(Updates with lawyer comment in 11th paragraph.)
Feb. 9 (Bloomberg) -- Wynn Resorts Ltd.’s former Vice Chairman Kazuo Okada must wait until Feb. 23 to find out whether he may see the casino operator’s financial records, a Las Vegas judge ruled, saying she needs more time to go over the document requests in detail.
Nevada state court judge Elizabeth Gonzales said at the conclusion of a hearing today that Wynn Resorts should consider Okada’s records request and return to her in two weeks. She said she will also review Okada’s requests before determining which ones are reasonable.
“The company has a right to determine each document individually,” Gonzales said. A director’s right to review company books is limited under Nevada law, she said.
Okada, who was removed as vice chairman in October, sued Wynn Resorts in state court in Clark County, Nevada, to force the company to produce spending records. Okada, who is chairman of Universal Entertainment Corp., Wynn Resorts’ largest shareholder, has $380 million invested in the casino operator dating back to 2000, according to regulatory filings.
Kirk Lenhard, an attorney for Wynn Resorts, argued that Okada’s request was premature as such actions should be brought before the board of directors. The board should be allowed to review the request at a meeting next month before the court rules, Lenhard said.
Gidon Caine, an attorney for Okada, said the request was about “good corporate governance.”
“We’re encouraged that the court saw Mr. Okada’s role as a fiduciary as important,” Caine said after the hearing.
Okada’s Aruze USA Inc. said in an e-mailed statement today that the company looks forward to working with Wynn Resorts to gain access to the books and records.
Okada opposed Wynn Resorts’ HK$1 billion ($129 million) pledge in July to the University of Macau Development Foundation, according to the complaint. Wynn Resorts said last month that the dispute with Okada stemmed from Okada’s decision to compete by pursuing projects in the Philippines. Okada was removed as vice chairman after admonishments from the board over the plan, Wynn Resorts said.
In court today, Lenhard said that Okada was using his position as a director as a ruse to see Wynn Resorts’ books. Universal, a Tokyo-based pachinko-machine maker, owns a 20 percent stake in the company.
Gonzales “did not grant Mr. Okada’s request for relief but she did ask us to reconsider the request,” Robert Shapiro, a lawyer for Wynn Resorts, told reporters after the hearing. “We will go to the board of directors and get back to Judge Gonzales in two weeks.”
Wynn Resorts fell 0.9 percent to $113.59 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares had gained 3.8 percent this year before today.
The case is Okada v. Wynn Resorts Ltd., A-12-654522-B, District Court, Clark County, Nevada (Las Vegas).
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