Bloomberg News

MGM Resorts, Kerkorian Settle Claim Tied to Ex-Director

August 19, 2014

MGM Resorts International (MGM:US) and billionaire Kirk Kerkorian’s investment arm paid $225,000 to settle New Jersey claims they let a former board member continue to work with the casino operator after a wiretapping conviction.

Terry Christensen was convicted of conspiracy and illegal wiretapping in a case unrelated to the casino company, the New Jersey Division of Gaming Enforcement said in a July letter posted on its website. Christensen continued to work for MGM after resigning from the board at the request of regulators.

MGM Resorts and Tracinda Corp. are paying the settlement in connection with the casino company’s effort to regain permission to operate in New Jersey. Las Vegas-based MGM agreed to leave the state four years ago in a separate matter. Kerkorian is the founder of MGM Resorts and is its largest investor, with almost 19 percent of the shares (MGM:US), according to data compiled by Bloomberg.

“This was simply an administrative means of closing a file on a previously resolved matter from a few years ago in advance of our licensing hearing next month,” Alan Feldman, an MGM spokesman, said in an e-mailed statement.

Richard Sobelle, Tracinda’s general counsel, declined to comment. In an e-mail, Christensen said he hadn’t read the settlement.

According to the letter, MGM Resorts continued to consult with Christensen on matters including executive compensation and the company’s financial structure. He advised on deliberations regarding the hiring of Goldman Sachs Group Inc. to advise the company and a possible investment by Genting Malaysia Bhd. Christensen also attended board meetings as Kerkorian’s representative until 2009, the state said.

Board Role

Christensen, an MGM Resorts board member from 1987 to 2006, was convicted in 2008 of illegal wiretapping in a child support action between Kerkorian and his former wife, according to the letter.

MGM Resorts fell (MGM:US) 0.2 percent to $25.10 at 2:35 p.m. in New York. The shares had gained 6.9 percent this year through yesterday.

In 2010, MGM Resorts put its 50 percent stake in the Borgata Hotel Casino & Spa in Atlantic City in a trust and agreed to sell the holding after New Jersey regulators said they would find the company’s partner in a Chinese casino venture unsuitable for a license.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net Rob Golum


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Companies Mentioned

  • MGM
    (MGM Resorts International)
    • $22.11 USD
    • -0.67
    • -3.03%
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