A settlement has been reached between Wynn Resorts and shareholders. Wynn Resorts will pay a total of $49 million to turn the page of former CEO Steve Wynn’s sexual harassment saga.
Wynn Resorts to Pay $49m in Settlement Case
On Wednesday, Wynn Resorts said it would pay $41 million to settle a derivative lawsuit filed by the company. Nearly half of this amount, estimated $20 million, will come directly from former CEO and chairman Steve Wynn.
The total sum will be increased to $49 million because of “corporate governance enhancements”, resulting from filing the lawsuit, to which the company has agreed.
As part of the statement, the company has included a clause whereby none of the chief executives or the company itself is found guilty or complicit with any of the wrongdoing Mr. Wynn allegedly committed. The segment specifically reads:
“[…] neither the company, nor its current or former directors and officers were found to have committed any wrongdoing in connection with the settlement.”
The settlement should offer a resolution to eight individual shareholder cases filed against the company, following the saga involving Mr. Wynn and his alleged sexual harassment of female employers for years.
Specifically, the shareholders’ lawsuits sought to claim damages stemming from the investigations and reports of “disregarding a sustained pattern of sexual harassment and egregious misconduct.”
Wynn Resorts has avoided paying by withdrawing the money from insurance carriers. Meanwhile, Mr. Wynn’s decision to pay is seen as a sign that he acknowledges wrongdoing, or in the very least cannot avoid a court of law proving otherwise.
Things Will Have to Change
Moving forward, Wynn Resorts is going to introduce changes to its governance policies to ensure that similar situations do not happen.
While the Nevada Gaming Commission was conducting its investigation, the watchdog stipulated that Wynn Resorts’ higher-ups knew of Mr. Wynn’s misconduct.
The main allegation against Mr. Wynn was also the most shocking. Based on these allegations, Mr. Wynn assaulted and impregnated an employee. To settle, Mr. Wynn used 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.”
On another occasion, Mr. Wynn paid a cocktail server $975,000 pushing her into a non-consensual sexual relationship, the complaint specified. Since the scandal broke, Wynn Resorts has gone through multiple internal shifts, appointing Matt Maddox as CEO and introducing Ellen Whittemore as general counsel.
Briefly, the lawsuit threatened some of Wynn’s projects, with regulators threatening to cancel previously issued permits and set the company back millions.
Despite the lawsuit, many have seen an opportunity to scoop up Wynn shares in anticipation of a price upswing. As of the today, Wynn Resorts, Limited shares are up 0.35% traded at $121.97 each.
Image credit: Wynn Resorts, Ltd.