The Las Vegas casino giant Wynn Resorts has asked the Clark County District Court in Nevada to dismiss a suit by its largest shareholder after Wynn denied the shareholder the chance to view certain financial records. The shareholder is a resident of Hong Kong and owns 20 percent of the company. He is also questioning a pledge to donate $135 million to the University of Macau, located in the city known as the gaming capital of the world and where Wynn Resorts receives 70 percent of its overall profits.
The response to the litigation, submitted to the court on Jan. 30, counters that the shareholder has no right under Nevada law to conduct the inspections he desires or to “play detective.” The filing claims that the defendant is attempting to avoid Nevada “statutory limitations on stockholder inspection rights.” In addition, 11 of the 12 board members approved the donation to the University of Macau, with the defendant being the only board member to vote against the donation. The shareholder is defending his Jan. 11 lawsuit, telling Reuters he looks forward to defending his claim in court.
Steve Wynn, who himself owns only a 10 percent stake in the company, has shown interest in expanding into Asia gaming markets. Many saw the defendant as a key asset in this expansion, but the lawsuit may muddy the relationship.
The shareholder has proposed four election candidates for the upcoming shareholder meeting. If elected, his efforts would push out the current COO and President of Marketing. Amid the lawsuit, Wynn Resorts exhibited strong Q4 earnings largely thanks to a strong performance from Macau businesses, despite the public legal spat between the operating group and its largest investor.
Source: Reuters, “Wynn asks judge to oppose top investor’s suit,” Farah Master, Jan. 31, 2012