Hilton Hotels Corp. v. ITT Corp.

Hilton Hotels Corp. and HLT Corporation (collectively, Hilton) (plaintiff) filed a motion for a preliminary injunction that would require ITT Corp. (defendant), a Nevada corporation, to conduct its annual meeting in May 1997. ITT’s bylaws required annual meetings to be held at such date, time, and place as determined by its board of directors. Nevada Code 78.330 required Nevada corporations to hold annual meetings for shareholders to elect directors and conduct other business. Nevada Code 78.345(1) required Nevada corporations to elect directors within 18 months after the last election. In ITT’s opposition to the preliminary injunction motion, Professor John C. Coffee, Jr., submitted an affidavit that annual meeting was to be understood as an adjective to distinguish annual meetings for electing directors as opposed to other special meetings called by the board of directors. ITT had not yet set its annual meeting or sent notice regarding the annual meeting. Hilton’s motion for a preliminary injunction argued that ITT was required to hold an annual meeting every 12 months. In the alternative, Hilton argued that failure to hold the annual meeting in May 1997 would constitute a breach of the fiduciary duty owed by ITT’s incumbent board of directors to its shareholders. Hilton further argued that a delay in the annual meeting could potentially cause Hilton to withdraw its tender offer for ITT.