Hilton Estate Executor Wins Court Ruling : Bates OKd to Vote Stock for Anti-Takeover Rules

A probate judge here ruled Wednesday that the executor of the Conrad Hilton estate may vote its controlling block of stock in Hilton Hotels in favor of management’s anti-takeover proposals at Monday’s annual stockholders meeting.

Rejecting the California attorney general’s contention that executor James Bates has a conflict of interest because he also is a Hilton director, Judge Robert I. Weil held that voting the stock was well within the business discretion allowed Bates.

Voting of the estate’s 27.4% Hilton stake for the proposals, as Bates has said he will do, is expected to go a long way toward assuring their passage.

Weil’s decision was a setback to Las Vegas-based casino operator Golden Nugget, which has made overtures toward acquiring the controlling Hilton interest and has worked against the anti-takeover proposals.

Golden Nugget, which was not a party in Wednesday’s proceeding, has another chance today to advance its cause in a federal court proceeding. There it seeks a preliminary injunction that, if granted, probably would delay Hilton’s annual meeting.

Backed by Foundation Attorneys

Judge Weil, after a hearing, concluded that Bates had no conflict sufficient to justify the court’s disqualifying him from voting the Hilton shares. Therefore, Weil said, it “ill-behooves the court to substitute its own judgment for the executor’s business judgment.

Bates’ position in the dispute was supported by attorneys for the Conrad Hilton Foundation, which was named chief beneficiary in Conrad Hilton’s will, and by attorneys for Hilton Hotels Chairman Barron Hilton.

However, the foundation is opposing Barron Hilton’s claim before the same court that he has an option to buy the 6.8 million Hilton shares from his father’s estate for $24 per share. The stock’s market price has been about $68, and Golden Nugget has offered $72 a share for the block.

James Cordi, a deputy attorney general in the charitable trust division, told the court Wednesday that he was appearing to oppose Bates’ voting for the Hilton anti-takeover proposals in the interests of charities benefiting from the estate.