Las Vegas Injury Lawyers Blog

In Holiday Retirement Corporation V The State Of Nevada Division Of Industrial Relations, the Supreme Court of the State of Nevada held an employer is required to acquire knowledge of an employee's permanent physical impairment before a subsequent injury occurs to qualify for reimbursement from the Subsequent Injury Account for Private Carriers.

Holiday Retirement Corporation hired a couple as co-managers of a retirement residence. At the time the wife was hired, Holiday was not aware that the wife had had two back surgeries, including one to treat an on-the-job injury. While working for Holiday, the wife reinjured her back. An MRI revealed the prior back surgeries, and that the wife needed another back surgery. After surgery, Holiday put the wife on modified work duty restrictions. A year later, she and her husband quit.

The wife's permanent partial disability (PPD) evaluation showed the wife had a 35% whole person impairment, with 75% of the impairment due to the Holiday injury. She was awarded compensation. Holiday's insurer sought reimbursement under NRS 616B.587, arguing that the wife's compensation was based on her combined injuries and would be less if she just received compensation for only her Holiday injury.

The State of Nevada Division of Industrial Relations (DIR) denied the insurer's request for reimbursement. Under NRS 616B.587(4), an insurer is not entitled to reimbursement if the insurer " had knowledge of the 'permanent physical impairment' at the time the employee was hired or if the employee was hired after the employer acquired such knowledge." Because Holiday did not have knowledge of the wife's prior permanent physical impairment until after she was injured working for Holiday, no reimbursement was allowed.

Holiday appealed to the DIR and then the District Court, both of which affirmed the original DIR determination. Holiday appealed to the Supreme Court of Nevada.

"The language in NRS 616B.587(4) is plain and unambiguous. The "critical difference" between an employer who retains a permanently physically impaired worker before a subsequent injury occurs and one who retains a permanently physically impaired worker after the subsequent injury has already occurred. In the former situation the potential for liability remains contingent; in the latter, the potential for liability is certain. Permitting reimbursement in the latter situation is akin to "providing employers an option to buy casualty insurance to cover a casualty that has already occurred."

District Court affirmed. Holiday Retirement Corporation V The State Of Nevada Division Of Industrial Relations, No. 54968, Sup. Ct. Nev., (April 05, 2012)

Continue reading "A Nevada Employer Must Have Knowledge of an Employee's Previous Injury to Receive Reimbursement " »

A Nevada lobbyist, accused of embezzling from his former partners, has filed a $180 million business lawsuit countersuit.

In 2004, F. Harvey Whittemore, a Nevada lobbyist, and an entity his family owed, sold 50% of their ownership in various companies to several entities owned by Thomas Seeno, a California developer. In 2005, Whittemore and Seeno transferred all their interests in these entities to two new entities - Wingfield Nevada Group Holding Company LLC and The Foothills at Wingfield, LLCs. In 2007, Seeno's son, Albert D. Seeno, Jr., bought a part of Whittemore's interest in Wingfield. The three men then executed an agreement appointing each of them as co-managers of Wingfield. The agreement also required any transactions over $5 thousand to be approved by all three owners.

In the fall of 2010, the Seenos noticed discrepancies in Whittemore's financial records. After they confronted him, Whittemore admitted and signed a written "confession" regarding his malfeasance. The "confession" stated, among other malfeasances, that
Whittemore had misappropriated Wingfield money for personal use, improper financial dealings, extra compensation, and political donations. Whittemore also acknowledged that he diverted Wingfield investment money and other company assets for his own personal use.

The Seenos, as co-owners of the new entities, filed a business litigation lawsuit on behalf of the new entities against Whittemore, his wife Annette, and various other entities that profited or may have profited from Whittemore's malfeasance. The suit, filed in the District Court of Clark County, Nevada in January 2012 alleges Whittemore engaged in a breach of his fiduciary duties, fraudulent concealment, civil conspiracy, breach of contract, tortuous breach of the implied covenant of good faith and fair dealing, unjust enrichment, conversion, and intentional interference with prospective economic advantage.

Last week, Whittemore and his wife Annette filed a counter business lawsuit against the Seenos claiming the Seenos "are associated with organized crime networks, have associated with and are associating with known felons and are currently, along with the Doe defendants, under investigation by the FBI and IRS, and were raided by agents of the FBI, IRS, and the Secret Service." Whittemore also claims the Seenos are intentionally devaluing the assets of the new entities.

Whittemore also acknowledges that he has transferred personal assets to the Seenos, but claims the transfers were because the Seenos threatened Whittemore, his wife, and family with intimidation and bodily harm, and not because he is guilty of embezzlement, fraud, or any other criminal activity. The Whittemores demand punitive damages of $180 million for racketeering, contract, fraud, conspiracy and conversion.

