United States-listed 26 Capital Acquisition Corp says it is pursuing legal action against four entities linked to Japanese conglomerate Universal Entertainment Corp because they “were not honouring their contractual obligations” regarding a deal that would involve the listing in the U.S. of the operator of the Okada Manila casino resort in the Philippine capital.
The 26 Capital entity – a special purpose acquisition company (SPAC) listed on the Nasdaq stock market in the U.S. – said in a statement sent on Monday to GGRAsia, it had filed a lawsuit against four Universal Entertainment affiliates in February because they were “refusing to do the work required to close” the deal.
It was announced last month that 26 Capital was suing Tiger Resort, Leisure and Entertainment Inc – the promoter of the Okada Manila casino resort (pictured in a file photo) –, as well as three other entities also controlled by Universal Entertainment, urging the prompt consummation of the previously-announced merger between the two sides.
In a court document filed earlier this month, Universal Entertainment denied the accusations made against the group by 26 Capital. The Japanese conglomerate instead pointed the finger at the U.S.-based firm’s alleged “aggressive disregard for the U.S. securities laws” and “a public relations strategy designed to mislead the SPAC’s investors.”
Universal Entertainment is now seeking to have the deal between the two sides called off.
“The counterclaims are nothing more than a desperate litigation strategy to deflect from Universal Entertainment’s own improper conduct,” said the 26 Capital statement sent to GGRAsia.
It added: “We look forward to proving them wrong at the trial in July – if their counterclaims even get that far.”
Universal Entertainment announced in October 2021 a merger agreement involving 26 Capital and the entity operating Okada Manila, which would result in the Okada Manila operation becoming a publicly traded company listed on Nasdaq.
The merger and subsequent listing was initially expected to be completed by the end of June 2022. However, it 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, Kazuo Okada, first occupied and then ran the property.
According to Universal Entertainment, the deadline of the merger agreement with 26 Capital lastly had been changed to September 30, 2023.
