It was recently announced that a settlement has been reached between Wynn Resorts and Leighton Contractors (Asia) over the luxury resort project known as Wynn Palace Macau. Wynn will now have to pay $121 million in fees to the contractor and at the same time, companies associated with Wynn Resorts will have to pay $200 million as well.
The settlement was announced during a filing by CIMIC Group Ltd. with the Australian Securities Exchange. CIMIC is the parent company of Leighton. Wynn Resorts and Leighton were able to come to an agreement to resolve both groups’ claims and cross-claims in regards to the resort in Macau.
In the past, Wynn had accused the Leighton group of not delivering the project on time based on a guaranteed price arrangement made by both sides. However, Leighton claimed that the project changed as work took place and this caused more time as well as money to be needed to complete the plans.
According to CIMIC, the casino operator will make settlement payments to Leighton but the timing has not been announced. In the filing, CIMIC stated that both companies have agreed not to pursue their claims and counterclaims including extensions of time as well as liquidated damages. Wynn has agreed to meet a settlement payment schedule with Leighton.
In a separate filing with the Hong Kong Stock Exchange Wynn announced it would make payment of close to $200 million to Leighton Asia. This in addition to the $121 million settled upon between the operator and contractor.
For work that has been completed and accounted for, Wynn will be paying around $21.1 million from the amount listed above. An additional $55.2 million was withheld under a construction agreement made in Cotai while as much as $45 million will be paid when work that is ‘outstanding, defective, or non-conforming’ is completed to the satisfaction of the group. With the extra payments made, the Wynn Palace will be far past the original budget of $4.2 billion to create.