HotelChatter

Not just Stealing Proprietary info but Theft!

"...Starwood received from Hilton eight large boxes of hard-copy documents as well as computer hard drives, zip drives and thumb drives containing more than 100,000 electronic files downloaded from Starwood computers, much of it highly proprietary," Starwood said. "It was at this point that Starwood first became aware of the theft." (-Travel Weekly)

stealing...huh?

Ross Klein is a brilliant marketeer and basically re-wrote the book on launching luxury brands in today's market.  Stealing trade secrets?  I think not!  And for Hilton, what better time for this lawsuit to be filed than right near launch...you know what they say; "all press is good".  And if Starwood is so concerned about Denizen, it must be FABULOUS!  Can't wait until they open!

yikes

do you really think this is good press for hilton? they're getting totally slammed and are gonna have an ugly legal battle on their hands.  

they don't have a shovel in the ground on a single project and getting construction financing is gonna be TONS of fun for the next year+.  they have a concept and all of W's manuals on how open a luxury/lifestly/boutique hotel.  that's about it

and the complaint, while addressing denizen, is mostly going after the breach of the non-solicitation agreements... and the whole stealing of all sorts of proprietary starwood info

wonder what BabyJ's position is in hilton's pr department

yikes is right

yeah, definitely not good press for hilton. they already have an enormous uphill battle trying to differentiate this brand from W, Edition, Andaz, not to mention Morgans, Thompson, etc... First, they lured away W executives, and now, to be accused of blatantly ripping off W trade secrets... there's nothing good about this for hilton.

accused of stealing is never good press

while i don't doubt that ross klein is pretty crafty--the whole Aloft brand was his project too--being accused of stealing brand profiles and important contacts (like property owners who are currently using starwood's brand) is not cool. and certainly is not good press.

right now, if you're a hotel owner in the midst of completing your project and you are choosing between edition or denizen to run your hotel, um...which one are you going to choose?

they both suck

When I try to imagine the "denizen brand" I just see an accountant type in a cheesy embroidered going-out shirt. Anyone else?

w sold in nyc

the two hotels at 39th street in NYC the court and tuscany has sold and will soon be closed. The deal was finalized this week.the plan is to open a condo.

Starwood Suing Hilton

We all found it a bit odd that Hilton was able to launch a new luxury brand in what appeared to be a very small window. The law suit filed by Starwood does not come as a surprise at all. Hilton took the idea from concept to launch in under a year? The company went downhill the day Blackstone took over. If Starwood allegations are in fact proven to be true, then one can expect numerous heads and jobs to roll. The closest thing Ross and his buddies at Hilton can expect re their career paths in the hospitiality industry, will be part time bellmen at the Holiday Inn Express.

Filch this

Sounds like brilliantly immature. The litmus test is could Ross have asked for permission and would Starwood have granted permission for whatever was in the boxes? Not a chance. Good luck to Hilton's legal crew sorting this one out. Any good executive joining a competitor knows better. You cannot take property wrongfully or secretly. Period. Full stop.

Amazed

Reading the filing, if it is all or even some of it is true, I was left with one thought ... where have all our ethics gone.  Certainly the folks who recruited Ross knew what he brought along ... especially if even a 1/4 of the eight boxes of materials were in his offices in Beverly Hills.  It is probably time Ross, but Nassetta too, to take a hike.  Bring back the some of the decent Senior Executives of Hilton ... they dreamed up "Be Hospitable" and they were!

Not very hospitable anymore...

The filing only skims the surface, as this goes much further then Ross and the ex-Starwood group. Can anyone explain how it is possible that not one person in Beverly Hills questioned how and/or where this information came from? Seems as if Ross took more then a few towels when he left Starwood. It is time for Nassetta and the whole lot to go --when the fish stinks, its from the head down.

Strategy

The major brands are moving towards this boutique direction to expand into new markets and more opportunities. It's like terrority claims in the new frontier, whoever is there first wins. Starwood got there before Hilton and now Hilton is battling as the new entrant. As for strategies in imitabillity, that's hard to say. This may or may not be a long battle.

blackstone

one thing is clear: this never would've happened before blackstone. hilton used to be a decent, ethical (not to mention highly profitable) company, but that wasn't good enough for blackstone and the rest of the morally-challenged "shadow banking" system that has helped collapse our economy because of their relentless greed.

No Surprise

It was a "sad day at Hilton" was the day Blackstone brought in new management, and, in particular, Ross Klein.  I was already very disappointed to learn that after Ross had hired an entire team, Blackstone announced they would be relocating the Hilton Corp office.  Which means many of those who left their jobs to work for Ross/Hilton would now lose their jobs, putting them out of work in a crappy economy. I have no doubt Ross and Hilton management knew at the time they hired those poor people that they'd be relocating in the near future.  SHAME ON THEM.  Now, the announcement of being sued for espionage!  I hope that those he brought with him from W to Hilton also will be sharing the responsibility (i.e., Susan, Erin Shaeffer, Chris, etc.)  Lets hope that the ole saying "what comes around goes around" will hold true in this case.

