HILTON HOTELS CORP. V. ITT CORP.
978 F.Supp. 1342 (D.Nev. 1997)
NATURE OF THE CASE: This was a hostile takeover attempt and the litigation that ensued. Hilton moved for a permanent injunction.
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.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
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