A blank-check company (or, in other words, a company that is already publicly traded but still has no operations or an established business plan) that made an attempt to take over the largest luxury casino in Manila is currently facing legal action brought by its former legal representatives. As reported by Bloomberg, the ex-attorneys of the firm have revealed that they are seeking to have its liquidation blocked from the court until it pays the legal fees it owes to them.
The legal action was filed in Delaware’s Chancery Court earlier this week by Schulte Roth and Zabel against 26 Capital Acquisition – a special-purpose acquisition company (also known as SPAC) found by Jason Ader, a former gambling industry analyst. In its lawsuit, the multidisciplinary law firm alleges that 26 Capital Acquisition owes it a total of $1.9 million for mergers and acquisitions work associated with the SPAC’s unsuccessful $2.6-billion acquisition of the Okada Manila resort.
Last week, 26 Capital Acquisition officially unveiled its liquidation following a Delaware court’s ruling against the special-purpose acquisition company’s request to force the casino resort’s owners to complete the planned deal.
For the time being, Okada Manila is the only Japanese-owned and operated casino venue on a global scale.
Earlier in September, Universal Entertainment – the Japanese conglomerate that currently controls the casino – predicted that the SPAC is likely to appeal the court’s ruling on the planned merger between 26 Capital Acquisition and the entity that controls the Philippine-based Okada Manila casino resort.
SPAC Announces Liquidation after Delaware Court Sides with Okada Manila Casino Owners
As CasinoGamesPro reported earlier in September, a Delaware court sided with the Japanese group operating the Okada Manila casino, saying that the company would not be obliged to proceed with its merger agreement and complete the deal with 26 Capital Acquisition.
The court issued the decision not to order the completion of the merger partly because the special-purpose acquisition company engaged in conduct that should not be rewarded. After the judge’s ruling, the CEO and chairman of the SPAC, Jason Ader, shared that 26 Capital Acquisition was quite disappointed by the decision, especially considering the fact that the proposed merger would have benefitted all parties. Mr. Ader also noted that his company would continue to explore various strategic options as it would remain committed to enhancing shareholder value.
According to the judge’s statement, the Nasdaq-listed 26 Capital Acquisition still had the right to seek damages from the Japanese conglomerate over the busted merger. At the time he issued his ruling, he said he would address that matter at a later date.
A couple of weeks after the judge’s decision, the SPAC announced liquidation, adding that it would pursue all available remedies against the UEC Parties, including damages. It noted that further releases with updates on the remedies in question are set to follow. The company also revealed that 26 Capital Acquisition will redeem all of the outstanding shares of common stock as a result of the Trust Account liquidation.