Feb 15 Las Vegas (Reuters) - A federal judge allowed Wynn Resorts (WYNN.O) to hold a special shareholder meeting on Feb 22 to remove dissident shareholder Kazuo Okada from its board, the latest twist in a year-long battle between Wynn chief executive Steve Wynn and his one-time partner and largest investor.
Federal Judge James Mahan rejected a bid by Okada to block the meeting, ruling against the Japanese investor’s contention that Wynn had given its shareholders a “grotesquely slanted proxy riddled with material misrepresentations.”
“I just don’t think this proxy is false and misleading,” Mahan ruled from the bench after an hour-long hearing.
He said Okada should have issued a counter solicitation to shareholders.
“We are disappointed and are assessing our options,” said Okada’s lawyer Marc Sonnenfeld. “This is just one battle in a long war.”
Okada’s Universal Entertainment 6425.OS was Wynn’s largest shareholder until February 18, 2012, when the board redeemed and canceled its 19.75 percent stake. In regulatory filings, Wynn said it relied on an independent report by former FBI director Louis Freeh that concluded Okada engaged in improper conduct with cash payments and gifts to Filipino gaming authorities
Okada has denied the allegations.
Last week independent shareholder proxy advisory firms ISS and Glass Lewis recommended that Wynn shareholders vote on whether to remove Okada from the board.
“A vote for the removal of Okada is warranted in light of the material risk that Okada’s directorship poses to the company’s ability to receive gaming licenses for operations that are currently in the company’s pipeline,” ISS said in its report.
Glass, Lewis based its recommendation on “the deterioration of the relationship between (Okada) and the board,” as well as what it said was “the risk that Mr. Okada may pose to the company’s business plans.”
In December, Okada and his Universal Entertainment Corp filed a libel action against Thomson Reuters (TRI.TO) and others over news articles relating to payments Universal made to an ex-consultant to the Philippine gaming authority. In a court filing last year, Okada said the Freeh report did not show anything that “could pose a legitimate and imminent danger to Wynn Resorts’ gaming licenses.”
Reporting By Ronald Grover; Editing by Alden Bentley