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Wynn Resorts seeks to have judge reject shareholder's lawsuit claims
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LAS VEGAS REVIEW-JOURNAL
Updated: Jan. 31, 2012 | 8:25 a.m.
Grievances by the Wynn Resorts Ltd.'s largest shareholder are nothing more than "half-truths and sweeping generalizations," attorneys for the Las Vegas gaming company said Monday in court papers.
The filing in Clark County District Court is Wynn Resorts' first official response to a Jan. 11 lawsuit filed by Kazuo Okada, a Japanese businessman whose companies, slot machine maker Aruze USA and its parent company Universal Entertainment Corp., hold 19.66 percent of Wynn Resorts' stock.
In his lawsuit, Okada questions specific expenditures by the company and said that even though he is a member of the Wynn Resorts board of directors, "despite several written demands, Wynn Resorts insists on keeping its books and records hidden" from him.
Okada is a founder of Wynn Resorts and has invested $380 million in the company since 2000. A $135 million donation by Wynn Resorts to the University of Macau Development Foundation last year led Okada to seek access to the company's financial records.
"As a member of the board of directors of Wynn Resorts, Mr. Okada has just as much right as any other director, including Steve Wynn, to inspect the corporate documents he deems necessary to carry out his fiduciary duties to all Wynn stockholders," an Aruze spokesman said in a statement Tuesday. "The response of Wynn Resorts' management, while full of colorful rhetoric, cannot explain this away. We look forward to presenting our position to the court."
Wynn's attorneys counter that Okada should have raised his concerns directly with casino developer Steve Wynn if he had concerns about spending at Wynn Macau Ltd.
"Okada opted instead to publicly air his purported grievances through his (lawsuit), utilizing innuendo, hyperbole, half-truths and sweeping generalizations," Wynn attorney Robert Shapiro, a partner in the Las Angeles law firm Glaser Weil Fink Jacobs Howard Avchen & Shapiro LLP, wrote in the response to Okada's lawsuit.
In its filing Monday, Wynn Resorts asked for dismissal of Okada's claims, describing his requests as nothing more than "stockholder inspection requests" on Aruze's behalf. The company is not legally required to allow such requests if its filings with the federal Securities and Exchange Commission are current, as are Wynn Resorts' filings, Shapiro noted.
In its 117-page response to Okada's lawsuit, Wynn attorneys claim that to get around the prohibition, Okada presented his request as a director rather than a shareholder. A judge will have to determine whether his status as a director negates the state law concerning shareholders.
The company's response also questioned why he would seek information about the $135 million donation.
Okada received countless documents from Wynn over the past 10 years, Wynn's lawyers maintain. They note that the donation was approved on an 11-1 vote of the Wynn board. Before the vote, the board received information about the pledge and discussed it, with Okada presenting "dissenting views."
In his lawsuit, Okada demands that Wynn open his financial records to show how $120 million invested in 2002 by Aruze has been spent. He also seeks information about the stockholders' agreement between Steve Wynn, Elaine Wynn and Aruze, and other records covering Wynn Resorts from 2000-2002.
The fact that Okada owns nearly 20 percent of the company means he cannot have what he seeks, Wynn's attorneys argue.
"Nevada law does not afford Okada ... the right to do an end-run around the express statutory limitations on stockholder inspection rights or to play detective, while unnecessarily distracting and burdening Wynn's management with the endless task of satisfying his unfounded and unarticulated concerns," the filing said.
Brownstein Hyatt Farber Schreck LLP's Las Vegas office also represents Wynn. Lionel Sawyer & Collins and Alston & Bird LLP represent Okada.
District Judge Elizabeth Gonzalez has scheduled a Feb. 9 hearing on the issue.
Shares of Wynn lost $3.66, or 3.07 percent, to close Monday at $115.41 on the Nasdaq Global Select Market.
Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.
