Judge won’t halt attempt to oust Wynn board member

By Hannah Dreier, Associated Press

Published Friday, Feb. 15, 2013 | 12:50 p.m.

Updated Friday, Feb. 15, 2013 | 3:07 p.m.

LAS VEGAS — A Japanese billionaire lost his bid Friday to halt a move by Wynn Resorts Ltd. to oust him from its board.

U.S. District Judge James Mahan ruled in a Las Vegas court that Kazuo Okada had not shown that the company purposefully misled shareholders in a statement calling a special meeting to vote on his removal.

Okada had argued that the proxy calling the Feb. 22 meeting made false statements, violating Securities and Exchange Commission rules.

Mahan said the disputed material came down to subjective disagreements, not factual errors. He suggested Okada should have filed a counter-solicitation telling his side of the story instead of seeking an injunction.

The suit is part of an ongoing battle between former friends Okada and company CEO Steve Wynn.

Okada was once the largest shareholder in Wynn Resorts, which operates luxury hotels and resorts in Las Vegas and Macau, but the company forcibly bought back his 20 percent stake in the company.

Wynn Resorts said a lengthy investigation by former FBI Director Louis Freeh uncovered evidence that Okada had acted improperly in dealings with Philippine officials.

In seeking an injunction, Okada argued that an investigation commissioned by the company could not be called independent.

Mahan dismissed this argument and said that reports must always be paid for by someone. He noted that Freeh previously investigated Penn State's Jerry Sandusky child sex abuse scandal.

Okada says Wynn is seeking to push him out so he can increase his control of the publicly-traded company.

"This is another misguided and improper effort by Mr. Wynn and his allies to silence my independent voice as a director and consolidate power and control," Okada said in a statement supporting the injunction.

The two men have traded accusations of unethical or illegal conduct during an extended legal battle that has become increasingly personal and public.

In September, Okada filed an open letter to stockholders with the SEC in which he blamed a decline in the company's stock price on what he called lost shareholder confidence in company management.

On Friday, Wynn attorneys characterized Okada, 70, as a "dissident director" who would hinder the company's expansion plans. Wynn Resorts is seeking regulatory approval to open casinos in Pennsylvania and Massachusetts.

Okada attorney Marc Sonnenfeld declined to say whether the team would appeal the decision.

"We're disappointed, and it's one skirmish in a bigger battle," he said.

Wynn attorney Robert Shapiro said the company was gratified shareholders would have the opportunity to vote on who should be a director of the corporation.

Nevada gambling officials recently ended their investigation into allegations by Okada that Wynn Resorts made an improper donation to the University of Macau, and found no evidence of wrongdoing.

Wynn Resorts said earlier this year that it is reducing the overall size of its board and increasing the percentage of independent directors as it tries to expand into new jurisdictions. The company had a 12-member board and has reduced it to nine members. If Okada is removed, that will shrink to eight.