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Published January 7, 2024, 1:11 p.m. ET
An unusual multibillion-dollar trial between Warren Buffett's Berkshire Hathaway and the billionaire Haslam family was canceled by the court on Saturday, two days before it was scheduled to begin.
“This confirms that the hearing in this matter scheduled for January 8 and 9, 2024 is hereby canceled and removed from the court’s calendar,” a Saturday filing in the case said. The entry said it was approved by Judge Vice Chancellor Morgan Zurn.
The Haslam family, Berkshire Hathaway and Zurn's law firm could not be reached for comment.
The two-day trial in Delaware Chancellor Court was intended to determine the value of the Haslam family's 20 percent stake in Pilot Travel Centers, the largest U.S. truck stop chain.
Buffett's designated successor, Greg Abel, was expected to make a statement.
The Haslams, including Jimmy Haslam, the owner of the Cleveland Browns football team, sold Berkshire 80% of Pilot for $11 billion in two separate deals, in 2017 and January 2023.
A lawyer for Berkshire said in court that EBIT would differ by $1.2 billion depending on the accounting the site uses. Portal The Haslams, including Jimmy Haslam, the owner of the Cleveland Browns football team, sold Berkshire 80% of Pilot for $11 billion in two separate deals. AP
They also have a put option that allows them to sell the remaining 20% in the first two months of each year.
Pilot, which also operates under the Flying J brand, has about 650 locations and sold 13 billion gallons of fuel in 2022.
Each side accused the other of using accounting tricks to manipulate the Knoxville, Tenn.-based company's earnings before interest and taxes (EBIT), which determine the value of Haslam's 20 percent stake.
Pilot, which also operates under the Flying J brand, has about 650 locations and sold 13 billion gallons of fuel in 2022. Portal
According to the Haslams, after Berkshire received the 80 percent pilot stake, Berkshire implemented “pushdown accounting” that would reduce debt if the put option was exercised.
A lawyer for Berkshire said in court that EBIT would differ by $1.2 billion depending on the accounting the site uses.
The outcome of the trial would have revolved around a simple question: Did Berkshire have to get the Haslams' approval for the accounting change?
Berkshire said it did nothing wrong.
The company said it had complied with its contractual obligations as the introduction of pushdown accounting did not constitute a change in “accounting principles”.
The trial comes less than two months after the death of Berkshire Vice Chairman and Buffett's longtime confidant Charlie Munger. AP
The trial comes less than two months after the death of Charlie Munger, a Berkshire executive vice chairman and Buffett's longtime confidant, leaving a void that increased Abel's responsibilities at the Omaha, Nebraska-based conglomerate.
Abel, 61, who is also vice chairman and keeps a low profile in public, was publicly identified in 2021 as Buffett's eventual successor as chief executive.
He was on lists of potential witnesses to be called by both Berkshire and the Haslams.
Buffett, 93, was not expected to testify at the trial.
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