There’s no older or more successful trick in the fraudster’s playbook than selling something worthless and/or nonexistent to a credulous senior. And so when the fast-talking cosmopolitan lawyers at Jones Day were charged with selling off a German pipe maker about to go belly-up, they (allegedly) knew exactly who to turn to.
Berkshire Hathaway… led by Warren E. Buffett, is suing Jones Day, the law firm that represented the owners of the pipe maker when it was sold to a Berkshire Hathaway subsidiary in 2017. The lawsuit, filed late last month, accuses Jones Day of helping to trick Berkshire Hathaway into paying five times what the German company was worth…. The lawsuit accuses Jones Day of withholding documents that would have exposed Wilhelm Schulz’s perilous financial state and calls the firm a “co-conspirator” in a “massive fraud….”
Wilhelm Schulz “was the corporate equivalent of a house about to go into foreclosure,” the lawsuit says. But Precision Castparts never knew about the revised loan agreement because Jones Day withheld it, the lawsuit contends.
Jones Day also did not disclose a report by the consulting firm KPMG, commissioned by Schulz, which concluded that the company faced an “imminent liquidity crisis,” according to the lawsuit. Nor, the suit says, did Jones Day inform Precision Castparts that a German lawyer had warned Wilhelm Schulz managers that they were legally obligated to declare bankruptcy.