Chippy Start to 26 Capital, Okada Manila Trial

Chippy begins trial against Manila Okada 26 Capital

The lawsuit against 26 Capital Acquisition Corp. began Monday. (NASDAQ: ADER ), Okada Manila finally goes public, and things are getting risky.

Special purpose acquisition company (SPAC) CEO Jason Ader told Delaware Chancery Court that Universal Entertainment Corp. Okada Manila's Japanese parent and its subsidiaries tried to derail the merger .

We didn't get any cooperation," Ade said at the trial.

In October 2021, Universal Entertainment and Ade's blank check company announced plans to merge, which will pave the way for Okada Manila to be listed on Nasdaq. Under the terms of the agreement, Okada Manila will transfer its entire stake in the casino operator and 26 Capital will provide the company with up to $275 million in cash. The casino resort is valued at $2.6 billion.

Increasing dispute between Okada Manila and 26 Capital

Throughout 2022 and into this year, tensions have grown between Universal Entertainment and the Aders SPAC.

Earlier this year, the Japanese company filed a lawsuit to stop the merger, a move 26 Capital called "desperate." Okada Manila’s parent company claimed that Ader hoped to complete the deal and earn profits for himself and SPAC investors.

The Japanese company also claimed that 26 Capital may have violated U.S. securities laws and painted an overly enthusiastic picture of Okada Manila's business prospects in an effort to keep SPAC shareholders committed to the merger. They must vote for the deal to ultimately pass.

The hostilities came to a head on June 30 when Universal and its subsidiaries said they would terminate the merger agreement. In the process, Universal highlighted a rift between 26 Capital and a jilted shareholder, alleging that Ader publicly made misleading statements about Okada Manila's business prospects.

Ade remains optimistic

On Monday, Ader told the court that Universal executives were slow to complete the merger, raising concerns that they were not using their "reasonable best efforts" to complete the deal. Still, the SPAC boss remains optimistic and is calling on the courts to force Universal to stop honoring the agreement.

"It still seems to me to be a good offer," Ader told the court.

While Okada Manila is only an integrated resort and will be the smallest publicly traded gaming company in terms of number of properties, Ade has previously discussed expansion plans, including the possibility of the company applying for casino licenses in Japan and New York in the future.