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Best of Chris Sieroty

Gaming Guru

Chris Sieroty
 

Wynn Resorts says Okada "recycles" allegations

18 June 2012

Wynn Resorts Las Vegas responded on Friday to Kazuo Okada's motion for a preliminary injunction against the Las Vegas-based company by saying Steve Wynn's former business partner and one-time majority shareholder was recycling old allegations.

"Mr. Okada is recycling previous baseless allegations in the press, while continuing to interfere with the judicial process by refusing to accept service of court documents," a Wynn Resorts statement said.

Wynn Resorts justified its decision to remove Okada by saying the "carefully considered actions taken by the Wynn board to redeem an unsuitable shareholder" was done in order "to protect the company and its shareholders."

Okada's decision to file a new claim Thursday against Wynn Resorts was the latest development in the ongoing legal battle between Okada and his former business partner and chairman of Wynn Resorts, Steve Wynn.

Okada asked a federal judge in Nevada to immediately restore the rights of his Universal Entertainment Corp. subsidiary, Aruze USA, as the largest shareholder of Las Vegas-based Wynn Resorts.

Okada also filed an amended counterclaim against Wynn, the company's general counsel and individual board members.

"This motion for a preliminary injunction and our amended counterclaim seeks to protect our investment and restore independent judgment and sound corporate governance to the Wynn Resorts board," Okada said in a statement.

Wynn's attorneys have not responded yet to Okada's motion, and no court date has been set. Shares of Wynn Resorts closed Friday below $100, losing 96 cents, or 0.96 percent, to fall to $99.53 on the Nasdaq.

Okada, whom Wynn once called his "best friend" and who helped bankroll the gaming company's casinos starting in 2000, has waged a legal battle to get his 19.66 percent stake, or 24.5 million shares, in Wynn Resorts returned after Wynn forcibly bought back the shares.

In February, Okada's $2.7 billion investment in Wynn Resorts was redeemed for a $1.9 billion note maturing in 2022.

Wynn bought back Okada's shares at a steep discount after the company published a compliance committee report claiming Okada had engaged in "improper" activities with gaming regulators regarding his plans to build a casino in the Philippines.

Okada, ousted Feb. 24 from the board of Wynn Resorts' Chinese subsidiary, Wynn Macau, remains a member of the board at Wynn Resorts. Wynn has said the moves were necessary to protect the company's gaming license.

Wynn's decision to redeem the shares and remove his former business partner came after Okada filed suit in January to gain access to company financial records and documents related to Wynn's pledge to donate $135 million to the University of Macau Development Foundation.

Okada suggested the donation was improper given Wynn has a gaming license in Macau, and at the time was seeking Chinese government approval to build another resort on the Cotai Strip.

Both Okada and Wynn are under investigation for possible violations of the U.S. Foreign Corrupt Practices Act, a 1977 federal law that makes it a crime for U.S. companies or executives associated with them to bribe foreign officials to gain business advantage.

Okada's latest filing is also an attempt to stop efforts to remove him from the board.

Wynn Resorts has already filed a preliminary proxy statement with the Securities and Exchange Commission announcing that a special stockholder meeting will be held for the purpose of removing Okada as a director. No date has been scheduled.

Okada, chairman of Universal Entertainment, said in the filing that Wynn "indulged in fraud, deception, theft and betrayal to maintain control of his gaming enterprises."
Wynn Resorts says Okada "recycles" allegations is republished from Online.CasinoCity.com.