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UPDATE, 19:15, 28/02/19
A few hours after the announcement of Sheldon Adelson's severe illness, the company confirmed that he was suffering from non-Hodgkin's lymphoma.
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Questions have been raised about the health of Sheldon Adelson, chief executive officer of Las Vegas Sands, while the date of the beginning of a lawsuit in the Clark County Court could cost millions of dollars in damages and interests in society.
It is unclear whether Adelson, 85, will be able to testify in the civil lawsuit brought by Richard Suen, a Hong Kong businessman, who has been seeking compensation from the gaming giant since 2004 for the first time. help that he claims to have provided to society. lucrative concession to operate casinos in Macau in the early 2000s.
On January 23, Adelson, the largest shareholder in Las Vegas Sands, missed the conference call with fourth-quarter earnings analysts because it was "a little under the weather," said Rob Goldstein, president of Las Vegas Sands. A gambling source said Adelson had not attended the company's board meeting in January associated with the call.
But the remarks made in public before the Suen case paint a different picture.
On Monday, at a hearing on whether Adelson should sit for a deposition, Las Vegas lawyer Jim Jimmerson, one of Las Vegas Sands' attorneys, told the judge District, Rob Bare, that the CEO had not been seen in the company's offices. since Christmas.
According to a transcript of the hearing, Mr. Jimmerson would have "recently learned that Mr. Adelson's state of health was in a disastrous state and that he had not actually participated in the procedure of the company due to his physical presence in Las Vegas at the company on Las Vegas Boulevard, since approximately Christmas day. "
On February 19, in court, Las Vegas attorney Todd Bice suggested that if Adelson was unable to file a statement or offer a testimony at trial – which must open Monday -, Las Vegas Sands, listed on the stock exchange, should inform the Securities and Exchange Commission of Adelson's Medical Problems.
Adelson testified in the two previous trials in 2008 and 2013 about his business relationship with Suen in the early 2000s. Suen won both cases and judgments of several million dollars, but the Nevada Supreme Court dismissed the case. case twice in District Court. Suen's lawyers said they want to question Adelson about events since the 2013 lawsuit, including the company's efforts to win a casino project in Japan.
In a February 22 application against Sands' attempt to prevent Adelson from being dismissed, Suen's lawyers alluded to the company's claim that the CEO should be excused from "any new evidence based on his age." / his health". The petition quoted an "unsworn letter from a doctor" and argued that if the CEO of the company is too ill to be dismissed, he can not meet his fiduciary duties either.
"The unsworn final letter of the so-called Dr. Adelson masks the lack of real evidence," Suen's attorney wrote in a petition dated Feb. 22. "Tellingly, the only real activity he refers to as discouraging is a statement."
The Las Vegas Sands lawyers have filed a court order to prevent Adelson from sitting down for questions. According to the court transcript, Jimmerson has appointed a doctor who treats Adelson. Bare then suggested that the doctor may have to answer questions from the court as to whether Adelson can be dismissed or participate in the trial.
Las Vegas Sands spokesman Ron Reese said Thursday by e-mail that Adelson continues to fulfill his obligations as president and CEO.
Suen's lawyers declined to comment.
A law professor specializing in securities law and corporate governance compared all the potential problems regarding Adelson and Las Vegas Sands to the late CEO Steve Jobs and Apple Computers. Jobs, who died of cancer in 2012, revealed his diagnosis in 2004. He has undergone various treatments over the years, but medical information is not provided to markets in real time.
In the annual Las Vegas Sands 10K Year End Report filed with the SEC on Feb. 22, Adelson, Goldstein and Chief Financial Officer Patrick Dumont – Adelson's son-in-law – were listed in the Factors section. of risk. Adelson, the founder of the company, which controls 56% of the casino operator's shares, "exerts a significant influence on our policies and our business," according to the 10K, which contained an electronic signature of the president / CEO.
"The loss of their services (Adelson, Goldstein, Dumont) or the services of our other senior executives, or the inability to attract and retain senior management personnel could have a material adverse effect on our business ", said the company in the 10K.
Benjamin Edwards, an associate professor at the UNLV Boyd School of Law, said Adelson's importance for Las Vegas Sands could even outweigh the importance of Jobs at Apple. Any problem with Adelson could constitute a "risk factor" for the company.
"If a company knows that an executive is ill and that this one is described as a risk, the shareholders might want to know it," Edwards said. "If a key CEO is too sick to participate in depositions, this is probably important for shareholders because the same health problem can limit its ability to act on behalf of the company. Nevertheless, the mere fact that reasonable shareholders would probably like to know, of course, does not mean that the company is automatically required to disclose it. "
According to Monday's transcript, lawyer Richard Sauber, who also represents Las Vegas Sands, told Bare: "At the present time, we do not expect Mr. Adelson to be a witness at all. of first instance. That's what we expect from his state of health. "
Adelson is ranked # 15 on the Forbes 400 billionaires list with a net worth of $ 36.2 billion. He and his wife Miriam are the largest donors to the Republican Party and the GOP. They donated $ 113 million in the last election cycle, including financial support for President Donald Trump's campaign.
Since the election of 2016, Adelson has dined at the White House with Trump. In November, he was photographed at the White House when Miriam Adelson received President Trump's Presidential Medal of Freedom.
The Suen lawsuit marks the third time that the case is being heard by a Clark County Court jury. Suen complained in 2004 that Hong Kong-based Round Square had opened the door to Las Vegas Sands while Macao was looking to expand its gaming market. He said the company breached an agreement that paid him a $ 5 million success bonus plus 2% of the company's net profit in Macau.
Las Vegas Sands has become one of the largest casino operators in Macao with five major resorts. In 2018, the company generated $ 8.67 billion in revenue from its operations in Macau, 63% of its $ 13.72 billion.
In May 2008, a jury voted in favor of Suen and awarded him $ 44 million. In November 2010, the Nevada Supreme Court overturned the judgment and ordered a new trial. In May 2013, a second jury voted in favor of Suen and awarded him $ 70 million. With interest, the judgment is now worth $ 101 million.
In March 2016, the Supreme Court upheld the judgment in Suen's favor, but also remanded the case to the district court to determine the amount of damages that it should receive. Bare heard the 2013 case and will also oversee the new trial.
At the 2008 trial, Adelson's health was evoked during a testimony. At the witness stand, he told the jury that in 2001 he suffered from lumbar plexopathy, a condition that causes intense pain along the side and hip. He still suffers from the disease and uses a motorized scooter.
He also testified that his pain medication often made him sleepy. Miriam Adelson, a drug addiction physician, prescribed methadone, which he said made the pain easier to manage. However, the company has not communicated to the shareholders information about his illness.
Howard Stutz is an independent gaming reporter for The Nevada Independent and the editor of CDC Gaming Reports. He worked as a journalist in Nevada for 30 years. You can contact him at the address [email protected]. On Twitter: @howardstutz
The court documents mentioned in this story are incorporated below.
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