Fourth shareholder lawsuit filed against Wynn Resorts

Looks like Bob Kraft made a major blunder picking Wynn for a Foxborough partner. Due diligence is highly rated.

Fourth shareholder lawsuit filed against Wynn Resorts
By Steve Green

With attorneys appearing to be in pile-on mode, a fourth outside shareholder lawsuit was filed Thursday against the directors of Wynn Resorts Ltd. of Las Vegas.

Like three other suits filed since March 27, Wednesday’s filing in federal court in Las Vegas covers the feud between Wynn Resorts and board member Kazuo Okada.

Okada has suggested Wynn Resorts improperly agreed to donate $135 million to the University of Macau.

Critics suggest the donation was tied to the company’s lucrative casino license in Macau, a Chinese gambling district. Wynn Resorts disputes this and says attorneys found the pledge was in compliance with the U.S. Foreign Corrupt Practices Act, an anti-bribery law.

Wynn Resorts, in the meantime, is complaining Okada provided improper benefits to Filipino gaming regulators and plans to develop a Filipino gaming resort that would compete with Wynn’s properties.

The first suit, on March 27, named all 12 Wynn board members including Okada and accused them all of wrongdoing.

The last three suits, including Thursday’s filing, don’t name Okada as a defendant and generally assert allegations similar to those Okada has made against the company and its directors.

‘‘The individual defendants have breached their fiduciary duties in connection with the (Macau) contribution and Wynn Resorts’ public dispute with Okada. As a result, Wynn Resorts has suffered damages which include paying the wasteful $135 million contribution and the costs incurred to defend against a related investigation by the United States Securities and Exchange Commission and to pay Okada’s related legal expenses in accordance with the company’s Articles of Incorporation,’’ Thursday’s lawsuit alleges.

It was filed by shareholder Maryanne Solak, a Virginia resident who is represented by the Las Vegas law firm Muckleroy Johnson and the firm Kessler Topaz Meltzer & Check LLP of Radnor, Pa.

Solak’s suit is a “derivative claim” in which she’s asking that Wynn’s directors – other than Okada – be required to pay damages to the company for the benefit of all shareholders.

The proposed damages are unspecified and are for “the individual defendants’ breaches of fiduciary duties and waste of corporate assets.”

Wynn Resorts isn’t commenting on the series of outside shareholder lawsuits, which if nothing else will result in legal costs and require some of management’s attention to deal with them.

In similar situations involving multiple shareholder lawsuits against other gaming companies, judges have ordered the suits be combined to avoid duplicative work by attorneys and the judges.