Hilton is now subject to an injunction preventing the hotel chain from introducing any lifestyle hotels for two years.
Starwood filed a lawsuit against Hilton in federal court last year claiming that two of Hilton’s senior management team had filched proprietary and confidential information that fed into plans for Hilton’s lifestyle brand, Denizen.
The two senior Hilton executives, Ross Klein and Amar Lalvani, were both former Starwood employees. Klein, head of luxury and lifestyle brands, was profiled by Marketing Week before the lawsuit launched.
As part of a legal settlement Hilton has agreed to make a $75m (£48.7m) cash payment to Starwood and the latter is also to receive another $75m (£48.7m) in hotel management contracts.
Christopher J. Nassetta, president and chief executive officer, Hilton Worldwide, says: “Hilton Worldwide regrets the circumstances surrounding the dispute with Starwood Hotels & Resorts Worldwide and is pleased to bring an end to this prolonged litigation.
“Hilton Worldwide is committed to fair, ethical and robust competition in the marketplace, and we will continue to focus on what we do best – providing exceptional services for all of our guests around the world.”
A Manhattan federal grand jury is continuing to investigate whether Hilton and the former executives should face criminal charges.
Starwood’s own W lifestyle hotel chain has proven a success and W Leicester Square is planned to open next year.