Shareholder Derivative Suit Against MGM Resorts Execs Dismissed
Irell & Manella LLP, working with co-counsel from Munger Tolles & Olson, secured a dismissal with prejudice of a federal shareholder derivative action against the senior management of MGM Resorts International, including its chairman and chief executive officer, chief design and construction officer and its former general counsel. Irell earlier obtained dismissals for MGM’s chief financial officer and its former chairman and CEO.
The complaint filed by an MGM shareholder in September 2009 challenged the management of the multi-billion dollar CityCenter construction project on the Las Vegas strip, MGM’s capital plan, and related public disclosures. The suit largely followed the allegations made in a separate consolidated state court shareholder action. In 2012, the state trial court dismissed that case with prejudice for failure to plead demand futility, the threshold procedural hurdle derivative plaintiffs must satisfy before shareholders may seize control of a corporation’s legal claims. The trial court dismissal was later affirmed by the Nevada Supreme Court. Based on the Nevada Supreme Court's ruling in that case, Irell sought dismissal of the similar federal action. On June 30, 2014, Judge Kent Dawson of the U.S. District Court for the District of Nevada dismissed the case in its entirety and denied the plaintiff's request for leave to file an amended complaint.
The Irell team included David Siegel, Glenn Vanzura and William Briggs. Irell continues to represent the individual defendants in a consolidated federal shareholder class action, which is pending in Nevada.
The case is In re MGM Mirage Derivative Litigation (2:09-cv-01815-KJD-RJJ, District of Nevada).