The gloves are off at Penn Entertainment as HG Vora Capital Management files a lawsuit amid a proxy battle that’s turning into one of the gaming industry's most heated corporate showdowns.
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The hedge fund, which holds a significant stake in Penn, alleges that the company violated Pennsylvania corporate law by reducing the number of board seats up for election—from three to two—a move that effectively blocks one of HG Vora’s nominees from getting a vote. The suit argues that this undermines shareholders’ rights and is a clear attempt to rig the outcome ahead of Penn’s June 2025 Annual Meeting.
HG Vora had nominated William J. Clifford, Johnny Hartnett, and Carlos Ruisanchez for board seats. Penn countered by offering to appoint Hartnett and Ruisanchez but not Clifford, a former CFO with decades of industry experience. The exclusion has only intensified tensions.
This proxy fight unfolds against the backdrop of Penn’s controversial $2 billion partnership with ESPN to launch ESPN Bet. While the deal was hailed as transformational in late 2023, it has since drawn investor skepticism amid lackluster adoption and continued stock underperformance. HG Vora argues that Penn’s management has misallocated capital, underdelivered, and rewarded itself with bloated compensation packages.
The outcome of this boardroom battle could significantly impact Penn’s direction. With shareholder confidence wavering and activist pressure mounting, June’s vote may determine whether Penn stays its course or faces a major shake-up.
