HG Vora Capital files complaint against Penn Entertainment

HG Vora Capital Management filed a complaint in the United States District Court for the Eastern District of Pennsylvania against Penn Entertainment (PENN) and its board. The complaint alleges that Penn violated Pennsylvania’s Business Corporation Law and the board breached its fiduciary duties when it reduced the number of seats up for election from three to two at the company’s upcoming 2025 annual meeting of shareholders. The complaint further alleges that Penn violated federal securities laws by failing to abide by the universal proxy rules and making materially false and misleading statements and omissions in proxy materials filed with the SEC regarding the annual meeting. HG Vora said, “The complaint seeks declaratory and injunctive relief determining that PENN’s Board Reduction Scheme is invalid, that PENN must correct the materially false and misleading statements in its proxy materials, and that PENN must allow shareholders an opportunity to elect all three independent nominees proposed by HG Vora – William J. Clifford, Johnny Hartnett, and Carlos Ruisanchez – to the Board. PENN’s Board Reduction Scheme, implemented amidst a contested election and while facing the prospect of losing three Board seats is, in HG Vora’s view, a self-serving action with no legitimate corporate purpose. HG Vora believes the Board’s manipulation of the Company’s election rules is an affront to shareholder democracy and only benefits its incumbent directors, notably its Chairman and CEO. HG Vora believes that substantial changes are necessary to restore accountability and ensure all options are considered to maximize shareholder value. HG Vora has filed a preliminary proxy statement with the SEC in connection with the Company’s Annual Meeting. HG Vora encourages shareholders to read the full complaint and review its definitive proxy materials when they become available.”