The merger of Okada Manila SPAC is not required, according to a US judge.

The operating company of the integrated resort Okada Manila in the Philippines has been told by a US court that it is not required to carry out a previously planned SPAC merger with Jason Ader’s 26 Capital Acquisition Corp.

The court found that 26 Capital had “engaged in actions that should not be rewarded” when promoting the termination of the merger, according to a Reuters story released early on Friday morning (Asian time). A further trial has also been planned to cover potential compensation.

In February, Ader filed a lawsuit in the Delaware Court of Chancery against the Okada Manila businesses Tiger Resort Asia Ltd (TRAL), Tiger Resort, Leisure and Entertainment Ltd (TRLEI), UE Resorts International Inc (UERI), and Project Tiger Merger Sub Inc. The claim in the complaint was that by delaying the merger’s completion, these parties had broken their merger agreement responsibilities. A court order to force the merger’s completion was also sought in the complaint.

Officially ending the merger agreement as of June 30, 2023, the Okada Manila entities—all divisions of Japan’s Universal Entertainment Corp.—cited “numerous substantial breaches of the merger agreement and fraudulent actions by 26 Capital… that were uncovered during the legal proceedings.”

The Delaware court’s decision observed that forcing the merger through might be in violation of a contentious Philippine court order made the year before, which demanded that TRLEI’s board be restored to its original makeup, including the appointment of Universal founder Kazuo Okada as CEO once more. In the middle of 2022, Kazuo Okada used that court order to seize control of Okada Manila for three months. Since then, he has been the subject of at least two Philippine arrest warrants.

The Delaware court also ruled that 26 Capital never informed TRLEI that its main merger advisor, Alex Eiseman, the creator of the hedge fund Zama Capital, also owned more than 60% of one of 26 Capital’s affiliates. Eiseman’s role was described by the judge as “a scheme to mislead Universal.”

The Okada Manila entities and 26 Capital had not yet released any statements as of the time of publishing, although according to Reuters, representatives of the Okada Manila entities are “satisfied with the verdict.”

Original Story by: IAG