A Nevada court judge on Friday denied Steve Wynn’s motion to terminate a shareholders’ agreement with his ex-wife Elaine Wynn that would have allowed both of them to sell their shares in casino operator Wynn Resorts Ltd.
On February 9, Wynn Resorts said it had been informed that Mr Wynn had declared the 2010 stockholders’ agreement “invalid” and agreed to give up control over his ex-wife’s shares of the company, given his resignation a few days earlier as chairman and chief executive of the casino group amid allegations of sexual misconduct.
The latest court ruling leaves in place the three-way court battle among Mr Wynn, his ex-wife and former business partner Kazuo Okada. The judge said she denied Mr Wynn’s request because the validity of the stockholders’ agreement is “too intertwined” with other issues in the lawsuit, including the forced redemption of Mr Okada’s shares six years ago, reported Bloomberg News.
The stockholders’ agreement – signed in 2010 – prevented Mr Wynn, his ex-wife and Mr Okada from selling their respective shares in Wynn Resorts without the consent of the other two shareholders.
In 2012, Wynn Resorts forcibly ordered the redemption at a discount of the company shares controlled by Mr Okada, the company’s then biggest single shareholder. Mr Wynn and Mr Okada have been feuding for about six years. Mr Okada’s shares in Wynn Resorts were held via Aruze USA Inc, a subsidiary of Japanese conglomerate Universal Entertainment Corp.
Universal Corp – which says that Mr Wynn and his ex-wife are still bound by the 2010 pact – is still seeking return of the 24.55 million shares it held in Wynn Resorts.
The case over the shareholders’ agreement goes to a jury trial next month.
According to company filings, Mr Wynn owns 11.8 percent of Wynn Resorts stock. Mr Wynn has said he has no immediate plans to sell his shares in the company.
The latest court decision means that Ms Wynn is still not able to control her stake in Wynn Resorts, and for now prevents Mr Wynn from divesting any part of his stake, even if gaming regulators deem him “unsuitable” for a licence.
Gaming regulators in Nevada and Massachusetts have said they are looking into the sexual misconduct allegations, reported by the Wall Street Journal. Mr Wynn has denied the allegations.
The Massachusetts Gaming Commission said a fortnight ago that the completion of the investigation into Wynn Resorts remained “a priority” for the body.
The Nevada gaming regulator said on Thursday that it plans to implement new regulations and standards that would help casino firms comply with existing federal and state workplace sexual harassment laws.
The notification included a 15-point checklist for licensees to gauge the strength of their anti-sexual harassment policies, and the Nevada Gaming Control Board said that companies that breach the regulations could be disciplined through fines or licence suspensions or revocations.
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"On March 20, 2018, Mr Wynn disclosed that he intends to sell all or a portion of the common stock controlled by him … in the open market … or in privately negotiated transactions”