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Las Vegas Sands Fight Taken to Federal Court

LAS VEGAS (CN) - Las Vegas Sands subsidiary Venetian Macau fired its interim president for placing shareholders' interests ahead of Sheldon Adelson's and to retaliate for his whistleblowing, Steven Jacobs claims in Federal Court.

In his Friday lawsuit, Jacobs accuses Venetian Macau of firing him for "blowing the whistle on improprieties and placing the interest of shareholders above those of Adelson."

Jacobs has a pending wrongful termination lawsuit in state court against Adelson and Las Vegas Sands, but, "because Las Vegas Sands has sought to avoid its obligations and wrongdoings by pointing the finger at Venetian Macau," Jacobs said, he also sued Venetian Macau.

The new lawsuit largely repeats from the Clark County case. Jacobs claims Las Vegas Sands faced serious financial problems in 2008 that were exacerbated by infighting between principal shareholder Adelson and Sands' management.

He says Sands board members and senior executives "internally expressed concern over Adelson's oftentimes erratic behavior," and that "Adelson's behavior had become so corrosive that some government officials in Macau ... were no longer willing to even meet with Adelson."

A fact-finding tour indicated that Adelson had "burned many bridges in Macau," and a confrontation between Adelson and then-Macau CEO Edmund Ho was mentioned many times, Jacobs says.

Ho told Sands executives that "while Adelson had done much to improve Macau's economic fortunes, the time had come for him to spend more time with his family and leave the company's operations to others," Jacobs says in the complaint.

"Translated into blunt businessman's terms: Adelson needed to retire," Jacobs says.

He claims that Adelson "paralyzed management" at Las Vegas Sands, forced the removal of former President and COO William Weidner, and delayed the Sands' timely access to capital markets, triggering several emergency transactions to raise money in 2008 and 2009.

Jacobs says Adelson profited greatly from the delays by charging Las Vegas Sands a "hefty price, obtaining convertible senior notes, preferred shares, and warrants" that later enabled Adelson to "reap a staggering windfall as a result of these highly favorable, for him, financing terms."

"Conveniently, Adelson was the principal beneficiary, to the detriment of all other shareholders, of the very financial calamity he helped create," Jacobs says.

Jacobs says he entered a "poisonous environment" when he went to work for Venetian Macau in 2009, in charge of restructuring Las Vegas Sands' financial and other operations in Macau.

Jacobs started working for Las Vegas Sands in August 2009, and was fired in July 2010 to "cover up a host of improper activities," and the Sands is trying to shift responsibility for his wrongful termination from Las Vegas Sands to Venetian Macau, he says in the new lawsuit.

To cover their tracks, Jacobs says, Adelson and a Sands executive fabricated reasons for his firing, printed them on Venetian Macau letterhead and sent them to Jacobs weeks after he was fired.

He says Las Vegas Sands shares performed very well while he was in charge of its Macau operations, with its share price rising from $1.70 in March 2009 to more than $28 per share in July 2010.

Jacobs says Las Vegas Sands officials credit him with rescuing the company, but Adelson fired him anyway.

"Adelson would make sure that Jacobs was cheated out of what he was owed, a practice that Adelson has honed in dealing with many executives and companies that refused to do as Adelson demanded," Jacobs says in the lawsuit.

Jacobs seeks damages for breach of contract, with interest.

His attorney Todd Bice was not available by telephone Sunday night, nor was Las Vegas Sands Vice President Ron Reese.

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