{"id":308,"date":"2026-01-12T13:40:01","date_gmt":"2026-01-12T13:40:01","guid":{"rendered":"https:\/\/coffeemug.club\/index.php\/2026\/01\/12\/penn-justified-in-reducing-board-size-says-legal-committee-vora-wanted-to-sell-company\/"},"modified":"2026-01-12T13:40:01","modified_gmt":"2026-01-12T13:40:01","slug":"penn-justified-in-reducing-board-size-says-legal-committee-vora-wanted-to-sell-company","status":"publish","type":"post","link":"https:\/\/coffeemug.club\/index.php\/2026\/01\/12\/penn-justified-in-reducing-board-size-says-legal-committee-vora-wanted-to-sell-company\/","title":{"rendered":"Penn Justified in Reducing Board Size, Says Legal Committee; Vora Wanted to Sell Company"},"content":{"rendered":"<ul>\n<li><strong>Legal committee says casino operator made \u201cinformed\u201d decision to reduce board size<\/strong><\/li>\n<li><strong>That move resulted in a lawsuit by hedge fund HG Vora <\/strong><\/li>\n<li><strong>The special litigation committee is independent<\/strong><\/li>\n<\/ul>\n<hr \/>\n<p>A special litigation committee formed by Penn Entertainment\u2019s (NASDAQ: PENN) board of directors found the regional casino operator was justified in its move to reduce the size of the board last year &#8212; a move that invited a legal challenge from investor HG Vora.<\/p>\n<figure id=\"attachment_243056\" aria-describedby=\"caption-attachment-243056\" data-style=\"width: 858px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-243056 size-post-thumbnail-858xAUTO lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" alt=\"Penn ESPN\" width=\"858\" height=\"413\" sizes=\"auto, (max-width: 858px) 100vw, 858px\" data-src=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/penn2-858x413.jpg\" data-srcset=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/penn2-858x413.jpg 858w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/penn2-430x207.jpg 430w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/penn2.jpg 1200w\"><figcaption id=\"caption-attachment-243056\"class=\"text-description\">A slide from a Penn Entertainment investor presentation. The company was justified in reducing its board size, says a legal committee. (Image: Penn Entertainment)<\/figcaption><\/figure>\n<p>In December 2023, Vora revealed what was at the time an <a href=\"https:\/\/www.casino.org\/news\/hg-vora-takes-sizable-activist-stake-in-penn-entertainment\/\">18.5% stake in the gaming company<\/a>, 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\u2019t board members, said Penn was justified in that move.<\/p>\n<blockquote class=\"main-blockquote\">\n<p>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,\u201d said the gaming company in a recent Form 8-K filing with the Securities and Exchange Commission (SEC).<\/p>\n<\/blockquote>\n<p>The committee\u2019s report was published in response to ongoing litigation brought by HG Vora in which the hedge fund claims Penn\u2019s decision to reduce the number of directors up for election earlier this year to two from three <a href=\"https:\/\/www.casino.org\/news\/vora-sues-penn-over-board-seat-flap-calls-it-affront-to-investor-democracy\/\">stifles shareholder democracy<\/a> and runs afoul of Pennsylvania corporate law.<\/p>\n<h2>Vora Wanted to Sell Penn Off in Pieces<\/h2>\n<p>The committee\u2019s 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.<\/p>\n<div class=\"callout\">\n<p>Vora, which <a href=\"https:\/\/www.casino.org\/news\/its-on-vora-initiates-proxy-war-against-penn-entertainment\/\">has been a vocal critic<\/a> of Penn CEO Jay Snowden, the board, and the company\u2019s online sports betting missteps, previously didn\u2019t openly discuss the possibility of selling the company, but that move would likely <a href=\"https:\/\/www.casino.org\/news\/penn-not-alarmed-by-call-for-sale-sticking-with-espn-bet\/\">have the support<\/a> of some investors.<\/p>\n<\/p><\/div>\n<p>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.<\/p>\n<p>Speaking of real estate, Penn Chairman Carlino is also the chairman and chief executive officer of Gaming and Leisure Properties (NASDAQ: GLPI), Penn\u2019s 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\u2019t need to pursue that route if it can refocus the narrative on its iGaming and land-based casino operations.<\/p>\n<h2>Vora Landed Two Penn Board Seats<\/h2>\n<p>Litigation between Penn and Vora is pending, but the hedge fund was successful in placing Johnny Hartnett and Carlos Ruisanchez on the board &#8212; a move the casino giant agreed to.<\/p>\n<div class=\"callout\">\n<p>In June, Vora noted <a href=\"https:\/\/www.casino.org\/news\/hg-vora-makes-final-push-for-votes-in-penn-proxy-fight\/\">the candidacy of William Clifford<\/a> \u2014 the third dissident candidate \u2014 \u201cwas supported by dozens of institutional investors and actively managed funds and received a majority of votes cast in the election.\u201d It could be up to a court to decide if Clifford\u2019s candidacy and the vote are valid.<\/p>\n<\/p><\/div>\n<p>Citing <a href=\"https:\/\/www.casino.org\/news\/penn-fires-back-at-iss-says-clifford-candidacy-is-flawed\/\">his \u201cantiquated views,\u201d<\/a> 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\u2019t have the open mind needed to usher in a new era of value creation for investors.<\/p>\n<p>The post <a href=\"https:\/\/www.casino.org\/news\/penn-justified-in-reducing-board-size-says-legal-committee-vora-wanted-to-sell-company\/\">Penn Justified in Reducing Board Size, Says Legal Committee; Vora Wanted to Sell Company<\/a> appeared first on <a href=\"https:\/\/www.casino.org\/news\">Casino.org<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Legal committee says casino operator made \u201cinformed\u201d decision to reduce board size That move resulted in a lawsuit by hedge fund HG Vora The special litigation committee is independent A special l<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[],"class_list":["post-308","post","type-post","status-publish","format-standard","hentry","category-mergers-acquisitions"],"_links":{"self":[{"href":"https:\/\/coffeemug.club\/index.php\/wp-json\/wp\/v2\/posts\/308","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coffeemug.club\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coffeemug.club\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/coffeemug.club\/index.php\/wp-json\/wp\/v2\/comments?post=308"}],"version-history":[{"count":0,"href":"https:\/\/coffeemug.club\/index.php\/wp-json\/wp\/v2\/posts\/308\/revisions"}],"wp:attachment":[{"href":"https:\/\/coffeemug.club\/index.php\/wp-json\/wp\/v2\/media?parent=308"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coffeemug.club\/index.php\/wp-json\/wp\/v2\/categories?post=308"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coffeemug.club\/index.php\/wp-json\/wp\/v2\/tags?post=308"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}