Published on: December 3, 2025, at 10:57 AM.
Updated on: December 3, 2025, at 11:11 AM.
- Legal committee concludes casino operator acted “informed” in board size reduction
- This decision prompted legal action from hedge fund HG Vora
- Independent special litigation committee established
An independent special litigation committee appointed by Penn Entertainment’s (NASDAQ: PENN) board has determined that the regional casino operator’s decision to downsize its board last year was justified—an action that sparked a lawsuit from investor HG Vora.
In December 2023, Vora disclosed an 18.5% stake in the gaming firm, criticizing the company’s lackluster stock performance while demanding board representation. Shortly after, Penn reduced its director positions from nine to eight. The special litigation committee, composed of two independent individuals, confirmed that the board’s decision was justified.
The Special Litigation Committee Report states that it found the Board made an informed decision based on good faith and in the best interests of PENN when it opted to decrease the board size from nine to eight members. Additionally, the committee has concluded that pursuing HG Vora’s derivative claims would not benefit PENN, as outlined in a recent SEC Form 8-K filing,” the gaming company stated.
The committee’s findings came in response to ongoing litigation from HG Vora, which alleges that Penn’s decision to limit the number of directors up for election from three to two undermines shareholder rights and contravenes Pennsylvania corporate laws.
Vora Proposed Divesting Penn’s Assets
The report also discusses a claimed conversation between Parag Vora, founder of HG Vora, and Penn Chairman Peter Carlino, where Vora indicated an interest in divesting the casino operator’s assets piecemeal.
Vora, a sharp critic of Penn CEO Jay Snowden, the board, and the company’s online sports betting errors, had previously not openly suggested selling off the company; however, such a measure could gain traction among certain investors.
Liquidating Penn’s assets individually would be complex, as the company operates 43 casinos across 20 states and essentially does not own the real estate of these establishments. Selling any venue would entail transferring operational rights rather than the property itself.
Additionally, it’s noteworthy that Penn Chairman Carlino also serves as the chairman and CEO of Gaming and Leisure Properties (NASDAQ: GLPI), which is Penn’s primary landlord. The notion of Penn being up for sale is speculative, as Wall Street views Ameristar as unwilling to sell and believes the company can shift its focus back to its iGaming and land-based casino strategies.
Vora Secured Two Seats on the Penn Board
Legal disputes between Penn and Vora are ongoing, but the hedge fund successfully placed Johnny Hartnett and Carlos Ruisanchez on the board—an agreement the casino corporation accepted.
In June, Vora highlighted the candidacy of William Clifford—the third dissenting candidate—asserting that dozens of institutional investors and active funds supported him, resulting in the majority of votes in the election. A court may ultimately decide on the validity of Clifford’s candidacy and the election results.
Penn opposed Clifford’s nomination, citing his “dated views,” making this the second failed attempt since 2020 to get him on the board of a gaming company with which he shares a long history. Despite having over a decade of experience with Penn and its predecessor firms, the current leadership believes he lacks the innovative mindset necessary for creating new value for investors.