Wynn Resorts' Okada Lawsuit Halted for Criminal Probe
Wynn Resorts Ltd. (WYNN)’s lawsuit with former director Kazuo Okada was halted while U.S. authorities pursue a criminal investigation into possible bribery of Philippine officials by the Japanese billionaire.
A Nevada judge today granted the Justice Department’s request to halt pretrial evidence exchanges in the suit for six months while it conducts the probe. Clark County District Judge Elizabeth Gonzalez, addressing concerns raised by Okada’s lawyers, told U.S. lawyers not to seek extensions of the stay.
“Don’t come back asking for another six months, and another six months, because it ain’t going to happen,” she said at a hearing in Las Vegas.
Wynn Resorts sued Okada last year for breach of fiduciary duty and forcibly redeemed his 20 percent stake in the casino operator, alleging he made potentially illegal payments to Philippine government officials that could threaten the company’s gaming licenses. Okada, 70, filed counterclaims to undo the redemption of his shares.
The U.S. last month asked to halt discovery in the civil case where it overlapped with a criminal investigation into whether Okada violated the Foreign Corrupt Practices Act that prohibits bribery of foreign officials to win business. Okada, the chairman of Tokyo-based Universal Entertainment Corp. (6425), is developing a casino resort in the Philippines.
Charles McCrae, a lawyer for Okada, argued at the hearing that stopping all discovery in the case “ties us to a chair” by preventing Okada’s attorneys from gathering evidence related to a report by former Federal Bureau of Investigation Director Louis Freeh that was the basis for Wynn Resort’s redemption of Okada’s shares.
On April 22, Universal Entertainment released a review it commissioned from former Homeland Security Secretary Michael Chertoff that concluded Freeh’s report was “deeply flawed,” “one-sided, and seemingly advocacy-driven.”
The case is Wynn Resorts v. Okada, A-12-656710-B, Clark County District Court, Nevada (Las Vegas).
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