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My hasty comment: Shapiro specialize in white color crime cases. He defended Sands when China Sands CEO was fired. He defended Kerkorian, MGM, too. He also defends entertainers' bankruptcies. He is the head of White Color Criminal Defense Group. He is with so many lawyers and he Collect hefty fees together. Okada is a billionaire. We will see if Okada take over Wynn. Former Mrs. Wynn can go either way but she will stay away from this fight. In case, Okada can take back Wynn. I wonder if Okada uses his knolwledge of Sokaiya attack to be prepared to fight this. Wynn is easier than to be attacked by Sokaiyas.
Whit6e color CRIMINAL DEFENSE LAWYER TEAM? It was against Sands when Sands' ex-CEO (China) sued Sands. It goes to any money like MGM, Kerkorian, but their speciality is defending movie stars. Remember Las Vegas Bess by Eva L? I like to see business law firms fight each other. No fun now. Where are Vermillian extortion lawsuit gone to enjoy that Martin who defended Ms. Q in Henderson?
Wynn hired OJ Simpson lawyers. I hope good to Wynn no matter how he goofs. Where is his public relation man?
Sorry I meant 1/10th.
Maybe Wynn never knew basic bookkeeping or business report. If he is 11/10 th thinker of you guys, he may be able to figure out what kind of his business papers would satisfy Okada. He must have 'yes sir' men working with him beside attorneys who take advantage of him. Unlike Sand's Adelson whose wife has PhD, he does not have family help, either. It is not time when bingo parlor operator could become successful in casino business, but other casino hotel owners grew with their business - very efficient with computers, too. Not Wynn, the way he file lawsuits, I can conclude this. He will not be able to discuss with Japan where they communicate with Computer. They write in Japanese and we read translated English right away. v.v. Suppose Yoko Ono's wealthy clan will go on casino hotel, I don't think Wynn will be included, Her head clan is Mitsui which owns Toshiba and many big corporations. Or if Sony, etc. Japanese admire Las Vegas Casino business. But I think Wynn will be skipped.
I wonder Okada has a plan to take over Wynn. Coming from Japan where analog era and digital era were replaced by ubiquitous era business practice all over, he began with Wynn, looks like. However, Wynn goofed so he may want to do by his organization. Taking over Wynn type operation would not be hard. I just wonder.
Steve Wynn has never been good in Math. He is a billionaire. For $ 135 million donation, he could use his money to get over. When Sheldon Adelson of Sands easily donated for Gingrich, and donate and help schools in Clark County, Wynn could use his own money to get away from this law suit. He has his eye problem but that is physical handicap. That should not cover his stupidity. It is cheaper to pay 135 million dollars to Macau school than paying for those law firms.
Okada's other company will make a hotel-casino in Philipine. Wynn fugured that will reduce income in Macau. Some time ago, Wynn badmouthed one country in Asia thinking Casino in that country is bad news for Wynn casino in Asia. Sands and MGM advanced there and so Wynn did, too. Wynn had to do extra nice things. Sands and MGM have different approach to Asian Government. When Japan legalize hotel-casino to earn money it needs to recover Fukushima area, watch out Sands and MGM, Caesars will big splash over there. Wynn? I don't know. Japanese Government is not honest entity. So, they can spot Wynn type operation easily. It has ATM type card system which stops under-age people from gambling. Their standarized card system, USA do not have yet. Also, Toshiba invented 'compact nuclear leak system' something like that without Japanese Government money. Anyway, Wynn is not a thinker like you people. He will lose. His lawyers make money.
big frankie - The accounting process/books are not the same as the formal SEC reports. It is as simple as that. It forms a loop and some specific expenditures may or may not be listed in a formal/official SEC filings. Take a look at the SEC regulations. One has to see the books to verify an expenditure or use of capital if it is not required to be set apart by an SEC regulation or opinion. Add to this the regulations at the Hong Kong exchange and the Wynn Macau subsidiary and the issue becomes cloudy.
Wynn wants judges to pass laws that say he is above the law basically