HILTON HOTELS <HLT> GIVEN RIGHT TO SUE IRS
Hilton Hotels Corp said it received
approval from Federal court to sue the Internal Revenue Service
to determine if the IRS was correct in allowing the Conrad
Hilton Foundation to hold certain stocks.
    That ruling by the IRS allowed the Foundation, set up by
the late Conrad Hilton, to hold onto 27 pct of the Hilton Corp,
worth approximately 164 mln dlrs, according to Hilton
attorneys.
    Barron Hilton, Conrad's son, is making a bid to purchase
those 6,782,000 shares, the company said.
    However, in an effort to hold onto the stock, the
Foundation changed its tax status from a private foundation to
a public support organization, freeing it from the constraints
of the excess business holdings limitations imposed on private
foundations by the Tax Reform Act of 1969, according to the
Hilton Corp.
    That act said that a private foundation could not own more
than 20 pct of a corporation, lawyers explained. Anything over
that figure had to be sold.
    The lawyers explained that when Conrad Hilton died, the law
required that excess holdings by the Foundation above 20 pct of
the common stock should be sold. Under Conrad Hilton's will,
Barron had the option to buy the seven pct,  according to the
Hilton lawyers.
    Now Hilton lawyers contend that through a clause in the tax
law, Barron Hilton is entitled to buy the entire 27 pct block
of stock. The Hilton lawyers explained that Barron was
attempting to keep the large block from going public, leaving
the family in control of the corporation.
   
 Reuter