The Real Mr Klein

The full 91 page complaint makes it quite clear. Point 44 states that the W brand was strong and successful prior to his joining. He made 400K as President and received over 600K for the settlement. Settlement for what - he was termed for some reason? No, it was institutional owned as W had a case-history dating back to 1998 to develop the brand under Barry S. Preplans started earlier in the '80s. If anything, Klein mass-produced the W product and diminished what was in place but given the economics for which we are all now paying for, the brand grew to shareholders delight. He caught the wave and used it for a personal platform to garner the next big thing. He spent more than a few dollars of corporate funds to develop his bio (read: small book) for the sole purpose to achieve what he thought then he'd get away with. Klein led Hilton into believing he could deliver but obviously he could not unless had taken everything. He basically bought himself a job with Blackstone by producing all these documents. His resume speaks for of his creativity more than his achievements.

Shame indeed!

I must agree with "now you oc me", who mentioned that before Blackstone, there never would have been any question about Hilton's ethics, and with "Mr. Big", who correctly points out the shame of yanking the rug out from under new hires without thought or conscience.  Shame on the new management indeed, from the CEO on down - and on up into Blackstone, who certainly must have sanctioned what appears to the outside viewer to be self-centered moves based on, as "now you oc me" so aptly put it, "relentless greed".  We picture the CEO moving the company back to his own home town without caring about the 500 people he's put out of work in southern California, where the unemployment rate is higher than anywhere else in the country.  There he is, in his ivory tower, telling himself it was best for the company, and trying not to think about the lives he's disrupted.  Well, they call it an ivory tower for a reason.  It's ironic that it was Hilton who discovered through research that the one thing people desire is ADMIRATION.  How well admired are the leaders of the "new" Hilton corporation today?  Yeah, that's what I think, too.

Layoffs at Hilton

Rumor has it that a memo was sent to all present Hilton employees advising that the are forbidden to provide references for any previous employees. Former employees, regardless of years of service, were handed a piece of paper that was limited to "date of hire and last day worked."  No references in a job market that is the most competitive it has been in more than a decade? Real nice Hilton - great way to treat people who dedicated years to your company. Maybe they should change their tag line from "Be Hospitable" to "Be Hostile"

In Defense Of Ross

Inevitably, the many people whom Ross Klein has wronged, slighted or dismissed along the way are now feeling a justifiable need to gloat at his demise. Knowing Ross, and the man he has become, I can't say that I blame them. I have seen him turn into the narcissistic, petulant, immoral man he now is, and I have seen him mistreat, ignore and dismiss his friends, family and co-workers too much to simply ignore it.

But there's more to the story than that. The fact is, Ross is truly a tragic figure, a man with all of the toys in the world but no happiness. It may sound cliched, but it's quite true: he was not always like this. He will pay the price for his wrongdoing, but know that your schadenfreude comes at the expense of a broken man. As has previously been pointed out, the real criminals here are the amoral villains that operate the Blackstone Group, who initiated the courtship of Ross and Amar from Starwood with the express purpose of stealing from Starwood the tools to carbon-copy the success of the W Hotels. Heads will roll over this, Ross' and Amar's for certain, perhaps even Chris Nassetta, but if you think for a moment that John Ceriale and his compatriots will feel the heat, you have underestimated their power. Just know that not a single decision at Hilton was ever made without a phone call to Blackstone, and then tell me who's responsible for this. There will be no justice, and, as always, those who will lose the most will be those with the least to lose, the office assistants and hotel staff caught in the middle. It's a sad day.

In Defense of Blackstone

Never want to gang up on someone in Ross's situation; I will let the courts take care of that however from a pure business standpoint how you can fault Blackstone?!

They acquired/hired two supposedly highly talented individuals whom were called in for their ideas. These individuals on their own accord took sensitive corporate information that was not theirs.  I don't see Blackstone posting this in the initial job responsibilities.

When Ross and folks produced a new boutique line in less than 9 months, I am sure Blackstone was thrilled. After all this is what he was hired for.

I know in the end people are siding between a `Team Hilton' vs. a `Team Starwood,' however isn't it really `Team Starwood' vs. these individuals who took information in order to justify their 6 figure salaries. I know in the end Hilton will be punished as is corporate responsibility however for the individuals; unfortunately you steal, you get caught, you have no one to blame but yourself!

Re: In Defense Of Blackstone

"These individuals on their own accord took sensitive corporate information that was not theirs."

