Feds investigating Pilot’s Jimmy Haslam over Berkshire’s bribery allegations

Jimmy Haslam’s alleged secret payments to Pilot executives, the center of a counter-lawsuit filed by Berkshire Hathaway, are now part of a federal investigation.

During a recent court hearing at the Delaware Chancery Court in Wilmington, it was revealed that federal prosecutors in the Southern District of New York are looking into alleged payments to Pilot Travel Centers executives by Haslam, according to a report by Bloomberg.

The report says Pilot officials were made aware of the federal investigation while collecting pre-trial information for a lawsuit against Berkshire filed by Haslam. That lawsuit accuses Berkshire of artificially deflating the value of Pilot Travel Centers.

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.

The revelation of a possible federal investigation into Haslam’s alleged actions complicates what has been a back-and-forth legal battle between Haslam and Berkshire.

Each party is accusing the other of illegally affecting the value of Pilot Travel Centers as Haslam is poised to sell his remaining stock of the company to Berkshire.

In October, Haslam filed a lawsuit against Berkshire for allegedly manipulating Pilot Travel Centers’ financial statements. Specifically, Berkshire is accused of using what is called “pushdown accounting” to intentionally lower the value of the truck stop company.

About a month after Haslam filed his lawsuit, Berkshire filed a countersuit that accuses Haslam of bribing Pilot Travel Centers executives to inflate the short-term value of the truck stop company. The lawsuit claims executives who received under-the-table payments from Haslam made significant business decisions that prioritized short-term profits while ignoring Pilot Travel Centers’ long-term profitability.

Both parties have a substantial financial stake in Pilot Travel Centers’ current value. In 2017, Berkshire acquired 38.6% of the company for nearly $3 billion. In January, Berkshire paid more than $8 billion for an additional 41.4% stake in the company. Per the contract, Haslam has the option each year to sell his remaining stake. That option begins Jan. 1 and is good for 60 days.

A trial on Haslam’s claims of accounting manipulation is set for Jan. 8. On Wednesday, Dec. 13, the Delaware Chancery Court issued an order barring Berkshire from using the alleged payments to executives as a defense during the accounting trial. LL