According to Elaine Wynn

Wynn Resorts would dispose of Boston Harbor project to avoid 'scrutiny'

"I am concerned that the longstanding legacy directors cannot exercise objective judgment on our behalf going forward, in light of the regulatory and media scrutiny of their past decision-making."
2018-05-07
Reading time 2:27 min
The ex-wife of Steve Wynn with whom she founded the company has issued a letter to shareholders last week in which she expressed continued concern about the potential sale of the Boston-area casino project and the composition of the board of directors.

After Steve Wynn resigned as CEO and sold his shares of the company this year following a wave of sexual misconduct allegations, Elaine Wynn became the largest shareholder and has criticized continued ties of board members to her former husband.

She has recently issued a public warning to a member of the Wynn Resorts board who she wants out, John Hagenbuch who is up for re-election at the annual meeting of shareholders this month, Mass Live reports.

In the letter, she expressed continued concern about the potential sale of the Boston-area casino project and the composition of the board of directors.

"I am concerned that the longstanding legacy directors cannot exercise objective judgment on our behalf going forward, in light of the regulatory and media scrutiny of their past decision-making," Wynn wrote in her letter to shareholders. "In particular, I am troubled by the potential conflict of interest between the protection of their personal and professional reputations and their responsibilities to the Company and that this conflict could lead to business decisions that are not in the interests of the shareholders."

Following an explosive report in the Wall Street Journal detailing decades of sexual harassment allegations against Steve Wynn, the Massachusetts Gaming Commission opened an investigation into the suitability of Wynn Resorts to hold the sole eastern Massachusetts casino license.

"Some members of the current board are directly implicated by the Massachusetts regulatory investigation," Wynn alleged in her letter. "I do not know what the Commission will conclude, but I believe that the legacy directors would prefer that their actions not be scrutinized by the gaming officials."

Wynn said the Massachusetts casino project - recently renamed Encore Boston Harbor - is an "extremely attractive opportunity" for the company.

"Wynn holds the only gaming license in the immediate Boston region and will be the only luxury gaming destination in the Northeastern United States," she said.

Wynn Resorts CEO Matt Maddox recently denied a planned sale of the $2.4 billion casino project in Everett.

"Boston's not up for sale. What Boston represents for us is a good growth opportunity," Maddox said on CNBC. "I like that market. I found that land. I pursued that deal. I entered the agreement with the host community five years ago. I liked that market then, I like that market now."

A day prior to those comments, Maddox hinted at a sale.

He described Massachusetts project as a "really good opportunity" for the company but kept the possibility of a sale on the table.

"If there was ever any risk due to heightened rhetoric that there could be any contagion from Massachusetts into our $20 billion company in Las Vegas and Macau, we will have to take a hard look at what is best to protect our shareholders and value," Maddox said, as reported by the Review-Journal.

Industry insiders have confirmed to MassLive that gaming officials are exploring the sale of Wynn Boston Harbor, with MGM Resorts International as a top candidate to purchase the project.

Wynn claimed in her letter to shareholders that Maddox is concerned not about market dynamics but rather the "reputational risk" the Massachusetts investigation "could inflict upon management and members of the board of directors."

Wynn has called on shareholders to re-elect Hagenbuch to the board.

"Given Jay's key board role and deep institutional knowledge, withholding your vote for him would only serve to undercut the progress Wynn is making," the company said in a filing Wednesday.

Wynn Resorts has expanded its board to 11 members and rehired three female directors in recent months.

Leave your comment:
Subscribe to our newsletter
Enter your email to receive the latest news
EVENTS CALENDAR