Las Vegas Mogul Steve Wynn Fights to Hold Onto His Casino Empire
Alleged sex scandals and other inappropriate behavior have rocked any number of industries in recent months from the world of entertainment to politics and sports. One figure caught in the thick of things is Steve Wynn. He has become synonymous with all the glitz and glamour that Las Vegas Casinos and Wynn Resort have come to stand for. However, according to a recent article posted on Bloomberg.com , he could be in for the fight of his life just to maintain this status.
How Does Steve Wynn Plan To Hold Onto His Las Vegas Casino Empire?
The walls appear to be closing in on Wynn amid his sexual misconduct allegations. Earlier this month, he decided to step down from his company. His real issues are just starting to surface as he fights to hold onto his 11.8 percent financial stake in Wynn Resorts. He has stated that he has no intention of selling his stake, but he may have no choice in light of a current court battle dating all the way back to 2012.
Buying Back Some Of Their Debt?
The Bloomberg report states that Wynn Resorts wants to alter the terms of some of its bonds to avoid having to buy back some existing debt. Above all, this is the crux of a complicated three-way lawsuit that also involves Wynn’s ex-wife Elaine Wynn and a former business partner, Kazuo Okada.
Legal Barriers For Large Company Share Block Sale
Without a legal barrier to the sale of a large block of company shares, Wynn Resorts could be forced to buy back some of its existing debt. The price could be higher than its face value and its current market value. The company has $500 million in notes that do not mature until 2023, and they are trading around 99.9 cents on a dollar. Wynn Resorts could find itself in a situation where the buy-back price of these bonds would be at 101 cents on the dollar.
The Change-Of-Control’ Trigger
To ward off any market action that could hurt the company’s overall financial health, Wynn Resorts is looking to raise the ‘change-of-control’ trigger to 50 percent from its current level. The company has already made a $10 million offer to holders of the 2023 bonds to agree to the change in terms.
According to Bloomberg, ‘At the heart of this legal fight is a 2010 agreement that gave Steve Wynn control over Elaine Wynn’s and Okada’s shares. This month, he agreed to give up the control he had over Elaine’s portion and has also said that the pact no longer binds either party’. Also, this means that she can now sell her 9.4 percent stake in the company.
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Will The Alleged Steve Wynn Sex Scandal Hurt His Las Vegas Casinos Long Term?
Complicating the current lawsuit, Okada has argued that the 2010 agreement is still in effect. He also states that Wynn does not have the legal stature to give up control over his ex-wife’s shares.
Most importantly, this situation bears watching in the coming weeks. The Bloomberg report indicated that the first step towards any resolution should take place later this week. A Nevada state court judge has scheduled a hearing on the matter for March 2.
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