Starwood's lawsuit alleges that Ross Klein, global head of Hilton luxury and lifestyle brands, and Amar Lalvani, global head of Hilton lifestyle and luxury brand development, stole more than 100,000 electronic and hard-copy files from Starwood after Hilton recruited the two executives. Klein and Lalvani had been senior executives with Starwood's luxury brands group before joining Hilton in June 2008, following the Blackstone Group's $26-billion buyout of Hilton in October 2007.

The confidential files thus passed along to Hilton--which included strategic development plans, term sheets and playbooks on converting a standard hotel into a luxury property--were used to accelerate its entry into the lifestyle hotel market, the Starwood complaint alleges. "This brand-in-a-box information provides Hilton with the means to bring a competitive hotel chain to market expeditiously and without expending tens of millions of dollars and years of development, thereby avoiding the inevitable and costly trial and error along the way," according to the complaint.

Starwood first became aware of the alleged theft in February, following its initiation last November of arbitration proceedings with Klein over alleged violations of the non-solicitation provisions in his employment contract and separation agreement. At that time, Starwood requested relevant information from Hilton, which in February delivered eight boxes of hard copy documents as well as computer hard drives, zip drives and thumb drives with files that had been downloaded from Starwood computers.