trustees.
But attorneys for Nelson, the longtime president of Paulucci International, and Simmons, the Florida state Senate majority whip, argue that Jeno and Lois Paulucci appointed them for a reason -- to responsibly handle the assets, and that they were too far from Minnesota to influence the Pauluccis.
Further, they contend, any challenges to their authority should be handled in Florida, where half of the trust's beneficiaries live and most of the property is located. Inventory includes dozens of pieces of real estate in Minnesota and Florida, jewelry, paintings, artwork, vehicles and furniture.
"Where is the most economical, logical and efficient place to have this resolved? It's in Florida," Thomas Hatch, a Minneapolis attorney representing Simmons and Nelson, said in court this week.
St. Louis County Judge Heather Sweetland ordered earlier this year that Florida was the most appropriate venue to handle the dispute over Jeno Paulucci's trust. That decision was appealed by the Paulucci children. Last month, Hennepin County referee Dean Maus made a similar decision for Lois Paulucci's trust, prompting another review Wednesday by Judge Jay Quam. In court Quam asked why the venue issue has become "such a gigantic fight?"
"Everyone is willing to spend thousands of dollars on an issue that doesn't even get to the merits of the case," he told the assembled attorneys. "That's a little troubling."
Fight likely to remain stalled
The fight stems in part from a key difference in probate laws between the two states. In Minnesota, the consent of only adult beneficiaries is required to remove trustees from a will. Florida requires the consent of all beneficiaries, including minors. Although eight Paulucci great-grandchildren are minors and cannot consent, their parents can do so on their behalf. The mother of at least one of them does not want Nelson and Simmons removed, although his father, the Pauluccis' grandson, does consent.
In documents, the Paulucci children argue that Berens and Eck should be restored as trustees partly because they've handled the family's trust and estate for 35 years. They say that Nelson has taken control of the family's assets and intends to live off the trusts.
Hatch would not comment on Jeno or Lois Paulucci's mental state, saying only "we will have to wait for that evidence to come out." He added, however, that Jeno Paulucci was taking care of "lots of business from September to October." The day before his death, he authorized the sale of Bellisio Foods, known for its Michelina's brand of frozen foods.
Hatch said in court Wednesday that his side can produce memos written by Jeno Paulucci that suggest why he wanted a change in trustees. Attorneys for Mick and Cindy Paulucci plan to call doctors and nurses to testify about their parents' confusion, documents say.
However, no witnesses are likely to be called until the venue battle is resolved. Quam's decision is likely to be appealed, stretching the fight well into next year.
Abby Simons • 612-673-4921
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