We are all entitled to our own opinions based on the information we have. Based on what I know, I am strongly lead to believe that Ross and Amar were at best tacitly encouraged, and at worst explicitly directed by those higher on the food chain to appropriate Starwood materials known by all involved to be confidential. A visit to the Luxury and Lifestyle Brands office any time during the nine-month gestation of Denizen would show even the most impartial observer just how much confidential information was flying around- we're talking about entire binders of material with the W/St Regis/Starwood logos on the front and "Confidential- For Internal Use Only" stamped on every page. At any point in time, any of the senior management at Hilton or Blackstone, for whom this was clearly visible, could have easily put a stop to it. The fact that they did not strongly implicates them as willing enablers of Ross' methods. As was noted several times in the court filings themselves, the sheer volume of material taken invalidates any claim that this was something done surreptitiously and without executive knowledge.

Ross Klein and burnt bridges

Seems to me that Klein has a history of burning bridges.  I understand that not many people at Starwood were sad to see him go, and having been exposed to him at Hilton, I can see why.  Tales of his temper tantrums, petulant behavior, arrogance, and yes, even physical assaults on others, permeated the Beverly Hills Hilton offices.  Many old time Hilton employees breathed a sigh of relief when he was out of the building on administrative leave, no matter what the cost to the company.  The fault really lies with upper management who let him get away with behavior and business practices that heretofore would not have been tolerated.

Shame on Hilton

Just another case of a once great American corp, imploding before our very eyes.  My heart goes out to all the Hilton employees in Southern California who are caught up in this.  Hilton owes them more than the paltry severence that will probably be offered.
The real shame is that this was once a very good company to work for, but the hiring of the likes of Murch, Barter, Ross Klien, Roberts, Emmer, Lavlani. Gary Eflving and Faulk have steered this company into a downward spiral, from which it may never recover. A once strong Middle Management has been replaced by egocentrics who are applying business principles without thought or foresight.  They seem to operate in an atmosphere where human resources are as disposable as the supplies that stock thier hotels.  Corporate espionage aside, Hilton has been ticking down, since the loss of long time Hilton employee Susan Umeda.  Like an earlier comment said, what comes around goes around.

In Defense of Ross

Hilton has been down this road before.  Prior to Blackstone's purchase of Hilton, there was the Barter Incident of 2007 in San Francisco.  All I can say is that it took a lot of time and energy away from leading the company into the future, to soothe all the men involved and to mend fences with strategic partners.  The Barter Incident wasn't the only transgression, the Sidlin Caper in Aspen in early 2006 and the lack of professionalism by the Design Team at the HD Show in 2007 show that Hilton has been a rudderless ship long before Blackstone took the helm and steered Hilton into the rocks.  Finally and it hurts to speak of it but the Ted Carroll Mysteries still have yet to be solved by the authorities.  The outcome and ramifications from this will reverberate for decades throughout Hilton, Blackstone, and Brandon Brockmiller.  Even without an outcome at this time many people have lost their jobs because of the carelessness, greed and unbalanced behavior of one individual.  Thats all I can say.

Starwood v. Hilton: the movie

All this commentary makes it seem this is the hotel industry's "Barbarians at the Gate."  What's next? Movie rights sold to the highest bidder (to recoup legal costs)and Rupert Everett tagged for Ross Klein?

SupplyChainReaction

On May 15 you put out a lot of names that no one knows anything about. maybe you can elaborate.

Where is Barron?

Since Blackstone bought the Hilton Family of Brands, they seem to be hell bent on destroying not only the Hilton name but the entire chain.  Never have I seen such a flagrant showing of arrogance and greed.  They are gutting this great company from the inside out.  They are firing people left and right.  They don't care if you are a good employee, if you work 60 hours a week; they don't know your work, have never met you and don't care. There is no rhyme or reason their firings.  They post open positions internally and then tell the "fired" employees they are not qualified.  Ex managers, directors, VPs with a good track record are not eligible.  But I guess it's really because they don't have any stolen secrets to bring to the table. I can say all this because I work in it every day.  I haven't lost my job yet but I really don't care if I do.  This is not Hilton anymore.

Barron, where are you?  Do you care that Blackstone is ruining the Hilton name and the spirit of the company you spent you life building?

It is truly a Mad, Sad Season at Hilton.....or should we just change all the brand's signs to say "Blackheart"....I mean "Blackstone"?

Hilton doesn't need more bad PR

It never ceases to amaze me how some corporate entities seem to have such a complete lack of business sense or common sense. I understand the concept of saying that any press is good press, but I think this takes it a bit too far. It will be interesting to see what if any "proof" Hilton can come up with to substantiate their claims against Klein or if they will jut drop it when they see this thing going nowhere. I'd have to think they would have someone in their marketing department that would do some hand slapping on this issue before any more damage is done. I guess only time will tell.

Really?!

I have to laugh at most of these posts since I am certain many have never met or really know Mr. Klein or the other people who have been listed by name....which by the way I find totally unnecessary.
Some say that Mr. Klein treated his friends and "family" poorly....I wonder, do you know his family?  Blackstone will remain at the center....to deny any knowledge of having some  sort of competitive advantage is preposterous!  Whether that advantage was due an illegal act remains to be seen, and PROVEN.
Peace

shocking?

Isn't this business as usual?