The former president and CEO of Sands China Ltd., a majority owned subsidiary of the Las Vegas Sands, on Wednesday filed a breach of contract lawsuit against the gaming giant in Clark County District Court, alleging he was wrongfully terminated and as a result is owed millions of dollars in salary, bonuses and stock options.
Steven Jacobs, who was fired in July, in court papers said there were many conflicts with Sheldon Adelson, chairman of the Las Vegas Sands Corp., owner of The Palazzo and Venetian hotel-casinos and the Sands Expo and Convention Center in Las Vegas, gaming operations in Pennsylvania and the Macau property.
The allegations paint an unflattering portrait of Adelson, claiming he made “repeated and outrageous demands” of Jacobs, despite Jacobs’ “saving the Titanic” after the economy soured in 2008 and sent tourism and gaming numbers tumbling.
Jacobs’ attorney, Don Campbell, wrote that Adelson told Jacobs to use “improper leverage against senior government officials of Macau” in order to obtain title to apartments.
Jacobs also alleges that Adelson told him to “threaten to withhold Sands China business from prominent Chinese banks unless they agreed to use influence with newly elected senior government officials of Macau in order to obtain favorable treatment with regards to labor quotas and table limits.”
The court papers also allege that Adelson ordered that “secret investigations be performed regarding the business and financial affairs of various high-ranking members of the Macau government so that any negative information obtained could be used to exert ‘leverage’ in order to thwart government regulations/initiatives viewed as adverse to LVSC’s interests.”
Other alleged conflicts between Jacobs and Adelson, according to court papers, include Adelson’s insistence that “Sands China continue to use the legal services of Macau attorney Leonel Alves “despite concerns Mr. Alves’ retention posed serious risks” of violating the U.S. Foreign Corrupt Practices Act, which was passed in 1977 to combat bribery of foreign government officials to obtain or retain a business.
Jacobs in court papers alleges Adelson demanded he withhold information from the Macau property’s board of directors involving Chinese criminal triads, government investigations and even cost overruns at the resort on the South China Sea.
On July 23, Jacobs was terminated. In a letter from Adelson, no cause for the termination is mentioned. He was not allowed to clean out his office and was instead “escorted off the property by two members of security in public view” and left at the Chinese border. While part of China, Macau is in a special economic zone and is the only city in China that allows legal gaming.
Roughly two weeks later, according to court papers, Jacobs received a letter that explained he was terminated for cause, and was therefore ineligible to receive at least one year’s salary for severance.
Jacobs earned $1.3 million per year and was eligible for a performance-based bonus of half that amount. According to court papers, Jacobs saved the Macau operation. In a section of the lawsuit titled “Jacobs Saves the Titanic,” Campbell said Jacobs removed $365 million in costs and repaired relationships with government officials that Adelson “strained due to his rude and obstreperous behavior.”
Jacobs in the lawsuit is also credited with making the resort the market leader by bringing in mainland Chinese gamblers. The lawsuit said he was “able to raise over $4 billion from the capital markets and restart construction of a stalled expansion.”
According to court papers, the Macau operation accounted for 65 percent of the Sands’ net revenue for the fiscal year ending in June, a month before Jacobs was terminated.
“While Las Vegas Sands normally does not comment on legal matters, we categorically deny these baseless and inflammatory allegations,” said Sands spokesman Ron Reese. “From here on out, we will let the process work its way through the appropriate legal system.”
Contact Doug McMurdo at firstname.lastname@example.org or 702-224-5512 or read more courts coverage at lvlegalnews.com.