Shareholder Agreement Between Steve Wynn and Ex-Wife Invalidated By Judge
Posted on: March 16, 2018, 06:00h.
Last updated on: March 16, 2018, 03:31h.
A shareholder agreement between Steve Wynn and ex-wife Elaine Wynn has been invalidated by a Clark County District Court judge, issuing an order that also dismisses any claims Elaine Wynn may have pursued in a case that pits Wynn Resorts against Aruze USA.
As a result of the order, the Wynns now have the ability to sell shares in Wynn Resorts. Steve Wynn, the former Chairman and CEO of the company, currently holds about 11.8 percent of the company’s shares, while Elaine Wynn holds 9.4 percent.
Regulators Might Want Steve Wynn Out
The ability for Steve Wynn to sell shares in the company may prove important. Gaming regulators in both Nevada and Massachusetts are currently conducting investigations into Wynn’s suitability as an owner. While Wynn is no longer on the board of directors for the company, regulators could decide that his significant stake makes him more influential in the corporation’s affairs than officials are comfortable with.
Elaine was granted nearly half of Steve Wynn’s stake in Wynn Resorts in 2010 following their divorce, but the shareholder agreement prevented her from having control over her stock. In 2016, she told a court that she had agreed to let Steve Wynn retain control of her stock so that he could better protect their mutual interest in the company, which didn’t always align with those of Kazuo Okada and Aruze USA.
Elaine Wynn argued that this was no longer necessary once the company had redeemed Aruze’s shares, which happened in 2012. But Aruze USA was still part of the shareholders agreement.
That changed last week, when a $2.4 billion settlement between Wynn Resorts and Universal Entertainment included an agreement from Aruze not to consider itself a party to the shareholders agreement, leaving only Elaine and Steve Wynn to contest whether it should still be in effect.
The agreement between the former couple was one of the many issues still under litigation in the broader shareholder case. The Clark County District Court expected to hear 20 additional motions related to the case on Friday morning.
Decision to Sell Could Shape Company’s Future
Steve Wynn resigned from his position as chairman and CEO of Wynn Resorts in February following a string of sexual harassment and sexual assault allegations against him.
Wynn has vehemently denied all of the claims against him, and has suggested that Elaine Wynn has been clandestinely trying to ruin his reputation as part of a campaign to get a more favorable result in the battle over their shareholder agreement.
If either Steve or Elaine Wynn decide that they wish to sell their shares, there are a number of possibilities as to how that could play out. It’s possible that Wynn Resorts itself could buy back some of that stock, rather than allow it to be sold on the open market.
That could also help the company better control any future decisions over mergers or acquisitions, as large shareholders like Steve and Elaine Wynn would currently have significant influence over any votes on the firm’s future.
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