The soap opera involving HG Vora and Penn Entertainment (NASDAQ: PENN) took a new twist on Monday, as the hedge fund alleged that the regional casino operator might have infringed upon investor voting rights by cutting the number of Vora-supported candidates for board nomination from three to two. 

On the previous Friday, the gaming firm released a statement informing investors that it will put forward two of Vora’s favored candidates — Johnny Hartnett and Carlos Ruisanchez — for its board of directors. William Clifford, who was part of the trio nominated by Vora in January, was excluded from the group. Penn's choice to prevent Clifford from being voted on is intriguing, especially in light of his history. He was formerly an executive at Penn and had senior positions at Pinnacle Entertainment, which was bought by Penn seven years prior. 

The money manager is fully aware of this and stated it will proceed with a strategy to nominate all three candidates to the Penn board.

"Just ten days prior, the Board expressed an entirely different intention, to nominate three different candidates,” according to a statement issued by the investor. “Because it is unclear if the Company’s stated intention on Friday will persist, HG Vora will nominate its three candidates and solicit votes on their behalf.”

Vora asserted that on April 15, it received written notification from Penn regarding its plan to conduct an election for three board positions at the forthcoming annual meeting. 

Vora Unafraid to Challenge Penn Director Slate 

Following its investment in Penn in December, Vora stated that the makeup of the gaming firm's board breached Pennsylvania corporate law. The money manager stated today that the issue was resolved only after the deadline for nominating new directors had elapsed. Vora stated that Penn is depriving investors of their rights. 

“HG Vora believes the Board’s self-serving action, taken in the face of the prospect of losing three Board seats, had no legitimate corporate purpose and deprives shareholders of their fundamental right to elect directors of their choosing,” according to the press release.

The investor — among Penn's biggest — has repeatedly cautioned that it stands ready to initiate a proxy battle against the gaming firm to present all three of its candidates to shareholders. Vora is fulfilling that promise, mentioning today that it has submitted proxy battle documents to the Securities and Exchange Commission (SEC). 

“On the morning of April 25, 2025, representatives of PENN and HG Vora discussed how best to fill the three available Board seats,” the shareholder said in the statement. “HG Vora’s representative reiterated HG Vora’s belief that all three of its candidates would be successfully elected to the Board by PENN’s shareholders if the proxy contest went to a final vote. Later that same day, PENN’s Board announced the extraordinary action, in the midst of the proxy contest, of reducing the number of Board seats to be filled at the Annual Meeting.”

Penn Encounters Clifford Dilemma 

When it stated it would permit Hartnett and Ruisanchez to be nominated for the board, Penn made it clear that it hadn’t finalized an agreement with Vora, but added it “remains focused on realizing the substantial value creation opportunity throughout the business” and aims to prevent a proxy fight. 

It seems that the gaming company welcomed the proxy battle it was cautioned about and one it might struggle to succeed in. When it comes to generating shareholder value, it's difficult to claim that adding Clifford to the board would obstruct that aim, and it might be even tougher to persuade other investors that he poses an obstacle to that goal. 

“Clifford, would be a valuable addition to the Board of PENN,” notes Vora. “Rather than continuing to waste shareholder capital and corporate resources on entrenching the Board in the name of ‘activism defense,’ PENN should welcome Mr. Clifford to the Board and work with its financial advisors to consider all options to maximize shareholder value.”