NFL
Published December 15, 2023, 5:48 PM ET
Browns owner Jimmy Haslam is under investigation after Warren Buffett's Berkshire Hathaway claims he tried to bribe Pilot Travel Center employees to boost profits this year, with the intention of getting a higher selling price for the company achieve.
A lawyer for Pilot revealed that Haslam is being investigated by federal prosecutors during a hearing in a civil lawsuit between Haslam and Berkshire, Bloomberg reported earlier this week.
Berkshire began acquiring Pilot, a chain of truck stops and gas stations, in 2017 and currently owns 80 percent of the company.
The Haslam family has an annual option to sell the remaining 20 percent of Pilot based on a valuation of 10 times last year's EBIT (earnings before interest and taxes), a common profit measure.
Although this seems fairly straightforward, the sides disagree due to accounting methods and differing incentives.
Federal prosecutors are investigating whether Jimmy Haslam bribed Pilot executives to boost profits, according to a Bloomberg report. Getty Images
In the short term, Berkshire would prefer that profits and therefore the asking price be lower, while the Haslam family would like the opposite.
Haslam, the son of Pilot founder Jim Haslam, did not respond to a query from Bloomberg about the apparent federal investigation, but his lawyers vehemently disputed the claims when they were first made.
“We described Berkshire's allegations as wild fabrications in our objection letter,” Haslam family lawyer Anitha Reddy said earlier this month, according to the Associated Press. “I don't think we could have been clearer about denying them. And if Berkshire has any doubts, we believe they are false and intend to defeat them according to the court-ordered timetable.”
Warren Buffett on CNBC in 2016. NBCU Photo Bank/NBCUniversal via
The AP previously reported that Berkshire alleged Haslam tried to bribe “at least 15” Pilot executives with millions of dollars so the company could make higher profits in 2023.
In other good news for Haslam, prosecutors in the civil case have decided that Berkshire's bribery allegations are not relevant to the case, according to Yahoo Finance.
The Haslam family filed the original lawsuit alleging that Berkshire was reducing profits.
Berkshire Hathaway began purchasing Pilot in 2017. HUM Images/Universal Images Grou
Pilot ran into trouble last decade when it emerged that the chain had systematically defrauded mass transit customers of promised fuel discounts.
The company had to pay $92 million in penalties.
Haslam denied knowledge of the plan and was not prosecuted for it.
Earlier this year, Haslam purchased a 25 percent stake in the Milwaukee Bucks from New York financier Marc Lasry.
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