Warring Wynns pull company’s directors into dispute

The document is heavily redacted, but the message is clear. Elaine Wynn is trying to raise the stakes in her battle with ex-husband Steve Wynn over control of her share of Wynn Resorts Ltd.

Attorneys for Elaine Wynn late Monday filed a redacted version of her motion for approval to file a fifth amended counterclaim and crossclaim in her attempt to pry loose her 9.2-percent ownership interest in the casino company. The document was originally filed under seal March 10 and is part of a larger protracted legal dispute between Steve Wynn and former partner Kazuo Okada. In her lawsuit and media campaign, Elaine Wynn, who is president of the state Board of Education, accuses company co-founder, Chairman and CEO Steve Wynn, of “using a public company to fund his lavish lifestyle and personal politics” and displaying “reckless, risk-taking behavior” that jeopardizes the corporation and exposes it to legal challenges.

Although much of the discovery in the case has been delayed and remains incomplete, the document states “the few depositions that have been taken in recent weeks — consisting mostly of Wynn Resort Directors — revealed new facts that were not previously disclosed to Ms. Wynn.” Among those directors deposed: former Nevada Gov. Bob Miller, longtime company insider D. Boone Wayson, Alvin Shoemaker and Ray Irani.

The latest filing increases the volume on her claim by citing redacted deposition testimony given under oath by Wynn Resorts corporate directors. The amended complaint alleges Steve Wynn and Wynn Resorts general counsel Kim Sinatra intentionally failed to disclose pertinent information to the board of directors. As a result, those directors “failed to apply appropriate governance standards.”

It also promises “startling admissions” are contained in those redacted deposition transcripts. The document alleges the facts gained in the depositions will further illustrate the trouble the company has been courting.

It also generated dueling press releases.

From her: “And while Ms. Wynn did not have access to those facts until the other Directors recently were deposed, no one on Mr. Wynn’s side can claim to be surprised by Ms. Wynn’s amended allegations; Mr. Wynn and Wynn Resorts are far more familiar with the threat the Company faces from the pattern of misconduct detailed in the amended pleading than Ms. Wynn … who was ousted from her Director position for asking too many questions about the Company’s governance and losing the favor of the controlling shareholder.”

From him: “In issuing a press release regarding the routine filing of purported supporting documents, Ms. Wynn is simply recycling the same lies and distortions she has sought to promulgate in an attempt to embarrass Mr. Wynn, his fellow Board members and colleagues. She is promising verification for these same tired allegations without delivering on them. There was no legal reason for her press release. Her only motivation is an attempt to harm Mr. Wynn and Wynn Resorts and conduct the trial of her unfounded allegations in the press rather than in court where they are destined to be proved false.”

Attorneys for Wynn Resorts have argued that Elaine Wynn was well aware of the agreement she signed that gave her then-husband control over her shares. For his part, Steve Wynn has couched her allegations as the rantings of a bitter former spouse. She counters that she attempted to raise her concerns internally, but only after being “ousted from the board entirely was she forced to acknowledge that legal resolution of all of her claims was the only solution,” her press release states.

The company’s attorneys, meanwhile, also accuse two members of Elaine Wynn’s legal team, Michael Fazio and Michael Zeller, of forwarding “false and inflammatory accusations” apparently out of a desire to “shock and awe.” A March 7, 2016, letter from Wynn Resorts attorneys gives an indication of the increasingly prickly atmosphere. Attorney Debra Spinelli of Pisanelli Bice wrote in part, “The lengthy exchanges and responses in the transcript pages you reference demonstrate that Governor Miller answered Mr. Quinn’s questions but Mr. Quinn did not like the answers. Questions were repeated multiple times and in different ways to try to elicit different answers. Deposition tactics aside (and this includes making rude and patronizing gestures outside the purview of the video camera), Mr. Quinn did receive answers to his badgering questions.”

It’s hard to see much through all that black ink, but arguments that the depositions should remain obscured out of a fear of exposing “trade secrets” won’t cut it for long. These are casino board members, not CIA agents.

Now that the company’s directors have been drawn into the arena, transparency will go a long way toward proving whether Steve Wynn has been reckless and Elaine Wynn has a sound legal argument or whether it’s time for the warring former power couple to move on.

John L. Smith’s column appears Sunday, Tuesday, Wednesday, Friday and Saturday. Contact him at 702-383-0295 or jsmith@reviewjournal.com. On Twitter: @jlnevadasmith