Macau’s Court of First Instance has sided with Las Vegas Sands in the battle against Asian American Entertainment Corporation and the main reason why the latter was defeated in court was the failed attempt to sign a formal agreement. AAEC wanted to claim $12.1 billion in compensation.
The Legal Battle between LVS and AAEC Explained
The feud between LVS and AAEC dates back to the early 2000s. Both parties launched a joint bid for a casino license in Macau in 2002. However, LVS decided to link with Galaxy Entertainment Group and even though the bid was successful, it was never fully materialized.
Galaxy was left with the gaming concession while LVS had its first sub-concession in Macau. Frustrated by the outcome, AAEC launched legal action against LVS, as well as Venetian Venture Development LLC and Venetian Casino Resorts LLC in 2007, but the case was dismissed in 2010.
Subsequently, AAEC filed a lawsuit against Las Vegas Sands Nevada, Venetian Macau Ltd, Las Vegas Sands LLC, and Venetian Casino with the Tribunal Judicial de Base at the start of 2019. It originally sought $375 million in compensation; however, the sum was drastically increased to $11.7 billion six months later. AAEC explained that the amount mirrors lost profits between 2004 and 2018.
Macau’s Court Explained That Formal Agreements Weren’t Signed by the Parties Involved
The case between LVS and AAEC was brought to an end last week after Macau’s Court of First Instance ruled in favor of LVS.
The details have now been revealed and the court explains that even though a letter of intent was signed by both parties on October 18, 2001, formal agreements weren’t conceived.
LVS and AAEC were in a phase of negotiation until their relationship fell apart. As a result of that, the court went on to elaborate that the letter of intent expired on January 15, 2002, and since AAEC couldn’t prove that LVS was connected to Galaxy before that date, the court ruled that LVS didn’t violate the binding clauses of the letter of intent.
When the ruling was issued, the court said that AAEC overestimated the compensation and “acted with malice” when it comes to distorting the facts.
Sands China, an LVS subsidiary, noted that AAEC may appeal the ruling by May 18 this year. The company also added that it will monitor all developments and “continue to defend the matter vigorously.” The legal battle and several other factors proved to be quite challenging for Las Vegas Sands as the company published its report in Q1 of 2022 and it resulted in $478 million in losses.