LAS VEGAS, March 28, 2016 /PRNewswire/ -- Elaine Wynn, a co-founder of Wynn Resorts
("Wynn" or the "Company")(NASDAQ: WYNN), the Company's third
largest shareholder and a former member of the Board, today filed a
complaint in Nevada State Court to
gain control of her Wynn Resorts stock so that she can make
decisions about her investment like any stockholder.
Ms. Wynn, a prominent businesswoman, philanthropist and
community leader, who has long experience with Wynn Resorts and the
gaming industry, is being denied her right to control her own stock
by her ex-husband Stephen Wynn, the
Company's Chairman and CEO. As stated in her complaint, Mr.
Wynn breached their January 2010
Stockholders Agreement by orchestrating Ms. Wynn's ouster from the
Board of Directors in retaliation for her asking questions about
the "tone at the top," the absence of appropriate internal
controls, the withholding of information from the Board and the
reckless activity of the CEO and others in the Company.
As a result of her removal from the Board, Ms. Wynn has no
meaningful avenue to protect her substantial economic interest in
Wynn Resorts, including any ability to raise issues concerning
corporate governance. Because of Mr. Wynn and Wynn Resorts'
failures to address this matter, Ms. Wynn has been left with no
choice but to proceed with legal action to resolve her claims.
This includes seeking a judicial determination that the
January 2010 Stockholders Agreement,
which purports to prohibit her from transferring stock that she
owns without the permission of Mr. Wynn, and grants to Mr. Wynn all
rights to vote her stock, is invalid and unenforceable as a matter
of law.
In filing the complaint, Ms. Wynn "also seeks damages for Mr.
Wynn's breach of his obligations under the January 2010 Stockholders Agreement, including
for his failure to support her renomination and reelection to the
Board of Directors, and for Wynn Resorts' tortious interference
with that contract. Furthermore, and in the alternative, to
the extent that the January 2010
Stockholders Agreement is deemed valid and enforceable, Ms. Wynn
seeks specific performance ordering Mr. Wynn to comply with his
contractual obligations, as explicitly required by the January 2010 Stockholders Agreement."
Mr. Wynn's denial of Ms. Wynn's ability to control her stock and
her ouster from the Board came in retaliation for her having raised
important concerns about business practices at Wynn Resorts and the
complete absence of proper corporate governance.
Among other things, the complaint asserts:
- Mr. Wynn and certain members of the management team engaged in
reckless behavior and created a tone at the top which punished
dissent or inquiry;
- Mr. Wynn was accused of misconduct on Company property
involving at least one Company employee that was sufficiently
serious to cause him to make a secret multi-million dollar payment,
and yet the Board was never told;
- Mr. Wynn was forced to terminate employees who he never should
have hired because of their associations with alleged illegal
activity and, in at least one case, hid the reasons for the
executive's departure; and
- Mr. Wynn stifled opposing views within the Company, even at the
Board level; the only time in the Board's history that it ever
voted against Mr. Wynn's ostensible position on any issue was when
it voted to oust Ms. Wynn, when in fact it was carrying out his
actual direction in doing so.
Named as a defendant, in addition to Mr. Wynn, is Wynn Resorts'
General Counsel Kimmarie Sinatra,
who aided and abetted the breach of Mr. Wynn's fiduciary duties and
the intentional interference with contractual relations.
As the complaint states:
"Ms. Wynn raises these issues reluctantly: she had hoped, for
the sake of her family and of the Company she helped to build, that
the issues plaguing the operation of Wynn Resorts and the reckless
risk-taking of its Chairman and CEO Mr. Wynn could be addressed
through proper corporate processes and channels. They cannot
be. Mr. Wynn has intentionally kept the Wynn Resorts Board in
the dark and has turned the General Counsel of the Company into his
co-conspirator."
"Every time Elaine Wynn sought
information, as a director should, she confronted a 'tone at the
top' that punished inquiry, even by her, a major shareholder,
director and co-founder of Wynn Resorts. Mr. Wynn operates
the Company without the effective checks and balances that the law
requires, beginning with independent and effective Board
members. Ms. Wynn and her fellow Board members were
intentionally fed misinformation by Mr. Wynn and Kimmarie Sinatra, the Company's General Counsel,
a process that depended on the deficiencies in the internal
controls and their intentional circumvention with regard to the
decisions of the Chairman and CEO."
"Although bound by the January
2010 Stockholders Agreement to support Elaine Wynn's director candidacy, Mr. Wynn
instead engineered her removal from the Board in retaliation for
her challenging his decisions and questioning his judgment.
Ms. Wynn cannot sit by idly and accept punishment for doing what is
right and daring even to inquire about Mr. Wynn's reckless
operation of the Company."
As the complaint continues: "The ostensible purpose of the
January 2010 Stockholders Agreement
was to place restrictions on the stock held by Mr. Okada (through
his company, Aruze USA, Inc.) to
preserve the Wynn-Okada alliance and avoid the kind of takeover
that the Wynns faced at the Mirage. Mr. Wynn induced Ms. Wynn
to sign the January 2010 Stockholders
Agreement by a series of false representation, both professional
and personal, including that the purpose was to restrict Mr. Okada,
not her, and that she would serve on the Board for at least as long
as the restrictions applied so that she could protect her stock in
the Company, which is Ms. Wynn's largest asset."
"Now that the shares held by Mr. Okada's company have been
redeemed, the ostensible purpose of the January 2010 Stockholders Agreement has been
frustrated. If the purpose was indeed to impose limits on Mr.
Okada, as Mr. Wynn and his counsel maintained, then there is no
legitimate basis for continuing to enforce the Agreement's
restrictions on Ms. Wynn's shares."
"As is now clear, Mr. Wynn is misusing the January 2010 Stockholders Agreement to exert full
and perpetual control over his former wife's life and legacy."
Media Contacts:
Robert
Siegfried or Ross Lovern
KEKST
212.521.4800
robert.siegfried@kekst.com / ross.lovern@kekst.com
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SOURCE Elaine Wynn