State Seeks to Bar Stock Vote by Hilton Estate
The California attorney general has asked a probate judge here to bar the estate of the late Conrad Hilton from voting a controlling 27.4% block of shares when stockholders decide May 6 about anti-takeover proposals made by the management of Hilton Hotels, the company said Friday.
James E. Bates, executor of the estate, petitioned the court Friday to rule whether he has the power to vote the shares and whether a vote on the resolutions would be an abuse of his discretion as executor.
Bates told the court in his petition that he intends to vote in favor of the resolutions unless the court rules that it would be an abuse of his role or he himself receives new facts causing him to reconsider.
James Cordi, a deputy state attorney general in the charitable trust division, said he told the court in his petition late Thursday that he believes that Bates has a conflict between his duties as a Hilton Hotels director and the interests of charity.
The Conrad Hilton Foundation, a charitable trust, is the beneficiary of the bulk of the estate of Conrad Hilton, the hotel chain’s founder.
A hearing on Cordi’s and Bates’ petitions was set for next Wednesday before Los Angeles County Superior Court Judge Robert Weil.
The court’s decisions could go a long way toward determining the result of the May 6 stockholder vote.
In turn, the balloting outcome could make the difference in whether Golden Nugget, a Las Vegas-based gambling hall operator, might follow the rebuff of earlier overtures to Hilton Hotels with a full-blown takeover effort.
The Conrad Hilton estate’s 27.4% holding is by far the largest stake in Hilton Hotels. The Los Angeles-based firm’s proxy said the block is sufficient to control the corporation under federal securities regulations.
About half of Hilton’s shares are in the hands of institutional investors, which also are expected to play a major role in the voting.
Meanwhile, a hearing is set for next Thursday on Golden Nugget’s request last week for a federal court injunction to void proxies that Hilton Hotels management holds for the May 6 meeting. That court action could delay the annual meeting.
Golden Nugget has asked U.S. District Judge Matt Byrne to prevent Hilton and its directors from voting any shares or communicating with stockholders without filing “true and correct” proxy statements and other pertinent data.
As previously reported, Golden Nugget accused the defendants of violating securities laws by failing to disclose adequately the purpose and effect of the anti-takeover measures or “certain information” about the company’s casino-licensing difficulties in New Jersey.
Hilton for its part told the court that the “true purpose” of Golden Nugget’s suit was to divert Hilton’s energies from its efforts to license its nearly completed $300-million hotel-casino in Atlantic City, N.J.
Golden Nugget “makes no secret of its desire to impede” the efforts to solve the licensing problem or sell the hotel-gambling complex, Hilton’s court papers said.
Golden Nugget offered early this month to buy the 27.4% block of Hilton stock for $488 million, which Bates called inadequate.
When it made the offer, Golden Nugget said that, if it got the block, it would consider an offer to buy the rest of Hilton’s publicly traded shares.
