Berkshire Hathaway settles suit with Haslam family over truck-stop company

Jimmy Haslam, CEO of Pilot Flying J. and Warren Buffett, Chairman and CEO of Berkshire Hathaway.

Lacy O’Toole | CNBC

Berkshire Hathaway settled a billion-dollar lawsuit with the Haslam family over how Berkshire accounted for the value of Pilot Travel Centers, which would affect the price paid in a forced buyout of the family’s remaining stake in that truck-stop giant, both sides said Sunday night.

The settlement, whose terms were not disclosed, avoided a two-day trial to resolve the dispute that had been scheduled to begin Monday in Delaware Chancery Court.

The trial would have been a rare one involving Berkshire Hathaway.

Greg Abel, who has been designated by Berkshire as the successor to longtime CEO Warren Buffett, was expected to testify at the trial.

The Haslam family and its Pilot Corp. in the suit filed this fall alleged that Berkshire Hathaway improperly adopted a form of accounting of the value of Pilot Travel Centers that would have led to a sharply lower price Berkshire would pay to acquire the family’s remaining 20% stake in PTC.

Berkshire in turn had accused Cleveland Browns owner Jimmy Haslam of offering payments to PTC executives to boost the value of the company so that his family would get a bigger buyout from Berkshire, which controls PTC.

Last month, it was reported that federal prosecutors in New York were investigating Berkshire’s allegations about Jimmy Haslam. The Haslam family and Pilot Corp. strongly denied those claims.

Berkshire and Pilot Corp. in similar press statements Sunday night said that they had reached an agreement to fully settle the Delaware Chancery case. including “the dismissal of all claims and counterclaims.”

A notice on the Chancery Court’s docket for the case, posted Saturday night, said, “The trial scheduled in this matter for January 8 and 9, 2024, is hereby canceled and has been removed from the Court’s calendar.”

That notice did not explain the cancelation, and the reason for the trial being called off was not known until the statements were issued by the litigants on Sunday.

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Berkshire owns 80% of PTC after having spent $11 billion in separate purchases in 2017 and then again last January to buy out the majority stake owned by the Haslams.

The Haslams had a “put option” to compel Berkshire to buy out their remaining 20% state within a 60-day window every year thereafter.

Last year, the family sued Berkshire, alleging that the conglomerate had used so-called pushdown accounting that would have the effect of lowering the stated value of PTC, and thus short the Haslams on what would be legally owed to them.

The Haslams said that form of accounting was not authorized by them.

Berkshire in turn had argued that its use of pushdown accounting was not a change in accounting policy that was barred by its purchase agreement with the Haslams.

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