HG Vora Disputes Findings of Penn Entertainment’s Special Legal Committee

Background of the Dispute

The ongoing conflict between hedge fund HG Vora and Penn Entertainment has intensified, focusing on the conclusions drawn by Penn’s special legal committee (SLC). HG Vora has criticized the committee’s report, claiming numerous factual inaccuracies in its evaluation.

Board Size Reduction and Legal Challenge

The disagreement originated when Penn Entertainment reduced its board members from nine to eight, removing HG Vora’s chance to hold a seat. HG Vora intended to have three representatives on the board but contested the cut, arguing that Penn’s action violated Pennsylvania corporate law.

Role and Findings of the Special Legal Committee

In response to the controversy, Penn appointed a two-member special legal committee to review the board’s restructuring. The committee concluded that the reduction was warranted. However, HG Vora rejected these findings, accusing the SLC of bias and misinterpreting the legal standards applicable to this situation.

Concerns About the SLC’s Independence

HG Vora further alleged that the special legal committee was closely aligned with Penn Entertainment’s interests, driven by Penn’s goal to exclude William Clifford from the board. The hedge fund challenged Penn’s assertions of the SLC’s independence, pointing out that Vora’s nominated directors, Hartnett and Ruisanchez, were not interviewed during the committee’s investigation.

Summary of HG Vora’s Position

Overall, HG Vora maintains that the special legal committee did not conduct a thorough or impartial investigation, failed to substantiate its conclusions with sufficient evidence, and operated with a clear bias favoring Penn Entertainment’s management decisions.