For a civil battle pitting two of the gaming industry’s biggest names and involving one of the world’s best-known casino companies, the warring parties in the Steve Wynn-Kazuo Okada litigation sure appear interested in maintaining their privacy.
Wynn Resorts Ltd. last week fell short in its motion for summary judgment in Clark County District Judge Elizabeth Gonzalez’s courtroom over whether it forced the redemption in 2012 of Okada’s 20 percent position in the company. The issues and allegations will now be heard by a jury. The Nevada Supreme Court in July issued a decision that appeared to deflate Okada’s legal argument.
Okada, founder of Tokyo-based Universal Entertainment, has seen his fortunes founder in the wake of his ouster from the board of Wynn Resorts and the reporting of a federal bribery investigation of his casino development in the Philippines. He has maintained that the Wynn corporate board was hand-picked by its chairman and acted on his instructions. Wynn’s ex-wife Elaine Wynn – a former Wynn board member – is also a litigant.
Okada has been trying to determine the steps the Wynn board took before it voted to remove him. Although some board members have given depositions, the company has denied other requests.
More recently, Okada has also been removed from the board of Universal. But with Gonzalez’s ruling, it now appears his attorneys will be able to argue whether the Wynn board was sufficiently independent to merit protection under Nevada’s business judgment rule.
“The Wynn board will pull out all the stops to go after, to attack anyone opposed to Mr. Wynn, like Mr. Okada and Ms. Wynn,” Bloomberg News reported Universal Entertainment lawyer David Krakoff arguing in last week’s hearing. “But when it comes to Mr. Wynn and his friends, the board does nothing.”
Judge Gonzalez ruled that state law protects individual corporate board members from personal liability, but not the company itself, Bloomberg reported. It also excludes Steve and Elaine Wynn.
At a time when gaming regulators and casino industry observers might be interested in learning more about arguments from both sides, the docket in the case is riddled with motions to seal and redact records. For a couple of public businessmen and a case focused on the leadership of a publicly traded company, it seems more than a little strange. Mafia trials aren’t this cloaked in shadows and seals.
The relationship between Wynn and Okada wasn’t always so contentious. In fact, it was downright cozy. Wynn once enthused that Okada was a close friend as well as a big investor in the rise of Wynn Resorts. Wynn vouched for Okada’s credibility as Okada’s financial infusion helped build the company.
Okada was bounced from the Wynn board after an investigative report conducted by former FBI Director Louis Freeh raised suspicions that the Japanese business titan had bribed gaming regulators in the Philippines with as much as $40 million to sooth approval of his $2.4 billion Okada Manila casino palace.
Wynn’s board of directors moved to compel the redemption of Okada’s large stake in the company, buying back 24.5 million shares for $1.9 billion. At the time, the shares were worth substantially more.
Among the documents I’d like to read: Those Okada & Co. provided to the “United States Government or Government Agencies.” Alas, it’s filed under seal.
As, it appears, is a document that might complicate the life of Okada’s former best friend at Wynn Resorts.
John L. Smith is a longtime Las Vegas journalist and author. Contact him at jlnevadasmith@gmail.com. On Twitter: @jlnevadasmith.
