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Unbrotherly Feud Erupts When Winn Empire Falls

March 22, 1987|DENISE GELLENE | Times Staff Writer

The end came hard for Ted Douglas Nelson. The day after he quit Knudsen Foods--the troubled dairy run by his family--his older brothers locked him out of his office and took away his company-owned Mercedes.

"Do you know what?" asks a wounded Nelson, 37. "My brother Dee kept his car."

Just five days after Nelson lost his car last September, his family lost control of its corporation and most of its fortune. Knudsen, once the largest dairy in the West, ran out of money and filed for bankruptcy protection. (Knudsen continues to operate but is being sold off to pay creditors.)

It was a bitter end to an unusual partnership between Nelson and his twin half-brothers--Dee Roy and Lee Roy Bangerter. For more than a decade, they borrowed staggering amounts of money and eventually built a teetering giant called Winn Enterprises--named after their mother--with far-flung investments in real estate, banking and dairy products.

It made them rich. According to court documents, the brothers have two jets, an assortment of boats and spacious mansions in Orange County. By 1985, Dee Roy's fortune alone was worth about $12.5 million, according to a court record.

Those heady days are over. Dee Roy has filed for personal bankruptcy protection. His Villa Park mansion, with such amenities as a racquetball court and tanning room, is up for sale for $2.9 million. Nelson pledged most of his personal fortune to guarantee bank loans to Knudsen and Winn Enterprises, both now in bankruptcy proceedings. Lee Roy's personal financial situation has not been publicly disclosed.

Several Lawsuits

The wreckage of their empire is spread across the Southwest and has spawned several lawsuits from unhappy investors who lost money in business dealings with the brothers. The family is torn, and the Bangerters no longer talk to Nelson.

Now the brothers are fighting over what's left of the family fortune--a troubled nursing home company founded by their mother called Care Enterprises. It is an angry struggle. On one side are the Bangerter twins, who run Care and sit on its board of directors. On the other side is Nelson, who has teamed with Dee Roy's estranged wife in an effort to topple his brothers and take control of the company.

Dee Roy says the feud has deeply wounded his family. "It has turned my children against their mother and that's wrong--totally wrong," he says bitterly. He says his 17-year-old son is bothered by nightmares and his 16-year-old daughter refuses to speak with her mother, Janice B. Bangerter.

"Where does it end?" he asks, fighting back tears.

At one time, acquaintances say, the brothers were an ideal team. Nelson, who likes to wear cowboy boots and fat Western belt buckles with conservative suits, was the gunslinger, the one who charged ahead and made deals. The more conservative style of the Bangerter twins appeared to temper Nelson's flamboyance.

They kept their disputes private. C. Eugene Hutchins, a real estate executive who worked closely with Nelson and Dee Roy, says he can't remember a single disagreement between the brothers. "They were always united . . . they always supported each other," he says.

Acquaintances privately nicknamed them Huey, Dewey and Louie after Donald Duck's inseparable, look-alike nephews. Indeed, their kinship was remarkable since the brothers were separated while young children and didn't get to know each other well until they were adults.

Weren't Raised Together

The Bangerters, who are five years older than Nelson, grew up on their paternal grandparents' Utah dairy farm after their father was killed in World War II. Nelson was raised by his mother in Southern California after she divorced his father.

There were visits--the twins spent summers in California and Nelson spent holidays in Utah--but the brothers didn't become close.

Nonetheless, the three brothers seem alike in some ways. They all drove Mercedes cars. They are church-going Mormons with large families: Lee Roy Bangerter has seven children; Dee Roy Bangerter and Nelson each have six.

As they retell it now, the brothers acknowledge that their relationship was never as smooth as it appeared publicly during Winn Enterprises' rise. Lee Roy frequently clashed with Nelson over business deals. Dee Roy was called on to cast the swing votes that got the brothers into real estate, banking and dairy products.

The twins say the brothers' partnership worked initially because they abided by majority rule. It was a team in which "decisions were balanced by three personalities," Lee Roy says.

But the Bangerter twins say the partnership started to unravel during the late 1970s when Nelson started investing its money without asking his brothers. The twins also say Nelson waged costly and unsuccessful takeover battles for such food companies as Kern Foods and Olson Egg Farms on his own. The Bangerters say Nelson also spent millions of dollars on what turned out to be money-losing real estate investments without consulting them first.

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