Universal Entertainment and Kazuo Okada File Defamation Lawsuit in Japan Against Wynn Resorts Limited CEO Stephen Wynn
Universal Entertainment Corp. (UE), and its chairman, Kazuo Okada, today announced the filing of a lawsuit before the Tokyo District Court against Wynn Resorts, Limited (NASDAQ: WYNN), its Chairman and CEO, Stephen Wynn, along with the company's directors and general counsel. The lawsuit seeks approximately ¥11 billion (approximately $140 million) in damages related to Wynn's attempt to strip Aruze USA Inc. (a subsidiary of UE) of its interest in Wynn Resorts and remove Okada as a director.
The lawsuit states that the global resonance of Wynn's actions and misleading public announcements led to a falloff in Universal Entertainment's stock price and new business opportunities, and damaged Okada's reputation.
The latest action, filed on August 28, opens an additional front in the legal dispute surrounding Mr. Wynn's attempt to damage the "reputation, credibility and property" of Universal Entertainment and Okada. That dispute has its roots in the 2010 divorce of Steve and Elaine Wynn, which resulted in Steve Wynn losing ownership of roughly half of his stock in the company, leaving Aruze USA as the single largest shareholder and posing a threat to Wynn's total control of the company. When Mr. Okada questioned the propriety of a $135 million pledge from Wynn Resorts to the University of Macau Development Foundation, Wynn moved to retaliate against Okada and eliminate the threat of dissension from the Wynn Resorts Board of Directors.
(Wynn Resorts made the pledge at a time when it was seeking a gaming license for a casino in Macau. The Chancellor of the University of Macau is also the head of Macao's government, with ultimate oversight of gaming matters. The U.S. Securities and Exchange Commission is reviewing the University of Macau Foundation donation by Wynn Resorts over possible violation of the Foreign Corrupt Practices Act. That pledge is also the subject of an inquiry by the Nevada Gaming Commission, as well as the basis for six separate shareholder lawsuits against Wynn Resorts Limited.)
In a counterclaim filed against Wynn Resorts, Limited and the Wynn Board of Directors earlier this year (now pending in the state court in Nevada), UE is seeking to preserve Aruze USA's shareholder voting rights in Wynn Resorts, which Wynn Resorts wrongfully purported to redeem. This action asserts that Steve Wynn has indulged in fraud, deception, theft and betrayal to maintain control of his gaming enterprises and enrich himself based on a false and predetermined pretext.
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