The ex-wife of Wynn Resorts Ltd. (WYNN) founder and chairman Steve Wynn asked for a court order invalidating a stockholders agreement that prevents her from selling her 10 percent share of the casino operator.
Elaine Wynn, in a filing today in federal court in Las Vegas, said the restrictions on her shares were similar to those on shares held by Kazuo Okada, the board member whose 20 percent stake in Wynn Resorts was forcibly redeemed after he was accused by the company of making improper payments to Philippine gambling regulators. Okada has denied the allegations.
The initial 2002 stockholders agreement, which stipulated that Okada and Steve Wynn would vote their 25 percent stakes in the company as a block, gave Steve Wynn control over who was elected to the company’s board, according to Elaine Wynn’s filing. The agreement was amended when Elaine Wynn became a separate shareholder as a result of her divorce.
“The shareholder status of Mr. Okada’s company, Aruze, was a fundamental premise of Ms. Wynn’s decision to enter into the January 2010 stockholders agreement,” according to Elaine Wynn’s filing. “Ms. Wynn would not have agreed to give her ex- husband the potential ability to restrict the market for her stock if not for her desire to support and not undermine the existing alliance between Mr. Wynn and Mr. Okada.”
Elaine Wynn, who is also a board member of Las Vegas-based Wynn Resorts, is a counter-defendant in the case initially brought by Wynn Resorts against Okada alleging the Japanese billionaire is developing two casinos and three hotels in Manila and seeking to lure “high-limit, VIP gamblers” from China, in direct competition with Wynn’s casino in Macau.
Elaine Wynn came to own 10 million shares, worth about $1 billion, after her 2009 divorce from Steve Wynn that entitled her to half their community assets. Steve Wynn wanted to restrict her ability to sell the shares because he didn’t want to give Okada an opening to renegotiate the restrictions on his shares too, according to the filing.
With the forced redemption of Okada’s shares in February, there’s no longer a reason for her to be bound by the restrictions, according to Elaine Wynn’s filing. Her ex-husband still maintains that she can’t sell her shares without his consent, Elaine Wynn said.
“Today’s cross claim filed by my ex-wife Elaine P. Wynn is a legally baseless attempt to drag into federal court a domestic relations matter that was previously settled in family court here in Las Vegas,” Steve Wynn said in an e-mailed statement. The 2010 stockholders agreement “was at the essence of a property settlement between us that was extensively negotiated while Elaine was represented by a top divorce lawyer.”
Okada filed counterclaims against Wynn Resorts and the board in March, challenging the redemption of his shares at a $800 million discount. In a filing June 14, he asked the court to maintain his voting rights during the litigation.
Okada, the former vice chairman at Wynn Resorts who helped bankroll the company 12 years ago, had filed a petition in state court in Clark County, Nevada, in January for access to Wynn Resorts’ financial records. Okada opposed the company’s HK$1 billion ($129 million) pledge in July 2011 to the University of Macau Development Foundation.
Steve Getzug, a spokesman for Aruze USA Inc., Okada’s holding company, declined to comment.
The case is Wynn Resorts v. Okada, 12-00400, U.S. District Court, District of Nevada (Las Vegas.)
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