In a significant legal development, the Supreme Court of the Philippines has lifted a 2022 court order that led to the forced takeover of the Philippines integrated resort, Okada Manila, by a group representing its ousted founder, Kazuo Okada. The recent resolution not only denied Kazuo Okada’s petition in the intra-corporate case against Okada Manila operator Tiger Resort, Leisure and Entertainment Inc (TRLEI) but also lifted the Status Quo Ante Order (SQAO), allowing TRLEI to resume control.
Background of the Ownership Dispute:
The legal battle over Okada Manila’s ownership traces back to a 2022 court order that resulted in a forced takeover by representatives of Kazuo Okada, who had been ousted for alleged acts of fraud against the company. The subsequent issuance of the SQAO allowed Okada’s representatives to control Okada Manila temporarily, creating a complex and contentious situation within the integrated resort.
Supreme Court’s Resolution:
The recent resolution from the Supreme Court, dated November 13, 2023, marked a pivotal moment in the dispute. It not only rejected Kazuo Okada’s petition but ruled that his legal action against TRLEI was time-barred, having been filed beyond the prescribed period for an election contest. More significantly, the court declared that Okada was properly removed as a shareholder, director, chairperson, and CEO of TRLEI.
Corporate Structure and Shareholding:
The Supreme Court’s ruling delved into the corporate structure, emphasizing that Kazuo Okada was a nominal shareholder in TRLEI with only one nominal share, which had been revoked by the company in 2017. The court further dismissed Okada’s claim as the controlling stockholder of the ultimate parent company, Okada Holdings Limited (OHL). Citing foreign judgments from Japanese and Hong Kong courts, the court recognized Okada’s son, Tomohiro Okada, as the majority shareholder of OHL.
Immediate Implications and Resolution:
With the Supreme Court’s resolution, the legal saga surrounding Okada Manila’s ownership has concluded. The immediate lifting of the SQAO has restored control to TRLEI, allowing the integrated resort to resume normal operations. This resolution provides clarity and paves the way for the resolution of financial and operational challenges that arose during the period of legal uncertainty.
Future Prospects and Refinancing:
The lifting of the court order enables Universal Entertainment Corp, the parent company of Okada Manila, to resume negotiations with Philippine financial institutions. The company plans to proceed with the refinancing of privately placed notes outside Japan, addressing issues such as the limitation on share buy-back. The resolution of the legal dispute is expected to boost investor confidence and contribute to the overall stability of Okada Manila’s financial structure.
The Supreme Court’s decision to lift the court order and resolve the Okada Manila ownership dispute brings closure to a complex legal chapter. The clarity provided by the ruling not only reinstates TRLEI’s control over Okada Manila but also opens the door for strategic financial moves by Universal Entertainment Corp. As the integrated resort looks toward the future, stakeholders and industry observers will closely monitor the progress and potential impacts of the refinancing efforts and operational stability.