One of Minnesota's richest families feuds over $1 billion estate

Eighteen months before Serene Warren filed a lawsuit that shattered one of Minnesota's richest families, her parents invited her to their Oregon winery for what turned out to be their last visit together.

While Serene mashed potatoes in the kitchen for a family dinner, she broached the topic of the family business, Upsher-Smith Laboratories, which was run by her brother, Mark Evenstad.

Though neither Warren nor her husband worked for the pharmaceutical company, they were angry because Warren's parents had recently given her brother an extra 1.5% of their stock in the Maple Grove firm, upsetting the siblings' matched 25% shares. Warren wanted equal standing, she testified. But her father interrupted her before she could make her case.

"He started shouting and pounded his fist on the counter and says that's a passive investment," Warren testified last year, according to the trial transcript. "'That's none of your business. ... You don't have to worry about how the company is being run.' "

That 2016 meeting was the last time Warren saw her father, who died in 2020 after battling chronic pulmonary issues for five years. She didn't attend his funeral or her parents' 50th wedding anniversary in 2016. She was so wary of further communications that she even set her phone to block calls and texts from her estranged family, she testified.

Warren said she avoided her family for "emotional self-protection," testifying that they bullied her if she challenged them on anything. She is seeking $228 million in damages, court records show.

In a 2018 interview with a mediator brought in to negotiate a settlement in the dispute, Ken Evenstad said he still loved his daughter but considered her lawsuit an "almost unforgivable" action.

"I find it despicable when we have provided her with $250 million, and there's still more to come," Evenstad told the mediator, according to a transcript. "What is she complaining about? ... What's unfair is for her to get as much as she's gotten, and she's never lifted a finger to help in any way."

The five-year legal battle over the Evenstad fortune will culminate in a court ruling later this month, more than a year after testimony in the case concluded. A Hennepin County judge is expected to decide how much Warren should receive for her claims against her family and the attorney who helped distribute her parents' wealth.

It has been a bruising battle. Attorneys for the Evenstad family have portrayed Warren as a greedy slacker who suffers from "the pinnacle of entitlement," eliciting testimony that demonstrated how she and her husband have been living off her parents' money for decades.

Altogether, her brother testified, Warren and her family have received a total of $328 million over the years, including $283 million for her ownership interest in Upsher-Smith, which was sold to a Japanese company in 2017.

Her parents also covered educational costs for Warren's three children, and helped her and her husband buy homes on Lake Minnetonka and in Austin, Texas. Warren testified that she has been a stay-at-home mom since at least 1994, while her husband testified he hasn't earned a paycheck since 2004.

"Serene Warren is so blinded by the privileges that have been afforded to her all of her life off the backs of her parents, Ken and Grace Evenstad, and her brother, Mark Evenstad, that she believes unless she gets exactly what she wants when she wants it, she is a victim," said attorney Janel Dressen, who represents the family's shrunken company, now known as Acova Inc. "The evidence, however, in this case shows that Serene Warren is not a victim, and she has not been oppressed."

Warren's attorneys challenged that portrait, calling her a wonderful person who was treated as a "second-class shareholder." They accused her father and brother of "looting" the company of more than $250 million by paying themselves eight-figure bonuses and engaging in other insider transactions, and then freezing her out of meetings after she questioned some of their business practices.

Warren's attorneys said it doesn't matter whether or not she was an ungrateful daughter who received her 25% stake in the family business as a gift from her parents. The only issue, they said, is that she was not paid equally for her shares when the family started selling off their business assets 2017. The sales of Upsher-Smith and related properties brought in more than $1.3 billion.

"This case is not about resolving family relationships. We are not in family court," her attorney, Thomas Swigert, said in his closing argument. "The court does not need to take sides. The court doesn't have to like Serene more than Mark.

Upsher-Smith was founded in 1919 by Frederick Upsher-Smith, a pharmacist and the grandfather of Ken Evenstad's wife, Grace. Ken Evenstad, also a pharmacist, was working at Schneider Brothers in 1969 when Grace's uncle offered him the chance to buy the faltering business for $1,500. At the time, Upsher-Smith had just two skin-care products and one employee.

