Sheldon Adelson
A Nevada judge has rejected a request by Macau casino operator Sands China Ltd. that action be suspended on fired CEO Steven Jacobs’ lawsuit.
After his 2010 firing, Jacobs sued Sands China and its parent company, Las Vegas Sands Corp., charging he was improperly denied stock options and that his firing came after he clashed with Las Vegas Sands Chairman and CEO Sheldon Adelson.
Sands China last week asked Clark County District Court Judge Elizabeth Gonzalez to put its portion of the lawsuit on hold while it appeals to the Nevada Supreme Court an earlier decision by the same judge.
The issue on appeal is whether the Nevada court has jurisdiction over Sands China, a Hong Kong Stock Exchange-listed company.
Sands China insists it’s an independent company, but attorneys for Jacobs say it’s common knowledge that Sands China is controlled by Adelson and Las Vegas Sands from Las Vegas — and that makes it subject to the jurisdiction of the Las Vegas court.
Sands China attorneys said Gonzalez should stay the case against the Chinese company so — in the event it wins the appeal — it doesn’t waste millions of dollars finding documents for the lawsuit and gaining approval from the Macau government to release them to Jacobs' attorneys.
Approvals are needed under Macau’s strict privacy laws, they said.
Jacobs’ attorneys countered that regardless of whether Sands China is in the case, Las Vegas Sands would have to gain the same documents from its subsidiary and turn them over to Jacobs during the discovery phase of the lawsuit.
They also noted that Sands China likely is also producing many of these documents to regulators conducting multiple probes of Las Vegas Sands and Sands China, including one looking into Las Vegas Sands’ compliance with a U.S. statute barring bribes to foreign officials.
These investigations and resulting shareholder lawsuits are tied to the Jacobs’ lawsuit and its allegations that Adelson ordered Jacobs to commit illegal acts – charges denied by Adelson and Las Vegas Sands. They say Jacobs was fired for cause and that after his firing he tried to extort money by threatening to go public with damaging information.
Gonzalez, during a hearing last week, sided with Jacobs and refused to delay discovery in the Sands China portion of the lawsuit.
"I don’t think you are in the position where the production of documents that has been requested is going to cause you a problem,’" Gonzalez told Sands China attorneys."You need to disclose the documents that are relevant and that will not, in your opinion, get you in trouble with the Macau authorities."
Gonzalez predicted Jacobs’ attorneys at some point will complain Sands China isn’t producing enough documents, and at that time she’ll be able to rule on any discovery disputes.
"At that point we may be in a position to address the motion for a stay (of the lawsuit). Today’s not the day," Gonzalez said.
Her ruling was the second against Sands China on motions to delay the suit against it. The first came in May after the company filed its appeal to the state Supreme Court on the jurisdiction issue.