Wynn Resorts seeks to have judge reject shareholder’s lawsuit claims
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.
