Jonathan Weil of The Wall Street Journal reports that as much as $1.2 billion is at stake in an argument over a seemingly obscure accounting method between Warren Buffett and truck-stop mogul Jimmy Haslam. He writes:
Warren Buffett and truck-stop mogul Jimmy Haslam are fighting over a seemingly obscure accounting method. What’s really at stake: possibly as much as $1.2 billion.
Buffett of course is chairman and chief executive of Berkshire Hathaway BRK.B 0.43%increase; green up pointing triangle. Haslam, who owns the Cleveland Browns football team with his wife Dee, built his father’s truck-stop chain, Pilot Travel Centers, into an empire before selling a majority stake to Berkshire.
Now, their two companies are duking it out in a Delaware court over the question of the proper accounting method for reporting PTC’s earnings. That will determine how much Berkshire could have to pay to the Haslam family’s company, Pilot Corp., to buy the 20% of PTC it doesn’t yet own.
In this fencing match, the accounting rules are the blades. Pilot Corp. told the court that Berkshire took steps to make PTC look less profitable over the short-term, potentially cutting any deal’s value by as much as $1.2 billion. […]
According to both companies’ versions of events, Buffett told him that when and if the Haslam family decided to exit, Berkshire would do exactly what the contract says. Pilot Corp. said the elder Haslam couldn’t get a straight answer to his question about whether Berkshire would use pushdown accounting on its year-end 2023 financial statements. It sued Berkshire on Oct. 23.
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