Hilton vs. Starwood. Death of Denizen?

terra_cotta_soldiersFair and honest competitive behavior or something else?  Hilton Hotels President & CEO Christopher Nassetta has a legal and ethical leadership challenge at hand to be sure.  It used to be said the most feared words in business were “I’m Mike Wallace from 60 Minutes”.  Nowadays its likely the attention of Federal prosecutors.  According to news reports the Hilton Hotels Corp has received a federal grand jury subpoena from the U.S. Attorney’s Office for the Southern District of New York for documents related to allegations that the company and two executives stole documents from rival Starwood Hotels & Resorts to develop Hilton’s luxury brand, Denizen Hotels.  Hilton Hotels has reportedly decided to temporarily suspend development of its Denizen brand and has placed Hilton executives Ross Klein and Amar Lalvani on paid leave.

Hilton Hotels Corporation founded by Conrad Hilton who bought his first hotel in 1919 has enjoyed a reputation for quality, value, integrity and strength that will surely be tested by the ongoing federal investigation into what the New York Times has called a case of corporate espionage.  With more than 3,200 hotels and 525,000 rooms in 77 countries and 135,000 employees worldwide, Hilton Hotels is one of the most recognized brands on the planet.  How much damage will be done to the brand, Hilton Hotels ethical reputation and their plans for the new Denizen Hotels as a result of the federal grand jury investigation and legal proceedings?  Depending on the outcome, that could become the million (or perhaps billion) dollar question.

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