Wynn Loses Bid to Avoid Trial Over Okada's Stock Redemption
Wynn Loses Bid to Avoid Trial Over Okada's Stock Redemption
(Bloomberg) -- Wynn Resorts Ltd. lost a bid to avoid a jury trial over the forced redemption of Kazuo Okada’s 20 percent stake in the casino operator.
A Nevada state court judge in Las Vegas rejected Wynn’s argument that a July decision by the state’s supreme court had “beheaded” the Japanese billionaire’s claims that the company’s board had illegally redeemed his shares in 2012.
The ruling by Nevada District Court Judge Elizabeth Gonzalez was the first to address the merits of the almost six-year-old battle between Steve Wynn, his ex-wife Elaine Wynn and Okada, his former business partner. The case is scheduled to go to trial in April.
Okada and Tokyo-based Universal Entertainment Corp., the company that indirectly held the Wynn shares and ousted Okada earlier this year, claim that Wynn’s board acted on Steve Wynn’s orders when it voted to redeem Okada’s holding. The company said the action was due to improper payments Okada made to Philippine gaming officials.
As such, the board wasn’t acting independently and its decision wasn’t shielded from legal challenges by the state’s “business judgment” rule, according to Okada and Universal, who are still collaborating in the Las Vegas litigation.
“The Wynn board will pull out all the stops to go after, to attack anyone opposed to Mr. Wynn, like Mr. Okada and Ms. Wynn,” Universal Entertainment’s lawyer David Krakoff argued at Monday’s hearing. “But when it comes to Mr. Wynn and his friends, the board does nothing.”
Wynn had argued that a July 27 Nevada Supreme Court decision, denying Okada and Universal Entertainment access to the board’s communications with its legal advisers, made it clear that courts can’t question a board’s decision as long as it’s made following proper procedures.
Gonzales said in her decision that the state’s “business judgment” rule protects Wynn’s individual board members, other than Steve and Elaine Wynn, from personal liability, but not the company itself.
Michael Weaver, a spokesman for Wynn Resorts, said the company had no comment on the judge’s ruling.
The case is Wynn Resorts Ltd. v. Okada, A-12-656710-B, Clark County, Nevada District Court (Las Vegas).
To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.
To contact the editors responsible for this story: Elizabeth Wollman at ewollman@bloomberg.net, Paul Cox
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