A court in Delaware says 26 Capital “engaged in conduct that should not be rewarded”.
The Philippines.- A Delaware judge has ruled that Okada Manila, owned by a Universal Entertainment Corp affiliate, is not obligated to proceed with its SPAC merger arrangement with 26 Capital Acquisition Corp.
The agreement announced in October 2021 was intended to allow Universal to combine with its Philippine subsidiary Tiger Resorts Asia and list Okada on the Nasdaq. However, Universal Entertainment called off the agreement, accusing 26 Capital of disregarding SEC laws and misleading investors.
According to Reuters, vice-chancellor Travis Laster’s decision, issued on Thursday (September 7), determined that 26 Capital “engaged in conduct that should not be rewarded”. He said that while 26 Capital retains the option to seek damages, this will be addressed at a later stage.
This ruling departs from the historical precedent in Delaware, where courts have often mandated the completion of merger deals. Laster clarified that the unique circumstances surrounding this case made it impractical for the court to oversee and enforce its order, which would potentially conflict with a Philippine court order and inadvertently rewarding inappropriate behaviour.
Laster highlighted an undisclosed conflict of interest involving the casino’s deal adviser, Alex Eiseman, who also held a substantial stake in a 26 Capital affiliate. This undisclosed connection raised concerns of bias and a potential conspiracy to mislead Universal Entertainment.