Elaine Wynn — ex-wife of now-disgraced gaming tycoon Steve Wynn — is getting the last laugh in one of the most antagonistic post-divorce court fights in gaming history.
The former couple, who founded Wynn Resorts in 2002 with Japanese pachinko billionaire Kazuo Okada, have been locked in a bitter legal feud over company shares for several years now.
But now the former chairman’s forced departure from the board has strengthened his ex-wife’s hand. On Friday, the company announced in a securities filing that the casino mogul had agreed to cede control of Elaine Wynn’s shares.
Las Vegas’ very own War of the Roses kicked off in 2012, when Wynn Resorts accused Okada of bribing a foreign official, allegedly to secure government backing for his Okada Manila resort in the Philippines, a venture with which Wynn Resorts had declined to be involved.
Wynn Resorts sued Okada, thanks to an agreement between the three founders that gave Steve control over their shares, and forced him to sell his stake in the company. Okada sued to regain control and Elaine Wynn joined that suit.
Staking Out Claims
As part of the Wynns’ 2010 divorce settlement, they split their stakes evenly, but Mrs. Wynn ceded voting control over her shares to her ex-husband and agreed to a restriction on selling them. In return, Steve Wynn agreed to always reelect Elaine to the board of directors.
But by 2012, she wanted to take back control of her equity. Mr. Wynn responded to Elaine’s lawsuit by claiming she had breached fiduciary duties by suing the company, and he subsequently booted her off the board.
In papers filed to the court in mid-2016, Mrs. Wynn described her ex-husband’s behavior as “reckless” and “risk-taking,” warning that it could harm the company and expose it to damaging litigation, although she did not describe the specific nature of what that behavior entailed.
In late January, when the damning story of decades of sexual misconduct against numerous female employees broke in the Wall Street Journal, Mr. Wynn immediately accused his ex of being the source. He has consistently denied all of the allegations, even after stepping down as chairman and CEO early last week.
He Said, She Said
In an official statement the company said, “sufficient evidence exists to show that Elaine Wynn, personally and/or through her agents, instigated and facilitated the Wall Street Journal article. Elaine Wynn has threatened to ‘destroy’ Mr. Wynn and in that quest ‘did not care if the stock went to zero.’ We believe that the Wall Street Journal article was in furtherance of that effort.”
Lawyers for Mrs. Wynn have denied that their client was the source.
Elaine’s prediction of “damaging litigation” has proved to be correct. At least one shareholder has filed a suit against Wynn and the company’s board for “disregarding a sustained pattern of sexual harassment and egregious misconduct,” leading to depleted stock values.