Two billionaires are fighting over the financials of a massive truck stop chain — and now the feds are involved.
According to an explosive Wednesday report from Bloomberg, a contentious feud between Cleveland Browns owner Jimmy Haslam and celebrity billionaire philanthropist Warren Buffett has captured the attention of federal prosecutors in Manhattan.
Haslam and Buffett have been locked in a legal battle over a number of issues stemming from the sale of ownership in Pilot Travel Centers, a truck stop chain owned by the Haslam family, to Buffett’s Berkshire Hathway, which was originally announced in a 2017 release.
At the time, the deal was for Berkshire to purchase 38.6 percent equity in the company, with the Haslam family still maintaining the majority.
“Given the impeccable reputation of Warren Buffett’s Berkshire Hathaway, and our shared vision and values, we decided this was an ideal opportunity,” Haslam said at the time.
As Reuters noted, things went so swimmingly well that the two sides agreed to another, larger purchase in January.
Berkshire acquired another 41.4 percent stake in Pilot for $8.2 billion, nearly six years after spending $2.8 billion to acquire the first 38.6 percent.
Since then, the business relationship has soured to the point of finger-pointing and litigation.
In October, Reuters reported that Berkshire was being sued by the Haslam family.
In that lawsuit, the Haslam family, including Jimmy, accused Berkshire of devaluing the remaining 20 percent the family had in Pilot.
In very simplified terms, the Haslam family accused Berkshire of using shady accounting to artificially lower the true value of the remaining stake the family held in Pilot.
Fast forward two months later, and, as part of the ongoing lawsuit against Berkshire, Buffet’s company countered by similarly accusing Jimmy Haslam of artificially inflating the value of his remaining shares.
According to Bloomberg, Haslam, who also has a co-ownership stake in the NBA’s Milwaukee Bucks, stands accused of illegally paying top executives to help boost his short-term value.
Berkshire, according to the report, accused Haslam of offering “payments to influence Pilot Travel executives’ short-term business decisions in hopes of juicing quarterly earnings and pumping up his 20% stake’s value.”
The Bloomberg report noted that, according to a Berkshire attorney, at least “one Pilot Travel top executive already has tried to manipulate the books.”
Berkshire’s legal team further alleged that “Haslam, whose family owned Pilot Travel until selling it a controlling stake, launched an ‘illicit scheme’ involving secret pledges of bonuses to be paid out of his own pocket to 15 senior executives and other managers.”
The attorneys allege Haslam “promised the millions of dollars in ‘side payments’ to the executives to boost short-term profit at the expense of Pilot Travel’s long-term value.”
These allegations have prompted the hand of prosecutors in the Southern District of New York, who are investigating these alleged payments.
Haslam’s Pilot Corp. lawyer Brad Wilson confirmed to Bloomberg that the company was aware of the probe.
Haslam claims that he stands to lose $1.2 billion if Berkshire is allowed to continue its alleged accounting shenanigans.
A civil trial is currently set for January in Delaware.
Any time the Southern District of New York are bringing charges YOU KNOW it politically motivated!