By Ben Blaschke
Wynn Resorts announced early this morning that it has reached a settlement agreement with Universal Entertainment Corporation and Aruze USA, Inc which will see Wynn pay a settlement of almost US$2 billion and all ongoing litigation between the parties dismissed.
The settlement is related to the forced redemption by Wynn in 2012 of shares owned by former board member Kazuo Okada and Aruze USA worth almost US$2.8 billion. Wynn claimed at the time that Okada had put Wynn’s gaming license in jeopardy amid allegations he provided improper hospitality at Wynn properties to Philippine gaming officials to the tune of US$110,000.
Aruze and parent company Universal Entertainment Corp subsequently began litigation to reclaim the shares, stating that the forced redemption was invalid and improper.
In a filing to the US Securities and Exchange Commission, Wynn Resorts said, “The settlement provides for the parties to the agreement to dismiss all litigation between Universal Entertainment and Aruze USA, and Wynn Resorts, its then-directors and executives with respect to the redemption. The settlement agreement also puts an end to claims brought by Universal Entertainment and Aruze USA against Wynn Macau in Macau.”
The settlement amount is US$1,936,442,631.36, the principal amount of the redemption note that the company previously issued to Aruze. Wynn has also agreed to pay an additional amount of US$463,557,368.64 on 31 March 31 2018 to settle allegations surrounding the interest rate on the redemption note.
Wynn added that, “Among other items, the settlement agreement provides that Aruze USA will not consider itself a party to the Amended and Restated Stockholders Agreement among Universal Entertainment’s subsidiary Aruze USA, Steve Wynn and Elaine P Wynn, nor will it assert any claims or rights under the Stockholders Agreement.
“The settlement agreement also provides for the parties to release one another from all claims related to the redemption and to cooperate with each other in any litigation that may arise from the settlement agreement or previous litigation.”