© Reuters. FILE PHOTO: Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc's annual shareholder meeting in Omaha, Nebraska, US, on May 4, 2019. REUTERS/Scott
By Tom Hals
WILMINGTON, Delaware (Reuters) – A Delaware judge said she will grant a trial requested in January by Warren Buffett's Berkshire Hathaway (NYSE:) if it agrees to certain conditions, to resolve allegations that billionaire Jimmy Haslam tried to improperly inflate his stake. at a truck stop chain.
Vice Chancellor Morgan Zurn of the Delaware Court of Chancery said in a Friday ruling that efficiency favored hearing Berkshire's allegations next month along with a Jan. 8-9 trial into the Haslam family's claims that Berkshire was deflating the value of Pilot Travel Centers.
The dispute concerns how much Berkshire would owe if the Haslams, including Cleveland Browns owner Jimmy Haslam, exercised their option to sell their 20% stake in the country's largest truck stop chain to Berkshire in the first two months of 2024.
Zurn gave Berkshire until 9 a.m. ET (1400 GMT) Monday to decide whether the company would agree to a trial in January on the condition that discovery be limited to what was necessary to defend itself against the lawsuit brought by the Haslam family.
A lawyer for Berkshire did not immediately respond to a request for comment. A lawyer for the Haslam family declined to comment.
Berkshire said it would suffer irreparable harm if its case was not resolved before the Haslams exercised their option to sell the stake.
Berkshire owns 80% of Pilot, having paid Haslams $2.76 billion for a 38.6% stake in 2017 and $8.2 billion for another 41.4% stake in January.
Each side accuses the other of trying to manipulate Pilot's earnings, the basis for valuing that stake.
The Haslams sued Omaha, Nebraska-based Berkshire in October, accusing it of seeking a “windfall” by adopting pushdown accounting for Pilot.
Berkshire responded on Nov. 28, saying Jimmy Haslam attempted to bribe Pilot executives with millions of dollars to inflate earnings in 2023 at the expense of future years.
According to court documents, the Haslams believe the 20% stake in Pilot was worth $3.2 billion before Berkshire's accounting change, an amount Berkshire disputes.
Pilot is headquartered in Knoxville, Tennessee, and has approximately 800 locations.
Berkshire also owns dozens of other companies, including railroad BNSF and auto insurer Geico.
