Wynn Resorts to pay $2.6bn to settle lawsuit with Japan's Universal
Wynn Resorts Ltd has agreed to pay $2.6-billion to settle a lawsuit brought by Japan's Universal Entertainment Corp and its U.S. unit, ending a six-year old dispute that pitted casino mogul Steve Wynn against his former associate Kazuo Okada.
The size of the compensation was lower than market expectations and sent shares in Universal, a maker of Japanese-style slot machines and the operator of a casino in the Philippines, plunging 16 percent in Thursday trade in Tokyo.
The lawsuit relates to Wynn Resorts' 2012 forced redemption of a stake held by Universal's unit Aruze USA at a 30 percent discount after an internal investigation by former FBI director Louis Freeh alleged Okada had violated U.S. anti-corruption laws.
Universal accused Wynn Resorts' board of breaching its fiduciary duties and violating racketeering laws by voting to redeem the shares.
Under the settlement, Wynn Resorts will pay a total $2.6 billion including the principal amount of the redemption note and interest owed by March 31, Universal Entertainment's law firm, Buckley Sandler LLP, said in a statement.
The 24.5 million shares, equivalent to around 20 percent of Wynn Resorts at the time of the lawsuit, are now worth around $4.4 billion.
Shares in the Japanese firm tumbled by their daily trading limit of 1,000 yen, shrinking its market value to around $4 billion.
The settlement resolves all claims between Wynn Resorts, Universal and Aruze, its then directors and executives with respect to the redemption, Wynn Resorts said in a separate statement.
Wynn quit as CEO of Wynn Resorts last month, following claims he subjected women who worked for him to unwanted advances. Wynn has previously denied the accusations.
Okada last year lost his board position at Universal with the board accusing him of misappropriating $20 million in funds. Okada has previously denied this.
Okada was also ousted as director of a Hong Kong investment company that controls Universal Entertainment amid a rift with family members over money and control.