Wynn-Okada Lawsuit Halted Six Months for Criminal Probe
Wynn Resorts Ltd. (WYNN)’s lawsuit against its former director Kazuo Okada was halted for six more months so the U.S. can continue to investigate possible bribery of Philippine officials by the Japanese billionaire.
Nevada state court Judge Judge Elizabeth Gonzalez at a hearing today in Las Vegas granted the Justice Department’s request for a second six-month stay of the civil case so that the government can pursue the criminal probe unhindered.
“My concern is that there are particular safety concerns about witnesses,” the judge said.
The Justice Department asked for a new stay yesterday, citing recently discovered evidence in its probe. The government submitted details about the evidence and arguments for why it warrants further delaying the lawsuit under seal. The stay bars both sides from seeking depositions of witnesses who also may have been talking to the government.
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 officials that could threaten the company’s gaming licenses. Okada, 71, filed counterclaims to undo the redemption of his shares.
Okada’s lawyer, Charles McCrae, said at the hearing today that another six-month delay would hurt his client even more than the original stay.
“We are emphatically opposed to any further stay,” he told the judge. “Every day the case goes by, we suffer more damage.”
Okada, the chairman of Tokyo-based Universal Entertainment Corp. (6425), is building a casino resort in the Philippines. It will compete with casinos in Macau, where Wynn Resorts gets most of its revenue. Okada, who became a billionaire selling machines for Japanese pachinko parlors, won one of four provisional gaming licenses awarded for the Manila hub in 2008.
Universal Entertainment said Feb. 5 that a third-party committee was investigating payments made through its U.S. unit, Aruze USA Inc., in the Philippines. The committee was looking at $40 million in payments, according to the statement.
The case is Wynn Resorts v. Okada, A-12-656710-B, Clark County District Court, Nevada (Las Vegas).
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