Wynn Resorts Sues Elaine Wynn Over Secret Copied File Stash

Posted on: April 4, 2017, 05:00h. 

Last updated on: April 4, 2017, 02:45h.

Wynn Resorts is suing its former co-founder and director, Elaine Wynn, for punitive damages on the grounds that she superstitiously allowed her lawyers to copy computer hard drives belonging to the company.

Wynn Resorts sues Elaine over copies information
Elaine and Steve Wynn, pictured here in happier times, are engaged in a full blown war of the roses over a 2010 shareholders agreement that bars Elaine from selling her almost 1 billion equity in Wynn Resorts. (Image: zimbio.com)

It’s the latest salvo in a long-running war of the roses between Wynn and her estranged husband, Wynn Resorts CEO Steve Wynn. Elaine is seeking to regain control of her 10 percent stake in the company she formed with her ex in 2000, currently worth almost $1 billion.

As part of their final divorce settlement in 2010 the couple split their stakes in Wynn Resorts evenly, while Steve, as CEO, agreed to always reelect 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.

Relations Deteriorate

The settlement was initially amicable, but the fight kicked off in 2012 when Wynn Resorts sued its major shareholder, the Japanese billionaire Kazuo Okada, and ousted him from the board over allegations that he bribed a Philippine gaming regulators in order to secure a license for the project that eventually became the Okada Manila, which Wynn was not involved in.

Okada coounter-sued, and sensing her moment, Elaine joined the lawsuit in an attempt to extricate herself from the shareholders agreement that barred her from selling her shares.

Wynn Resorts resolved she was in breach of fiduciary duties to the company and ousted her from the board.

Elaine recently petitioned the Nevada Supreme Court for whistle-blower protection in relation to allegations of securities violations by Wynn Resorts, after being refused protection by the Las Vegas trial judge presiding over the case.

Covert Operations

But in the latest filing, Wynn Resorts claims Elaine’s allegations are based on privileged information that her former her lawyers secretly copied from private company files in 2013. They also claim lawyers made a forensic image of her assistant’s computer.

“Whether Elaine and her agents covertly accessed even more information than they copied may never be known,” the company said in the filing. “The computers were connected to Wynn Resorts’ corporate network and Elaine didn’t supervise her attorneys.”

Elaine, meanwhile, claims she was merely following the advice of her legal team, although she admitted she had not told Wynn Resorts that the information had been accessed and copied.

“I relied on their counsel to follow their directions,” she said in during a hearing last week. “And they wished to image my computer, and so I cooperated with that request.”

The case continues.