Warren Buffett take note: Don’t get involved in the RV business. It’s full of wealthy rednecks and sometimes they like stealing cash directly from the office vending machines.
That’s at least what one executive of a Berkshire Hathaway-owned RV company has alleged in a recent lawsuit filed after he was denied the CEO position and fired from the company. The former exec, Brad Mart, said he helped orchestrate the $800 million sale of the RV company, Forest River, in 2005 by simply submitting a two-page summary of the business to the Oracle of Omaha, who “surprisingly” called Mart a few hours later and bought the company shortly after.
“Mart was surprised that Buffett made the decision to purchase the company with virtually no due diligence, including no onsite visit to Forest River,” he said in the complaint.
But the real charges come against former Forest River owner and current CEO Peter Liegl, who Mart accuses of taking cash from factory vending machines and depositing it in his personal bank account. If that wasn’t enough of a crime, Mart also says Liegl keeps Forest River employees on the payroll even though they had retired and required the company to purchase RV parts and supplies from National Supply, a company wholly-owned by Liegl, at inflated prices, “pouring millions of dollars into Liegl’s pockets over a period of years,” according to the complaint.
Mart said he talked to Buffett six times in 2008 about the alleged frauds committed by Liegl, but the Berkshire chairman said through an assistant that, “he just can’t get involved in issues like this at subsidiaries.”
“Mr. Mart did not alert Mr. Buffett to any unethical, fraudulent or illegal activities” at Forest River, a Berkshire Secretary said in an interview with Bloomberg News. “In the course of the investigation, these allegations came to light,” Krutter said of the fraud claims. “My investigation did not identify any fraudulent, unethical or illegal activities.” the secretary said he’s seen “no evidence or indication” that allegations of death threats from Liegl are valid, and that the reasons for Mart’s dismissal aren’t related to his claims.
Read Complaint Against Berrkshire filed by Brad Mart