Recently, Warren Buffett’s Berkshire Hathaway has claimed that the billionaire Haslam family attempted to bribe at least 15 executives who worked with the Pilot truck stop chain by offering them millions of dollars. The goal was to artificially inflate the company’s profits for this year, which would force Berkshire to pay more for the Haslams’ remaining 20% stake in the business.
The billionaire Haslam family, including Cleveland Browns owner Jimmy Haslam and former Tennessee governor Bill Haslam, had previously accused Berkshire Hathaway of changing Pilot’s accounting practices to understate its earnings for the year.
Legal proceedings regarding Berkshire’s counter lawsuit are expected to occur this Thursday. There has been no immediate response to these allegations from the Haslams’ lawyers or a family representative.
Berkshire Hathaway claims that it only learned about the Haslams’ bribery attempts this month. Allegedly, a senior executive promised a bonus to inflate profits, a move discovered by the current Pilot CEO, who was appointed by Berkshire this year.
Berkshire redacted the number of employees that allegedly accepted the bribes, though they estimate that around 15 employees received substantial offers from Jimmy Haslam at a dinner in March in Knoxville, Tennessee.
Berkshire Hathaway initially purchased 38.6% of Pilot in 2017 for $2.758 billion before increasing their holdings to 80% this year for an additional $8.2 billion. Buffett mentioned to Berkshire shareholders this spring that he regrets not purchasing the entire company outright in 2017, as the price was more favorable back then, but the Haslams declined the offer.
Pilot operates over 850 truck stops and employs roughly 30,000 individuals in the United States and Canada. It has significantly contributed to Berkshire’s revenue and profits this year.
Furthermore, the Haslams argue that Berkshire’s shift to “pushdown accounting” this year led to higher depreciation and amortization expenses, resulting in lower net income for Pilot. Berkshire claims that it’s difficult to ascertain the precise amount by which Pilot’s profits were inflated due to these executive decisions.
Berkshire has requested a January trial date to resolve the disputes and to determine the correct value of Pilot, especially regarding whether the Haslams will be permitted to sell their stake in 2024, given the uncertainty surrounding the company’s 2023 earnings.
Additionally, Berkshire holds numerous other businesses, including Geico insurance, BNSF railroad, and various major utilities. It also has a substantial stock portfolio with notable stakes in companies such as Apple, Coca-Cola, American Express, and Bank of America.
