26 Capital backer seeking to remove Jason Ader as principal following failed Okada Manila merger

A key investor in special purpose acquisition company 26 Capital Acquisition Corp is reportedly seeking to oust the SPAC’s principal Jason Ader, following its failed merger deal with the operating entities of Philippines integrated resort Okada Manila.

Bloomberg revealed this week that Zama Capital Master Fund is seeking a court order to have Ader removed as managing member of 26 Capital Holdings, which oversaw the failed deal following a high-profile dispute between the merger partners.

This follows law firm Schulte Roth & Zabel’s separate US$2 million claim against 26 Capital, filed in September, for work it did in relation to the merger deal before its collapse. Schulte Roth & Zabel was granted a temporary restraining order at the time preventing 26 Capital from dissolving until a hearing is held.

The previously planned merger between 26 Capital and the Okada Manila entities, first announced in October 2021, had been part of the latter’s efforts to secure a NASDAQ-listing.

However, after multiple delays to the merger being consummated, Ader in February filed a lawsuit against Okada Manila entities with the Delaware Court of Chancery 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.

In response, the Okada Manila entities 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 ultimately ruled in early September that there was no requirement for the merger to proceed.

Among the reasons given were 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”.

26 Capital announced its intention to liquidate on 22 September.