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Hilton Suspends Development of Denizen Hotels

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?