We have discussed the dueling lawsuits between Wynn Resorts’ founder and chairman Steven Wynn and one of the company’s board members over a $135 million donation to the University of Macau several times in this blog. Now a third party has entered into litigation over the dispute.
The newest lawsuit was filed by the Louisiana Municipal Police Employees Retirement System, a shareholder in the Las Vegas-based casino and hotel business. The lawsuit accuses both Wynn and the board member of harming the Wynn Resorts brand through their conduct, violating their fiduciary duties to shareholders and leaving the company vulnerable to a federal investigation into possible corruption.
The dispute began in January, when the board member, at that time the single largest shareholder in Wynn Resorts, sued Wynn in Clark County District Court over his refusal to hand over documents related to the board’s decision to make the huge donation. The board member, a Japanese gaming mogul, opposed the donation and implied that it was intended to influence gambling regulators in Macau.
The lawsuit by the pension fund agrees. It notes that the chancellor of Macau University is also the chief executive, or head of state, of Macau, which is a special administrative region of China. The lawsuit claims that the donation is not a genuine gift but an attempt to improve the chances of Wynn getting its casino license renewed there in 2022.
But the Japanese shareholder is not left off the hook. The suit accuses him of using Wynn Resorts accounts to “improperly influence gaming regulators in the Philippines” related to a casino project there.
The pension fund filed the litigation as a derivative lawsuit, which means that it is suing Wynn’s directors and officers on behalf of the company. It is asking for the donation to be cancelled, for the board to reform its internal procedures and for board members to pay damages to the company.
Source: VEGAS INC, “Wynn fallout continues with shareholder lawsuit,” Steve Green, March 27, 2012