Cleveland Browns owner Jimmy Haslam is under federal investigation over payments to executives at Pilot Travel Center that may have influenced the sale of billions of dollars in the company’s stock to Warren Buffett’s Berkshire Hathaway, Bloomberg reported.
December 13. Haslam has owned Browns with his wife, Dee, since October 2012.
The 69-year-old entrepreneur also serves as chairman of the board of the Pilot Flying J truck stop chain and holds various other executive positions.
Participate in the world of sports at a high level.
Haslams has an option to sell the remaining 20 percent stake in Pilot to Berkshire Hathaway, which owns the remaining 80 percent, after Jan. 1, 2024, according to the Associated Press.
Jimmy Haslam sued Warren Buffett over his accounting practices in October 2023.
At the heart of this legal matter are payments that may have artificially inflated the value of Haslam’s stock in Pilot Travel Center.
Prosecutors in the Southern District of New York are investigating payments that may have inflated the value of Haslam Pilot’s stock, according to people familiar with the matter.
The investigation was revealed in the civil lawsuit between Haslam and Berkshire, Bloomberg reported.
According to Bloomberg, this is not the first legal interaction between Haslam, who owns Pilot Corp., and the billionaire who runs the company that owns a majority stake in Pilot Travel, a chain of truck stops.
The Browns owner sued Buffett in October, alleging that Berkshire tried to devalue the remaining unsold shares of Pilot.
In October 2023, Reuters reported: “Berkshire unilaterally adopted, without authorization, accounting rules that artificially ‘grossly’ reduced Pilot’s earnings before interest and taxes, according to the complaint filed Thursday in Delaware state court.
The Khaslams will receive the remaining stake if they sell their shares. Despite repeated objections from his family, Buffett refused to promise not to use leveraged accounting, according to the suit.
The new investigation comes as a result of information exchanged before the civil suit about the accounting methods used in the sale, Bloomberg reported.
According to Buffett, management at Pilot Travel, founded by Haslam Buffett, changed its accounting methods to reduce the value of its assets by $1.2 billion if it decided to sell its remaining stake to Buffett.
Buffett’s lawyers also alleged that Haslam “launched an ‘illegal scheme’ in which he promised 15 senior executives and other managers to pocket secret bonuses.”
According to Bloomberg, Berkshire’s lawyers alleged that he promised millions of dollars in “side payments” to executives to boost short-term profits at the expense of Pilot Travel’s long-term value.
Among other claims, Berkshire also alleges that David Clothier, a manager at Pilot Travel, received additional bonuses and altered financial records in Haslam’s favor.
Haslam’s trial on the accounting charges is scheduled to take place in Delaware, according to Bloomberg.
Haslam also owns NBA and MLS teams.Haslam bought the Browns franchise from Randy Lerner for $1 billion in 2012, but that’s not his only connection to the sports world.
And that’s not his only connection to the NFL, either.
The billionaire acquired a minority stake in the Pittsburgh Steelers four years ago in 2008, but had to relinquish it when he bought the Browns in 2013.
NFL rules prohibit multiple teams from having possession at the same time.In seven games into the 2012 campaign, Haslam has only made the playoffs once since being acquired by Cleveland.
That could change after an injury-plagued 2023 season that featured four different starting quarterbacks.
Jimmy and Dee Haslam also purchased a stake in the NBA’s Milwaukee Bucks from Mark Larry in early 2023.
The NBA Board of Governors approved the sale in April after the Haslams agreed with Lasry in late February to buy a 25 percent stake in the Bucks for $3.5 million, with owners Wes Edens and Jamie Dinan also joining, according to ESPN
Haslam also took over MLS team Columbus Crew from Anthony Precourt in 2018, which was his most successful career as a sports manager.
Not only did he keep the club from moving, but he also won the MLS Cup twice (2020 and 2023).
