Berkshire Hathaway countersues Haslam billionaires in Pilot valuation battle

Warren Buffett’s Berkshire Hathaway has accused billionaire Jimmy Haslam of making secret payments to staff in order to inflate the price Berkshire would have to pay for the Haslam family’s 20% ownership in truck stop operator Pilot Travel Centers, according to partially redacted filings made public on Tuesday in a countersuit against the Haslam family in Delaware Chancery Court.

The Haslams have been suing Buffett’s company over Pilot, and their lawyers did not respond immediately to requests for comment. Jimmy Haslam, who also owns the Cleveland Browns football team, is at the center of the dispute.

In a complaint last month, the Haslams accused Berkshire of modifying its accounting for Pilot to lower the business’s profit, impacting the price Berkshire would owe if the family exercised a put option to sell its 20% stake next year. Berkshire’s countersuit seeks an injunction stopping the Haslams from exercising their option in 2024 or distorting Pilot’s results through unauthorized payments to employees.

Berkshire’s countersuit revealed that Jimmy Haslam had allegedly 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 company believes that these promised payments influenced the employees’ decision-making in a way that prioritized the Haslams’ profit over Pilot’s long-term value.

Berkshire became aware of the payments in a routine meeting in early November with Pilot Chief Executive Adam Wright, where another senior Pilot executive indicated knowledge of a “side deal” with Jimmy Haslam. The number of executives who allegedly received payment offers was redacted.

With a trial in the Haslams’ lawsuit set to begin in January, Berkshire wants its claims tried at the same time. The judge overseeing the case is expected to discuss scheduling at a Nov. 30 hearing.

Jimmy Haslam is worth $8.8 billion according to Forbes magazine. The family also includes former Tennessee Governor Bill Haslam, and Jimmy’s father, Jim Haslam, who founded Pilot. The case is Pilot Corp v Abel et al, Delaware Chancery Court, No. 2023-1068-MTZ. (Reporting by Jonathan Stempel in New York; Editing by Sonali Paul)


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