Warren Buffett’s Berkshire Hathaway has filed a lawsuit accusing the Haslam family offering to bribe Pilot executives in an attempt to inflate the value of the truck stop chain.
On November 28, Reuters reported that Berkshire Hathaway has filed a countersuit in Delaware Chancery Court that accuses Jimmy Haslam and the Haslam family of offering millions of dollars worth of secret payments to at least fifteen executives at Pilot to encourage them to temporarily inflate the company’s profits in order to increase the value of the Haslam family’s remaining 20% stake.
“Haslam’s outrageous and illegitimate scheme has harmed and threatens to further harm (Pilot) and, by extension, … Berkshire,” the countersuit states.
The Haslams filed suit against Berkshire Hathaway on October 23, accusing the company of using deceptive accounting practices to artificially drive down the value of the Haslam stake in Pilot Travel Centers.
The countersuit claims that Berkshire Hathaway only became aware of the Haslam’s attempts to bribe employees this month during a routine meeting with an executive, though they accuse Jimmy Haslam of initiating the scheme as early as March 2023.
Berkshire Hathaway believes that Jimmy Haslam offered payments to approximately 15 Pilot executives at a country club dinner in Knoxville, Tennessee, in March 2023, then again to 10 executives in April.
The lawsuit argues that the promise of bribes influenced Pilot executives to make decisions that favored short-term profitability over the long-term financial health of the company.
Berkshire Hathaway took over majority ownership of the Pilot Company as of January 31, 2023, as part of a plan announced in 2017 to reduce the Haslam family’s stake in Pilot to 20% by 2023. The 2017 announcement stated that Berkshire Hathaway would acquire an additional 41.4% stake in 2023 to add to the 38.6% stake acquired in 2017 in order to obtain a majority stake in the Pilot company at that time. The agreement would also allow the Haslam family to sell the remaining 20% stake in the company to Berkshire Hathaway on January 1, 2024, if they choose.
The countersuit seeks to prevent the Haslams from exercising their option to sell their 20% stake in 2024 or from using promises of payment to artificially increase the value of Pilot.
Pilot CEO Shameek Konar and CFO Kevin Wills stepped down following the Berkshire Hathaway takeover in early 2023 and were replaced by longtime Berkshire Hathaway executives Adam Wright and Joe Lillo.
Cleveland Browns owner Jimmy Haslam owned and operated Knoxville-based Pilot Flying J since 1996.