Berkshire Hathaway acquires remaining 20% stake of Pilot Travel Centers

In a quick turnaround from a contentious courtroom battle, Berkshire Hathaway has acquired Pilot Company’s remaining 20% stake of Pilot Travel Centers.

Pilot Company, owned by the Haslam family, and Berkshire Hathaway made the announcement on Tuesday, Jan. 16. With the acquisition of Pilot Company’s 20% ownership interest, Berkshire now owns 100% of Pilot Travel Centers.

Terms of the sale have not been publicly disclosed. It came just a little over a week after both parties reached a settlement to end a $1 billion lawsuit in the Delaware Chancery Court.

Berkshire began its acquisition of Pilot Travel Centers in 2017 when it bought 38.6% of the company for nearly $3 billion. In January 2023, Berkshire acquired an additional 41.4% stake in the company. Per the contract, the Haslams have the option each year to sell their remaining 20% stake. That option began on Jan. 1 and was good for 60 days.

However, that option to sell was muddled in the months leading up to the effective date.

With potentially billions of dollars on the line, Berkshire and Pilot Company accused each other of artificially affecting the value of Pilot Travel Centers.

In October, the Haslams filed a lawsuit in the Delaware Chancery Court claiming that Berkshire had intentionally lowered the value of Pilot Travel Centers in 2023 in order to pay a lower price for their remaining share of the company. Specifically, the lawsuit argued that Berkshire used an accounting method that depressed Pilot Travel Centers’ reported earnings. Although the accounting method is allowed under the U.S. Generally Accepted Accounting Principles, the lawsuit claimed it violated the contract between Berkshire and the Haslams.

A month after the Haslams filed their lawsuit, Berkshire fired back with a countersuit claiming Jimmy Haslam attempted to inflate the value of Pilot Travel Centers. The lawsuit alleged that Haslam secretly promised “massive” under-the-table payments to high-level Pilot employees. In exchange, the employees would make decisions that would prioritize the company’s short-term 2023 earnings over the company’s long-term value.

During the course of litigation, it was revealed that federal prosecutors in New York are looking into Berkshire’s allegations regarding Haslam’s payments to executives. A spokesperson for the U.S. Attorney’s Office for the Southern District of New York declined Land Line’s request for verification of the investigation.

A two-day trial for the Haslams’ claims was scheduled to begin on Jan. 8. However, both parties announced that a settlement had been reached on Jan. 7. Although details of the agreement were not disclosed, Berkshire said in a statement that it had fully settled “the Delaware litigation, including all claims and counterclaims.” LL