Penn Entertainment is facing legal pressure from one of its major shareholders, HG Vora Capital Management, over a decision to shrink the number of board seats up for election at the company’s 2025 Annual Meeting. The lawsuit has been filed in the United States District Court for the Eastern District of Pennsylvania.
Good to know
- HG Vora is pushing for the election of three independent board nominees.
- The fund alleges Penn violated shareholder rights by limiting board elections.
- The lawsuit challenges Penn’s compliance with SEC rules on proxy materials.
HG Vora argues that Penn Entertainment unfairly reduced the number of board seats available at the upcoming shareholder meeting from three to two. This decision, according to HG Vora, directly undermines shareholders’ ability to bring in new independent voices.
The complaint does more than just question the board seat count. It also accuses Penn of breaching federal securities laws by filing misleading materials with the Securities and Exchange Commission. Specifically, HG Vora says the company did not follow the universal proxy rules that require equal treatment of board nominees.
HG Vora is now asking the court to stop Penn from limiting the election and to allow all three of its proposed nominees—William J. Clifford, Johnny Hartnett, and Carlos Ruisanchez—to be included in the vote.
This legal move follows a recent development where Penn confirmed only two board nominations, both of whom—Hartnett and Ruisanchez—had ties to HG Vora. That decision led to a standoff between the shareholder group and the company.
In its filing, HG Vora claimed that Penn’s board is acting to protect its own leadership, especially the current Chairman and CEO. The investment firm said this kind of maneuver limits shareholders’ influence and weakens corporate accountability.
HG Vora insists that opening the board to more independent oversight would benefit shareholders and restore stronger governance practices at the company.
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