Toji Takeuchi

The operating entities of Philippines integrated resort Okada Manila have filed a series of counterclaims against US-based SPAC firm 26 Capital Acquisition Corp, seeking to terminate a previously planned merger agreement that would have seen the company listed on the NASDAQ. The counterclaims, lodged with the Delaware Court of Chancery, are in response to a lawsuit filed by 26 Capital and its founder, Jason Ader, in early February which alleged the Okada Manila entities had breached their obligations under the merger agreement to consummate the merger promptly. The lawsuit also called on the court to order the consummation to take place. However, in a lengthy 103-page response, the so-called UEC Parties – comprising Tiger Resort Asia Ltd (TRA), Tiger Resort, Leisure and Entertainment, Inc (TRLEI), UE Resorts International Inc and Project Tiger Merger Sub Inc – call for the agreement to be terminated, accusing Ader of fraud, of breaching US securities laws and of breaching the terms of the merger agreement. “The UEC Parties accordingly seek to remedy these breaches through declaratory relief that will permit the UEC Parties to part ways with this fundamentally untrustworthy and dishonest SPAC promoter,” the response states. Among the UEC Parties’ multiple counterclaims is an allegation that Capital 26 and Ader have embarked on a “concerted and increasingly erratic campaign … to pursue closing at all costs in pursuit of a windfall.” Describing the planned merger as a “complicated deal” from the outset given the challenges of listing a Philippines casino in the United States, the UEC Parties allege that Ader made misleading public statements aimed at easing investor concerns and without receiving permission from the UEC Parties to do so. In-particular, they allege that Ader failed to disclose to his investors of “material developments in the Philippines” after the former chairman of UEC, Kazuo Okada, forcibly took control of Okada Manila for a three-month period in mid-2022.