Independent Review Backs PENN’s Board in Dispute Over Director Cutback

PENN Entertainment‘s ongoing fight with activist investor HG Vora took a new turn this week after an independent review supported the casino operator’s approach to its board restructuring. 

Report Finds PENN Acted Properly in Reducing Board Seats Amid HG Vora Clash

A report given to the US District Court for the Eastern District of Pennsylvania on November 26 lays out the findings of a special litigation committee, which spent months looking into claims that the company had tweaked its board makeup to lessen the investor’s sway.

The committee, consisting of two external members backed by outside legal experts, looked over documents, talked to witnesses, and evaluated the legal claims at the heart of HG Vora’s lawsuit. Once it finished its work, the group decided that the board used proper information and acted in the company’s best interests when it reduced the number of director positions earlier this year. It also suggested that going forward with the shareholder-started claims would not help the organization.

The fight between HG Vora and the company got worse in 2025. HG Vora said the company was not controlling things well enough and wanted big changes in who runs it. The investor pushed hard to get three seats before the June meeting, where shareholders vote. However, those in charge backed two new people and tried to reduce the number of board members. In the end, two people HG Vora recommended got seats, but a third could not even try to get voted in.

PENN Gains Momentum in Court After Review Cites Risks Linked to HG Vora’s Influence

The situation grew more tense as the year went on. In May, HG Vora filed a complaint in federal court. They claimed that cutting down board positions did not follow proper governance rules and reduced options for shareholders. They also launched a website and shared a detailed presentation for investors. This presentation criticized the company’s plans, including money it had promised to spend before. A federal judge turned down early attempts to speed up the court process. Later, the judge gave the committee looking into the issue more time to finish its review.

Based on the new report, the board looked at several factors before cutting the extra seat. One key issue was the chance of regulatory problems linked to HG Vora’s ownership setup and its attempts to sway company decisions. The group pointed out that watchdogs had earlier cautioned both parties about rules tied to the investor’s holdings, which had some parts not covered by normal license rules.

These results give PENN a stronger case as the lawsuit goes on. Judges tend to side with free-standing groups when they show they can work on their own and dig deep into investor claims. Now, PENN might try to throw out some parts of the suit. Still, HG Vora can challenge how the group did its work, which could lead to a long fight.

As the legal battle unfolds, experts remain wary about the company’s future. Recent evaluations suggest the company still faces issues with making money and managing debt, while market indicators show ongoing pressure. Right now, the committee’s findings are the biggest development since last summer and might steer the course of the disagreement in the coming months.