GGRAsia – Lawsuit vs Universal Ent starts July 10 says 26 Capital

Lawsuit vs Universal Ent starts July 10 says 26 Capital

Jul 04, 2023 Newsdesk Latest News, Philippines, Top of the deck

United States-based 26 Capital Acquisition Corp says the trial for the lawsuit pitting the firm against some subsidiaries of Japanese conglomerate Universal Entertainment Corp is to start on July 10.

It was announced in February that 26 Capital was suing Tiger Resort, Leisure and Entertainment Inc – the promoter of the Okada Manila casino resort in the Philippine Capital – and three other Universal Entertainment subsidiaries, urging the prompt consummation of a previously-announced merger between the two sides.

“26 Capital is eager to commence trial on July 10, 2023 and remains fully committed to closing the transaction and improving the merged company’s corporate governance,” the firm told GGRAsia in an emailed statement.

It added: “26 Capital believes that [the Universal Entertainment's subsidiaries] have engaged in repeated contractual breaches to avoid closing [of the merger agreement]“.

The court case is being heard by a court in the U.S. state of Delaware.

In its latest update, 26 Capital – a special purpose acquisition company (SPAC) listed on the Nasdaq stock market in the U.S. – also commented on a Friday announcement by the Universal Entertainment side saying it had “resolved the termination of the merger agreement”, effective immediately.

“26 Capital believes that the termination notice is baseless”, it said.

The response from 26 Capital, led by businessman Jason Ader, stated it “confirms that on June 30, 2023, it received a purported notice of termination of the agreement and plan of merger and share acquisition” from Tiger Resorts Asia Ltd.

The latter is a privately-held Hong Kong entity involved in the ownership structure of Okada Manila. Control of Tiger Resorts Asia had itself been disputed between Kazuo Okada, the ousted founder of Universal Entertainment, members of his family, and the current Universal Entertainment board.

The Universal Entertainment side had announced in October 2021 a merger agreement involving 26 Capital, which would result in Okada Manila becoming a publicly traded company listed on Nasdaq.

The merger and subsequent listing operation was initially due to be completed by the end of June 2022. Completion was delayed several times, against the backdrop of what Universal Entertainment claimed was an “illegal” occupation between May 31 to September 2, 2022 of Okada Manila, when people acting on behalf of the resort’s ousted founder, Mr Okada, first occupied and then ran the property.

Universal Entertainment has argued there had been “various material breaches of the merger agreement” by 26 Capital, and alleged “fraudulent conduct” by 26 Capital.

In its latest update, 26 Capital said that such allegations were in its view “meritless”.