US Markets
Monday, January 8th, 2024 3:19 pm EDT
Key Points
Billion-Dollar Lawsuit Settlement:
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- Berkshire Hathaway has reached a settlement in a billion-dollar lawsuit with the Haslam family regarding accounting practices related to Pilot Travel Centers.
- The lawsuit focused on how Berkshire accounted for the value of Pilot Travel Centers, impacting the price in a forced buyout of the Haslam family’s remaining stake in the truck-stop giant.
Avoidance of Trial and Unspecified Settlement Terms:
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- The settlement avoided a scheduled two-day trial in Delaware Chancery Court that was set to begin on Monday.
- The terms of the settlement were not disclosed in the statements issued by both Berkshire Hathaway and the Haslam family.
Allegations and Counterclaims:
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- The Haslam family and Pilot Corp. alleged that Berkshire Hathaway improperly adopted an accounting method that would have resulted in a significantly lower price for acquiring the family’s remaining 20% stake in Pilot Travel Centers.
- In response, Berkshire accused Cleveland Browns owner Jimmy Haslam of offering payments to Pilot Travel Centers executives to artificially boost the company’s value for a larger buyout from Berkshire.
- The lawsuit had been ongoing, with federal prosecutors in New York reportedly investigating Berkshire’s allegations against Jimmy Haslam. However, the Haslam family and Pilot Corp. strongly denied these claims.
Berkshire Hathaway has settled a billion-dollar lawsuit with the Haslam family over accounting practices related to Pilot Travel Centers. The dispute centered around how Berkshire accounted for the value of Pilot Travel Centers, which would impact the price in a forced buyout of the Haslam family’s remaining stake in the truck-stop giant. The terms of the settlement were not disclosed, avoiding a scheduled two-day trial in Delaware Chancery Court. The Haslam family and Pilot Corp. alleged that Berkshire Hathaway improperly adopted an accounting method that would have led to a lower acquisition price for the family’s 20% stake in Pilot Travel Centers. In return, Berkshire accused Cleveland Browns owner Jimmy Haslam of offering payments to boost the company’s value for a larger buyout from Berkshire. The settlement includes the dismissal of all claims and counterclaims. Berkshire owns 80% of Pilot Travel Centers, having acquired the majority stake from the Haslams in separate purchases in 2017 and 2023. The Haslams had a “put option” allowing them to compel Berkshire to buy out their remaining 20% stake within a 60-day window each year. Last year, the family sued Berkshire, alleging the use of unauthorized pushdown accounting to lower the stated value of Pilot Travel Centers. Berkshire argued that pushdown accounting was not a prohibited change in accounting policy per their purchase agreement with the Haslams. The cancellation of the trial was confirmed in statements by both parties on Sunday.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/07/trial-canceled-in-berkshire-hathaway-suit-by-haslam-family.html
