Nashville at law: Music entrepreneur faces RICO lawsuit

Monday, April 20, 2009 at 12:17am
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James Lestorti

His own brother once called James C. Lestorti "the devil himself." But the nine former employees and contractors now suing Lestorti in Nashville's U.S. District Court make their claims in more clinical language: breach of contract, fraud, negligent misrepresentation, assault, and violations of the Racketeer Influenced and Corrupt Organizations Act.

The ex-workers filed suit last week against Lestorti and his record label, WhiteStar Entertainment. They claim he attracted all of them to come to work for him in Nashville last year with claims that he had the financial wherewithal to launch an ambitious music enterprise, but that the business abruptly failed in December and that Lestorti has not been heard from since. The plaintiffs say they are owed $300,000 for unpaid compensation as well as loans that some of them made to Lestorti.

For Lestorti, the lawsuit marks the latest of several legal disputes in recent years. In 2005, when Lestorti was CEO of a Connecticut-based kitchen cabinet manufacturer that had generated over $100 million a year in sales, creditors forced the company into involuntary bankruptcy. The firm, LesCare Kitchens Inc., founded by Lestorti's father in 1945, shut down its factories and went out of business.

In 2006, Lestorti sued his brother and a cousin in Connecticut, claiming they conspired to deceive his parents into signing away his half of LesCare's ownership to them. A newspaper account that year quoted the brother, Louis Lestorti Jr. as saying: "A 90-year-old father and an 88-year-old mother are being manipulated and brainwashed by the devil himself, my brother. He not only destroyed the old company, he has totally destroyed our family."

Lestorti incorporated WhiteStar in July 2007 and began publicizing it last fall, announcing the signing of country singer-songwriters George Ducas, Jason Meadows and Danielle Peck. In its press releases, the company said its founder had been involved in NASCAR racing and in a sports management company with Alex Rodriguez of the New York Yankees. Describing him as a "major philanthropist," the releases said he had been awarded the "Congressional Medal of Distinguished Services to the United States and the Senatorial Medal of Freedom for service on the President’s Roundtable and President’s Club."

The former workers' lawsuit claims that Lestorti "never intended to abide by the terms and conditions of the publishing and recording agreements" he entered into with the performers, that he lacked the financial resources to fulfill the terms of those contracts, and that he has now breached them. It also asserts:

• that Lestorti "misappropriated funds from his deceased mother’s trust in order to finance his lavish business expenditures,"

• that he made "false and fraudulent representations" of his "professional and personal associations in the recording industry and his ability to use said contacts to develop WhiteStar," and

• that in December, during a Jason Meadows show at the Mirage Hotel in Las Vegas, Lestorti "became noticeably intoxicated" and "threatened to cause bodily harm" to one of the plaintiffs by cutting him with a broken beer bottle, before bouncers removed him from the venue.

The lawsuit seeks $900,000 in compensatory and $1 million in punitive damages, plus $30,000 for the assault count. Robin J. Gordon of Gordon Law Group represents the plaintiffs.

Attempts to reach Lestorti last week to comment for this story were unsuccessful.

United States District Court

Standard Candy Co. v. NutraBella Inc. Filed April 10. Standard, famous as the maker of Goo Goo Clusters, claims that a former client whose products Standard produced on a private-label basis has failed to pay up after its formula-tinkering led to a fish-flavored batch of candy bars. NutraBella, which specializes in foods for pregnant women, last year fired Standard and refused to pay more than $90,000 in bills.

Standard says the California company ordered it to include the nutritional additive DHA in the candy despite warnings that it could harm the flavor -- which is just what happened. NutraBella then refused to pay a later $40,000 invoice on the grounds that Standard owed it for the bad batch, and it terminated the relationship with Standard while the Nashville candy maker was still holding more than $50,000 worth of ingredients that it cannot use in other products.

Standard seeks damages of $92,000, plus interest. Plaintiff's attorneys: Rhea Bucy, Scott Derrick and Tom of Gullett Sanford Robinson & Martin PLLC.

United States Bankruptcy Court

Developmental Learning Center Inc. Chapter 11 case dismissed April 15. Nonprofit DLC, which treated and educated troubled youths who have been taken out of the Metro school system or ordered to alternative schooling, withdrew its attempt to reorganize after shutting down its operations. Metro removed all of its students in late March after learning the center had lost its liability insurance coverage. Most have been relocated to Baxter Alternative Learning Center, according to an MNPS official.

David Burn of Drescher & Sharp in Nashville represented DLC, which had been in business almost 40 years.

Davidson County Circuit Court

Pam Webb v. Nashville Area Habitat for Humanity Inc. Filed April 13. Webb, who lost her job as vice president of family services at Habitat in February, claims she was fired for opposing "illegal acts" of discrimination against those Habitat is supposed to serve. She says she put in a written complaint with superiors after Chris McCarthy, president and CEO of Habitat's local operation, "made statements and asked staff members to implement policies that are discriminatory and in direct violation of the Equal Credit Opportunity Act and other fair housing statutes."

"The claims in that complaint are false," McCarthy said in an interview last week. "This is a really disgruntled former employee who was separated in connection with a larger reduction in force. The agency and I absolutely deny any wrongdoing or claim of wrongful termination or retaliation. We will vigorously defend against these claims."

Webb seeks compensatory and punitive damages of $500,000 each. Plaintiff's attorney: James L. Harris of Green Hills.

Lattie Brown and Oscar Noel v. Gerald Nicely as commissioner, Tennessee Department of Transportation. Filed April 9. This lawsuit attempts to pull TDOT into a legal fray that has been going on since 2002 regarding pollution of Locke Branch Creek in Williamson County by roadbuilders working on State Route 840. Landowners Brown and Noel were already suing TDOT's contracted builder, Vaughn Contractors, for failing to implement erosion controls, allowing mud runoff to stream into the creek.

Court documents allege the infraction was a violation of a Nationwide Pollution Discharge Elimination System permit issued jointly to TDOT and Vaughn, a document that “prohibits the discharge of storm water that is notably discolored, turbid, muddy and otherwise in violation of the state water quality criteria and standards.” The lawsuit states the plaintiffs are entitled “to damages and relief including but not limited to damages for the loss of and interference with the use and enjoyment of” the property.

Plaintiff's attorney: Elizabeth L. Murphy of Nashville.

— Kyle Swenson contributed to this article.