No. of Recommendations: 22
there is substantial background that berkshire's meddling with the economics of the pilot acq triggered the downward spiral of behavior by the haslams.
What???
There is clear evidence that the Haslams manipulated the economics of the second tranche, ensuring that Berkshire would have to pay a lot more as a multiple of cash flow, paying almost 3x as much per share for the next 41.4% ($8.2b) as they had paid for the first 38.6% ($2.8b). After acquiring the second tranche Berkshire had a majority, and was able to make sure this didn't happen again. We don't know exactly how much Berkshire paid for the remaining 20%, but Berkshire thought it was worth $3.0b. So we got taken advantage of in the second tranche, paying a couple of billion too much.
Anyways, the Haslams didn't need any Berkshire meddling to demonstrate bad behaviour, long before the initial Berkshire acquisition. It surprises me that Berkshire would have wanted any association with the Haslams in the first place. Berkshire got an ok deal on the first tranche, got clearly ripped off on the second tranche because of Pilot executives manipulating earnings for the second tranche, and then Berkshire made sure it didn't get ripped off on the third. We don't know the details of the legal settlement, but it looks like the Haslams folded and settled because their behaviour was so clearly bad on the second tranche, it wasn't a good idea for them to take the case in front of a judge.
dtb
