Bloomberg LOS ANGELES (Bloomberg) — Wynn Resorts Ltd. agreed to pay a total of $2.4 billion to settle a lawsuit with Universal Entertainment Corp. over the forced redemption of the Japanese pachinko-machine maker’s 20 percent stake in the casino operator six years ago.
The settlement announced Thursday is the latest dramatic turn since Steve Wynn resigned last month from the casino empire he founded amid a sexual harassment scandal.
It adds $464 million to a $1.94 billion 10-year promissory note Wynn gave Universal in 2012 for the shares, and it puts an end to the biggest chunk of the court fight that started with the acrimonious falling out between Steve and his former business partner, Kazuo Okada.
Wynn Resorts has come under scrutiny from gaming regulators in Macau, Nevada and Massachusetts, where it is building a $2.4 billion casino resort, in the wake of reports the founder and now former chairman pressured employees into having sex with him.
The settlement with Universal Entertainment may help clear a path for Steve Wynn, the company’s biggest shareholder, to sell part of his stake should that be necessary.
Okada, ousted from his Tokyo-based company last year, isn’t a party to the settlement and Wynn Resorts’ claims against him for breach of fiduciary duty remain pending. A trial on those allegations is scheduled for next month in Las Vegas and a lawyer for Okada, J. Stephen Peek, said his understanding is that the claims against his client will move forward.
In February 2012, Wynn Resorts took the Japanese billionaire’s shares, which then had a market value of about $2.7 billion, and gave him the promissory note in exchange.
The company claimed Okada had put the company’s gaming licenses at risk by making illicit payments to Philippine regulators. Okada countered that he was forced out of the company because Steve Wynn perceived him as a threat to his control.
Wynn Resorts will make the $2.4 billion payment to Universal by March 31, the company said in a statement.
“Today’s outcome is tremendous for our client,” David Krakoff, a lawyer for Universal Entertainment, said in a separate statement. “It resolves long-running litigation on very favorable terms, and provides substantial resources for Universal to continue its international growth.”
The settlement doesn’t cover claims by Steve Wynn’s ex-wife, Elaine Wynn, who has been trying to get out from under a 2010 stockholder agreement that ties up her 10 percent stake in the company.