Wynn board member Okada mostly fails in initial document bid

Wynn Resorts Ltd. board member Kazuo Okada will have to try harder to gain detailed financial information from the casino-resort giant after a court ruling Thursday.

Okada and Wynn Resorts are battling in two lawsuits over charges Okada improperly provided gifts and cash to Filipino gaming regulators and counter suggestions by Okada that Wynn Resorts improperly used a $135 million donation pledge to the University of Macau to advance its casino interests in Macau.

After the dispute became public with a Jan. 11 Okada lawsuit in Las Vegas demanding to see confidential Wynn records, Wynn removed Okada as a shareholder and as a board member of Chinese subsidiary Wynn Macau Ltd. and sued him in Las Vegas on Feb. 19.

Wynn is now making preparations for a shareholder vote to remove Okada from the Wynn Resorts board.

Last month, Clark County District Judge Elizabeth Gonzalez in Las Vegas ruled Okada as a director had a right to make reasonable requests for confidential information — the key word being reasonable.

Since then, Wynn Resorts says it has provided Okada 898 pages of information that is either public information or information he should already have.

Examples include minutes of Wynn board meetings, employment agreements and agreements with banks.

Other than that, the Wynn Resorts board felt providing insider information to Okada wouldn’t be appropriate since Okada is now at odds with the board and the company, said Kirk Lenhard, a Las Vegas attorney representing Wynn Resorts.

On top of that, Lenhard said, the parties will have plenty of opportunities to fight over production of the same documents in the suit Wynn filed against Okada on Feb. 19 alleging breaches of his fiduciary duties as a director.

''Any additional (document) production would be inappropriate,'' Lenhard said, noting that besides the lawsuits the Okada-Wynn feud is being examined by gaming regulators in Nevada and Macau as well as the Securities and Exchange Commission.

Those investigations will lead to even more requests for documents, he said.

Lenhard said the January lawsuit filed by Okada demanding to see the books and records was really just a tool aimed at gaining information to help Okada defend himself against the lawsuit he knew would be filed against him and that was filed on Feb. 19.

But Menlo Park, Calif., attorney Gidon Caine said many of the documents sought by Okada predate the dispute that erupted last year between Okada and the Wynn board.

Caine said Wynn was being too stingy with the production of documents.

Documents missing, he complained, included records on Wynn Resorts entertaining Macau government officials from 2000 to 2002 while the company was seeking a gaming license in the Chinese gambling district; documents on Wynn Resorts’ discussions with Macau officials on the license and documents on meals, entertainment, lodging and gifts provided to directors, agents or employees of the University of Macau.

But Gonzalez found the requests ''are overbroad'' as presented and for that reason she would not require Wynn to comply with those requests ''as they are currently framed.''

Gonzalez did review certain information that was disputed and has not been made public. She ordered just two pages of it produced to Okada. She didn’t disclose what that information was.

In another setback for Okada, Gonzalez ruled Wynn Resorts doesn’t have to turn over information about Jan. 6, 2010, amendments to a stockholders agreement between Steve and Elaine Wynn and Okada’s company Aruze USA related to the Wynns’ divorce and how their shares were divided in the divorce.

Steve Wynn, chairman and CEO of Wynn Resorts, now holds a 10 percent stake in the company with his approximately 10 million shares and Elaine Wynn has a 9.7 percent interest.

After Wynn Resorts forcibly redeemed Okada’s $2.7 billion stake in the company at a discount for a $1.9 billion, 10-year note, financial company Waddell & Reed became its largest shareholder with an 18 percent stake.

Gonzalez on Thursday suggested to Okada’s attorneys that if they want information on this stockholder agreement, they should seek it from the other parties to the agreement (the Wynns individually, not the company).

''You can make a request from other individuals as opposed to the corporation,'' she told Okada’s attorneys.

Being among the largest shareholders in the company, the Wynns and formerly Aruze agreed in the stockholders agreement to restrictions on the transfer of shares and to always vote for board directors endorsed by Wynn and approved by Aruze.

Okada’s legal team didn’t comment after Thursday’s hearing on whether they’ll continue to try to gain the disputed documents through Okada’s January lawsuit, or through the suit Wynn filed against Okada in February that Gonzalez is also presiding over.