Bloomberg News

Kazuo Okada to Argue Again for Wynn Resorts Books Access

August 23, 2012

Lawyers for Kazuo Okada, the Japanese billionaire Wynn Resorts Ltd. (WYNN:US) is trying to remove from its board, are scheduled to return to a Nevada court in October to argue for access to the casino operator’s books.

Clark County District Judge Elizabeth Gonzalez in Las Vegas, according to a notice filed in court, scheduled a hearing for Oct. 2 on arguments whether Okada’s request for documents, including ones regarding Wynn Resorts’ dealings with Macau officials going back as far as 2000 and the company’s use of $120 million he invested in 2002, is reasonable.

The judge at a hearing in June deferred a decision until Wynn Resorts’ lawyers had a chance to question Okada, 69, about the purpose of his request. Wynn Resorts’ lawyers have argued that Okada is using the petition as “back-door discovery” to collect evidence to use in Wynn Resorts’ lawsuit against him, in which the two sides can’t yet request documents.

Okada will appear Sept. 18 in Las Vegas for a deposition by Wynn Resorts’ lawyers, according to the notice filed today by the casino operator’s lawyers. Wynn Resorts will have 10 days after they question Okada to supplement their opposition to his request, according to the filing.

Lawyers for Okada and Wynn Resorts didn’t immediately return calls today seeking comment on a new hearing.

‘VIP Gamblers’

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.

Okada 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.

‘Carefree Disregard’

Okada in a May 2 filing justified his request for access to the books and records by arguing that Stephen Wynn, 70, has shown a “carefree disregard” for the law and his obligations to shareholders and that he has caused Wynn Resorts to waste funds and put the company at risk by “embroiling it in a morass of ever-growing litigation and government inquiry.”

At a May 17 hearing on Okada’s petition, James Pisanelli, a lawyer for Wynn Resorts, said Okada’s real purpose was to look in the 10-year-old documents for evidence that something happened in Macau that is similar to what the company said he did in the Philippines.

“There is no corporate governance at stake here,” Pisanelli said. “What there is, is a grasp for the unclean- hands defense.”

The case is Okada v. Wynn Resorts, A-12-654522-B, District Court, Clark County Nevada (Las Vegas). Nevada (Las Vegas).

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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Companies Mentioned

  • WYNN
    (Wynn Resorts Ltd)
    • $200.12 USD
    • -0.39
    • -0.19%
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