Wynn Resorts Settles Most Claims In Legal Fight With Former Partner

-By Carol Miller

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Las Vegas-based Wynn Resorts has agreed to pay a total of $2.4 billion to a Japanese gaming company to settle claims involving an involuntary stock redemption that resulted in a six-year-long lawsuit, Wynn Resorts announced. The March 9 settlement, between Wynn Resorts Ltd. and Tokyo-based Universal Entertainment Corp., and Universal’s subsidy, Aruze USA Inc. does not stop the planned April 2018 trial in the case. Wynn Resort, however, has agreed to pay the sum by March 31, 2018.

Wynn Resorts is still suing Kazuo Okada, a Japanese pachinko king and formerly the largest shareholder in Wynn Resorts, for allegedly breaching his fiduciary duties by engaging in corrupt business practices in his dealings with officials in the Philippines’.

Those allegations of foreign corrupt practices in the Philippines, involving Okada, were used by Wynn Resorts to oust Okada, and his related companies — Universal Entertainment Aruze USA – from Wynn Resorts. The “Okada parties,” as the three were referred to in court, had their Wynn Resorts stock forcibly redeemed in February 2012, which resulted in a loss in redemption value of the stock of nearly $2 billion. In addition, Okada’s lawyers argued that another $463.6 million had been lost due to the interest rate at the actual time of the stock redemption note.

Kazuo Okada was also voted off the Wynn board of directors in February 2012, as a result of the corruption claims against him. Okada’s lawyers have long denied any wrongdoing by their client. Universal Entertainment Corp., previously held an almost 20 percent stake in Wynn Resorts through its subsidiary Aruze USA Inc. Wynn Resorts.

Steve Wynn, the founder and then-chairman and CEO of Wynn Resorts, became the largest shareholder in the company with the 2012 ouster of his longtime business partner, Kazuo Okada. Steve Wynn resigned as chairman of Wynn Resorts on Feb. 6, 2018, after numerous sexual misconduct allegations against the mogul began surfacing a month before, in January. Most notably, the news of a $7.5 million settlement — made in 2005 to an unnamed former Wynn Resorts’ manicurist — was made public. A February 2018 Bloomberg News report revealed that the settlement involved a paternity claim against Steve Wynn in relation to the manicurist. Bloomberg’s published report said that no child was born of the alleged relationship between Steve Wynn and his employee.

A January 2018 Wall Street Journal report alleged that the same then-Wynn Resorts’ manicurist had complained to others at the company that Steve Wynn had pressured her into having sex with him. That claim was vigorously denied in a statement issued by Steve Wynn.

“The idea that I ever assaulted any woman is preposterous,” Steve Wynn said in a statement.

Steve Wynn was replaced by Matt Maddox, who has been president of Wynn Resorts since 2013. Maddox had been with the company since 2002. Steve Wynn’s ex-wife Elaine Wynn joined the lawsuit between Steve Wynn, Wynn Resorts and the Okada entities shortly after the legal battle started. Elaine Wynn originally sought to have her stockholder agreement with her ex-husband voided. The two agreed, upon divorcing, that Steve would control Elaine’s shares of Wynn’s stock to avoid a hostile takeover of Wynn Resorts. But Elaine wanted out of the agreement shortly after the Wynn Resorts’ legal fight with Okada started.

After Steve Wynn resigned in February, he offered to give Elaine control of her stock back. But Elaine opted to continue the legal fight on that, and other claims, involving Steve Wynn and Wynn Resorts. The case is being heard by Judge Elizabeth Gonzalez in Clark County District Court in Las Vegas.

Wynn Resort, however, has agreed to pay the sum by March 31, 2018.