Buffett’s Berkshire has been sued by the Haslam family over the Pilot Truck Stop acquisition

Oct 26 (Reuters) – Warren Buffett’s Berkshire Hathaway (BRKa.N) has been sued by billionaire Haslam’s family, accusing the group of using improper accounting to write down the value of its remaining 20% ​​stake in Pilot Travel Centers, the largest U.S. truck stop operator. .

The family, including Jimmy Haslam, owner of the Cleveland Browns football team, sold Berkshire’s 38.6% stake in Pilot for $2.8 billion in 2017 and another 41.4% stake for $8.2 billion in January. It said it has the right to sell the rest with the same valuation methods on January 1, 2024.

According to a complaint unsealed Thursday in Delaware Chancery Court, Berkshire unilaterally and without consent adopted “discounted” accounting rules that artificially reduced Pilot’s earnings before interest and taxes, and “grossly” underestimated the amount the Haslams would receive if they sold their cars. The remaining share.

The family repeatedly objected, but Buffett refused to commit to not using discount accounting, the complaint said.

Instead, she said, he told Pilot founder and Jimmy Haslam’s father, James Haslam II, this month: “I said Berkshire would abide by the terms of the contract. And that’s exactly what will happen.”

Buffett’s assistant did not immediately respond to a request for comment after market hours.

Christine Seabrook, Pilot’s chief legal counsel, said in a statement that the lawsuit relates to a “narrow matter between the owners” and declined to comment on the matter.

The complaint filed on October 23 seeks to ensure that Haslam’s 20% stake is properly valued, and to stop what it alleges is Berkshire’s improper accounting.

Estimates of how much of a “windfall” the Haslam family said Berkshire would receive on its account have been revised because of its calculations.

According to the complaint, several Pilot executives, including Greg Appel, a Berkshire vice president expected to succeed Buffett as CEO of Berkshire, are also charged.

Pilot is headquartered in Knoxville, Tennessee, with approximately 800 locations in the United States and Canada.

Omaha, Nebraska-based Berkshire generated $197 million in net income on $24.3 billion in revenue from February to June, according to Berkshire. Second quarter report.

Buffett is 93 years old, and the elder Hassan is 92 years old. Haslam’s other son, Bill Haslam, is the former governor of Tennessee. Jimmy Haslam He deserves $8.7 billion, according to Forbes magazine.

The case is Pilot Corp v Abel et al, Delaware Chancery Court, No. 2023-1068-MTZ.

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