Hilton Hotels Corp. v. Itt Corp.

978 F.Supp. 1342 (D.Nev. 1997)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

Hilton (P) decided to buy ITT (D) and announced plans for a proxy contest at the next ITT shareholder meeting. The price was $55 per share. D pulled a few tricks out of the hat and knew that it could delay the next shareholder meeting for 6 months longer than would have been thought as Nevada law only required a meeting every 18 months of the last meeting. Six months after the fight began D announced a Comprehensive Plan that was designed to be a poison pill for any takeover attempt. D split the company into parts and then reordered the boards of directors to stagger the board and making a required 80% shareholder vote to repeal the classified board provision or to remove a director without cause. This plan also resulted in a $1.4 billion-dollar tax liability if P acquired more than 50% of D. P then offered $70 per share. That was rejected. P then filed for injunctive relief that the failure to hold the annual board meeting in May 1997 would constitute a breach of the fiduciary duty owed by D's incumbent Board of Directors to its shareholders.