The motion indicates Steve Wynn wants to sell his company stock, though he denies that’s his motivation.
A judge ruled on Friday that Steve Wynn could not receive dismissal of certain motions in a longstanding lawsuit brought by his former wife, Elaine Wynn, on whether she could sell shares in Wynn Resorts Ltd. Steve Wynn recently stepped down from his position as Wynn Resorts’ CEO and would like to cash out his $2 billion in Wynn shares.
Nevada District Court Judge Elizabeth Gonzalez in Las Vegas said that the request was too intertwined with lawsuits by Kazuo Okada and Elaine Wynn, so Steve Wynn’s request to declare the Elaine Wynn case “moot” was denied.
Lawyers for Aruse Holdings (Kazuo Okada) and Elaine Wynn had opposed the request, according to Bloomberg News. At the hearing, Mark Ferrario, a lawyer for Elaine Wynn, told the judge that his client wanted “full and complete relief” — not just a dismissal on the issues Steve Wynn wanted dismissed.
Ferrario said, “Because of his own conduct, he’s now under scrutiny. They are desperately trying to avoid a devastating consequence coming down from regulators.”
Elaine Wynn’s Casino Company Shares
For the past 6 years, Steve and Elaine Wynn have been in a dispute over whether Elaine Wynn can sell off her shares in Wynn Resorts Ltd., which at various times have been estimated to be worth around $900 million to $1.6 billion. Presently, those shares are valued at $1.6 billion.
As a part of a stock option agreement made when the Wynns were married, Elaine Wynn agreed not to sell Wynn shares without agreement from the company’s board of directors. It seemed a reasonable agreement at the time, because the board wanted to keep a controlling interest in the company “in the family”, so to speak.
Denied Relief by Wynn Resorts
After her separation and divorce from Steve Wynn, Elaine Wynn wanted to cash out her shares and become a billionaire in reality — not just on paper. The Wynn Resorts board of directors refused to allow her to sell the stocks. Elaine Wynn took her ex-husband and the board to court, at least after she was removed from the board of directors after a vote in 2015.
Elaine Wynn’s lawyers argue that a 2012 case involving Kazuo Okada set a precedent which should allow her to cash out her stocks. Kazuo Okada is a Japanese slot machine and pachinko machine billionaire (Universal Entertainment) who has got into the international casino industry over the past 10 years. Back in 2012, Okada was a business partner with Steve Wynn.
Kazuo Okada’s Forced Redemption
At the time, Kazuo Okada was busy building the $2.4 billion Okada Manila (formerly Tiger Resort), but he also owned a major share in Wynn Resorts. In fact, when Steve Wynn’s divorce came final in 2010, it left him with a smaller share of Wynn Resorts — and business partner Kazuo Okada holding the most shares of any shareholder.
Steve Wynn found Okada “unsuitable” for that role and forced him to sell his shares of Wynn Resorts in 2011 — what is called a “forced redemption”. Okada was given a promisory note saying he would be paid $1.9 billion in 2022 for his shares in the company. Okada sued, claiming he had been shortchanged $800 million and he wanted payment immediately.
Kazuo Okada Lawsuit
In 2012, Okada became embroiled in an alleged bribery scandal involving licensing for Okada Manila. Authorities in Japan and the United States were looking into Okada’s financial dealings, allowing Steve Wynn’s lawyers to argue that Wynn was correct all along in challenging Kazuo Okada’s suitability to be a major stockholder.
For the past 6 years, Wynn Resorts has won a serious of legal showdowns with Kazuo Okada, who continues to want to release his funds. Meanwhile, Elaine Wynn’s lawyers have attempted to secure their own kind of “forced redemption“, in order to liquidate her funds. Once again, Wynn lawyers have been able to stonewall.
Judge Gonzales Denied Wynn’s Motion
Now, it appears that Steve Wynn wants to turn his Wynn Resorts stock into liquid assets, too. His lawyers filed a motion with a Las Vegas judge, claiming the long lawsuit with Elaine Wynn is now moot and the case should be dropped. Nevada District Court Judge Elizabeth Gonzalez in Las Vegas thus denied Steve Wynn’s motion, saying the cases are too intertwined.
After he resigned from Wynn Resorts Ltd., Steve Wynn told local media that the 2010 judgment against Elaine Wynn is not “enforceable”. Mr. Wynn, who owns 12% of Wynn Resorts, also noted that he has no plans to cash out his shares of the company he founded — though his actions in court would suggest otherwise.
