The investment giant Berkshire Hathaway, owned by Warren Buffett, has been sued.
On October 26th local time, according to a lawsuit document, Warren Buffett's company, Berkshire Hathaway, was accused of violating the terms of its acquisition of Pilot Travel Centers, the largest truck station operator in the United States, for over $10 billion, and changing the accounting methods used to value certain transactions.
Previously, Berkshire had acquired 80% of Pilot's shares for nearly $11 billion. But Pilot's original controlling family accused Buffett's deputies of modifying accounting rules, significantly reducing the value of the remaining 20% of the shares.
This family, including billionaire Jimmy Haslam, sold a 38.6% stake in Pilot to Berkshire for $2.8 billion in 2017 and 41.4% in January of this year for $8.2 billion. The company stated that it has the right to sell the remaining shares using the same valuation method on January 1, 2024.
But the Haslam family claims that Buffett's deputies have revised the accounting standards related to Pilot, reducing the value of so-called put options. The lawsuit shows that Pilot has repeatedly opposed Berkshire's shift towards lowering accounting standards. Pilot's lawyer wrote that using these rules "unfairly harmed Pilot but benefited Berkshire".
The Haslam family believes that changes in the accounting system will allow Buffett to "significantly depreciate" the remaining 20% of the stake in this truck station company. They requested a Delaware judge to order them to stop using this accounting system, citing a violation of the acquisition agreement. The family claims that most of the directors appointed by Berkshire (who now control the board of directors of the chain) have thwarted attempts to abandon "oppressive accounting rules", and Buffett has also refused to guarantee that the remaining 20% of the shares will be valued like before.
Pilot is headquartered in Knoxville, Tennessee, USA and was founded by James Haslam II, the father of Jimmy Haslam. It has approximately 800 stores in the United States and Canada. According to Berkshire's second quarter report, from February to June this year, the company generated $24.3 billion in revenue and a net profit of $197 million for Berkshire.
According to Forbes' 2023 Rich List, Jimmy Haslam is worth $8.7 billion and ranks 284th globally.