## Facts

- Hilton pursued a hostile acquisition of ITT through a tender offer and proxy contest seeking to replace ITT’s board at the next annual meeting.
- ITT was a Nevada corporation whose bylaws left the annual meeting’s date, time, and place to the board’s determination.
- Nevada statutes required shareholder meetings for director elections and required director elections within 18 months of the last election.
- ITT had not set or noticed the 1997 annual meeting when Hilton sought relief.
- Hilton claimed “annual meeting” required a meeting in May 1997 (consistent with prior practice) and that delay would function as an entrenchment tactic impairing shareholder voting rights.
- ITT argued the statutes and bylaws did not impose a fixed 12-month or May requirement and supported its reading with expert affidavit evidence distinguishing annual meetings from special meetings.

## Issues

1. Whether Nevada corporate law or ITT’s bylaws required ITT to hold its 1997 annual shareholders’ meeting in May 1997 (or within a strict 12-month period).
2. Whether ITT’s failure to schedule a May 1997 meeting constituted a fiduciary breach or inequitable conduct warranting a mandatory preliminary injunction.

## Decision

- The court denied Hilton’s motion for a mandatory preliminary injunction.
- The court held Hilton did not show a clear legal entitlement to a May 1997 meeting under Nevada law or ITT’s bylaws.
- The court found Nevada law permitted up to 18 months between director elections and ITT had not exceeded that limit.
- The court concluded Hilton did not make a clear showing that ITT’s timing decision impaired shareholder voting rights or otherwise constituted actionable misconduct.
- Applying the heightened standard for mandatory preliminary relief, the court found the facts and law did not clearly favor Hilton.

## Legal Principles

- Where governing statutes permit up to 18 months between director elections, “annual meeting” does not, without more, impose a strict 12-month meeting requirement.
- Corporate bylaws granting the board discretion to set the annual meeting date do not create a fixed-month obligation based solely on past practice.
- A mandatory preliminary injunction requires heightened proof; relief should not issue unless the movant shows the facts and law clearly support compelling the requested action.
- Allegations of entrenchment in a takeover contest, without a clear statutory/bylaw violation or concrete impairment of voting rights, are insufficient for mandatory injunctive relief.

## Conclusion

The court refused to compel ITT to hold its annual meeting in May 1997, holding that Nevada law and ITT’s bylaws allowed the board discretion to schedule the meeting so long as director elections occurred within the statutory 18-month limit, and that Hilton did not clearly establish disenfranchisement or fiduciary wrongdoing justifying mandatory preliminary relief.


Hilton Hotels Corp. v. ITT Corp., 962 F. Supp. 1309 (D. Nev. 1997)