ITB 2024 Special Reporting
Starwood vs Hilton going to grand jury.
Friday, 9th October 2009
Source : Andrew Calvo ~ Passions Of A Zealot
For anyone wondering what ever happened with the Starwood vs Hilton lawsuit over the stolen documents, well don't worry it sure ain't over yet.

Tomorrow's Wall Street Journal is publishing an article detailing how a Federal Grand Jury is weighing whether to criminally charge Hilton and/or some of its executives in the trade theft case.

We've seen how Hilton all but canceled their Denizen brand (well they haven't publicly announced it, but its assumed), Ross Klein has been replaced by John Vanderslice, Amar Lalvani and a huge contingent of other employees who jumped from Starwood to Hilton are no longer with Hilton and Steve Goldman formerly Hilton's head of Global Development has suddenly departed from the company as well.

Some have speculated that Hilton is close to reaching a settlement with Starwood, but unless I'm mistaken (I'm no lawyer), a Federal Grand Jury investigation would still continue even if Hilton & Starwood reached a settlement.

The part that makes me wonder and I'm sure scares the Hilton leadership team is the possibility that Hilton Worldwide itself may get criminally charged with wrongdoing in addition to it's former accused executives. That could leave the company struggling to do business as normal in an already difficult time for the hotel industry, from the WSJ article:

Prosecutors have exercised particular caution in pursuing criminal charges against major companies since the 2002 indictment of Arthur Andersen LLP. Criminal charges against Arthur Andersen for allegedly destroying evidence in the massive fraud case against Enron Corp. are widely regarded as having led to the big accounting firm's demise. The Supreme Court eventually reversed the firm's conviction on those charges, but only after the firm was disbanded.

An alternative approach that has become more common in recent years is for prosecutors to seek what is known as a deferred prosecution or nonprosecution agreement. That typically requires that a company be supervised by a federally appointed monitor and commit to reforms over a period of years.

I think it will come down to how many within Hilton including the top members of Hilton's executive team were aware of the actions of the Denizen development team.

I wonder if we'll ever find out.

One thing is definite though, no matter what the outcome of this Grand Jury investigation ends up being Hilton will be years behind Starwood and Marriott in creating a boutique hotel brand, and that's exactly what Starwood was trying to achieve.


Andrew Calvo is a Commercial Real Estate Advisor in New Jersey who lives in Tinton Falls, NJ.

This blog is about my passions - primarily hotels, commercial real estate, and development, etc.

Since I have been in High School I've had numerous jobs, but the field which has always interested me is Real Estate, Hotel Development and Construction. I consider myself a zealot in that area - I try to absorb as much as I possibly can, take the experiences that I learn, or read about and use them in my life.

 Latest News  (Click title to read article)

 Latest Articles  (Click title to read)

 Most Read Articles  (Click title to read)

~ Important Notice ~
Articles appearing on 4Hoteliers contain copyright material. They are meant for your personal use and may not be reproduced or redistributed. While 4Hoteliers makes every effort to ensure accuracy, we can not be held responsible for the content nor the views expressed, which may not necessarily be those of either the original author or 4Hoteliers or its agents.
© Copyright 4Hoteliers 2001-2024 ~ unless stated otherwise, all rights reserved.
You can read more about 4Hoteliers and our company here
Use of this web site is subject to our
terms & conditions of service and privacy policy