Okada Must Face Wynn Resorts Lawsuit Alleging Disloyalty
Kazuo Okada lost a bid to dismiss a lawsuit by Wynn Resorts Ltd. (WYNN), the casino operator that seeks to oust the Japanese billionaire as a director after forcibly redeeming his 20 percent stake in the company last year.
Clark County District Judge Elizabeth Gonzalez, at a hearing today in Las Vegas, denied Okada’s request to dismiss Wynn Resorts’ claims that he breached his duty as a corporate director by knowingly breaking the law and putting his own interest in developing a casino resort in the Philippines above that of the company.
Wynn Resorts sued Okada in February, at the same time the board voted to redeem his shares. Wynn Resorts alleges that Okada and his associates made payments to Philippine gaming officials in apparent violation of U.S. anti-bribery laws, which could threaten the company’s licenses to operate casinos.
Okada “strongly” believed that he was allowed to provide gifts when doing business and that what he did was lawful, one of his lawyers, Charles McCrea, said at today’s hearing.
“Unlawful activity means something against the law,” McCrea said. The Wynn Resorts’ “code of ethics is not a law. It is not a statute.”
McCrea wasn’t available for comment after the hearing.
Okada’s lawyers, in their Nov. 26 request to dismiss the claims, said Wynn Resorts’ complaint was “simply a further step in an orchestrated campaign to silence and punish the lone voice of dissent to Steve Wynn’s demands on the board of directors.”
Wynn Resorts has scheduled a special meeting of stockholders for Feb. 22 to vote Okada off the board.
Okada, the chairman of Tokyo-based Universal Entertainment Corp. (6425), had said in court filings that Steve Wynn, chairman and chief executive officer of the casino company, wants to oust him because he questioned and voted against a $135 million donation to the University of Macau in 2011.
Okada helped Steve Wynn 12 years ago to bankroll the gaming company, which has resorts in Las Vegas and Macau. In his counterclaims to Wynn Resorts’ lawsuit, Okada said Steve Wynn runs the business as a “personal fiefdom” and packs the board with “friends who do his personal bidding.” He seeks a court ruling that the redemption of his shares is invalid.
Wynn Resorts contends Okada was angry since at least February 2011 about the board’s refusal to get involved with the casino project he’s developing in the Philippines. The board was concerned about “deeply ingrained” corruption in the Philippines, according to the Wynn Resorts complaint.
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