Delaware Judge Offers Berkshire Speedy Trial Over Pilot Dispute
By Tom Hals
A Delaware judge has indicated that she is willing to grant a speedy trial requested by Warren Buffett’s Berkshire Hathaway (NYSE:) in January, provided certain conditions are met. This is in relation to resolving claims that billionaire Jimmy Haslam attempted to improperly inflate his stake in a truck stop chain.
Efficiency Favors Berkshire’s Allegations
Vice Chancellor Morgan Zurn of Delaware’s Court of Chancery stated in a Friday ruling that efficiency favored hearing Berkshire’s allegations next month alongside a Jan. 8-9 trial over claims by the Haslam family that Berkshire was deflating the value of Pilot Travel Centers.
Dispute Over Stake Value
The dispute revolves around how much Berkshire would owe if the Haslams, including Cleveland Browns owner Jimmy Haslam, exercised their option to sell their 20% stake in the country’s largest truck stop chain to Berkshire in the first two months of 2024.
Conditions for January Trial
Zurn has given Berkshire until 9 a.m. ET (1400 GMT) Monday to decide if the company would accept a January trial on the condition that discovery will be limited to what was necessary to defend against the lawsuit filed by the Haslam family.
Stakes and Allegations
Berkshire said it would suffer irreparable harm if its case wasn’t resolved before the Haslams exercised their option to sell the stake. Berkshire owns 80% of Pilot, having paid the Haslams $2.76 billion for a 38.6% stake in 2017 and $8.2 billion for another 41.4% in January. Each side accuses the other of trying to manipulate Pilot’s earnings, the basis for valuing that stake.
Legal Claims and Counterclaims
The Haslams sued Omaha, Nebraska-based Berkshire in October, accusing it of seeking a “windfall” by adopting “pushdown” accounting for Pilot. Berkshire countersued on Nov. 28, alleging that Jimmy Haslam tried to bribe Pilot executives with millions of dollars to inflate earnings in 2023 at the expense of future years. According to court papers, the Haslams believe the 20% Pilot stake was worth $3.2 billion before Berkshire’s accounting change, an amount Berkshire disputes.
Additional Business Information
Pilot is based in Knoxville, Tennessee, and has approximately 800 locations. Berkshire also owns dozens of other businesses including the BNSF railroad and Geico car insurer.
