Starwood Hotels & Resorts Worldwide Inc. has filed a lawsuit accusing Hilton Hotels Corp. of “aiding and abetting” two Hilton executives in illegally obtaining information that would hasten the development and launch of Hilton’s new Denizen “lifestyle” brand, and reduce the costs and risks of repositioning its luxury brands. The suit also is filed against the two executives, Ross Klein, global head of Hilton Luxury & Lifestyle Brands, and Amar Lalvani, global head of Hilton Luxury & Lifestyle Brand Development. The executives are accused of stealing more than 100,000 documents containing “Starwood’s most competitively sensitive information,” according to a Starwood press release.
The alleged misconduct began in February and March 2008, when Hilton began to recruit Klein, former president of the Starwood Luxury Brands Group, and Lalvani, former senior vice president, Starwood Luxury Brands Group. Both were closely involved with W Hotels, Starwood’s lifestyle brand. Hilton hired the two executives in June 2008 following its highly leveraged $20 billion-plus acquisition by Blackstone Group. The suit alleges that Klein and Lalvani, with help from other Starwood employees they brought with them to Hilton, stole “truckloads” of confidential electronic and paper documents in their last months at Starwood. The lawsuit contends that the confidential information then was used to help Hilton shave the time and expense involved in the “inevitable and costly trials and errors along the way” when launching its Denizen brand.
Kenneth Siegel, Starwood's chief administrative officer and general counsel, said in a statement, "The wholesale looting of proprietary Starwood information, including a step-by-step playbook for creating a lifestyle luxury hotel brand, unfairly enabled Hilton to launch a new brand in only nine months instead of the usual three to five years." He added that Starwood considers it “a blatant case of theft of trade secrets, computer fraud, and unfair competition."
As part of its suit, Starwood is demanding that Hilton and the accused individuals “certify the destruction of all materials derived in any way from Starwood confidential information, including plans for the promotion and roll-out of Hilton's Denizen brand.”
In a statement e-mailed to MeetingsNet, Hilton spokeswoman Ellen Gonda said, “Hilton Hotels Corporation believes this lawsuit is without merit and will vigorously defend itself. We fully intend to move forward on the development of our newest brand, Denizen Hotels.”