Sheldon Adelson, the billionaire chairman and CEO of Las Vegas Sands Corp., spent more than six hours on the witness stand Tuesday and repeatedly expressed his disdain for the former executive who brought him there.
Adelson said he never wanted to hire Steven Jacobs, the former president of Sands Macau who later filed a wrongful termination case against him. The witness said Jacobs had no experience running a company and nearly ruined Sands China Ltd. “many times.”
“He was one of the least competent and potentially destructive executives I had in over 50 companies in my 69-year business career,” Adelson said. “He only worked for the company for one year.”
Jacobs sued Sands China and Las Vegas Sands in 2010, shortly after he was fired. He later added Adelson as a defendant in the case.
Sheldon Adelson will be confronted in court for the first time with allegations of wrongdoing by a man he fired five years ago as the head of his Macau casinos.
Adelson, the 81-year-old billionaire founder and chairman of Las Vegas Sands Corp., is among the casino operator’s top executives listed as witnesses for a hearing starting Monday in a lawsuit brought by Steven Jacobs, the former chief executive officer of the company’s Macau unit.
Jacobs hasn’t had a chance during the 4 1/2-year-old Nevada case to put his ex-boss on the witness stand. He claims he was fired for balking at what he says were illegal demands, including to dig up information about high-ranking Macau government officials that, according to a court filing, could be used to “exert leverage.”
“There’s going to be mudslinging,” said Greg Doll, a lawyer at Doll Amir & Eley LLP in Los Angeles who isn’t involved in the case. “You can bet your bottom dollar that Jacobs is going to bring up stuff that is uncomfortable for Sands China and for Adelson in particular.”
Adelson denies allegations he ordered secret investigations into the business and financial affairs of government officials, as well as Jacobs’s claim that he personally approved a strategy condoning prostitution at the Macau casinos. Sands has said in court filings that Jacobs was dismissed for working on unauthorized deals and violating company policy.
LAS VEGAS (CN) – A former Sands China CEO’s lawsuit against Sheldon Adelson got under way Monday, with Adelson’s attorneys objecting so often a state judge threatened to hold them in contempt.
Steven C. Jacobs sued Adelson and his Sands companies 4½ years ago, claiming the casino billionaire wrongfully fired him for objecting to Adelson’s “outrageous” demands in Macau.
Among them: that Jacobs conduct “secret investigations” into the “business and financial affairs of high-ranking members of the Macau government,” to find damaging information to create “leverage” to stop regulatory actions that might harm China Sands’ business.
At a contentious evidentiary hearing Monday, Adelson’s attorney called Jacobs an “extortionist,” and Jacobs’ attorney retorted by accusing Adelson’s lawyer of trying to hold a Star Chamber hearing.
Jacobs sued Adelson, Las Vegas Sands and Sands China in Clark County Court in October 2010. Adelson claims that Nevada is not the proper jurisdiction.
Retired Las Vegas Sands COO Michael Leven on Monday answered questions aimed at proving Nevada is the proper jurisdiction, but Sands attorney J. Randall Jones and other Sands attorneys repeatedly objected.
They objected so often that judge Elizabeth Gonzalez threatened them with contempt.
“If you object every half-question, this hearing will take a month to complete,” Gonzalez said.
A Las Vegas judge began hearing testimony Monday to help her determine whether she has jurisdiction over Sands China Ltd. in a breach of contract case filed by Steven Jacobs, the former president of Sands Macau.
Jacobs sued Sands China and Las Vegas Sands Corp. in 2010, shortly after he was fired. He later added Sheldon Adelson, chairman and CEO of Las Vegas Sands, as a defendant in the case.
“Jacobs was not terminated for cause,” according to an amended complaint filed in December. “He was terminated for blowing the whistle on improprieties and placing the interests of shareholders above those of Adelson.”
For example, the document accuses Adelson of demanding “that secret investigations be performed regarding the business and financial affairs of various high-ranking members of the Macau government so that any negative information obtained could be used to exert ‘leverage’ in order to thwart government regulations/initiatives viewed as adverse to LVSC’s interests.”
The amended complaint also includes a defamation claim against all the defendants.
“In an attempt to cover their tracks and distract from their improper activities, Adelson, LVSC and Sands China have waged a public relations campaign to smear and spread lies about Jacobs,” the document alleges.
The amended complaint argues that Clark County District Court has personal jurisdiction over the defendants and Jacobs’ claims.
According to the document, Sands China is a Cayman Islands corporation that is 70 percent owned by Las Vegas Sands, and Sands China is publicly traded on the Hong Kong Stock Exchange.
“While Sands China publicly holds itself out as being headquartered in Macau, its true headquarters are in Las Vegas, where all principle decisions are made and direction is given by executives acting for Sands China,” the document alleges.
District Judge Elizabeth Gonzalez has ordered hefty sanctions against Las Vegas Sands subsidiary Sands China Ltd. for improperly withholding documents in an ongoing wrongful termination lawsuit.
In an order filed Friday, Gonzalez told the attorneys to surrender the documents, pay $250,000 to various legal charities and cover significant court costs incurred by plaintiff Steven Jacobs, the former president of Sands Macau. She previously ruled that failure to turn over the documents violated Jacobs’ rights.
Jacobs’ lawyer, Todd Bice, said the judge was trying to “level the playing field” by handing down the penalties.
“We’ll see whether or not they want to change their course of conduct,” he said.
In what Bice called one of the more significant sanctions, the judge also restricted Sands China Ltd. from calling any of its own witnesses during a hearing on jurisdiction.
“We are disappointed in the court’s decision and do not believe it is supported by the evidence,” Ron Reese, a spokesman for Las Vegas Sands Corp., wrote in an email in response to the 41-page ruling. “Sands China intends to seek review from a higher court.”
Gonzalez had previously ruled that Sands China violated her September 2012 order in the case by redacting the documents. The subsidiary’s “ongoing noncompliance is incompatible with and undermines the search for truth,” Gonzalez wrote Friday, calling the company’s lack of transparency “highly problematic.”
Jacobs sued Las Vegas Sands Corp. and Sands China in 2010 for breach of contract related to his termination and had asked the defendants to turn over about 100,000 emails and other documents. He sought the emails and documents to show that decisions made in Las Vegas controlled Sands China on many subjects. Included in the list was the allegation that Las Vegas Sands Chairman and CEO Sheldon Adelson had personally approved a “prostitution strategy” for Macau, which Adelson and the company deny.
