A Nevada state court, in the United States, has rejected a bid by casino operator Wynn Resorts Ltd to avoid a jury trial over a dispute originating from Japanese businessman Kazuo Okada’s previous role as a shareholder of the firm.
The latest ruling by Nevada District Court Judge Elizabeth Gonzalez means the case is scheduled to go to trial in April next year, Bloomberg reported.
Wynn Resorts is the parent company of Macau-based casino operator Wynn Macau Ltd.
Representatives of Wynn Resorts had argued that a July Nevada Supreme Court decision, denying Mr Okada (pictured) and Universal Entertainment Corp access to the Wynn Resorts board’s communications with its legal advisers, made it clear that courts could not question a board’s decision as long as it was made following proper procedures.
But Ms Gonzalez said in her ruling that the Supreme Court’s decision was aimed to protect Wynn Resorts’ individual board members – others than Steve and former spouse Elaine Wynn – from personal liability, but it did not protect the company itself.
In 2012, Wynn Resorts’ board voted to cancel Mr Okada’s 20 percent stake amounting to 24.5 million shares and issue him with a promissory note for US$1.9 billion. The note was in effect a 30-percent discount on the then US$2.77-billion valuation of his stake, held through the company he founded, Universal Entertainment.
The decision followed a Wynn Resorts-commissioned report that concluded Mr Okada was “unsuitable” to be a company director and a threat to the firm’s gaming licences. This was on the basis of Mr Okada allegedly providing gifts to what were then senior officials of the Philippine casino regulator, the Philippine Amusement and Gaming Corp.
Mr Okada and Universal Entertainment have denied any wrongdoing, and the firm has since won the right to develop his own gaming resort – Okada Manila – in that country. The Japanese entrepreneur claims his ousting from the Wynn Resorts board was due to him becoming the biggest single shareholder of the firm after Mr Wynn saw his own stake reduced following a divorce.
Universal Entertainment stated earlier this month it is also continuing to pursue via the Macau courts – on investors’ behalf – its dispute against Wynn Resorts.
Universal Entertainment noted in a filing that in February 2015, it, an associated business – casino slot machine Aruze USA Inc – and others, had filed a lawsuit in Macau’s Court of First Instance against Wynn Resorts (Macau) SA – a unit of Wynn Macau – and four of the latter’s directors, including Wynn Resorts’ founder and chairman Steve Wynn.
The suit had asked for the “dissolution of Wynn Resorts (Macau), the payment of damages totalling MOP8 billion [US$1 billion] and other actions,” noted Universal Entertainment’s latest filing.
On July 11, the court reached a verdict that rejected all of Universal Entertainment’s demands. Universal Entertainment said in its latest operating update: “The company is dissatisfied with the decision and took the appeal procedure on July 27, 2017 and submitted the appeal statement of the reasons on October 16, 2017.”
Mr Okada meanwhile was suspended and then ousted from the Universal Entertainment board in June pending an investigation into allegations of misappropriation by him of some of its funds. The same month it emerged that Mr Okada had also been dropped as chairman of a Hong Kong-registered entity called Okada Holdings Ltd. The company reportedly holds a 67.9-percent stake in Universal Entertainment.
In early September Universal Entertainment announced a company-commissioned investigation had found the businessman was responsible for “three acts of fraudulence” in relation to business dealings with a face value of nearly US$100 million. These cases did not involve Wynn Resorts or any alleged provision of gifts to Pagcor officials.
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”We do not believe that reopening the advance notice nomination deadline [for board directors] is appropriate or justified”
Daniel Boone Wayson
Chairman of the Wynn Resorts board of directors