Appeals court upholds dismissal of lawsuit against Wynn Resorts board

CARSON CITY — The 9th Circuit Court of Appeals has upheld the dismissal of a lawsuit filed against Wynn Resorts board members by a shareholder over questions about the company’s management of its Macau operations.

The lawsuit was filed in Las Vegas District Court in 2012 by the Louisiana Municipal Police Employees’ Retirement System, which holds Wynn Resorts stock. It alleged the board breached its fiduciary duties.

The “shareholder derivative action,“ where a shareholder sues on behalf of the company when it contends that directors and officers have not done their job of managing the company in the best interests of investors, was filed after Wynn Resorts decided in 2011 to donate $135 million to the University of Macau Development Foundation.

The filing asked not only for financial damages but a stop to any further donations to the University of Macau.

The case was dismissed by U.S. District Judge James Mahan. The Louisiana retirement system appealed.

In its ruling, the appeals court panel said the shareholders had to give sufficiently particularized allegations to support an inference that a majority of the board lacked independence. But the appeals court rejected the claims by the shareholder, finding that the allegations were inadequate to show a lack of independence by the members of the board.

The lawsuit suggested that Wynn subsidiary Wynn Macau Ltd.’s pledge to donate the $135 million to the University of Macau in China was unprecedented. The lawsuit noted that the chancellor of the University of Macau was also the head of Macau’s government, with oversight of gaming matters.

Wynn Resorts had previously denied any suggestion of impropriety, saying the pledge agreement had been reviewed by attorneys to ensure it complied with the U.S. anti-bribery law.

Contact Sean Whaley at swhaley@reviewjournal.com or 775-461-3820. Find him on Twitter: @seanw801