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Berkshire Hathaway Countersues Pilot Co.’s Haslams

Alleges secret payments to staff that would inflate price of family’s 20% ownership in travel centers
Pilot exterior - Berkshire Hathaway countersues Pilot Co.
Photograph: Shutterstock

Pilot Co. owner Berkshire Hathaway is countersuing the Haslam family, which owns the remaining 20% stake in the travel centers, over Pilot’s valuation.

Berkshire Hathaway, run by Warren Buffet, is accusing billionaire Jimmy Haslam, who also owns the Cleveland Browns, of “promising secret payments to staff that would inflate the price Berkshire would have to pay for the Haslam family's 20% stake in truckstop operator Pilot Travel Centers,” according to Reuters.

  • Pilot Co. is No. 13 on CSP’s 2023 Top 202 ranking of U.S. c-store chains by store count.

Berkshire made the accusation in filings that are partially redacted and which were made public Tuesday in the countersuit against the Haslam family in Delaware Chancery Court. This is the same court where the Haslam family is suing Berkshire Hathaway, accusing the conglomerate of using improper accounting to devalue the Haslams’ remaining 20% stake in the travel centers.

The Haslam family in 2017 sold 38.6% of Pilot, Knoxville, Tennessee, to Berkshire Hathaway for $2.8 billion and, in January, 41.4% more for $8.2 billion. The family “said it has a right to sell the remainder under the same valuation methods on Jan. 1, 2024,” Reuters reported.

Berkshire has unilaterally and without consent adopted “pushdown” accounting rules that artificially reduce Pilot’s earnings before interest and taxes and “grossly” reduce how much the Haslams would get if they sold their remaining stake, according to a complaint from October, Reuters reported.

The countersuit by Berkshire seeks an injunction preventing the Haslam family “from exercising their option in 2024 or distorting Pilot’s results through unauthorized payments to employees,” Reuters reported. Berkshire said in the countersuit that it learned in November that Jimmy Haslam had “as early as March devised a scheme to secretly promise ‘massive side payments’ to high-level Pilot employees, in order to inflate short-term profit at the Knoxville, Tennessee-based business.”

The promised payments, Berkshire said, affected employees' decision-making on a day-to-day basis, “giving them incentives to make short-term decisions that would boost the Haslams' profit at the expense of Pilot's long-term value,” according to Reuters.

Attorney Anitha Reddy, representing the Haslam family, said on Thursday, “We called Berkshire’s allegations wild inventions in our opposition brief,” the Associated Press reported. “I don’t think we could have been clearer that we dispute them. And if there is any doubt in Berkshire’s mind, we think they’re false and we intend to defeat them on whatever schedule the court orders.”

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