OMAHA, Neb. - In an ongoing legal battle, Warren Buffett's Berkshire Hathaway has accused the billionaire Haslam family of attempting to bribe executives at the Pilot truck stop chain to inflate the company's profits. The alleged scheme aimed to force Berkshire Hathaway to pay more for the Haslams' remaining 20% stake in the company. The counter lawsuit filed this week by Berkshire Hathaway comes in response to the Haslam family's claims that Berkshire was trying to understate Pilot's earnings through accounting practices.

A hearing on Berkshire's counter lawsuit is scheduled for Thursday, during which the accusations and counter-arguments will be examined. As of now, the attorneys representing the Haslams, along with a family representative, have yet to respond to the allegations.

According to court documents filed by Berkshire Hathaway, the company became aware this month of the Haslams' attempts to bribe executives who had previously worked for the family at Pilot. It was a senior executive, promised a substantial bonus, who revealed the bribery to the current CEO of Pilot - a position appointed by Berkshire Hathaway after the acquisition - according to the filing.

Berkshire Hathaway stated in the court filing that Jimmy Haslam, owner of the Cleveland Browns and part of the Haslam family, offered to personally pay bonuses to executives that far exceeded their annual salaries. These bonuses would be based on the price at which the Haslam family sold its remaining stake. While the exact number of executives who agreed to accept the bonuses remains undisclosed, Berkshire states that Haslam made the offer to approximately 15 employees during a country club dinner in Knoxville, Tennessee, in March. In addition, Haslam is accused of extending the offer to at least four other high-level executives in separate instances. Furthermore, it is alleged that the former CEO of Pilot extended the under-the-table payment offer to at least 10 other executives in April, as stated in Berkshire's filing.

The financial ramifications of these alleged actions remain unclear, as some of the figures in the lawsuits have been redacted. However, the Haslam family has claimed that their 20% stake in Pilot was worth $3.2 billion before Berkshire Hathaway's accounting changes.

The price Berkshire Hathaway will eventually pay for the Haslams' remaining stake is determined by a formula based on Pilot's reported earnings. This formula was agreed upon by Buffett and the Haslam family in 2017. Berkshire initially purchased 38.6% of Pilot in 2017 for $2.758 billion, before increasing its ownership to 80% this year for an additional $8.2 billion. Buffett expressed regret to Berkshire shareholders earlier this year as he wished he could have acquired the entire company in 2017 when the price was more favorable. However, the Haslam family declined to sell their entire stake at that time.

With over 850 locations and approximately 30,000 employees in the United States and Canada, Pilot is the largest network of truck stops in the nation. The acquisition of Pilot has already significantly contributed to Berkshire Hathaway's revenue and profits this year.

The Haslams, in their initial lawsuit against Berkshire Hathaway, argued that the company's decision to implement "pushdown accounting" resulted in higher depreciation and amortization costs for Pilot, leading to lower net income. However, Berkshire counters that it is impossible to accurately determine the extent to which Pilot's profits may have been inflated due to the decisions made by executives enticed by promised bonuses. According to Berkshire's filing, some recommendations to increase short-term profits, such as selling off assets or abandoning valuable hedge positions, were rejected, but it is likely that other decisions went undetected.

Berkshire Hathaway is seeking a January trial date to have its claims evaluated alongside the Haslams' lawsuit. The outcome of the trial will contribute to determining the proper value of Pilot and decide whether the Haslam family should be allowed to sell their stake in 2024, considering the uncertainties surrounding the company's 2023 earnings.

Apart from the truck stops, Berkshire Hathaway maintains ownership of various other businesses, including Geico insurance, BNSF railroad, major utilities, and a portfolio of stocks with significant stakes in companies such as Apple, Coca-Cola, American Express, and Bank of America, among others.