So, I'm sure you're all aware that on Sunday morning, the Wynn vs. Okada fight went from a couple of dudes duking it out in the quad to a full-on thermonuclear war.
Lots to talk about here. We're doing a special Vegas Gang show this week to discuss.
Categories: Wynn Resorts
"We also have a Code of Conduct, which outlines the requirements of being a member of the board and what is suitable and responsible activities on board members. All members of the board, except Mr. Okada, have signed that."
Why? And why would you want to admit you put someone on the board who hadn't? This is the kind of thing where Sheldon has to be laughing.
There aren't any real good or bad guys in this, IMO. Both guys have a lot of dirt to dig up, Wynn is spending a lot more money on attorneys because they're fighting to preserve their reputation in the US while Okada's position at Universal so far isn't in jeopardy, but both are going to slime each other as hard as possible to take each other down. And all the while Wynn Resorts has this SEC investigation over the university gift hanging over their head, and the more of a public pissing contest they make of this the more of a pressing issue that investigation will be.
Wynn probably has a good chance of coming out financially ahead of this thing if they can succeed in their plan to use the fact that Universal still has an Aruze USA office in Nevada to try and keep all court procedures local, but if this breaks out of the Regional Justice Center and and over to the District Court building a couple blocks away, all bets are off. And that's where anything regarding bribing foreign governments ultimately belongs.
All I know is we're probably to learn everything there is to know about Steve Wynn that nobody could say because of the consequences. The brand of stuff that he walks out of interviews and sues people over. Between the transitional period of the 70s and the opaque politics of Macau, there's a lot of potential tar there.
Best case, Steve mostly dodged potholes and kept his nose clean outside of the small stuff we've long known like the Milken financing. Worst case, Steve makes the industry look bad and guys like Gary Loveman have to go on a public charm campaign as guys who come from a business background instead of a casino background.
Okada, eh, obviously his future is more outside the scope of what we care about. He'll either lose money on the stock or lose money in legal bills, but the only question is whether he'll hang on in the eyes of regulators to show up in town somewhere else.
Even if he wins, Okada won't be able to stay a part of Wynn. He will have to divest, its just a matter of what price he gets.
Steve is in an even more precarious position. If he has lied about the any of the allegations, he stands to lose his company. A telling sign will be whether a court blocks the forced sale of Okada's shares. That would indicate to me the judge smells BS. For example, the code of conduct could have been signed by the directors as recently as last week. Also, 3 dozen incidents amounting to $110K might not be more than a couple trips to Japan or Macau on corporate jets and some dinners. Although these could be FCPA violations, they are certainly not significant monetary bribes (such as a $135M donation).
Also, interesting that this has been going on behind the scenes for at least a year (as indicated by the lengthy investigation). Wynn certainly got some powerhouse names for the investigation, so he must have known this was serious from the beginning (or did he just bring them in recently?)
If you look at the call from yesterday, Wynn's chief counsel is saying that the shares are already cancelled - it's done and cannot be undone. I don't know if that's really true but she seemed to believe that a judge couldn't issue an injunction even if he/she wanted to.
I don't see why stock can't be reissued or some other corrective action be taken if the judge so orders. I wonder if she can freeze all stock sales and transfers until this is sorted out?
Yesterday was a bit of a dog and pony show. They reiterated their allegations at length, but the report they produced still isn't available to anyone. Steve hyped up Bob Miller as the most experienced Nevada attorney of all time, but he's still another guy on the board who thought the UofM donation was a good idea, so I'm not sure what that's worth. It's not entirely "done" because they have not yet paid anything, just wrote a promise to eventually do so in the next decade.
I think the shares will probably sit in the hands of the transfer agent for months to come, which isn't bad for your regular Brian Fey type since the lowered supply boosts the remainders. They got an evaluator to tell them that the shareholder agreement is worth a 30% discount, but I've expected since this started that Okada will at least make an attempt to get a state judge to tear it up.
What I thought was interesting in that call was that Miller went to pop the pin on the UofM palm-greasing, that Okada wasn't against the idea entirely but simply wanted to spend half as much.
The Freeh report is on the WSJ site... It's pretty boring though, nothing of interest.
Oh my gato! I just don't know why I seem to believe that FBI man, Mr. Freeh's report although my heart really bleed for President Aquino. I can imagine how embarrassed he is over this thing. And I don't understand why Philippine Congress is banning Mr. Wynn and not Okada who gave the bribe. Can we not at least wait first for the final result of the war of the billionaires before we take sides. How are we to know who is telling the truth if we do not first hear out the evidences to the bribery allegation?
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