Wynn Resorts Embattled in Lawsuit With Former Shareholder
Wynn Resorts, Ltd. and its once-largest stockholder are involved in an ongoing lawsuit over shares which Wynn forcibly redeemed earlier this year.
July 13, 2012
Wynn Resorts, Ltd. and its once-largest stockholder are involved in an ongoing lawsuit over shares which Wynn forcibly redeemed earlier this year. Stephen Wynn and Japanese gambling magnate Kazura Okada, once close friends and colleagues, are each attempting to gain control of Okada's former 20 percent share. The dispute arose when Okada became involved in a casino deal in the Philippines. Wynn felt this would compete with his Macau casinos and refused to participate in the development.Wynn owns the Bellagio and Mirage Casino and Resort Hotels, while Okada made his fortune on pachinko, a slot-machine game that resembles pinball.
Each party alleges the other engaged in fraud in their respective casino developments and dealings between each other. Each also accuses the other of improper payments to government agencies, the University of Macao and the Philippines.
In its articles of incorporation, Wynn Resorts included a provision that would allow it to redeem Okada's shares if he was deemed unsuitable by its board of directors. Wynn Resorts bought back Okada's shares at a 30 percent discount last February. However, Okada is still a member of the board, but Wynn has stated a special stockholder meeting will soon occur with the only purpose being to remove Okada. As yet there is no date set for that meeting.
No End in Sight
Most recently, on June 15, 2012, Okada asked a federal judge to restore his stake in Wynn Resorts and additionally filed an amended counterclaim against the company. Wynn Resorts issued a press release regarding the new claim, claiming that the "facts clearly justify the carefully considered actions taken by the Wynn Board to redeem an unsuitable shareholder," Reuters reported.
The legal battle first began in January 2012 when Okada sued Wynn Resorts over financial documentation the company refused to hand over.
Whether it is a multinational company or a smaller to mid-size business, litigation can be costly to the bottom line. Anyone involved in a potential business dispute should contact an experienced business litigation lawyer to ensure the company's continued success.
Article provided by Tinley, Nastri, Renehan & Dost, LLP
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