The legal clash between hedge fund HG Vora and Penn Entertainment continues, with the former now scrutinizing the recent findings of the operator’s special legal committee (SLC). HG Vora asserted that the committee committed significant factual errors in its assessment.
The Hedge Fund Says the SLC Committed Significant Factual Errors
The current clash stems from Penn Entertainment’s earlier decision to reduce its board size from 9 to 8 members, effectively depriving HG Vora of a seat. The hedge fund, which sought to secure three directors on Penn’s board, was displeased with the decision and insisted that it had violated Pennsylvania’s corporate laws.
In response, Penn Entertainment onboarded the services of a two-person SLC, which evaluated the matter and determined that Penn’s decision to reduce its board size was justified. HG Vora, however, disagreed with this assessment, claiming that the SLC’s findings contained significant factual errors.
In its response, the hedge fund slammed the SLC as biased and misconstructing the legal framework for evaluating the decision. In its filing, submitted in the US District Court for the Eastern District of Pennsylvania, HG Vora further stated that the SLC did not back up its conclusion with facts and failed to perform a reasonable investigation on a rational basis.
HG Vora Questions Whether the SLC Was Truly Independent
HG Vora asserted that the SLC was a client of Penn and did everything in its power to achieve its goals. The hedge fund believed that Penn’s ultimate objective was to keep William Clifford off its board “at any cost.”
This contradicts Penn Entertainment’s claim that the SLC was independent. HG Vora challenged this claim by stating that if the SLC were truly independent, Penn would have considered interviewing Vora Penn directors Hartnett and Ruisanchez, instead of excluding them from the process.