Vora Claps Back at Penn Committee, Says it ‘Lacked Rational Basis’
Posted on: December 4, 2025, 04:51h.
Last updated on: December 4, 2025, 04:51h.
- Hedge fund takes issue with findings of Penn special legal committee
- That committee found Penn’s move to reduce board size didn’t violate any rules
- Vora say it wasn’t consulted when committee was created
HG Vora, the hedge fund with a long-running legal rift against Penn Entertainment (NASDAQ: PENN), said the findings of special legal committee (SLC) hired by the casino operator’s board are biased and contain factual errors.
The two-person SLC found that Penn’s 2024 decision to cut the size of its board to eight from nine directors, resulting in two instead of three directors standing for election this year was justified. Vora subsequently sued the regional casino on the grounds that decision violated Pennsylvania corporate law and shareholder rights.
The SLC’s investigation was biased, misconstrued the appropriate legal framework for assessing the Board’s decision, provided no factual support for the central premise underlying the SLC’s conclusion, and contained erroneous factual assertions,” according to a Vora filing in the US District Court for the Eastern District of Pennsylvania.
The hedge fund, which attempted to place three directors on Penn’s board, adds the committee didn’t perform a “reasonable investigation and lacked a rational basis for its decision to recommend against pursuing Plaintiffs’ breach of fiduciary duty claim.”
Vora Says Penn Kept Clifford off Board at All Costs
Following a proxy battle, Vora was successful in getting Johnny Hartnett and Carlos Ruisanchez on Penn’s board, but it also wanted William Clifford to join them. Following the gaming company’s annual meeting in June, the invest said Clifford’s candidacy “was supported by dozens of institutional investors and actively managed funds and received a majority of votes cast in the election.”
However, there wasn’t a board seat for him to occupy because Penn reduced the number of spots open for election this year to two from three. The Ameristar operator hasn’t said that Vora’s push for Clifford to join the board was behind that decision, but the gaming company has been overt in its desire to prevent Clifford from becoming a director, citing his his “antiquated views,” among other reasons.
A recent regulatory filing claims the SLC was independent, but counsel for Vora contest that point, noting the committee had a client — the Penn board.
“The SLC and its counsel then transparently set out to serve their client, the Board, to accomplish its goals of keeping William Clifford out of office at any cost, notwithstanding the clear expression of PENN’s shareholders that they want him to serve as a PENN director,” according to a letter drafted by law firm Quinn Emanuel to Penn’s lawyers.
SLC Had ‘Procedural Shortcomings’
While Penn asserts the SLC was independent, counsel for Vora see things differently, asserting the report submitted by the committee contained “procedural shortcomings” stemming from a “capture mindset.” Translation: the hedge fund’s lawyers believe the report is self-serving and that the committee committed a glaring misstep by not interviewing Hartnett and Ruisanchez — the two directors nominated by Vora Penn allowed to stand for election.
“Yet the SLC never interviewed either of them and excluded both from the process,” according to the Quinn Emmanuel letter. “The only logical conclusion to be reached from this obvious omission is that the SLC did not want to hear what they had to say because it feared that their potential support for Mr. Clifford might undermine their desired conclusion.”
The firm adds that if the SLC were truly independent, Hartnett and Ruisanchez would have been part of it as they’re ideally suited for such roles.
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