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In a Lawsuit Now Eleven Months Old, Steven Jacobs, Fired CEO of Sands China,
Attempting to Pry Extensive Information and Documents
 from Las Vegas Sands and Sands China

By Steve Green, Las Vegas SunMcClatchy-Tribune Regional News

Sept. 23, 2011--With his lawsuit now 11 months old, fired Macau casino CEO Steven Jacobs is now trying to pry extensive amounts of information from his former employer Sands China Ltd. and its parent Las Vegas Sands Corp.

Jacobs filed suit in state court in Nevada in October 2010 charging he had been wrongfully denied stock options when he was wrongly fired in July 2010 as CEO of Sands China.

To understand the significance of his dismissal, consider this: Sands China, as a standalone business, is one of the world's largest casino operators. It generated revenue of $1.2 billion in the second quarter alone from its Venetian Macao, Sands Macao and Four Seasons Macao properties.

Further intensifying interest in Jacobs' lawsuit is that it touches on Sands' efforts to distance itself from organized crime elements in Chinese casinos -- and it's believed to be responsible for investigations into Las Vegas Sands' compliance with a U.S. law barring bribes to foreign officials as well as shareholder lawsuits.

After 11 months of legal wrangling between Jacobs, Sands China and Las Vegas Sands, the state court is nowhere near ruling on the merits of Jacobs' wrongful firing claim, including charges Las Vegas Sands CEO Sheldon Adelson directed him to commit improper acts -- or on countercharges that Jacobs was fired for cause and stole massive amounts of sensitive company data.

Instead, attorneys are back to square one as they argue over whether Sands China can even be sued in Nevada.

A state court judge, Clark County District Court Judge Elizabeth Gonzalez, ruled Sands China is a proper party to the lawsuit, citing its "pervasive contacts'' with Nevada.

It's common knowledge Sands China is controlled from Las Vegas by Adelson -- but Sands China attorneys insist that as a foreign corporation, it's not subject to Nevada law.

They appealed Gonzalez's ruling on jurisdiction to the Nevada Supreme Court, which sided with Sands China in ordering Gonzalez to take another look at the issue.

The state Supreme Court decision put Jacobs' main lawsuit allegation on hold -- and this week he and his new legal team filed an extensive discovery -- or fact-finding request -- with Gonzalez in hopes of nailing down details about Sands China's activities in Nevada.

The request -- which Sands China and Las Vegas Sands are sure to argue is overbroad and would violate Macau's privacy laws -- asks Gonzalez to require that Las Vegas Sands or Sands China produce:

--Executives for depositions including Adelson, Sands President and Chief Operating Officer Michael Leven, Sands Chief Financial Officer Kenneth Kay and Sands President of Global Gaming Operations Robert Goldstein.

--Telephone records for calls Adelson, Leven and Goldstein had over several years involving Sands China.

--All documents reflecting the flow of money from Macau to Las Vegas Sands including those about the alleged physical couriering of money from Macau to Las Vegas and about a system for moving money called "Affiliate Transfer Advice.''

--All documents reflecting global gaming and/or player development efforts including those led by Goldstein "who, upon information and belief, oversees the active recruitment of VIP players to share between and among Las Vegas Sands and Sands China properties, player funding and the transfer of player funds.''

--The dates and times of all Sands China board meetings and the locations of each participant for each meeting.

--Documents reflecting the travels to and from Macau and Hong Kong by Adelson and other executives.

--The calendars of Adelson and other executives who had meetings related to Sands China or traveled to China for Sands China business.

--Documents about Leven's service as CEO of Sands China and as the executive director of the Sands China board of directors.

--Documents about negotiations and execution of agreements for the funding of Sands China that occurred in whole or in part in Nevada.

--Contracts and agreements Sands China entered into with entities based in or doing business in Nevada including slot machine and gaming systems maker Bally Technologies Inc. and BASE Entertainment, which produces shows at casinos.

--Agreements for shared services between Las Vegas Sands and Sands China including arrangements for the procurement of services, agreements for sharing private jets and trademark license agreements.

--Documents including e-mails reflecting services performed by Las Vegas Sands for Macau development projects, recruitment and interviewing of potential Sands China executives, negotiations about a possible joint venture between Sands China and Caesars Entertainment Corp., negotiations about the sale of Sands China's interest in sites to Macau competitor Stanley Ho and deals with show operator Cirque du Soleil.

--Documents used to calculate management fees for services provided by Las Vegas Sands to Sands China, and any reimbursements to Las Vegas Sands executives for such work.

--All documents Sands China has provided to Nevada gaming regulators.

Records about money transfers are likely to be of particular interest to Jacobs, as Sands China has already accused him of lying in asserting there had been improper transfers by courier.

And while Las Vegas Sands and Sands China will likely ask Gonzalez to sharply limit the allowed discovery, Jacobs' attorneys wrote in their request: "The law affords Jacobs the right to conduct jurisdictional discovery in order to meet his burden of establishing Sands China's systematic and pervasive contacts with the state of Nevada.''

Jacobs was initially represented in the lawsuit by the Las Vegas law firm Campbell & Williams, which has plenty of experience litigating against Las Vegas Sands and Adelson.

For undisclosed reasons, he's now represented by the Las Vegas firm Pisanelli Bice PLLC.

That firm's attorneys also are experienced in dealing with Las Vegas Sands and Adelson.

They're now gearing up for a retrial in a 7-year-old lawsuit in which Las Vegas Sands initially was hit with a $43.8 million judgment in favor of Hong Kong businessman Richard Suen and his company, who said they were responsible for Sands obtaining a lucrative Macau gaming license but weren't paid for their work.

The Nevada Supreme Court overturned that award, citing errors by the trial judge.


(c)2011 the Las Vegas Sun (Las Vegas, Nev.)

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