Lawyer Says Conrad Hilton Weighed Sale of His Stock

The late Conrad N. Hilton said in the 1970s that he was thinking of selling his stock in Hilton Hotels to RCA, his former tax attorney testified Wednesday. The point was made during a court battle involving the $500-million estate of the hotelier, who died at 91 in January, 1979.

Wednesday’s testimony by Donald H. Hubbs, who has been president of the Conrad N. Hilton Foundation for the last five years, was far different from a view propounded by another of his former legal clients, Conrad Hilton’s son, Barron.

Barron Hilton, who has claimed a right to buy a 27.4% controlling stake in the hotel chain from his father’s estate, has told Los Angeles County Superior Court Judge Robert I. Weil emphatically that Conrad Hilton did not want his hotel empire to go to outsiders.

Hubbs testified Wednesday that in more than 30 years as attorney for the Hiltons, he never heard the father talk of being fearful of an unfriendly takeover. Barron Hilton, who is chief executive of the hotel chain, told the court earlier that his father was very concerned at such a prospect.

The Internal Revenue Service recently approved the foundation’s reorganization in order to hold an unlimited amount of stock in Hilton Hotels.

The foundation, Conrad Hilton’s primary beneficiary, contends in the trial that Barron Hilton’s option under his father’s will was good only to buy the portion of the 27.4% hotel stake that could not be received by the foundation as “excess business holdings.”

The IRS ruling eliminated that problem.

Barron Hilton maintains that he properly exercised his option shortly after his father’s death and that the foundation, not he, is seeking a “windfall” on the greatly increased value of the stock since 1979.

James Bates, executor of Conrad Hilton’s estate, testified Wednesday that Conrad Hilton did not want the option in the will to “convey wealth” to his son Barron.

Before the trial, Bates had contended that Hubbs had a conflict of interest in acting for the foundation because of his longstanding ties with Barron Hilton and because he had suggested that the stock option for Barron be put into Conrad’s will to “solve” excess business holdings problems.

Bates’ attorney, Myron Harpole, chose Wednesday to cross-examine Hubbs as an adverse witness under court rules. Harpole repeatedly sought to shake Hubbs in his account that he learned only in late 1983 that the reorganization would avoid excess business holdings.

Hubbs acknowledged under questioning that he personally did nothing from October, 1983, until May, 1985, to attain that solution.