The clock is ticking for the Haslam family to sell a stake in Pilot Truck Stops to Berkshire Hathaway this year
DOVER, Del. — Following the settlement of a lawsuit pitting Cleveland Browns owner Jimmy Haslam against fellow billionaire Warren Buffett's Berkshire Hathaway, the clock is ticking for the Haslam family to decide whether to sell its remaining stake in the Pilot Truck Stop chain to Berkshire .
Lawyers told a Delaware judge last week that they were prepared for a two-day trial starting Monday in a high-stakes dispute over accounting practices at Pilot Travel Centers LLC. Late Saturday, however, the judge issued an order indicating that the trial had been canceled.
On Sunday, Haslam's Pilot Corp. announced that the case, including Berkshire's counterclaims against Pilot Corp., had been fully resolved. The terms of the settlement were not disclosed.
With the dispute resolved, the Haslams must now decide whether to sell their remaining 20% stake in Pilot Travel Centers to Berkshire in accordance with a 2017 business deal. PTC, headquartered in Knoxville, Tennessee, is a diversified fuel company that operates more than 650 travel centers, primarily under the Pilot or Flying J names, in 43 U.S. states and six Canadian provinces.
A spokeswoman for Pilot Corp. declined to comment Monday on whether the Haslam family, which includes former Tennessee Gov. Bill Haslam, will sell its remaining stake in PTC to Berkshire. A Berkshire spokeswoman did not immediately respond to emails seeking comment.
Berkshire bought an initial 38.6% stake in PTC for $2.76 billion in 2017. The two parties agreed at the time that Berkshire would take control of PTC by acquiring an additional 41.4% stake in January 2023. The price tag for that control purchase was approximately $8.2 billion.
The 2017 agreements gave Pilot Corp. from January 1 of this year, he will also have an annual opportunity of 60 days to sell his remaining 20% interest in PTC to Berkshire. The sales price would be calculated based on PTC's revenues in the previous year.
However, as the first sales deadline approached, the two sides accused each other of trying to manipulate the company's financials to influence the price Berkshire would have to pay for the Haslam family's remaining 20% stake in the truck stop chain.
In a filing in Chancery Court, Haslam's attorneys noted that an SEC filing from Berkshire last year removed Pilot Corp.'s “redeemable noncontrolling interest.” in PTC at approximately $3.2 billion. However, the pilot alleged that after Berkshire took control of PTC, it implemented “pushdown accounting,” which led to the company reporting lower net income. Pilot claimed that a 2017 agreement bars Berkshire from making such an accounting change without Pilot's approval.
Berkshire responded with accusations that Haslam tried to bribe employees of the Pilot Truck Stop chain to inflate the company's value and thus increase the amount Berkshire would have to pay.
An attorney for Pilot told a Delaware judge last month that federal prosecutors have begun an investigation based on Berkshire's bribery allegations.