OMAHA, Neb. (AP) \u2014 An attorney for the billionaire Haslam family called\u00a0bribery allegations\u00a0leveled by Warren Buffett\u2019s company a \u201cwild invention\u201d Thursday.<\/p>\n\n\n\n
But a judge didn\u2019t decide immediately whether those allegations will be resolved at a January trial that should help determine the multibillion-dollar price Berkshire Hathaway might have to pay the Haslams for the rest of the Pilot truck stop train.<\/p>\n\n\n\n
The Haslams and Buffett\u2019s company are accusing each other of manipulating Pilot\u2019s earnings this year to affect the price Berkshire would have to pay for the Haslams\u2019 remaining 20% stake in the company if the family decides to sell.<\/p>\n\n\n\n
The Haslam family \u2014 which includes Cleveland Browns owner\u00a0Jimmy Haslam\u00a0and former Tennessee governor Bill Haslam \u2014\u00a0accused Berkshire\u00a0last month of trying to understate Pilot\u2019s earnings this year by changing its accounting practices.<\/p>\n\n\n\n
Berkshire responded this week with a lawsuit of its own accusing Jimmy Haslam of trying to bribe key Pilot executives with payments several times their annual salaries to inflate the company\u2019s profits.<\/p>\n\n\n\n
\u201cWe called Berkshire\u2019s allegations wild inventions in our opposition brief,\u201d said attorney Anitha Reddy, who represents the Haslams. \u201cI don\u2019t think we could have been clearer that we dispute them. And if there is any doubt in Berkshire\u2019s mind, we think they\u2019re false and we intend to defeat them on whatever schedule the court orders.\u201d<\/p>\n\n\n\n
The judge promised to rule by the end of the week whether Berkshire\u2019s lawsuit can be heard at the same time a trial on Pilot\u2019s original lawsuit is scheduled in January. Berkshire wants the court to prevent the Haslams from exercising their option to sell the rest of the company to Berkshire next year because it says there are so many doubts about the accuracy of Pilot\u2019s 2023 earnings. Even if the judge agrees, the Haslams would still have the option to sell in future years under the agreement they signed back in 2017.<\/p>\n\n\n\n
Berkshire\u2019s attorney Craig Lavoie argued that it\u2019s crucial to block a sale next year because it will be hard to determine just how much Pilot\u2019s earnings have been effected by the alleged bribes. He said Berkshire believes at least 28 executives \u2014 many of whom are involved in buying and selling fuel for the nation\u2019s largest truck stop chain \u2014 were offered bribes.<\/p>\n\n\n\n
Berkshire said in its lawsuit that it just learned a couple weeks ago about the Haslams\u2019 attempts to bribe executives who used to work for the family at the company Jim Haslam \u2014 Jimmy and Bill Haslam\u2019s father \u2014 founded before Berkshire became the majority owner at the start of this year. A senior executive who had been promised a bonus revealed that to the current Pilot CEO, according to Berkshire.<\/p>\n\n\n\n
Lavoie said it\u2019s difficult for Berkshire to sort out what short-term decisions those executives might have made because of the bonuses.<\/p>\n\n\n\n
\u201cMr. Haslam\u2019s side promises have forced the company to investigate and interrogate many of the key employees it relies on today to operate the company,\u201d Lavoie said.<\/p>\n\n\n\n
When Berkshire bought its initial 38.6% stake in Pilot in 2017 it paid $2.758 billion. This year, it paid another $8.2 billion to give it control of 80% of the company, and it went on to install a new CEO and chief financial officer. Buffett told\u00a0Berkshire shareholders\u00a0this spring that he wishes he could have bought the entire company at once because the price was better in 2017, but the Haslams wouldn\u2019t sell it all then.<\/p>\n\n\n\n
Pilot\u2019s chain of more than 850 locations and roughly 30,000 employees in the United States and Canada has already provided a\u00a0meaningful boost\u00a0to Berkshire\u2019s revenue and profits this year.<\/p>\n\n\n\n
The Haslams said Berkshire\u2019s decision to shift to something called \u201cpushdown accounting\u201d this year forced Pilot to take on higher depreciation and amortization costs and that resulted in lower net income. The Haslams were outvoted on that change at Pilot board meetings.<\/p>\n\n\n\n
In addition to Pilot, Berkshire owns an eclectic assortment of other businesses including Geico insurance, BNSF railroad and several major utilities along with a number of smaller manufacturing and retail businesses. It also holds a\u00a0sizeable stock portfolio\u00a0with big stakes in Apple, Coca-Cola, American Express and Bank of America among other holdings.<\/p>\n","protected":false},"excerpt":{"rendered":"
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