Rather than send the case between Wynn Resorts and former vice chairman Kazuo Okada to a federal court, US District Judge Larry Hicks has said that the court case will be heard in a state court in Nevada.
Wynn is trying to remove Mr. Okada from its board of directors, having already forced his 20 per cent stake in the company back on him at a discounted value.
The case was filed in Nevada state court in February although by March, Mr Okada had upped the case to federal court, arguing that Wynn had violated the US Foreign Corrupt Practices Act because part of the fallout was based on allegations that Wynn had infringed US law by allegedly making improper payments to foreign officials.
Steve Getzug, a spokesman for Okada’s holding company Aruze USA, said: “The judge’s ruling addresses only the question of where the case should be heard, not the merits of the case. While we respectfully disagree with the court’s decision, we’re quite confident that a jury, no matter where it is seated, will agree that Wynn Resorts CEO Steve Wynn and his dutiful Board of Directors unlawfully stripped Aruze USA of its leadership stake in the company without any legitimate justification and to silence a vocal critic.”
Wynn claims Mr Okada made improper payments to gaming officials in the Philippines, where the Japanese billionaire is looking to develop two casinos which will be in direct competition with Wynn’s properties in Macau for Chinese players. Mr Okada denied the allegations but countersued claiming that Mr Wynn made a HK$1bn (US$129m) donation in July 2011 to the University of Macau Development Foundation, which he had objected to. Mr. Okada is petitioning a Nevada state court judge to gain access to Wynn Resorts’ books and records, a move which Mr Wynn has so far refused. The ruling sends the case back to the same court that rejected Mr Okada’s attempts to access Wynn’s financial records.
Mike Weaver, a spokesman for Wynn Resorts, added: “The mere presence of a federal question does not require federal jurisdiction.”