HG Vora Fast

Judge Mary Wells found that HG Vora had not shown sufficient risk of immediate harm to warrant fast-tracking the trial or holding an early case management conferenceImage Source: Shutterstock.com

US District Judge Mary Wells of the Eastern District of Pennsylvaniahas rejected HG Vora CapitalManagement’srequest to expedite its lawsuit against Penn Entertainment. 

Judge Denies HG Vora’s Request

In the lawsuit, HG Vora Capital, which holds a significant sngake in Penn Entertainment, claims the company restructured its board to prevent shareholder nominees from being appointed and provided investors with misleading information in its proxy statements. The hedge fund claimed that the move was intended to entrench current board members and block shareholders from voting on independent nominees. This ultimately skews the election results and breaches fiduciary duties, according to HG Vora’s claims.

However, in her ruling, Judge Mary Wells found that HG Vora had not shown sufficient risk of immediate harm to warrant fast-tracking the trial or holding an early case management conference. Additionally, the judge only partially granted Penn’s request to pause the proceedings, limiting the stay to Count V of the complaint, which alleges the board breached its fiduciary duties.

That portion of the case is paused for 30 days to allow a shareholder-appointed special litigation committee (SLC) to complete its internal investigation and issue a report. The court also canceled the oral hearing scheduled for July 10and directed the SLC to submit a status update by August 1.However, the remainder of the lawsuit will continue as planned.

It is also important to note that the lawsuit started in May amid the corporate legal battle brewing between HG Vora and Penn Entertainment. Back then, HG Vora pressed Penn over the $11 billion that the company allegedly lost investors over the past four years.

HG Vora also petitioned the court to overturn Penn’s plan to reduce the size of its board, require the company to issue corrective disclosures, include its three nominees on the proxy card, and allow shareholders to vote on all three at the 2025 annual meeting. Alternatively, it requested a special election or another mechanism to enable a vote on a third Class II director, whose term would extend through 2028.

About HG Vora

Founded in 2009, HG Vora Capital Management is a New York City-basedinvestment advisor registered with the SEC. The firm manages capital on behalf of a diverse group of institutional investors and focuses on investments across performing credit, stressed and distressed special situations, as well as value-oriented equities with potential catalysts. 

HG Vora’s investment team applies rigorous fundamental analysis and draws on deep industry expertise to evaluate complex situations, identify mispriced opportunities, and collaborate with management teams and sngakeholders to unlock value. The firm also works with companies to deliver creative and flexible capital solutions.