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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Judge tosses motion to order Sands to post bond

21 October 2008

LAS VEGAS, Nevada -- District Judge Michelle Leavitt denied a motion Monday that would have ordered Las Vegas Sands Corp. to post a bond on a $58.6 million judgment against the casino operator won by Hong Kong businessman Richard Suen following at six-week trial last spring.

After a brief hearing, Leavitt said she didn't believe Las Vegas Sands was in financial trouble despite the current global economic crisis.

Attorney John O'Malley of Los Angeles, who represents Suen, said Las Vegas Sands' failure to list any reserves to cover the verdict, a more than 90 percent decline in the company's stock price in the past year, and a $475 million cash infusion into the company by Chairman and Chief Executive Officer Sheldon Adelson on Oct. 1, gave his client cause for concern.

Adelson, who controls almost 70 percent of Las Vegas Sands personally and through his family trusts, loaned the company funds to help meet liquidity requirements and avoid the triggering of a $5 billion loan covenant. Adelson, once considered America's third-richest person, saw his net worth decline by $4 billion last month because of the slumping national economy.

Houston lawyer Rusty Hardin, however, said under a previous agreement with Suen's attorneys, Las Vegas Sands had secured an appeal bond for more than $73 million, roughly 125 percent of the judgment, but wouldn't post the bond until five days after Leavitt rules on numerous post-trial motions.

Hardin said both sides agreed to the arrangement. If Las Vegas Sands posted the bond and the judge ruled in favor of a new trial or reduced the verdict, the company would forfeit a premium of more than $540,000.

O'Malley, however, said he wanted assurances that the insurance company was still willing to post the bond despite the current economic crisis. Hardin told the judge the agreement was still in place.

"I think you got a pretty good deal Mr. O'Malley," Leavitt said in making her ruling. She rescheduled a hearing on the post-trial motions for Dec. 8.

In May a Clark County jury awarded Suen $43.8 million. An additional $14.8 million in interest was tacked onto the verdict. The jury found in favor of Suen, who claimed he should be compensated for helping Las Vegas Sands win a lucrative Macau gaming license in 2002. The lawsuit was filed in 2004.

Las Vegas Sands is appealing the $58.6 million judgment