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Hilton Suspends Development of Denizen Hotels

April 21, 2009 at 11:37 AM | by | ()

We hadn't heard much from the Hilton or Starwood camps since the news broke last week that Starwood was suing Hilton for the alleged theft of "trade secrets" that Hilton used to develop their recently-announced Denizen Hotels brand.

But today, Hilton speaks: the corporation issued a press release acknowledging that they've received a federal grand jury subpoena "requesting documents relating to Hilton's employment of former employees of Starwood Hotels & Resorts Worldwide, Inc. and materials which Hilton returned to Starwood in February of 2009."

These "employees," of course, are Ross Klein and Amar Lalvani — two ex-Starwood employees who migrated over to Hilton, allegedly taking sensitive information with them illegally. According to the press release, Klein, Lalvani and "their luxury and lifestyle team" have all been placed on paid administrative leave "pending Hilton's review of the situation."

And the biggie update: "At this time, further development of the Denizen Hotels brand has been temporarily suspended." Oh noes. Probably a good idea for Hilton to take a step back and clean up this mess — but could this mean Denizen will end up dead in the water?

Archived Comments:

Hilton in Trouble

When I read about this last week I never thought it would come to anything but to my surprise it does look like Hilton are in big trouble. If they thought they wearnt the would not be taking a back seat-er. It's the first time I have seen a major company being scared like that. I thought if Starwood won this then every hotel in the planet would be claiming they thought of this first. I mean if Hilton built the first Heathrow Hotels chain would that mean that no other chain could possibly do so?