A blank-check company that tried to buy Manila’s largest luxury casino is now facing litigation brought by its former attorneys, who say they’re seeking to block it from liquidating until it pays its legal fees, Bloomberg reports.
The lawsuit in Delaware’s Chancery Court targets 26 Capital Acquisition, which was formed by former gaming industry analyst Jason Ader. The suit was filed Tuesday by Schulte Roth & Zabel, which says it’s owed $1.9 million for mergers and acquisitions work tied to the $2.6 billion busted deal aimed at purchasing the Okada Manila resort.
26 Capital announced its liquidation last week, after a Delaware court ruled against the SPAC’s petition to compel the casino owners to follow through with the deal.
Japanese conglomerate Universal Entertainment, which controls the casino, predicted earlier this month that there would “likely be an appeal” by 26 Capital Acquisition regarding the court ruling on the merger between 26 Capital and the entity overseeing the Okada Manila casino resort in the Philippines.
Okada Manila is the only Japanese owned and operated casino in the world.
In a ruling against 26 Capital, a court in Delaware said the Japanese group would not need to go ahead with a merger agreement with the deal.
The decision not to order the merger completion was in part because 26 Capital “engaged in conduct that should not be rewarded,” said the judge.
“We are disappointed by the Court’s ruling as the proposed merger benefits all parties, but we remain committed to enhancing shareholder value and will continue to explore all available strategic options,” said Jason Ader, chairman and CEO of 26 Capital, after the judge’s ruling.
The judge stated that 26 Capital – a Nasdaq-listed SPAC – was still entitled to seek damages. He added he would address that matter at a later date, according to the document.
In announcing liquidation, 26 Capital said it would “vigorously” pursue all available remedies, including damages, and it will issue further releases with updates on such remedies and any such recovery as needed. Read more.
