Louisiana Municipal Police Employees' Retirement System v. Wynn

We must decide whether shareholders may pursue a derivative lawsuit against a corporation’s board of directors despite their failure to demand that the board initiate this litigation itself.

I

This is a shareholder derivative suit. The plaintiffs are shareholders of Wynn Resorts, Limited (‘Wynn Resorts”), a Nevada corporation that owns and operates casinos in Las Vegas and Macau, the latter through its subsidiary, Wynn Macau, Limited. The defendants are Wynn Resorts itself and eleven individuals who sit or sat on its board of directors. The shareholders wish to challenge two actions the board took on behalf of its subsidiary Wynn Ma-cau: a 2011 decision to donate $135 million to the University of Macau Development Foundation, and a 2012 decision to redeem the shares held by a former director named Kazuo Okada, who was the only director to vote against the donation.

We recite the facts as alleged in the shareholders’ amended complaint, and we assume them to be true for purposes of this appeal.

A

In 2006 Wynn Resorts opened its first hotel in Macau, China under a lease from the Macau government with a term from 2002-2022. Also in 2006 Wynn Resorts applied to the Macau…