Bloomberg News

Buffett’s Berkshire Hathaway Dropped From Ex-Employee Suit

February 24, 2012

(Updates with lawyer’s comment in the seventh paragraph.)

Feb. 23 (Bloomberg) -- Warren Buffett’s Berkshire Hathaway Inc. was dismissed from a lawsuit filed in Indiana by a former manager at its Forest River unit who said he was fired after complaining about illegal transactions.

U.S. District Judge James T. Moody in South Bend dismissed Berkshire Hathaway in a decision dated yesterday. Forest River, which makes recreational vehicles, and founder Peter J. Liegl remain defendants in the suit brought by Brad A. Mart, who was general manager of Forest River Financial Services.

“Because no claims remain against Berkshire Hathaway, it is dismissed from the case,” Moody wrote in his decision, which was entered in the case docket today. Mart didn’t make clear what false representations he accused Berkshire Hathaway of making and didn’t follow procedures for suing under the Sarbanes-Oxley Act, the judge said.

Berkshire Hathaway, based in Omaha, Nebraska, agreed to buy Forest River in 2005 for an undisclosed price. Mart said Liegl agreed to make him chief executive officer of Elkhart, Indiana- based Forest River when the founder retired in 2008.

Mart said he discovered Liegl was siphoning money from the company and told Buffett, who didn’t act on the information, according to Moody’s decision. Mart learned he was being fired in a November 2008 letter, although Liegl had announced the month before that Mart was being made president, Moody said.

Stephen A. Kennedy, a lawyer for Mart in Dallas, didn’t immediately return a call for comment on the ruling.

Whistle-Blower Claims

“With respect to the pending claims, the company intends to defend them vigorously,” Steven J. Pearlman, a lawyer for Forest River and Liegl with Seyfarth Shaw LLP in Chicago, said in a telephone interview.

As to the Sarbanes-Oxley whistle-blower claims, which also were dismissed against his clients, Pearlman said, “The company believes that the court conducted a thorough and accurate analysis of the legal issues and correctly concluded that it lacked subject-matter jurisdiction.”

The case is Mart v. Forest River, 10-cv-118, U.S. District Court, Northern District of Indiana (South Bend).

--Editors: Stephen Farr, Glenn Holdcraft

To contact the reporter on this story: Thom Weidlich in New York at tweidlich@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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