Encore Boston Harbor Has Another Messy Legal Battle On Its Hands

Construction of the Encore Boston Harbor casino project is entering its final year, but the ongoing dispute over the deal for the Everett land where the construction is taking place shows no signs of resolution.

Last month, the individual who previously had partial ownership of the land along the Mystic River and sold it to Wynn Resorts for their project, initiated legal proceedings against the company. The lawsuit claims that Wynn Resorts failed to fulfill its promise of paying him $18.6 million as agreed upon in exchange for his consent to the deal.

Wynn Resorts has recently filed a countersuit, asserting that the accusations are baseless and designed solely to disrupt the company’s association with the Massachusetts Gaming Commission.

Encore Boston Harbor Everett land deal

In late 2012, Wynn entered into an intricate land deal with FBT Everett Realty, LLC, agreeing to pay $75 million for the property. However, this transaction was dependent on Wynn successfully obtaining a casino license.

Initially, Anthony Gattineri asserted ownership of a 46 percent stake in the company. Nevertheless, doubts regarding FBT Everett Realty’s ownership arrangements quickly surfaced.

After allegations emerged that someone involved in the ownership had a criminal background, Wynn successfully negotiated the price of the land to be reduced to $35 million. Additionally, in 2014, Gattineri, Dustin DeNunzio, and Charles A. Lightbody were charged by the authorities for conspiring to conceal Lightbody’s financial stake in the agreement due to his criminal past.

In 2016, all three individuals were acquitted during the trial.

Although Gattineri asserts his initial resistance to accepting $35 million, he was ultimately compelled to do so due to his minority ownership position in the company.

Meanwhile, the Gaming Commission requested that Wynn obtain official documentation verifying the sole ownership of each individual associated with FBT Everett Realty.

In the beginning, Gattineri declined to sign any documents related to his ownership stake. In the lawsuit he filed recently, he alleges that Wynn executives intimidated him by threatening to tarnish his reputation in the media and cause significant financial harm.

In the end, Robert DeSalvio, an executive at Wynn, made a trip to San Diego to have a meeting with Gattineri.

Gattineri’s alleged $18.6 million handshake deal

Gattineri asserts that he made an agreement by shaking hands with DeSalvio during the meeting. It is claimed that DeSalvio agreed to reimburse the amount of money Gattineri had lost due to the reduction in price. As a reciprocal gesture, Gattineri agreed to sign a document confirming that he was the sole owner of the land, in exchange for approximately $18.6 million.

According to Gattineri, he requested to receive the offer in writing, but DeSalvio argued that due to casino operator regulations, it was nearly impossible to comply with his request.

After successfully concluding the land deal, Wynn commenced the construction of the $2.5 billion casino resort. However, Gattineri’s alleged negotiation for $18.6 million never materialized and he did not receive the amount he claimed.

Gattineri’s lawsuit alleges that this action is a violation of the contract, unjust trade practices, and fraudulent behavior. He is pursuing compensation of $18.6 million, along with interest and the costs of court.

According to Greg John, spokesperson for Encore Boston Harbor, the lawsuit is an effort to obtain an extra multimillion-dollar payment from Wynn, which goes beyond the agreed-upon payment already accepted by Gattineri and his associates in the initial land agreement. John emphasized that this agreement was finalized several years ago.

Wynn intends to vigorously defend against Mr. Gattineri’s implausible assertion that a publicly-traded company operating in a heavily-regulated sector would conduct a $20 million transaction solely based on a verbal agreement, without any supporting documentation or paperwork.

According to reports, Wynn has informed the Massachusetts Gaming Commission about the lawsuit, and the Commission’s legal department is currently examining it.

Wynn Resorts’ countersuit

This week, Wynn Resorts retaliated by filing a countersuit.

Wynn asserts that Gattineri’s actions are intentionally and maliciously aimed at disrupting Wynn’s business connections with the Commission.

According to Stephen Gordon, the attorney representing Gattineri, he stated to the Boston Herald that the counterclaim lacks any validity.

Their implication appears to be that pursuing legal action to assert Mr. Gattineri’s contractual rights would disrupt their association with the Massachusetts Gaming Commission.

More Encore Boston Harbor controversy

Certainly, the Encore Boston Harbor casino project is entangled in various controversies.

In February, despite firmly denying the allegations, chief executive Steve Wynn stepped down after The Wall Street Journal published a series of sexual misconduct accusations earlier this year.

The name of the Everett project was altered by Wynn Resorts in April, from Wynn Boston Harbor to Encore Boston Harbor. If everything proceeds as intended, Encore Boston Harbor is set to inaugurate on June 24, 2019.