3-8-18 8:02 PM EST | Email Article

By Kate O'Keeffe

Deal ends litigation over 2012 ouster

Wynn Resorts Ltd. will pay $2.6 billion to settle litigation with a company that at one time held a 20% stake in the casino giant, but was forced by Wynn in 2012 to give up its shares, according to people familiar with the settlement.

Wynn (WYNN) forcibly redeemed shares owned by Universal Entertainment (6425.TO) , then valued at $2.77 billion, at a 30% discount, and the board voted to remove Universal's founder and former chairman, Kazuo Okada, as a nonexecutive director. Wynn said an internal investigation conducted by a former Federal Bureau of Investigation director had found Okada to be "unsuitable," based on the company's own regulations. Wynn then filed suit in Nevada court against Universal and Okada, claiming breach of fiduciary duties and other offenses. Universal and Okada filed their own claims against Wynn, disputing the validity of the share redemption.

Okada isn't a party to Thursday's settlement, according to people with knowledge of the matter. Last year, Universal ousted Okada from his own company after accusing him of fraud. Okada has denied allegations of wrongdoing.

Wynn Resorts has been under pressure to resolve the shareholder dispute in the wake of recent allegations that former Wynn Chairman and Chief Executive Steve Wynn sexually harassed and assaulted employees. As long as the litigation continued, Wynn could have had difficulty disentangling himself from the company as its largest shareholder.

An expanded version of this report appears on WSJ.com (https://www.wsj.com/articles/wynn-resorts-to-pay-universal-entertainment-to-settle-litigation-1520551385?mod=mktw).

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-Kate O'Keeffe ; 415-439-6400; AskNewswires@dowjones.com


(END) Dow Jones Newswires

03-08-18 2002ET

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