Penn Justified in Reducing Board Size, Says Legal Committee; Vora Wanted to Sell Company
Posted on: December 3, 2025, 10:57h.
Last updated on: December 3, 2025, 11:11h.
- Legal committee says casino operator made “informed” decision to reduce board size
- That move resulted in a lawsuit by hedge fund HG Vora
- The special litigation committee is independent
A special litigation committee formed by Penn Entertainment’s (NASDAQ: PENN) board of directors found the regional casino operator was justified in its move to reduce the size of the board last year — a move that invited a legal challenge from investor HG Vora.
In December 2023, Vora revealed what was at the time an 18.5% stake in the gaming company, chastising the company for poor share price performance while demanding seats on the board. Soon thereafter, Penn cut the number of director spots to eight from nine. The special litigation committee, comprised of two independent individuals who aren’t board members, said Penn was justified in that move.
The Special Litigation Committee Report states, among other things, that the special litigation committee determined that the Board acted on an informed basis, in good faith and for the best interests of PENN in the exercise of its business judgment in its decision to reduce the overall size of the Board from nine to eight and that the special litigation committee has concluded, based upon its review of the shareholder claims, allegations, factual materials and legal authority, that it would not be in the best interests of PENN to pursue the HG Vora derivative claims or take other action,” said the gaming company in a recent Form 8-K filing with the Securities and Exchange Commission (SEC).
The committee’s report was published in response to ongoing litigation brought by HG Vora in which the hedge fund claims Penn’s decision to reduce the number of directors up for election earlier this year to two from three stifles shareholder democracy and runs afoul of Pennsylvania corporate law.
Vora Wanted to Sell Penn Off in Pieces
The committee’s report also contains details regarding a purported conversation between HG Vora founder Parag Vora and Penn Chairman Peter Carlino in which the hedge fund boss said he wanted to sell the casino operator in piecemeal fashion.
Vora, which has been a vocal critic of Penn CEO Jay Snowden, the board, and the company’s online sports betting missteps, previously didn’t openly discuss the possibility of selling the company, but that move would likely have the support of some investors.
As for liquidating Penn assets piece-by-piece, it would be a cumbersome process because the company runs 43 casinos across 20 states and owns basically none of the real estate on which those venues reside. In essence, if the operator sells any of its venues, it would be selling operating rights, not property.
Speaking of real estate, Penn Chairman Carlino is also the chairman and chief executive officer of Gaming and Leisure Properties (NASDAQ: GLPI), Penn’s primary landlord. Penn being for sale is a speculative exercise because Wall Street widely views the Ameristar as an unwilling seller and one that doesn’t need to pursue that route if it can refocus the narrative on its iGaming and land-based casino operations.
Vora Landed Two Penn Board Seats
Litigation between Penn and Vora is pending, but the hedge fund was successful in placing Johnny Hartnett and Carlos Ruisanchez on the board — a move the casino giant agreed to.
In June, Vora noted the candidacy of William Clifford — the third dissident candidate — “was supported by dozens of institutional investors and actively managed funds and received a majority of votes cast in the election.” It could be up to a court to decide if Clifford’s candidacy and the vote are valid.
Citing his “antiquated views,” Penn fought the nomination of Clifford, marking the second unsuccessful attempt since 2020 to place him on the board of the gaming company with which he has a long history. He spent more than a decade at Penn and predecessor companies, but current leadership believes he doesn’t have the open mind needed to usher in a new era of value creation for investors.
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