| LOS ANGELES
LOS ANGELES Oct 1 Lawyers for dissident Wynn
Resorts shareholder Kazuo Okada's will urge a Nevada
court on Tuesday to overturn the casino company's forced
redemption of the Japanese billionaire's $2.7 billion stake, a
ruling which would allow him to vote at its Nov. 2 shareholder
meeting to unseat two board members.
Okada said on Sept. 17 that he would nominate Yale law
professor Jonathan Macey and former CBS Corp (CBS.N) Chief
Financial Officer Fredric Reynolds for the company's 12-person
board. Okada, who remains a board member, held a 20 stake in
Wynn when the board voted in February to rescind the shares.
Wynn has rejected the nominations as invalid, calling it an
attempt to divert attention from the issues facing Okada and his
holding company, Aruze USA Inc.
The high-stakes legal battle pits Okada, formerly Wynn's
largest shareholder, against Wynn CEO Steve Wynn in a nearly
year-long struggle. Each billionaire claims the other made
improper payments to win favor in their respective Asian
Wynn forcibly bought back Okada's stake, valued at $2.7
billion, at a 30 percent discount after an internal probe by
former FBI director Louis Freeh revealed that Okada had
allegedly violated U.S. anti-corruption laws.
Okada's Universal Entertainment Corp is Japan's
largest pachinko manufacturer.
"Given the ticking clock aspect, I expect this litigation
will be a full-time job up until Nov. 2 and that any ruling by
the judge is highly likely to be appealed," said Jacob Frenkel,
a partner with Shulman Rogers in Maryland.
Okada's lawyers say the contract under which Okada first
bought his stake in Wynn precluded a forced redemption. They
also say Wynn's rationale, based on concerns the company's
standing with gaming regulators is threatened due to Okada's
alleged conduct, was without merit since no charges were proven.
Wynn argued its actions were justified because Okada's
alleged payoffs to regulators at the Philippines Amusement and
Gaming Corp (PAGCOR) were potential violations of the Foreign
Corrupt Practices Act (FCPA), therefore threatening Wynn's
standing with gaming regulators in Nevada and Macau.
In his lawsuit, Okada "disputes that any redemption has
occurred" and alleges that Wynn "undertook a secret
investigation" to force him off the board and "committed a
series of predicate acts of racketeering, which include fraud."
Okada's countersuit alleges that Steve Wynn "has run Wynn
Resorts as a personal fiefdom," and that his shares were worth
$2.7 billion, well above the $1.9 billion Wynn paid him in a
10-year note that was a 30 percent discount to the market.
In court filings, Okada said shareholders have lost
confidence in Wynn's management and board, citing the stock's
decline of 30 percent this year. He has claimed that only seven
of the 12 board members are independent, using Nasdaq listing
In August, Okada filed a defamation lawsuit in Japan against
the casino company related to the forced redemption of his
shares in February.
Okada claimed $140 million (11.2 billion yen) in damages,
alleging Wynn's actions led to a fall in Universal's stock price
and new business opportunities, and damaged his reputation.
The case is Wynn Resorts Ltd vs Kazuo Okada, an individual,
et al, U.S. District Court, Clark County, Nevada, No.