GGRAsia – S. Wynn to pay former firm US$20mln under lawsuit deal

S. Wynn to pay former firm US$20mln under lawsuit deal

Nov 28, 2019 Newsdesk Latest News, Top of the deck, World

Former casino entrepreneur Steve Wynn is to pay US$20 million to Wynn Resorts Ltd – the casino group he founded – as part of a settlement in a “consolidated derivative lawsuit”. A further US$21 million would be paid to the firm “from insurance carriers”.

Wynn Resorts – the United States-based parent of Macau casino licensee Wynn Macau Ltd – gave the information about the settlement in a Wednesday press release.

In response to an enquiry from GGRAsia, the group clarified that the consolidated action related to lawsuits that had been brought on behalf of the company by some of its shareholders. The defendants “were several, including the board, the company, Steve Wynn and certain executives,” added the group in its email to us.

The Associated Press news agency reported on Wednesday that the stockholder lawsuits stemmed from claims of a corporate cover-up of Mr Wynn’s alleged pattern of sexual misconduct.

The news agency said multiple shareholder lawsuits – consolidated into a single case in Clark County District Court in Las Vegas, Nevada – were filed in 2018 on behalf of New York public worker pension funds and municipal workers and others elsewhere over their investments in Wynn Resorts.

Mr Wynn founded Wynn Resorts and then led it, up to the time of his resignation in February 2018. His exit came amid allegations of multiple cases of sexual assault against female staff at the firm. Mr Wynn has denied any wrongdoing.

Under the settlement mentioned in the Wednesday release, certain fees and costs associated with bringing the suit would be deducted from the US$41 million tally due to Wynn Resorts, said the firm in its press release.

“Neither the company nor its current or former directors and officers were found to have committed any wrongdoing in connection with the settlement. The settlement is subject to court approval,” added the statement.

The company said the deal “also credits Wynn Resorts with US$49 million as a result of corporate governance enhancements undertaken after the filing of the lawsuit, and further enhancements agreed to by the company pursuant to the settlement.”

In its email to GGRAsia, the company clarified that the term “credit” meant a “reduction in the company’s liability” due to steps it had taken.

The press release had said that subsequent to the legal action the firm had agreed to specific changes in governance. They included: to amend its by-laws “to require the separation of the role of the chairman and chief executive officer and require a majority vote of the shareholders for the election or re-election of directors except in the case of a proxy fight”; to “strengthen its current commitment to diversity” by publicly stating its goal of 50 percent diversity on its board; and to create “enhanced succession planning” in relation to the composition of its board and appointment of executive officers.

In February this year the Nevada Gaming Commission fined Wynn Resorts US$20 million over the sex misconduct matters and the way those issues had been handled internally by the company.

On Wednesday the Nevada Gaming Control Board rejected a motion by Mr Wynn to dismiss a complaint it had filed against him in relation to the sexual misconduct claims.