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Universal Entertainment Seeks To Bar Redemption Of Okada's Stake In Counterclaim

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3/13/2012 8:23 AM ET

Universal Entertainment Corp. (UETMF.PK) Tuesday reported filing a counterclaim against Wynn Resorts Ltd. (WYNN: Quote) in a bid to block the redemption of the 20 percent stake in Wynn Resorts held by its subsidiary Aruze USA Inc. The move follows Wynn Resorts' announcement of February 19, 2012, which said the company had sought the resignation of director Kazuo Okada after finding him in breach of US Anti-Corruption Laws, and had also redeemed his 20 percent stake.

Okada, also Chairman of the Board at Universal Entertainment commented "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."

Besides alleging that, contrary to Wynn Resorts's statement, the stake had not been redeemed, Universal Entertainment said that such a redemption had no legal basis as the redemption provision relating to Wynn Resorts's stake was executed at a later date to Aruze USA's acquisition of the stake.

Additionally, the counterclaim argues that there was no basis for redeeming the stake at a 30 percent discount and accuses Steve Wynn and Wynn Resorts's general counsel Kim Sinatra of fraud and defamation, possibly in violation of Nevada's RICO statutes. The counterclaim seeks damages, punitive damages, treble damages and also a permanent injunction and declaratory relief.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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