HG Vora sues Penn Entertainment over board seat reduction
The complaint claims the shareholders’ interests are being violated.
Key Points
- The lawsuit also claims that Penn did not comply with federal securities laws
- It is also seeking to invalidate the Board’s reduction
Penn Entertainment is being sued by HG Vora Capital Management in the United States District Court for the Eastern District of Pennsylvania regarding the reduction of seats on the Board of Directors.
HG Vora pleads that Penn Entertainment violated the shareholders’ interests when it decided to reduce the number of seats up for election from three to two at the operator’s upcoming 2025 Annual Meeting of Shareholders.
The complaint also claims that Penn did not comply with federal securities laws by ignoring universal proxy rules and including misleading or inaccurate information in the materials filed with the SEC for the Annual Meeting.
Along with the demand, HG Vora is seeking declaratory relief and to invalidate the reduction of the Board of Directors and to allow shareholders to elect all three independent nominees it proposed: William J. Clifford, Johnny Hartnett and Carlos Ruisanchez to the Board.
This follows the discussion that happened a few weeks ago when Penn Entertainment announced two nominations for its Board of Directors, which only included Johnny Hartnett and Carlos Ruisanchez, and led to a discussion between the two companies.
HG Vora stated that the manipulation of the company’s board establishes an abuse of the shareholders’ democracy, which favors the current members of the board, particularly the Chairman and CEO.
It also declared that substantial changes are needed in order to restore accountability.
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