Kazuo Okada, the controller of Universal Entertainment Corp. will defend a shareholder lawsuit against Wynn Resorts Ltd. for .42 billion in damages. The staggering amount is for a forcible redemption of the 20 percent stake Okada’s company held in Wynn Resorts.
The issue at hand revolves around a managerial breach of loyalty surrounding a 2012 Wynn Resorts stake cancellation. In a filing to Nasdaq, Wynn Resorts alleged that Mr. Okada was taking the steps to pursue a casino license in the Philippines, thus rendering him “unsuitable” to be a shareholder of Wynn Resorts.
Furthermore, Wynn alleged Okada breached U.S. anti-bribery laws when it provided gifts to officials at the Philippine Amusement and Gaming Corp., who is the country’s casino regulator. Okada has vehemently denied any wrongdoing, and has asked to have his named cleared.
It doesn’t just end there, as Tsuyoshi Hosoba, a shareholder of Universal entertainment, has made seven complaints against Okada, three other current directors, three former executives and six former directors of Universal Entertainment.
In addition to the Wynn Resorts allegations, it is alleged that Universal Entertainment acquired real estate in the Philippines for a price that was higher than the appraised value.
Going back to 2012, the board of Wynn Resorts voted to cancel Okada’s 20 percent stake of 24.5 million shares of the company, with a promissory note for $1.9 billion. The note gave a 30 percent discount of the then $2.77 billion valuation of the stake.
Steve Wynn, in another court battle, has been ordered to pay $422,380 in legal fees to Wall Street hedge fund manager Jim Chanos over a defamation lawsuit. Chanos originally requested $590,699, but District Judge William H. Orrick determined there was not enough materials provided to justify the exorbitantly high costs.
