Government asks Starwood to Delay Civil Suit Against Hilton

by Alister POOLE on February 24, 2010

Manhattan federal prosecutors have requested a judge to allow the government to get involved in a civil suit between Starwood Hotels and Hilton Hotels. The suit involves corporate espionage allegations, and they want to stop discovery proceedings for half a year.

This suit was brought by Starwood against Hilton and two of their executives that use to work for Starwood - Amar Lalvani and Ross Klein. The suit alleges that the executives stole a huge amount of electronic files after Hilton recruited them in May and June two years ago.

The motion to halt the proceedings was filed last Friday by US Attorney for the Southern District of New York Preet Bharara. The statement says that the government will conduct more interviews with witnesses during this time.

They also say that halting the discovery proceedings is appropriate because Starwood has pursued discovery actively with a view in finding out what has happened between a number of witnesses and the US Attorney’s Office. It adds that potential defendants would be able to use the rules to obtain information that couldn’t otherwise be obtained and then tailor their defenses and testimony to conform with proof from the government.

Starwood is, of course, opposed to the motion from the government. They have asked the judge to deny the request, according to a new court filing, which says that halting the suit may hurt the investigation of the facts, as well as the ability to talk to witnesses. Starwood is instead asking the court for a compromise. None of the company’s representatives have commented on the recent developments.

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