A US court has ruled that the operating entity of Philippines integrated resort Okada Manila will not be required to complete a previously planned SPAC merger with Jason Ader’s 26 Capital Acquisition Corp.
According to a report by Reuters, the ruling, delivered early Friday morning (Asia time), found that 26 Capital “engaged in conduct that should not be rewarded” in pushing for the merger to close. A follow-up trial has also been scheduled in relation to potential damages.
Ader filed his lawsuit against Okada Manila entities – namely Tiger Resort Asia Ltd (TRAL), Tiger Resort, Leisure and Entertainment Ltd (TRLEI), UE Resorts International Inc (UERI) and Project Tiger Merger Sub Inc – with the Delaware Court of Chancery in February alleging they 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.
The Okada Manila entities, all subsidiaries of Japan’s Universal Entertainment Corp, officially terminated the merger agreement as of 30 June 2023 citing “various material breaches of the merger agreement and fraudulent conduct by 26 Capital … that were discovered in the litigation process.”
The Delaware court ruling found that ordering the merger to close might breach a controversial Philippine court order issued last year ordering the board of TRLEI be reinstated to its former composition, including the return of Universal founder Kazuo Okada as CEO. Mr Okada has since been the subject of at least two arrest warrants in the Philippine after he used that court order to seize control of Okada Manila for a period of three months in mid-2022.
The Delaware court also revealed that 26 Capital had never disclosed to TRLEI that its main advisor to the merger, Zama Capital hedge fund founder Alex Eiseman, also owned more than 60% of a 26 Capital affiliate. The judge described Eiseman’s involvement as “a conspiracy to mislead Universal”.
Neither the Okada Manila entities nor 26 Capital had issued any statement at time of publication, however Reuters reports that representatives of the Okada Manila entities are “pleased with the ruling”.
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