The unusual billion-dollar trial involving Warren Buffett’s Berkshire Hathaway and the Haslam family has been canceled by the court just two days before it was set to begin. The cancellation was confirmed by a docket entry on Saturday, stating that the trial scheduled for January 8 and 9, 2024, has been canceled and removed from the court’s calendar.
The non-jury trial in Delaware’s Court of Chancery aimed to determine the value of the Haslam family’s 20% stake in Pilot Travel Centers, the largest U.S. truck stop chain. The trial was expected to include testimony from Warren Buffett’s designated successor, Greg Abel.
As of now, there has been no official comment from the Haslam family, Berkshire Hathaway, or the chambers for Vice Chancellor Morgan Zurn, the presiding judge.
The legal dispute involves a put option allowing the Haslam family to sell the remaining 20% of Pilot Travel Centers to Berkshire Hathaway in the first two months of any year. Pilot, operating under the Flying J brand, boasts around 650 locations and sold 13 billion gallons of fuel in 2022.
Both parties have accused each other of employing accounting maneuvers to manipulate Pilot’s earnings before interest and taxes (EBIT), a crucial factor in valuing the Haslam family’s 20% stake. The Haslams argue that Berkshire, after acquiring the 80% stake in Pilot, adopted “pushdown accounting” to reduce its liability if the put option were exercised.
The trial hinged on whether Berkshire was required to obtain the Haslams’ consent for this accounting change. Berkshire asserted it fulfilled its contractual obligations, emphasizing that adopting pushdown accounting did not constitute a change in “accounting policy.”
The trial occurred shortly after the death of Charlie Munger, Berkshire’s vice chairman, leaving a void that increased the responsibilities of Greg Abel, Buffett’s designated successor. Abel, 61, who was publicly identified in 2021 as Buffett’s eventual successor as CEO, maintained a low public profile and was listed as a potential witness for both parties.
While Buffett, 93, was not expected to testify at the trial, the case held significant implications for Berkshire Hathaway and the valuation of Pilot Travel Centers
