Friday, September 23, 2016

Ohio Judge Declines to Order Haslam Testimony

By Walter F. Roche Jr.

Concluding his intervention was not necessary, an Ohio judge has declined to issue an order to force Cleveland Browns owner James A. Haslam to testify under oath.
In a three-page decision issued this week, Franklin County Judge David C. Young cited Ohio and Tennessee statutes and court rulings that provide a means for two trucking companies to subpoena Haslam for a sworn deposition.
The two companies, FST Express and HB Logistics, are suing Pilot Travel Centers, the Haslam family owned truck stop firm, charging they were cheated out of millions of dollars in promised rebates on diesel fuel purchases.
In requesting Young to issue a commission to subpoena Haslam, lawyers for the truckers acknowledged that they could petition a Tennessee court directly to issue a subpoena.
Shawn J. Organ, one of the lawyers representing the truckers, said Friday they will now go directly to Tennessee courts to schedule the deposition.
Though he heads the nationwide truck stop chain, Haslam has stated repeatedly that he was unaware of a scheme by Pilot sales staffers to cheat truckers out of promised rebates.
The trucking firms, however, contend they need Haslam's testimony because those involved in the scheme, including former President Mark Hazelwood, reported to Haslam.
"Haslam should be able to shed light on how the fraud was conducted, why Pilot did nothing to stop it until the FBI raided Pilot's headquarters on April 15, 2013 and whether Pilot's top executives turned a blind eye to fraud," lawyers for the trucking firms stated in the petition seeking the subpoena.
Hazelwood is under indictment on mail and wire fraud charges along with seven other former Pilot staffers. They all have entered not guilty pleas. The charges stem from a federal probe of Pilot's rebate practices.
Ten other former Pilot sales staffers already have entered guilty pleas to mail and wire fraud charges and await sentencing in U.S. District Court in Knoxville, Tenn.
Citing rulings from the Ohio Supreme Court and Tennessee laws, Young wrote, "Upon review, court involvement is unnecessary in this issue. For the foregoing reasons plaintiff's motion for the deposition of Jimmy A. Haslam 3d is rendered moot."
FST and HB are two of three trucking firms still pursuing civil claims against Pilot. The third case was filed in Mobile, Ala. by Wright Transportation.
The rebate allegations have proven costly for Pilot, the country's largest truck stop chain. Some $175 million has been paid to settle claims filed by other trucking firms and the federal government.

Monday, September 19, 2016

Pilot Wants Judge to Block Record Requests

By Walter F. Roche Jr.

Pilot Flying J is asking an Ohio judge to block two trucking companies from getting access to thousands of internal documents and a computer database with information on the truck stop firm's other customers.
In a 16-page filing in Franklin County Ohio Common Pleas Court, lawyers for Pilot are charging that the 303 pending discovery requests by FST Express and HB Logistics are unduly burdensome and seek information that will ultimately have no bearing on the pending litigation.
HB and FST are two of the three trucking firms still suing Pilot over charges that the Knoxville based firm cheated them out of millions of dollars in promised rebates on diesel fuel purchases.
In the latest filing lawyers for Pilot stated that an audit showed FST is only owed $11,000 and HB actually owes Pilot over $100,000.
The charges against Pilot stem from a federal probe in which a government agent described a wide ranging scheme by Pilot sales staffers to cheat customers out of promised rebates. Pilot already has paid over $150 million to settle claims from truckers and the federal government over the rebate shaving allegations.
In its motion, Pilot noted that the federal agent's affidavit made no mention of FST or HB.
"Plaintiffs seek to recover a windfall by pursuing manufactured claims of cost fraud against Pilot," the motion states.
Pilot said it already has produced 59 gigabytes or 72,889 pages of documents but it is unwilling to provide records relating to some 5,500 other customers over a nearly 10 year period.
According to the motion, a federal judge in a related case already had rejected the truckers requests for the same information.
As for providing access to its internal database, called SalesForce, Pilot said that would require lengthy review to exclude confidential information.
"Plaintiffs cannot seriously suggest that Pilot simply hand over the entire database replete with confidential information and potentially privileged information for thousands of non-party customers spanning nearly a decade without reviewing it," the filing concludes.
The third pending suit against Pilot over rebate allegations is proceeding in an Alabama court.
Ten former Pilot sales staffers have already entered guilty pleas to mail and wire fraud charges stemming from the rebate fraud probe and eight others have been indicted and are awaiting trial. They have all entered not guilty pleas.

Thursday, September 8, 2016

Browns Owner Sells Nantucket Property

By Walter F. Roche Jr.

Cleveland Browns owner James A "Jimmy" Haslam has sold his Nantucket vacation home for $6.7 million, more than $3 million less than the original asking price. In fact with the inclusion of an adjacent parcel in the deal, Haslam is getting $6 million less than his original asking price.
Massachusetts land records show the Haslam property was sold to the Jen Sankaty Lighthouse Trust. Michael Altman and Alexandria Stewart Altman are listed as the trustees. The Altmans reside in Bedford Corners, N.Y.
Haslam, the records show, took back a $5.5 million mortgage providing the financing for the transaction. The property is located at 37 Sankaty Head Road.
The deal also includes a second adjacent parcel for which Haslam was seeking an additional $3 million.
Haslam, who also heads the national truck stop chain, Pilot Flying J, first put the property on the sales block for just under $10 million in 2015. He purchased the property in 2006 for $3.85 million.
Real estate advertisements for the ocean front property show it has six bedrooms and a 2 bed room guest house.
Named "Southern Winds," the home was built after Haslam took ownership.
As listed on Sotheby's in early 2015 here is a description  of the property:

"Southern Winds" is a magnificent, Lyman Perry designed, ocean front estate with panoramic views of the Atlantic, Sesachacha Pond, Sankaty Head Lighthouse, Great Point, Nantucket Sound and town in the distance. With gorgeous custom finish work that is perfect in both design and execution, grand rooms that are magnificent in both scale and proportion, beautiful landscape design and breathtaking views from every room, this property - which includes a six bedroom main residence, two-bedroom guest cottage and garage - is a once-in-a lifetime opportunity for the most discriminating buyer.