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Fresh allegations filed in Hilton/Starwood espionage case

19 January 2010 by

Fresh allegations about the role of Hilton executives have been raised by rival Starwood in the ongoing corporate espionage case.

An amended complaint filed by Starwood last Thursday claims the alleged misconduct was known to, and condoned by at least five of the 10 members of Hilton's executive committee, in addition to chief executive Chris Nassetta and global development president Steven Goldman.

Neither Nassetta nor Goldman is named as a defendant in the new complaint. A lawyer for Goldman, Daniel Gitner, told the Wall Street Journal: "The new allegations are false, and the US Attorney's Office has told us that Mr. Goldman is not a subject or target of its investigation."

The 86-page complaint includes excerpts of e-mails between Hilton executives, one of which discusses "Hiltonizing" the Starwood documents and "sharing it with the Group ASAP". At least 44 Hilton managers were sent, received or copied on Starwood confidential documents, it said.

In addition to monetary damages, Starwood has asked the court to appoint a monitor to oversee Hilton's future conduct. Further, it says it wants to impose a "penalty box" on Hilton that would prohibit it from developing its own luxury brand for a period of time, according to the complaint.

"This case is about restoring a level playing field for fair competition, not just substantial monetary damages," said Kenneth Siegel, Starwood's general counsel.

Starwood began legal proceedings against Hilton last April, accusing it of stealing tens of thousands of pages of documents containing "competitively sensitive information" in order to pursue a rival to Starwood's successful, 10-year-old W hotel chain.

As a result Hilton was forced to delay the launch of its boutique brand Denizen which former Starwood executive Ross Klein was recruited to head up. Klein was subsequently placed on gardening leave until his resignation in September.

Hilton chief executive reassures owners over corporate espionage charges >>

Hilton director accused of corporate espionage resigns >>

Hilton could face criminal charges over corporate espionage >>

By Janie Stamford

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