Japan’s Universal Entertainment Corp announced Friday that a group of subsidiaries associated with its Philippines integrated resort Okada Manila have officially terminated a previously planned merger agreement with US-based SPAC firm 26 Capital Acquisition Corp that would have seen the joint venture company listed on the NASDAQ.
They also confirmed plans to pursue previously lodged counterclaims against 26 Capital and its founder, Jason Ader.
In a filing, Universal listed the date of termination of the merger agreement as Friday 30 June 2023, citing “various material breaches of the merger agreement and fraudulent conduct by 26 Capital … that were discovered in the litigation process.”
Universal first filed counterclaims in March in response to a lawsuit by 26 Capital and Ader in early February alleging the Okada Manila entities had breached their obligations under the merger agreement to consummate the merger promptly. The lawsuit also called on the court to order the consummation to take place.
In Friday’s termination notice, Universal said it has since learned of an unrelated lawsuit filed against Ader and others in a US court by investment firm Rimu Capital Ltd “for the cancellation of US$25 million worth of 26 Capital stock transactions by Rimu Capital, fraud and violations of the Investment Advisors Act, etc.”
As a result, the Okada Manila entities “resolved to call off the listing … on the NASDAQ market in the US with 26 Capital as a partner … and to issue a notice of termination of the merger agreement.”
In their original counterclaims filed in March, the Okada Manila entities – comprising Tiger Resort Asia Ltd (TRA), Tiger Resort, Leisure and Entertainment, Inc (TRLEI), UE Resorts International Inc and Project Tiger Merger Sub Inc – allege that 26 Capital and Ader have embarked on a “concerted and increasingly erratic campaign … to pursue closing at all costs in pursuit of a windfall.”
They also allege that Ader made misleading public statements aimed at easing investor concerns and without receiving permission from the Universal and the Okada entities to do so. Ader, the entities add, failed to disclose to his investors of “material developments in the Philippines” after the former chairman of UEC, Kazuo Okada, forcibly took control of Okada Manila for a three-month period in mid-2022.
Universal and its subsidiaries are seeking damages for all costs, expenses, fees and any other losses emanating from the merger agreement.
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