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November 26, 2014

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Wynns’ breakup won’t break up company

Their divorce is expected to be amicable, businesslike

Steve Wynn

Steve Wynn

Elaine Wynn

Elaine Wynn

Beyond the Sun

Steve and Elaine Wynn are ending their marriage, but the business partnership that built Wynn Resorts into a Strip powerhouse is not breaking up.

After the Wynns divvy up their community property, including a 21 percent share of company stock, Elaine Wynn is likely to have a more defined and independent role in the company, requiring her to get a gaming license as a major voting shareholder, a knowledgeable source close to the divorce case said.

She wants to continue to play a prominent role in the company, and Steve Wynn wants her to remain active in Wynn Resorts, the source said.

And a well-placed source at Wynn Resorts said the split is unlikely to affect the company’s plans to move forward. Elaine Wynn has been nominated for reelection to another three-year term on the Wynn Resorts board at the company’s annual shareholders meeting May 5.

Wynn Resorts owns two luxury casinos in Las Vegas and one in Macau and is building another $700 million resort in the Chinese tourist destination.

Like many other gaming giants in this recession, the company has been on a slide, losing $159.6 million in the fourth quarter of 2008. This week, however, Wynn Resorts announced a well-received public stock offering to help repay its $4.3 billion debt.

The Wynns’ stake in the company is according to the most recent record of their holdings, filed with the Securities and Exchange Commission in 2008. The 24 million shares, at Tuesday’s closing price of $20.72 a share, were worth about $497 million. That figure is about 20 percent of its value a year ago, when shares of Wynn Resorts traded at $97 per share. At that time, the couple’s stock holdings were worth about $2.3 billion.

In his four-page divorce complaint, Steve Wynn said that although he and his wife have “become incompatible in marriage,” he wants to “amicably and fairly resolve” the marriage in a prompt manner.

The couple has a track record of doing that. They married in 1963, only to be divorced in 1986 and remarried again in 1991 — all the while acquiring their current financial fortune. Forbes magazine estimates Steve Wynn’s current net worth at $1.5 billion.

Gaming regulators and analysts don’t expect the breakup to have a negative effect on the company, but divorces can be messy and unpredictable. With so much at stake in this case, there’s certainly a potential for things to turn sour.

Calls to Steve and Elaine Wynn were referred to media representatives, who declined to comment immediately. Their lawyers also declined to comment.

Steve Wynn is represented by seasoned Las Vegas divorce lawyer James Jimmerson, who has represented high-profile figures in the past, and Elaine is represented by Reno attorney Gary Silverman, who is also representing Gov. Jim Gibbons in his highly volatile divorce. Elaine’s other lawyer is Don Schiller of Chicago, who handled Juanita Jordan’s separation from NBA great Michael Jordan. Schiller did not return phone calls.

In the divorce complaint, Steve Wynn said that because of the couple’s wealth of community property, neither party should be awarded alimony or any other additional financial support.

The Wynns have yet to figure out the value of their community property, as well as the value of their joint debts, the complaint said.

But under Nevada law, the value of community property in divorce cases must be split in half.

In the case of the Wynns, it means each is entitled to half of the couple’s 21 percent share of Wynn Resorts stock. Nevada Gaming Control Board Chairman Dennis Neilander said Elaine Wynn would have to come forward for licensing if she ends up owning at least 10 percent of the company’s stock. Right now, Neilander said, the stock is registered with the SEC under Steve Wynn’s name, but the federal agency considers the shares jointly owned.

A licensing inquiry of Elaine Wynn would not be lengthy because the Gaming Control Board did a financial investigation of her husband when he was licensed at Wynn Resorts, Neilander said. The board would merely have to update that investigation and do a routine background investigation of Elaine.

Bill Lerner, a gaming analyst for Deutsche Bank, said he doesn’t think the divorce will harm the casino company or its shareholders.

Whenever the stock of a major shareholder in a publicly traded company comes into play, the other shareholders have to keep an eye on it to make sure the stock price is not driven down, he said.

But in this case, Lerner explained, he doesn’t see a big risk for the shareholders.

“Mrs. Wynn has been extremely engaged in the company and has added tremendous value for the company over the years,” he said.

Unlike the wives of many industry captains, Elaine Wynn — who has occupied a well-appointed office in the same executive suite as her husband’s office — is much more than an emotional supporter and homemaker for her powerful husband.

Elaine Wynn has weighed in on important business decisions on the design and development of her husband’s resorts throughout his more than 30 years in the gaming industry.

Her business involvement began as early as the mid-1970s, before he had developed a casino empire and was an ambitious young man running the tired Golden Nugget in downtown Las Vegas, which he would renovate into an upscale casino.

She served on the Golden Nugget’s board of directors from 1976 until 2000, when the company — later called Mirage Resorts — was acquired by MGM Grand. In October 2002 she joined the Wynn Resorts board.

In company materials sent to Wynn shareholders a year ago, Elaine is called “an active collaborator in the operation of Wynn Las Vegas.”

Many say Elaine can take some credit for Wynn’s success as a creative visionary in the gaming industry because her even-tempered personality has smoothed some of the rough edges caused by her husband’s hot-tempered aggressiveness.

Gaming regulators said they will be monitoring the progress of the divorce proceedings in the weeks ahead.

But just how much of those proceedings regulators will be able to follow remains to be seen.

Three hours after Jimmerson filed the divorce complaint on Steve Wynn’s behalf March 5, Family Court Judge Kenneth Pollock ordered the case sealed, records show.

Jimmerson, who has represented other celebrities, had urged the sealing in a two-page motion filed with the divorce complaint.

“The media exposure, publicity and scrutiny resulting from this matter will undoubtedly be intense and may result in significant harm to both the parties and the plaintiff’s business interests,” Jimmerson wrote.

When a divorce case is sealed under Nevada law, the complaint, all other pleadings and any judicial orders issued in the case, including the final judgment, still remain public.

Kept private at the request of either party are exhibits, including any financial and business records. All depositions and court proceedings also are conducted behind closed doors, and all transcripts of those proceedings are sealed.

Neilander, the gaming regulator, said he’s not concerned about the order sealing the case.

By law, the Wynns have to notify state and federal regulators about any changes at Wynn Resorts as a result of the divorce, he explained.

“We’ll have access to that information anyway,” he said.

Longtime divorce attorney Howard Ecker, who is an advocate of sealing divorce cases, understands that there’s a public interest in this case — because it involves two well-known public figures, a publicly traded company and lots of money involved.

“It’s a tough balance, but the public won’t be left totally in the dark here,” said Ecker, who has represented wealthy casino owners and public figures over the years. “The pleadings will give you the gist of what they’re fighting about, if there is a fight.”

Jeff German is the Sun’s senior investigative reporter.