April 22, 2009

Hilton reverses stance on Denizen Hotels

Hilton Hotel Corp. said Wednesday it was served with a subpoena concerning corporate espionage from the U.S. Southern New York Attorney's Office.

A week ago, the company said a corporate espionage suit filed by Starwood Hotels & Resorts Worldwide Inc., was without merit. On Wednesday, Hilton reversed direction and said it had suspended development of the Denizens Hotel brand pending an internal investigation.

Starwood Hotels filed suit April 16 alleging Ross Klein, its former Luxury Brands Group president, and Amar Lalvani, former senior vice president, helped develop the Denizen Hotels brand. In addition, Klein and Lalvani, aided and abetted by Hilton, stole massive amounts of proprietary and highly confidential Starwood information, the suit says.

In a statement, Hilton said, development of the Denizen Hotels brand has been temporarily suspended. In addition, Klein and Lalvani and members of their development team have been placed on paid administrative leave, the company said.