Wynn Resorts settles derivative lawsuit for $41 million, including $20 million payment from Steve Wynn
Wynn Resorts said Wednesday it will receive $41 million – which includes $20 million from former chairman and CEO Steve Wynn – to settle a derivative lawsuit filed on behalf of the company.
In a statement, Wynn Resorts said the settlement is subject to court approval and that “neither the company, nor its current or former directors and officers were found to have committed any wrongdoing in connection with the settlement.”
The company did not comment beyond the statement.
The settlement covers eight separate shareholder lawsuits filed in Clark County District Court that were bundled together. The lead plaintiff was the New York State Comptroller, a source said. The lawsuits were filed against Steve Wynn and the company’s board of directors for allegedly “disregarding a sustained pattern of sexual harassment and egregious misconduct” by the former chairman and CEO.
The lawsuits sought unspecified compensation from the injury and losses as a result of breaches of fiduciary duty, abuses of fiduciary power, sexual harassment and violations of law allegedly committed by the company’s founder.
Under the settlement, Wynn Resorts will receive $21 million from insurance carriers, in addition to the $20 million from its former CEO, less certain fees and costs associated with bringing the suit.
The payment by Steve Wynn could be viewed as the first time he has acknowledged any culpability in the matter, in which he has long denied any of the allegations raised in a Wall Street Journal article in January 2018.
The lawsuit settlement also credits Wynn Resorts with $49 million as a result of corporate governance enhancements undertaken after the filing of the lawsuit, and further enhancements agreed to by the company pursuant to the settlement.
The company agreed to several bylaw changes and governance policies as part of the lawsuit settlement, much of which has already taken place.
In addition to The New York State Common Retirement Fund, other plaintiffs included an operating engineers’ construction pension fund in Pennsylvania and municipal firefighters in California.
“We filed our lawsuit in response to serious and repeated allegations of sexual misconduct by Steve Wynn and the prior board’s alleged failure to stop it,” New York Comptroller Thomas DiNapoli told the Associated Press Wednesday. He is in charge of that state’s $209 billion retirement fund. DiNapoli said the fund holds shares in Wynn Resorts with an estimated value of $23 million.
“We are gratified that the reforms in this agreement and those undertaken following the initiation of our lawsuit will protect Wynn resorts employees and shareholders against future harm,” he said Wednesday.
Earlier this year, the Nevada Gaming Commission fined Wynn Resorts $20 million to settle a 10-count complaint that detailed years of failure by former company executives to “report and/or investigate” numerous allegations of sexual assault, sexual harassment and sexual misconduct by Steve Wynn. The fine was the largest handed down in Nevada history.
Steve Wynn has denied the allegations, although he resigned as chairman and CEO and sold his stock in the company 10 days after a report in the Wall Street Journal that uncovered years of sexual misconduct and harassment allegations by Wynn against employees.
Seven company executives named in the Gaming Control Board complaint left the company.
The primary count of the complaint dealt with the allegation that a Wynn Las Vegas salon employee was raped by Steve Wynn and became pregnant. Senior Wynn executives were made aware that the CEO reached a “private, confidential settlement with Employee 1 and paid her and her husband $7.5 million through a separate legal entity funded by Steve Wynn.”
According to the complaint, Steve Wynn also paid a cocktail server $975,000 after “pressuring her into a non-consensual sexual relationship.” Other counts in the complaint involved sexually harassing salon employees, cocktail servers and flight attendants working for the company private airline.
Wynn Resorts highlighted the numerous changes in the company’s make-up and structure over the last 12 months, including a complete revamp of the company’s nine-member board of directors, four of whom are women, and the appointment of longtime gaming industry veteran Phil Satre as chairman. The company also named Matt Maddox as CEO.
In addition to installing Maddox as CEO, and Ellen Whittemore as general counsel, the company named Marilyn Spiegel as president and hired Rose Huddleston to the newly created senior vice president of human resources.
The company also added several new policies, many of directed toward sexual harassment prevention. A compliance committee was created with numerous procedures to prevent any harassment allegation from going unchecked.
Associated Press contributed to this report.