(Bloomberg) — Warren Buffett’s Berkshire Hathaway has avoided trial by settling allegations it violated the terms of its buyout of truck-stop-chain Pilot Travel Centers by changing the accounting methods used to value the last part of the deal.
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Berkshire – which acquired an 80% stake in Pilot Travel for more than $10 billion from billionaire Jimmy Haslam – was accused of improperly changing the accounting methods to short charge the Haslam family out of their remaining 20%. The two parties reached a settlement on the eve of the trial, one of Haslam’s representatives confirmed.
Although details of the settlement haven’t yet been made public, the deal is likely to clear the way for Buffett to purchase the remaining 20% of Pilot Travel from Haslam later this month under terms of the original acquisition. The accord means both sides will dismiss all claims against each other, according to Haslam’s spokesperson.
A docket filing in Delaware Chancery Court said the trial, scheduled for Monday in Wilmington before Judge Morgan Zurn, had been cancelled. A lawyer for Buffett didn’t immediately respond to a request for comment on Sunday. Haslam, the owner of the NFL’s Cleveland Browns, was expected to testify live in the trial, but Buffett was not.
The settlement resolves a case that set up a bitter legal battle between the two billionaires. Haslam contends Pilot Travel executives installed by Buffett changed quarterly-earning accounting methods in a way that will cut the value of his holdings by $1.2 billion if the Tennessee-based billionaire choses to sell Buffett his remaining stake.
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As part of the case, Buffett’s lawyers accused Haslam of bribing Pilot Travel executives with promises of millions in bonuses to allegedly influence their short-term business decisions. Buffett says those promises were made in hopes of juicing quarterly earnings in order to pump up the value of his 20% stake. Federal prosecutors in Manhattan are investigating whether Haslam’s promised payments amount to bribes that violate federal law.
Read More: Truck Stop Tycoon Battles Buffett to Add to $18 Billion Fortune
The case is Pilot Corp. v. Abel, 2023-1068, Delaware Chancery Court (Wilmington)
(Updates with Haslam comment and dismissal of claims in third paragraph.)
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