Okada heads to court to regain Wynn shares for board fight

Mon Oct 1, 2012 7:27am EDT
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By Sue Zeidler

LOS ANGELES (Reuters) - Lawyers for dissident Wynn Resorts (WYNN.O: Quote) 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 November 2 shareholder meeting to unseat two board members.

Okada said on September 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 markets.

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 6425.OS is Japan's largest pachinko manufacturer.

"Given the ticking clock aspect, I expect this litigation will be a full-time job up until November 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.   Continued...

Wynn Macau Chairman and CEO Stephen Wynn speaks during a news conference in Hong Kong September 23, 2009. REUTERS/Tyrone Siu