SPAC Merger Trial Involving Universal Ent to Begin on July 10
- The legal action stemmed from a previously announced merger deal between 26 Capital and Universal Entertainment
- The lawsuit was launched by 26 Capital Acquisition Corp in February 2023
- Universal Entertainment decided to end the merger deal but 26 Capital is pushing for its completion
The trial relating to a lawsuit against multiple subsidiaries of Japanese gaming and entertainment conglomerate Universal Entertainment Corp will begin on July 10. The legal action was initiated by 26 Capital Acquisition Corp, a special purpose acquisition company (SPAC) based in the U.S.
The lawsuit stemmed from a planned merger between the SPAC company and Tiger Resort Leisure and Entertainment Inc. (TRLEI), the promoter of the Okada Manila integrated resort in the Philippines.
Universal Entertainment Accused of Avoiding Merger Completion
In October 2021, TRLEI announced a merger agreement with 26 Capital Acquisition Corp under which Okada Manila would become a publicly traded company listed on Nasdaq. TRLEI’s parent company is Tiger Resort Asia Ltd (TRAL), a subsidiary of Universal Entertainment Corp.
As part of the agreement, Okada Manila would receive up to US$275 million in cash from 26 Capital, with Universal Entertainment owning around 88% of the merged company at closing.
It was stated in the initial announcement that the merger was to be completed in June 2022, but it was delayed multiple times after the controversial “illegal” takeover of Okada Manila by Kazuo Okada’s group. The completion date was ultimately moved to September 2023, but 26 Capital, led by institutional investor and asset manager Jason Ader, filed a lawsuit in February urging the prompt consummation of the merger.
Announcing the start of the trial, 26 Capital accused the defendants of engaging in repeated contractual breaches to prevent the closing of the merger deal.
26 Capital Keen on Closing Deal
26 Capital also expressed its commitment to completing the transaction, despite a recent decision by TRAL to terminate the agreement citing alleged material breaches of the merger agreement by 26 Capital as well as fraudulent conduct by the company.
26 Capital confirmed it received a termination notice from TRAL on June 30 but argued that it was baseless and that the allegations made by the company against the SPAC firm were meritless.
In a court filing in March, the Universal Entertainment parties denied the accusations made by 26 Capital in its February lawsuit. It was also revealed during the time that Universal Entertainment was seeking to end the SPAC deal for the U.S. listing of Okada Manila.
Apart from TRAL and TRLEI, also listed as defendants in 26 Capital’s court case were UE Resorts International, Inc. (formerly Okada Manila International, Inc.) and Project Tiger Merger Sub, Inc. Case hearings are being held at a court in Delaware.