A billion-dollar trial between Berkshire Hathaway and the Haslam family, which was set to determine if Berkshire Hathaway improperly used an accounting method in a purchase of Pilot Travel Centers, has been canceled in Delaware Chancery Court. The trial was scheduled to start on Monday and conclude on Tuesday, but it was not immediately clear why it was canceled.
The dispute involves the purchase of the Haslam family’s remaining minority stake in Pilot Travel Centers by Berkshire Hathaway, which is headed by CEO Warren Buffett. It was also not clear if the cancelation would affect claims by Berkshire that family member Jimmy Haslam, who also owns the Cleveland Browns football team, had offered “illicit side payments to numerous PTC senior executives” to boost the value of the family’s remaining stake.
Federal prosecutors in New York were reported to be investigating these allegations about Jimmy Haslam. A notice on the Chancery Court’s docket confirmed the trial’s cancelation and stated that CNBC has requested comment from spokespeople for Berkshire and the Haslam family.
The trial’s cancellation came just two days after a brief conference with the lawyers for Berkshire Hathaway and the Haslams. The outcome of the trial could have led to Berkshire paying up to $1.2 billion more for the Haslams’ stake in the company.
Last year, the family sued Berkshire, alleging the conglomerate had used pushdown accounting that would lower the stated value of PTC and short the Haslams on what would be legally owed to them. Berkshire argued that its use of pushdown accounting was not a change in accounting policy that was barred by its purchase agreement with the Haslams.