Hilton Hotels Corp. v. ITT Corp.
United States District Court for the District of Nevada
978 F.Supp. 1342 (D. Nev. 1997)
Hilton (plaintiff) launched a tender offer for ITT (defendant) stock and announced a proxy contest for ITT's next annual meeting; ITT rejected the offer and, without shareholder approval, adopted a plan restructuring its board into three staggered classes elected in different years, which would prevent shareholders from voting out most sitting directors for one to two election cycles. Hilton sued for an injunction and a declaration that ITT could not implement the plan without a shareholder vote.
Whether a target corporation's board may entrench itself against a hostile takeover attempt by effectively removing shareholders' ability to vote current board members out of office.