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Gaming Guru

Tim O'Reiley

Okada's counterattack against Wynn Resorts scaled back

14 November 2012

Kazuo Okada's counterattack against Wynn Resorts, Limited for the forced redemption of his shares in February was trimmed at a Tuesday hearing but largely left standing.

Clark County District Judge Elizabeth Gonzalez removed one count that Okada, through his Aruze USA Inc., had based on the Racketeer Influenced and Corrupt Organizations Act. Enacted four decades ago to fight the mafia, federal prosecutors have expanded RICO applications to cover a wide range of white-collar crimes. RICO is less frequently used in civil disputes.

In this instance, Gonzalez found that the stock repurchase, part of the bitter and public business estrangement between Okada and Wynn Resorts chairman and CEO Steve Wynn, "is not a forced sale but a contractual agreement between shareholders in a highly regulated industry."

As a result, she kicked out the RICO claim.

But the other 17 claims raised by Okada remained intact and headed for a scheduled trial in April 2014.

Those claims cover the same ground from different legal angles.

Wynn filed the case in February to validate the board's action of repurchasing Okada's 19.6 percent stake, then the largest single block of stock, at a 30 percent discount to market value.

That was based on a board-commissioned investigation that determined Okada had illegally tried to influence Philippine gaming officials into permitting him to build a casino resort in the Manila area.

Okada filed the counterclaim, alleging the redemption estimate cost him at least $1 billion. He contends the repurchase was punishment for his dissent to a $135 million contribution the company made to the University of Macau last year.

"We are very satisfied that the judge has thrown out the RICO claim," Wynn attorney James Pisanelli said after the hearing.

In front of the judge, Pisanelli labeled the counterclaim "a bargaining tool, a weapon for revenge. I'm not sure which, maybe both, maybe just a PR campaign."

On this basis, he argued for throwing out all of it.

Okada's attorneys declined comment afterward.

The argument by both sides trod over the charges and countercharges that have marked the dispute for nearly a year.
Okada's counterattack against Wynn Resorts scaled back is republished from