The announcement of possible write-downs on real estate values in CityCenter comes only three days after another two disgruntled MGM MIRAGE shareholders filed cases in the US against current and former senior executives in the company.
The stockholders claim, among other things, breach of fiduciary duty and unjust enrichment of those executives at shareholders’ expense.
Those named as defendants in the latest court documents, filed in the US District Court in the District of Nevada on Monday, include majority owner Kirk Kerkorian, former Chairman and CEO Terrence Lanni and current President and CEO Jim Murren.
The filing by one of the shareholders, Mario Guerrero, also claims: “breach of fiduciary duty for alleged ‘insider selling and misappropriation of information’ against certain individual defendants,” but does not name those allegedly responsible.
The other filing by Regina Shamberger claims: “breach of fiduciary duties for alleged ‘insider selling and misappropriation of information’ against certain individual defendants”.
Earlier on August 19th another MGM MIRAGE stockholder, Robert Lowinger, filed a class action against Terrence Lanni, James J. Murren, Daniel J. D’Arrigo and Robert H. Baldwin alleging federal securities laws violations. Mr Lowinger claims that, between August 2nd, 2007 and March 5th, 2009, the defendants “disseminated or approved materially false and misleading statements that deceived the investing public regarding the Company’s business, operations, management and intrinsic value of its common stock.”
MGM MIRAGE disclosed information about the legal action in a filing to the US Securities and Exchange Commission.
The lawsuits appear to be a response to the company’s parlous financial situation which includes a US$13 billion plus debt burden and a correspondingly weak stock price that has lagged behind the general market in recovering from the systemic lows experienced in global equities since September last year.
Litigation by angry shareholders is relatively common in corporate business in the US, but will not help MGM MIRAGE’s cause in the financial markets and take up yet more time for executives still focused on turning the business round.
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