Starwood to Take $1.2-Billion Charge

Starwood Hotels & Resorts said it will take a massive $1.2-billion charge as a result of its widely anticipated plan to convert from a real estate investment trust to a traditional corporation. New York-based Starwood, which owns Sheraton hotels and Caesars Palace in Las Vegas, said it will take the $1.2-billion charge against earnings to reflect deferred tax liabilities. In addition, the company will reduce its dividend and repurchase as much as $1 billion worth of stock. The change in corporate structure was triggered by recent federal legislation that will reduce many of the tax benefits Starwood would reap when it makes future acquisitions. Starwood shares fell $2.63 to close at $39.88 on the NYSE.