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Gaming Guru

Tim O'Reiley
 

Old ties could hurt Wynn lawsuit

16 January 2013

Personal and business ties that date back more than a decade between Steve Wynn and Japanese gaming magnate Kazuo Okada could come to hurt the lawsuit brought by Wynn Resorts, Limited to validate the forced redemption of Okada's stake in February.

Clark County District Judge Elizabeth Gonzalez rejected Okada's move to have the case dismissed at a Monday hearing. But she opened an avenue for a different attempt.

Gonzalez said Wynn "may have serious problems" because several claims might have expired under the statute of limitations.

Because Nevada corporate law mandates that a lawsuit be filed within three years of alleged improper acts, that would rule out litigating Okada's actions before February 2009. Gonzalez framed the still-open question, to be raised at a future hearing, as when Okada's push to develop a hotel-casino in the Philippines came to the fore.

Wynn Resorts claims that the Manila Bay project, now under construction, amounted to self-dealing and a betrayal of his duties as a Wynn board member by developing a competitor to Wynn resorts in Macau.

Gonzalez set the time range between 2008 and 2010. Pinning down a precise date, she added, "(is) going to drive all the decisions for most of the claims for relief because of the long-standing relationship" between Wynn and Okada.

Okada attorney Charles McCrea Jr. argued that Wynn knew as early as 2007 that Okada was proceeding with the Manila Bay project.

Further, he said, "It is not self-dealing if you first present it to the corporation and the corporation rejects it."

However, Wynn attorney James Pisanelli said that the complexion of Manila Bay changed starting in the fall of 2010. Then, Pisanelli said, Okada started talking about poaching customers from Wynn and besting the Macau resort "as opposed to simply saying he wanted to go off and do something on his own."

Even if Wynn loses on the statute of limitation issue, Pisanelli said, "Not much will change in the overall landscape."

Notably, Wynn in 2011 commissioned a private investigation of Okada's pursuit of Manila Bay. The inquiry concluded that Okada paid bribes to Philippine officials to gain important approvals. Okada has strongly denied the charges.

Wynn has contended that alleged corrupt activities by a board member could jeopardize its gaming license, another justification for the forced redemption of the stock at a 30 percent discount.