Wynn Resorts Ltd. founder and chairman Steve Wynn and his ex-wife will be back in court after the company accused Elaine Wynn in a civil lawsuit of copying confidential company computer files for her personal benefit.

The company filed suit late last month in Clark County District Court seeking punitive damages as well as more than $15,000 in compensatory damages in a three-count complaint.

The lawsuit, filed March 28, accuses Elaine Wynn of breach of contract, breach of fiduciary duty and conversion, defined as the unauthorized assumption and exercise of rights of ownership over personal property belonging to another.

The lawsuit is the latest in seven years of legal battles between the Wynns that began with Steve and Elaine Wynn’s divorce settlement and continued when Steve Wynn filed suit against his former business partner and major Wynn Resorts shareholder Kazuo Okada.

In 2012, Steve Wynn filed suit against Okada, alleging the Japanese slot machine entrepreneur of bribing Philippine gaming officials when he developed what eventually became the Okada Manila, a 993-room hotel-casino that opened in Manila in December. Okada countered with a lawsuit against both Steve and Elaine Wynn. Steve Wynn is not affiliated with the Manila project but when the lawsuit was filed, the Wynn Resorts forcibly redeemed Okada’s 20 percent stake in the company.

Divorce Settlement

The Wynns’ 2010 divorce decree ordered the couple to split their stakes in Wynn Resorts evenly, while Steve, as CEO, agreed to always re-elect his ex-wife to the board of directors. In return, Elaine Wynn agreed to a provision that she wouldn’t sell her shares without the company’s permission.

But when Elaine Wynn was up for re-election to the board in 2015, shareholders rejected her after the board of directors nominating committee did not endorse her. Steve Wynn voted his shares for her, but she only received 26.2 percent of the total shareholder vote.

Based on allegations outlined in the most recent lawsuit, it’s clear now why some shareholders — mostly institutional investors who care most about the company’s financial performance — may not have voted for her.

According to the three causes of action listed in the recent lawsuit, the company is accusing Elaine Wynn of violating the Wynn Resorts’ Code of Business Conduct and Ethics and The Policy Regarding Nondisclosure and Nonuse of Confidential Information that board members are bound by.

Hard Drives Copied

The lawsuit says Elaine Wynn copied information from Wynn Resorts’ hard drives that she had access to as a director and copied them to personal computers and those files were shared with two law firms she had hired in her legal fight against Steve Wynn and the company.

“There are not two sets of rules — one for Elaine and one for everyone else — as Elaine appears to think,” said the lawsuit filed by the Las Vegas law firm of Pisanelli Bice, Wynn Resorts’ outside counsel.

“Elaine Wynn is bound by her fiduciary obligations and her contractual agreements to adhere to Wynn Resorts’ policies and procedures protecting company confidential and privileged information. … In committing the acts alleged herein, Elaine Wynn is guilty of oppression, fraud and malice toward Wynn Resorts. As such, Wynn Resorts is entitled to recover punitive damages from Elaine Wynn.”

Elaine Wynn’s attorney, Washington-based James M. Cole, did not return calls and emails from the Review-Journal, but told Bloomberg News last week she was acting under the advice of her personal attorneys, who were working with the company’s attorneys at the time.

Cole told Bloomberg it was disappointing to see Wynn Resorts “wasting the court’s valuable time by filing a new complaint about a matter they already had before the court and abandoned when the hearing did not seem to go well for them.”

The best litigation for business decision makers is the litigation that never happens. Court cases are time-consuming, expensive and take a business owner’s mind off business. The best way to avoid litigation? Document everything, know your obligations and be certain your protections are in place.

“It sounds a little simplistic, but I would say, know your legal obligations, comply with them, and most important, create documentation of your compliance,” said Lee Roberts of Weinberg, Wheeler, Hudgins, Gunn & Dial.

“Most litigation arises out of the business disputes with a party you’re doing business with, and it’s almost always about money,” said Roberts.

Step one in keeping a business out of litigation is to make certain the rights and obligations of both sides of a deal are documented. Whether with a formal contract created by a lawyer or a memo of understanding, or even a letter sent to the other side, it’s important there be some form of written documentation.

Click here to view the full article.

Wynn Resorts is attempting to overturn two district court orders directing it to hand over documents to Japanese gaming mogul Kazuo Okada as part of a long-running dispute over his ousting in 2012.

Okada was removed from Wynn’s board in 2012 after it was revealed he was being probed for corruption, and was forcibly made to redeem a 20 percent stake in the casino operator.

The documents in question contain information used by the Wynn board of directors in February 2012 to determine that Okada and his related companies were unsuitable parties that could jeopardize Wynn’s gaming licenses.

According to a report from Las Vegas Review, Attorney Todd Bice representing Wynn Resorts has argued that Clark County District Judge Elizabeth Gonzalez erred when she required that some information used by the board in its decision be turned over to Okada.

CARSON CITY — An attorney for Wynn Resorts Ltd. asked the Nevada Supreme Court on Monday to overturn two district court orders compelling the gaming company to turn over documents to Japanese billionaire Kazuo Okada in a long-running legal dispute over his ouster as a majority shareholder.

The information was used by the Wynn board of directors in February 2012 to determine that Okada and his related companies were unsuitable parties that could jeopardize Wynn Resorts gaming licenses.

The board voted to redeem all of the outstanding shares of Wynn Resorts stock held by Okada in exchange for a promissory note with a principal value of approximately $1.9 billion.

In the two combined cases heard in oral arguments in the capital, Wynn’s attorney said that Clark County District Judge Elizabeth Gonzalez erred when she required that some information used by the board in its decision be turned over to Okada, Aruze USA Inc. and its parent corporation, Universal Entertainment Corp., known as the Okada Parties.

Attorneys for the city of Las Vegas and a developer argued Thursday in court that the City Council should have a chance to decide the fate of a controversial plan to develop the Badlands golf course before a judge weighs in.

The nearly three-hour hearing in 8th Judicial District Court largely centered on the language of a state statute regulating planned developments and if public notice requirements were followed when the development was proposed.

A group of homeowners from the nearby Queensridge community filed a lawsuit in late 2015 against the city and three limited liability companies that own portions of the 250-acre course to stop plans to put a residential development on the course that their properties overlook. Two development applications to build homes on the closed course are pending at City Hall.

EHB Cos. attorney Jim Jimmerson called the lawsuit “frivolous,” asserting a landowner has a right to develop his own property.
City Attorney Philip Byrnes called the issue “very hotly contested,” and said the city could face litigation whether it approves or shoots down the development.