A company led by a Taiwan businessman, who argues that in 2001 he proposed being senior partner in a joint venture with Las Vegas Sands Corp to get a Macau gaming licence, has voluntarily withdrawn a lawsuit on the issue previously filed on July 9 with the U.S. District Court in Nevada.
The lawsuit against Las Vegas Sands was claiming intellectual ownership of as much as 72.5 percent of the US$20 billion-plus profits the plaintiff estimated the gaming operator has made in Macau since the award of its gaming rights there in 2002.
At a minimum, the suit from Asian American Entertainment Corp Ltd (AAECL), a Macau-registered company, asked for US$5 billion from Las Vegas Sands, with pre-judgement and post-judgement interest.
In addition, the suit also requested jury trial on issues including allegations of misappropriation of trade secrets and breach of confidence.
The action also named Las Vegas Sands chairman Sheldon Adelson and former company executives William Weidner and David Friedman as defendants.
GGRAsia approached the casino operator and also lawyers representing AAECL and its boss Marshall Hao Shi-sheng for comment on the notice of withdrawal of the lawsuit, dated December 23.
Las Vegas Sands spokesman Ron Reese told us the firm would not be making any comment. No reply was available from the California-based Cochran Firm, attorneys for AAECL, at the time this story went online.
Alleged ‘breach of confidence’
According to a court copy of the original suit that has been seen by GGRAsia, it was alleged the plaintiff “owns indivisibly” 72.5 percent – and the defendant Las Vegas Sands “owns indivisibly” 27.5 percent – rights to preparatory work central to the eventual success of Las Vegas Sands’ Macau licence application.
The lawsuit also called on Las Vegas Sands and related entities to account for profits “obtained from use of the work” done by the plaintiff “which eventually led to the procurement of lucrative Macau concessions contracts”.
Las Vegas Sands was initially granted a Macau gaming licence under a partnership with Galaxy Entertainment Group Ltd. However, the partnership quickly fell apart, reportedly over disagreement on management of the gaming assets. In December 2002, the government made an alteration to the concession contract, which allowed it de facto to be broken into two concessions.
Notwithstanding the break up between Las Vegas Sands and Galaxy Entertainment, the lawsuit as filed on July 9 claimed compensatory and punitive damages from Las Vegas Sands for “breach of confidence and misappropriation of trade secrets” arising from “defendants surreptitiously disseminating to Galaxy, a major competitor to the plaintiff, the work, that contained highly proprietary information, that was developed between plaintiff and LVS over the course of several months.”
The lawsuit added that AEECL’s original tender submission, prepared with Las Vegas Sands, had been copied “word for word” in a later tender submission made by the Galaxy Entertainment-Las Vegas Sands partnership, but that this fact had only been discovered in 2011 when a Macau lawyer acting for AAECL had a chance to compare the two documents.
The suit said the AAECL tender document had been so “cutting edge” and confidential, that it had been drafted in Hong Kong, not Macau, and the document had been accompanied by “several bodyguards in order to prevent its contents falling in the hands of its competitors”.
The July 9 document stated: “While AAECL suspected that LVS representatives Adelson, Weidner and Friedman had divulged some aspects of the joint venture that were to be kept in confidence, AAECL never once thought the actual AAECL Tender Submission, and all of its highly proprietary information, including project capital commitments, development plans including phases and costs, the cutting edge idea of temporary resorts, specific market research and analysis, marketing ideas, business models, and the use of specific architects, had been given to Galaxy.”
GGRAsia also approached Galaxy Entertainment for comment on the allegations in the lawsuit but got no reply by the time this story went online.
The suit further claimed that AAECL’s access to capital at the time of the gaming concession tendering process in 2001 was “critical” to Las Vegas Sands.
The July 9 document stated: “It was very well known that during this period of time LVS was suffering from significant financial problems, facing large losses from its Las Vegas related businesses, and did not have any capital of its own or any access to capital to invest in AAECL’s joint venture.”
Nov 01, 2017Sponsored content | A wide range of innovative and entertaining products will take centre stage on Aristocrat Leisure Ltd’s stand at the 2017 MGS Entertainment Show. The firm’s products will be available at booth #AO38. “At Aristocrat, we continually strive to use our passion, dedication and...
Nov 22, 2017U.S. regional tribal casino operator Mohegan Gaming and Entertainment is pushing back the opening of its new casino resort in Incheon, near South Korea’s capital Seoul, the company’s chief...
Nov 22, 2017
Nov 22, 2017
Oct 23, 2017The presence of some of the leading cloud computing...
Jul 11, 2017The Tokyo local election setback for Japan’s governing...
Jul 06, 2017A multibillion U.S. dollar casino project on Vietnam’s...
Jun 20, 2017Online gaming compliance testing services have become an...
Jun 01, 2017Macau-based casino operator Galaxy Entertainment Group Ltd...
”According to Macau law, the security personnel of casinos and the management staff do not have the law enforcement power that the police have”
Wong Sio Chak
Macau’s Secretary for Security