Kazuo Okada’s renewed request for Wynn Resorts Ltd. (WYNN:US)’s books and records was delayed by a Nevada state court judge until the casino operator’s lawyers have a chance to question the Japanese billionaire about his request.
Clark County District Judge Elizabeth Gonzalez postponed a ruling on Okada’s request at a hearing today in Las Vegas. She agreed with Wynn Resorts’ attorneys that the limited deposition of Okada was necessary to determine if he had a “proper purpose” for requesting Wynn records and books from as far back as 10 years ago.
“This is a victory because she granted the request we made, but this is a little step along the way,” Kim Sinatra, Wynn Resorts’ general counsel, said after the hearing.
Okada, whom the company seeks to remove from its board of directors, held the largest single stake in Wynn Resorts through his Tokyo-based Universal Entertainment Corp. (6425) until February. Then, in an escalating battle with Chief Executive Officer Stephen Wynn, his 20 percent stake in Wynn Resorts was forcibly redeemed because, the company said, he was “unsuitable.”
Okada sought a court order in January that, as a director, he was entitled to inspect Wynn Resorts’ books and records regarding its $130 million pledge last year to the University of Macau, which Okada says he opposed. Gonzalez in March ordered Wynn Resorts to produce only two more pages of documents to Okada.
In his renewed request, Okada seeks documents from 2000 through 2002 regarding entertainment of and contacts with Macau government officials, as well as documents explaining the company’s use of $120 million he invested in 2002. Wynn Resorts has argued Okada is using the petition to find evidence to fight a separate lawsuit Wynn Resorts brought against him.
The judge said she would consider Okada’s lawyers’ request to let the deposition take place in Hong Kong, where Okada now lives, rather than in Las Vegas, as Wynn Resorts’ lawyers had asked.
“Mr. Okada is studying the ruling and evaluating all of his options,” Steve Getzug, a spokesman for Aruze USA Inc., Okada’s holding company, said in an e-mailed statement.
Wynn Resorts sued Okada on Feb. 19, saying he breached his fiduciary duty by making improper payments to gaming regulators in the Philippines. Okada is developing two casinos and three hotels in Manila and seeks to lure “high-limit, VIP gamblers” from China in direct competition with Wynn’s casino in Macau, according to the complaint.
The company said in a statement that day that an investigation found that Okada appeared to have paid $110,000 to gaming regulators in the Philippines in violation of U.S. anti- corruption laws. The alleged violations, the company said, made Okada “unsuitable” because they might threaten Wynn Resorts’ Nevada gaming license.
A federal judge on June 21 sent Wynn Resorts’ lawsuit against Okada back to state court over Okada’s objections. Gonzalez at today’s hearing said she wouldn’t consolidate the two cases. If similar issues arise in both cases, they can be heard at the same time, the judge said.
In March, Okada had Wynn Resorts’ lawsuit removed to federal court, arguing that the underlying issue was whether he had violated U.S. law by allegedly making improper payments to foreign officials.
The case is Okada v. Wynn Resorts, A-12-654522-B, District Court, Clark County Nevada (Las Vegas).
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