SOUTH CHINA MORNING POST, 1st Jan 2011
By Neil Gough
Sheldon Adelson’s Las Vegas Sands and its locally listed subsidiary have responded to a Nevada lawsuit filed by former Sands China president and chief executive Steven Jacobs by seeking to have the case dismissed and releasing new details about his firing.
Adelson’s companies argue the case should instead be heard in Macau as Jacobs was employed by Venetian Macau Ltd, a Macau-based unit of Sands China. In addition, the firms accuse Jacobs of “repeatedly acting in a manner which exceeded [his] authority”, according to a copy of his termination notice filed as evidence with the court.
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Jacobs sued the Adelson firms in Las Vegas’ Clark County district court in October seeking severance pay and stock options worth around US$10 million.
His lawsuit alleges he was fired “without cause” in the summer after resisting Adelson’s “repeated and outrageous demands” that he “use improper `leverage’ against senior government officials of Macau” in order to win favourable treatment of Sands’ development plans and fend-off unfavourable policy decisions.
Jacobs’ suit described Adelson as “notoriously bellicose”, mercurial and demonstrating “rude and obstreperous behaviour”. Las Vegas Sands’ response, submitted to the Nevada court last month but only released publicly this week, calls Jacobs a “disgruntled former executive”.
Jacobs, who made US$1.3 million per year plus bonus and stock options, was removed from his office at the Venetian Macau casino hotel on July 23 and escorted off the premises.
A termination letter from Venetian Macau Ltd dated August 5 addressed to Jacobs says he was fired “with cause” and accuses him of exceeding his authority and failing to keep the board of Sands China notified of important decisions. Such actions included, among other things:
* Negotiating arrangements related to a US$4 billion Sheraton/Shangri-La casino hotel complex on the Cotai Strip without prior approval;
* Failing to obtain proper authorisation prior to signing an agreement with Playboy (which last month opened a club at the Sands Macao);
* Finalising contracts with Macau junket operator Jack Lam related to the Four Seasons without prior approval;
* Negotiating transactions with Harrah’s (now Caesars Entertainment) related to future Macau developments;
* Travelling to Toronto three times to meet Four Seasons without getting prior authorisation to negotiate a deal;
* Entering into negotiations with Cirque du Soleil without getting prior approval;
* Hiring Ogilvy without approval from the board;
* “Disagreeing in public with [Adelson’s] position on the growth prospects for Sands China”; and
* Exercising Las Vegas Sands stock options without first informing Adelson or the Sands China board.
In his suit, Jacobs contended that he was fired “without cause” and therefore entitled to severance pay of US$1.3 million and the right to exercise all unvested and outstanding stock options, potentially worth upwards of US$10 million.
The court is set to hear the Sands companies’ motions to dismiss the suit on February 1.
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