Evenstad took the business in a new direction, pushing into the then-nascent field of generic medications. Business boomed. By 1984, he was ready to buy out his only partner for $4 million. That was the last time an outsider owned any stock in Upsher-Smith.

In 1989, Ken and Grace Evenstad took some of their riches and bought an estate in Oregon, where they started a vineyard and began producing wine under the brand Domaine Serene, named after their daughter. Today, Domaine Serene is one of the nation's leading producers of pinot noir, and the Evenstads are recognized as leaders in the rise of Oregon's Willamette Valley region. In 2015, the couple purchased a 600-year-old Burgundy vineyard in France.

As kids, both Mark and Serene worked at Upsher-Smith. Serene Warren testified that she spent spring breaks as a teenager in the production facility, and summers filing papers in the human resources department. She later did data entry for the marketing team.

But she balked at family offers to come work at the company full-time after she graduated in 1990 from Wellesley College, where she majored in Chinese language and linguistics. The most recent of those job offers, Mark Evanstad testified, came in 2013 or 2014 and was aimed at finding a way to reduce her tax burden.

Warren testified that she didn't want anything to interfere with her ability to look after her three kids, who were then teenagers. Her increasingly fraught relations with her family also played a role. She acknowledged in court that not working for the company meant "not having to talk to them every day."

Ken Evenstad told a mediator that the "rivalry" between his children goes back to their childhoods, when Serene was the "straight-A student" who did "everything right." Mark, by contrast, "didn't apply himself" until he went to the University of St. Thomas, he said.

Mark Evenstad testified that he received a master's in business administration in 2000 and spent his summers working his way up the ladder at Upsher-Smith. At the time he took over the company in 2001, he was just 31.

Ken told the mediator that his daughter "was full of envy that Mark was so successful, and she never accomplished anything, and her husband didn't either ... I think she just thought, well, how can this be that he's this sort of goof-off and he's the one that's running the company?"

Ken and Grace Evenstad began giving their children stock in Upsher-Smith in 1993. Twenty years later, the four family members each owned 25% of the company, though Warren was the only family member with primarily nonvoting shares.

Family members said open conflict between the siblings broke out in 2014, when Ken and Grace Evenstad decided to reward their son for his stewardship of the company by giving him an extra 1.5% of their stock.

Chris Warren, Serene's husband, said the decision infuriated Serene, who told her parents in a 2014 email that the gift "would create a significant imbalance and poses risks to our family relationships now and in future generations."

Attorney Chris Madel, who represents Mark and Grace Evenstad, said Mark earned the extra shares by more than doubling the value of Upsher-Smith in a decade.

In his 2018 interview, Ken praised his son's leadership of the company, crediting him with earning the family an extra $300 million by selling the pharmaceutical business in pieces. He said Mark earned a $50 million bonus in 2017 through his "stellar" performance.

The Evenstad family offered to settle the dispute over the shares in 2017 by offering Warren $150 million. She tentatively accepted, but while the lawyers were working out the details she found out her parents were going to pay the settlement with funds obtained by liquidating one of the trusts they set up for her and Mark's families.

"I was devastated, because it turned what was a shareholder issue into a whole family issue," she testified. "The whole conflict now became very multi-generational. It affected my children. It was a total shock. And I couldn't believe the betrayal."

In her lawsuit, Warren blamed the family's long-time trustee, attorney Howard Rubin, of violating his duties by draining the trust without first talking to her or fairly considering the impact on her family.

At the trial, Rubin noted that the terms of the trust allowed Ken Evenstad to take back his money at any time before his death, and for any reason.

Two months after Rubin told Warren the trust money was gone, she filed her lawsuit against the family. She tried to explain her actions in a 2019 letter to her father, when his health was spiraling downward.

"You could have ended this at any time if you had been willing to treat me fairly and with respect," she said in the letter. "You bullied me, and you allowed Mark to bully me, often with advisors and company executives as spectators. ... You make me the scapegoat and claim that everything is my fault. All that I've done is stand up for my rights in response to cruel and manipulative behavior."

Her father never responded, but her brother did four days later.

"You are a mean spirited, ungrateful and selfish woman," Mark Evenstad said in the email to his sister. "Look around you. How have you been 'harmed' by mom and dad? How have you helped them in their time of need? .... Please leave mom and dad alone."