The FBI is now investigating whether Whittemore funneled thousands of dollars in illegal campaign contributions through his family and business employees.

Continue reading "Nevada Lobbyist Files a Business Litigation Countersuit against Former Business Partners" »

In a 117 page response, one of Las Vegas' most prominent businesses, the Wynn Resorts, has asked a Clark County District Judge to throw out a lawsuit to inspect the company's financial records, brought by their largest shareholder and board member, Kazuo Okada. At question is whether Okada, who is a 19.66 percent shareholder in Wynn Resorts, brought the lawsuit as a board member or shareholder. At issue in the business litigation is a $135 million donation given by the Las Vegas business to the University of Macau in 2011. In a vote of 11-1, the Wynn Resorts approved the donation with Okada being the lone dissenting vote.

Under Nevada Revised Statute (NRS) 78.257.1, Nevada stockholders who own or control at least 15 percent of "all of the issued and outstanding shares of the stock "of a Las Vegas business have the right to "inspect, copy, and audit financial records." However, if the business has provided its stockholders with a "detailed, annual financial statement or ... filed during the preceding 12 months all reports required to be filed pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934," NRS 78.257.1 does not apply. NRS 78.257.6.

In its response to Okada's litigation, Wynn Resorts argues that they are in current compliance with all SEC filings and disclosures, and as such Okada, as a stockholder, is not entitled to review the business' financial records. Furthermore, the fact that the Wynn Resorts board was given complete information on the donation and discussed the donation prior to the board's vote, precludes Okada from filing the business litigation as a director, to circumvent Nevada's shareholder laws.

District Judge Elizabeth Gonzalez will hear arguments from both sides on February 9.

Continue reading "Are Shareholder Rights to Company's Financial Records Limited?" »

With one of the most favorable tax situations in the country, Nevada is at the top of list for many start-up and ongoing enterprises. The state has no income franchise tax, no unitary tax and no corporate income tax. Nevada residents are not saddled with any personal income tax, gift taxes, inheritance or estate taxes, the real estate market is competitive, and there is a ready workforce.

So you'd think Nevada and cities like Reno, Tahoe, and Las Vegas would be booming with businesses. But with some of the highest consumption (sales, liquor, gaming, gasoline, etc) and unemployment taxes, Nevada is in hot competition with other western states, such as Texas, Wyoming, South Dakota, and Washington. Las Vegas to the rescue!!

In 2010, the city of Las Vegas joined forces with Zappos.com to make downtown Las Vegas a magnet haven for nongaming businesses. The first step, selling City Hall to the Resort Gaming Group who then leased the building to Zappos.com who expects to move-in in 2012. The second step, utilizing Zappos.com founder Tony Hsieh (pronounced "Shay") as Las Vegas' unofficial ambassador for new and unusual start-up entrepreneurs. The third step, making the revitalization of downtown Las Vegas a top priority and offering nongaming enterprises a vast array of free and low-cost services which start with developing a business plan to obtaining the necessary business licenses and incorporation.

But when contemplating a new business, one of the most important considerations is the business structure. In Nevada, and by proxy Las Vegas, one of the most popular business structures for new start-ups is the Limited Liability Company, or LLC, which is recognized in all 50 states.

Like the Subchapter S and C Corporation, an LLC is an entity separate from the individual owners. Unlike the C Corporation (whose income is taxed to the corporation and its stockholders), but like the Subchapter S, for tax purposes the company's income, or loss, passes through to the owners who then report the income, or loss, on their personal income tax returns. Double taxation is nixed. Another advantage of the Nevada LLC over the C and Subchapter S Corporations is annual meetings are not required, and all earnings do not have to be distributed and do not have to be distributed based on the ratio of ownership.

Another big advantage of a Nevada LLC is the reduced restrictions on who can own the company. With a Subchapter S Corporation, the number of owner shareholders is limited to 75. Furthermore owner shareholders can not be a nonresident alien or another corporation, including an LLC. With a Nevada LLC the number of owners is unlimited and can include resident aliens and other corporations.

There is also a big disadvantage to establishing a Nevada LLC - self-employment taxes. LLC owners are deemed to be self-employed and are therefore must pay self-employment tax on all the company's net income. With a C corporation owners are never liable for self-employment tax and in Nevada there is no personal income tax on their wages. With a Subchapter S corporation, self-employment tax is only due on wages paid.

Continue reading "Don't Start Your Las Vegas Business in a Bind" »