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Judge Orders Adelson to Produce Documents

LAS VEGAS (CN) - A federal judge ordered Sheldon Adelson, Las Vegas Sands and its former CEO William Weidner to produce documents they sought to protect under attorney-client privilege in a securities class action.

U.S. Magistrate Judge George Foley Jr. granted lead plaintiff Frank J. Fosbre Jr.'s motion to compel relating to claims for lost EBITDA caused by lawsuits filed in 2006 and arising from a subcontractor's work during construction of the Palazzo.

Foley's Jan. 14 order granted Fosbre's motion for in camera review of documents and threatens to appoint a special master if any irregularities are found.

"If in camera review of the foregoing documents indicates that defendants improperly asserted the attorney-client privilege in a manner that calls into question the reasonableness of their assertion of attorney-client privilege to the remaining documents, then the court will consider granting additional in camera review, which may include the appointment of a special master," Foley wrote.

Fosbre accuses Adelson et al. of lying to investors about the financial state of Las Vegas Sands from 2007 to 2008, so that Adelson could protect his majority ownership of the Sands, while building the Palazzo casino in Las Vegas and a larger development in Macau.

He seeks documents that were withheld or redacted due to claims of attorney-client privilege, but were disclosed to employees of investment firms Goldman Sachs and Jefferies; documents that did not involve legal advice; and documents presented during prior lawsuits with a subcontractor and arising from the construction of the Palazzo Resort Hotel Casino in 2006.

Fosbre said that documents voluntarily shared with Goldman Sachs and Jefferies are not protected by attorney-client privilege.

Adelson argued the investment firms' employees were the functional equivalent of Las Vegas Sands employees, and the communications are protected.

"It is reasonably clear that Goldman Sachs acted in the role of financial advisor in the upper echelon of Las Vegas Sands' management ... in providing different financing options and making recommendations to Las Vegas Sands as to which avenues to pursue," Foley wrote.

Foley said Las Vegas Sands hired Jeffries specifically to "evaluate and render opinions to the non-management directors of the board of directors of Las Vegas Sands."

The judge denied Fosbre's motion for documents pertaining to attorney-client communications involving employees of Goldman Sachs and Jefferies, but ordered Adelson et al. to submit logs describing the duties and roles of each Jefferies and Goldman Sachs employee to determine whether the communications are privileged and protected.

Foley denied Fosbre's motion to compel production of an Oct. 18, 2008 report on subcontractor lawsuits arising from construction of the Palazzo.

Foley granted a review of Las Vegas Sands documents from 2007 to 2008, including those relating to attorney Dylan Williams, who participated in discussions, but not in an attorney's capacity.

Foley gave Adelson et al. until Jan. 28 to produce the documents.

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