Kazuo Okada, recently ousted from the board of Wynn Resorts, has filed a counterclaim against Steve Wynn and his companies to prevent the “improper” redemption of his shares.
Universal Entertainment and its subsidiary, Aruze USA, filed the claim on Monday against Wynn, Wynn Resorts and the individual members of the Wynn Resorts board to stop the shares owned by Aruze USA from being redeemed at a 30 per cent discount.
Based on the findings of a year-long investigation into Okada, the Wynn Resorts board determined that both he and his companies were “unsuitable” under the company’s articles of incorporation. He was removed from the boards of both Wynn Resorts in the US and Wynn Macau, and Aruze USA’s 24 million Wynn Resort shares were redeemed.
Universal’s counterclaim contends that Wynn Resorts’ purported redemption violates the express language of multiple agreements between Wynn and Aruze USA, and among Steve Wynn, Elaine Wynn, Wynn Resorts and Aruze USA. It also accuses that Wynn and the other members of the board “seek to profit from their illegal acts in a process that was corrupt and unfair.”
“We are taking this action to protect our investment from what we believe to be an unconscionable course of conduct perpetrated by Steve Wynn and the Wynn Resorts board of directors to facilitate Mr Wynn's agenda of maintaining his absolute control over Wynn Resorts and in order to enrich himself,” said Okada, who serves as chairman of the board of directors of Universal Entertainment. “Our lawsuit contends that after having lost control of his previous ventures in Las Vegas, Mr Wynn has undertaken this campaign to suppress dissenting views on the Wynn Resorts board, particularly with regard to Wynn Resorts' unprecedented, inadequately explained and wasteful $135m donation to the University of Macau, so that this venture would not end with the same result."
The counterclaim also states that Wynn has run Wynn resorts as a “personal fiefdom, packing the board with friends who do his bidding.”
Okada added: “Our counterclaim highlights that the Wynn Resorts board did not exercise any independent judgment or otherwise act in a manner consistent with sound corporate governance principles.
“Rather, the Wynn Resorts board fell in line behind Mr Wynn and authorised the illegal redemption of Aruze USA's shares following a hurried and incomplete investigation that lacked sufficient findings and any form of due process in accordance with appropriate governance principles and standards. We are confident in the strength of our claims and look forward to bringing them before the court."
Last week, Wynn Resorts said it was planning to hold a special meeting of stockholders to vote on whether Okada should be removed as a director of the company. No date has been set for the meeting.
