Starwood sues Hilton, alleges corporate espionage

Thu Apr 16, 2009 10:37pm EDT
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By Deena Beasley

LOS ANGELES (Reuters) - Starwood Hotels & Resorts Worldwide Inc sued rival Hilton Hotels and two of its top executives for corporate espionage on Thursday, accusing the pair of ex-Starwood workers of stealing trade secrets to speed Hilton's entry into the "lifestyle" market.

Starwood claimed the two executives at Hilton, a unit of Blackstone Group LP, stole "truckloads of documents" -- more than 100,000 electronic files -- before and after they changed jobs.

The Hilton executives named were Ross Klein, head of luxury & lifestyle brands, and Amar Lalvani, head of development for the segment. The lawsuit was filed in the U.S. Southern District of New York.

Both executives had been closely involved in Starwood's W Hotels brand, said Starwood, which seeks monetary damages and a court order that would stop Hilton's new Denizen "lifestyle" brand projects. Starwood operates the Sheraton, W and St. Regis chains.

"This ... is a blatant case of theft of trade secrets, computer fraud and unfair competition," Starwood's general counsel, Kenneth Siegel, said in a statement.

Hilton, taken private last year in a leveraged buyout by Blackstone, declined immediate comment.

"Hilton Hotels Corporation is aware that a lawsuit has been filed, but we have not yet seen a copy. We will respond appropriately in due course," Hilton spokeswoman Ellen Gonda said in an email.

Starwood is moving ahead with a $4 billion overhaul of its core Sheraton name despite an economic slump that has crimped business and personal travel.   Continued...

<p>A general view of the Hilton hotel in the Universal City area of Los Angeles July 3, 2007. REUTERS/Mario Anzuoni</p>