Jimmy Haslam, CEO of Pilot Flying J. and Warren Buffett, Chairman and CEO of Berkshire Hathaway.
Lacey O'Toole | CNBC
A $1 billion trial intended to determine whether Berkshire Hathaway Inc. improperly used an accounting method that would have significantly disadvantaged the Haslam family in purchasing the family's remaining minority stake in Pilot Travel Centers was canceled in Delaware Chancery Court.
The trial was scheduled to begin on Monday and end on Tuesday.
It was not immediately clear why the trial was canceled and whether Berkshire Hathaway — headed by CEO Warren Buffett — or the Haslam family had settled their dispute over Pilot Travel Centers, the largest truck stop chain in the United States.
It was also not clear whether the cancellation would affect Berkshire's claims that family member Jimmy Haslam, who also owns the Cleveland Browns football team, offered “illicit side payments to several senior BTC executives” to boost the value of the remaining stake. For a family that would have to buy Berkshire.
Last month, it was reported that federal prosecutors in New York They were investigating those allegations about Jimmy Haslam.
“This confirms that the scheduled trial in this matter on January 8 and 9, 2024, is hereby canceled and removed from the court calendar,” according to a notice in the court docket.
CNBC requested comments from spokespersons for Berkshire and the Haslam family.
The cancellation came late Saturday, two days after the judge in the case held a brief conference with lawyers for Berkshire Hathaway and Haslams to discuss the logistics of the trial.
Buffett's designated successor, Greg Appel, was expected to testify at the trial, the outcome of which could have led to Berkshire paying up to $1.2 billion more for the Haslams' stake in the company than Berkshire would have otherwise paid.
Berkshire owns 80% of PTC after spending $11 billion in separate purchases in 2017 and then again last January to buy the majority stake owned by the Haslams.
The Haslams had a “put option” to force Berkshire to buy out their remaining 20% stake every year after that.
Last year, the family sued Berkshire, alleging that the group used so-called discount accounting that would have had the effect of lowering the reported value of PTC, thereby shorting the Haslams on what they would be legally owed.
The Haslam family said this form of accounting was not authorized.
Berkshire, in turn, said its use of top-down accounting was not a change in accounting policy that was prohibited by the purchase agreement with the Haslam family.
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