We've been watching this lawsuit go forward with interest for some time now. As you'll recall, Starwood sued Hilton over two senior executives (Ross Klein and Amar Lalvani) who departed and managed to show up at Hilton with seemingly truckloads of confidential documents relating to Starwood's luxury brands. Hilton fired Ross and Amar and sent the documents back to Starwood but claimed they didn't really appear to be confidential documents. Denizen, Hilton's new luxury brand, bit the dust soon after the first lawsuit was filed. The suit even contains a quote
from this blog describing the similarity of Denizen to W at the brand launch - what foresight!
As first reported in today's Wall Street Journal
, Starwood filed an amended complaint in New York District Court alleging further wrong-doing by Hilton. Most shocking in the new complaint is the seemingly personal attacks against Hilton CEO Nassetta. Starwood is going for the jugular by attacking the senior management team at Hilton.
We've pulled the document (all 130+ pages of it) and posted it here
for your weekend reading pleasure.
But in case you don't have time or inclination, we'll post a few of the best parts of this spectacle below:
It appears that the sheer amount of documents (and copies thereof) were truly enormous. Starwood (with just a touch of drama-queen) writes in the amended complaint:
"Hilton has delivered to Starwood hundreds of thousands of pages of documents and computer files retrieved from Hilton offices and the homes of Hilton employees around the world, and there is no end in sight. Deliveries of documents pursuant to the Preliminary Injunction continue, and documents were received as recently as yesterday, nearly a year later. This mountain of undisputed evidence...."
And many of the documents were sent by "Starwood employees used as corporate spies" recruited by Klein using personal email accounts with cute notes attached to the files like: "fyi, I do not ck this email from work so it is ok to send stuff on." Obviously, the computer science major who wrote these words didn't quite understand how nothing is really ever "ok to send stuff on"
And here is a great quote from an email from Lalvani regarding a potential W in Thailand: "Here’s an interesting one. . . . I have good connections with the owner. Lets discuss protocol during my transition on deals like this so we don’t miss them but also dealing with the fact we don’t have a lifestyle offering yet. This is going to be fun!!" Fun indeed.
And Hilton allegedly made it easy for all of the team to use the Starwood documents by uploading them onto Hilton's common drive:
“[W]ere you able to retrieve that strategic development list of cities/countries from Amar’s discs? Maybe you sent it and I missed it? We now need it urgently. Could you send to me or show me where to search?”
In response, Swierk informed Mani: "I asked Joy to put all of those documents on the s: drive so they are all located in s:HPP/HPP Development/W docs."
And "Hiltonizing" the stolen documents was a top priority:
"Further to our discussions earlier today, I think we need to have your team work with you ASAP on Hiltonizing this and sharing it with the Exec Group ASAP."
What Starwood asks of the Court in response to Hilton's actions is unprecedented, the best of which includes:
- Court appointment of one or more "monitors" to assure Hilton’s compliance with all injunctions and Hilton's non-use, directly, indirectly or derivatively of any Starwood confidential Information or information derived therefrom;
- Euthanizing Hilton's terminally infected Denizen Hotels brand;
- Imposing a "penalty box" or "time out" enjoining for an appropriate time period any further development of Hilton's luxury and lifestyle brands, to compensate Starwood for Hilton’s unjust enrichment from its wrongful use of Starwood confidential information across all of Hilton's luxury and lifestyle brands
Starwood is asking for a baby sitter to watch over Hilton and is even suggesting a "time out" - obviously the drafting lawyer has children.
Still, our favorite has to be the request to "euthanize" the "terminally infected" Denizen brand. Again, spectacular drama.
As we mentioned, Starwood is clearly going in for the kill with this--but at what cost, we wonder? Lawsuits are not Starwood's core business; hospitality is. If the allegations are true, Starwood is clearly entitled to relief, but one wonders if such a nasty public feud is in the best interests of anyone.These insights are excerpted with permission from Tom Botts' Hudson Crossing blog.