Judge Rejects HG Vora’s Request to Expedite Lawsuit Against Penn Entertainment
Judge Dismisses HG Vora’s Fast-Track Appeal
US District Judge Mary Wells from the Eastern District of Pennsylvania has decided against HG Vora Capital Management’s petition to accelerate the progress of its lawsuit against Penn Entertainment.
Details of the Legal Dispute
HG Vora Capital, a major shareholder in Penn Entertainment, alleges that the company altered its board structure to block shareholder-appointed nominees and provided misleading information in its proxy statements. According to HG Vora, these actions were aimed at maintaining the current board members’ control, preventing shareholders from voting on independent board candidates, thereby affecting election outcomes and violating fiduciary responsibilities.
Judge Wells ruled that HG Vora did not demonstrate an urgent risk that would justify hastening the trial or scheduling an early case management hearing. While she partially agreed with Penn Entertainment’s request to pause certain charges, the stay only applies to one specific count—the allegation that the board breached its fiduciary duties.
This particular claim will be suspended for 30 days to allow a special litigation committee, appointed by the shareholders, to complete an internal investigation and provide a report. Consequently, the court canceled the scheduled oral hearing set for July 10 and instructed the committee to give a status update by August 1. The other claims in the lawsuit will continue to move forward as planned.
Background on the Lawsuit
The lawsuit originated in May amid escalating legal tensions between HG Vora and Penn Entertainment. HG Vora has criticized Penn for allegedly eroding $11 billion in shareholder value over the last four years.
Furthermore, HG Vora asked the court to reverse Penn’s decision to downsize its board, demand accurate disclosures, include HG Vora’s three nominees on the proxy card, and allow shareholders to vote on these nominees at the 2025 annual meeting. Alternatively, the hedge fund proposed a special election or another voting mechanism to elect a third Class II director with a term extending through 2028.
About HG Vora Capital Management
Established in 2009, HG Vora Capital Management is a New York City-based investment advisory firm registered with the SEC. The firm manages assets for a wide range of institutional investors and specializes in credit investments, including performing credit, stressed and distressed opportunities, as well as value-driven equities that have potential catalysts.
HG Vora’s team utilizes thorough fundamental analysis and extensive industry knowledge to assess complex investment scenarios, identify undervalued opportunities, and partner with management and stakeholders to enhance value. The firm also provides companies with innovative and adaptable capital solutions.