Pilot settles lawsuit with Nashville company
JAN 09, 2014 12:16p ET
KNOXVILLE, Tenn. (AP) -- A Nashville trucking firm has settled its lawsuit over rebate fraud by the Pilot Flying J truck stop company owned by the family of Cleveland Browns owner Jim Haslam and Tennessee Gov. Bill Haslam.
The Knoxville News Sentinel reports that Western Express has withdrawn its lawsuit filed in Orleans Parish Civil District Court in Louisiana that alleged the company had lost more than $75 million over rebates withheld by Pilot, including $68 million in expenses related to additional debt obligations it was forced to take on.
Paul Wieck, the president of Western Express, told the newspaper Thursday that the lawsuit had been settled, but declined to disclose terms of the deal.
"We never stopped our relationship with Pilot, and they're a great partner," he said. "They had some issues within their organization that they got worked out and it's our plan for that partnership to last a long, long time."
Western Express was among several companies that declined to participate in Pilot's $85 million class-action settlement with 5,500 customers in November.
The company featured prominently in a 120-page FBI affidavit that included the transcript of a secret recording of John "Stick" Freeman, Pilot's vice president of sales, boasting of being caught withholding $1 million in rebates to Western Express.
Freeman said Pilot agreed to pay Western Express $1 million for a broken airplane to make up for the money it owed, but that the truck stop chain still came out way ahead. Freeman told a colleague that Jimmy Haslam was aware of the deal.
"He knew it all along. Loved it," Freeman said, according to the transcripts. "We were makin' $450,000 a month on him -- why wouldn't he love it?"
"Did it for five years, cost us a million bucks," Freeman said. "I mean, we made $6 million on the guy, cost us a million bucks."
Jimmy Haslam has denied any prior knowledge of the rebate scheme and has not been charged in the case. Seven other former members of the Pilot sales team have pleaded guilty to federal charges, and two others have agreed to cooperate with investigators.
Aubrey Harwell, an attorney for Pilot, has said the plane transaction "is not as some are trying to make it," but declined further comment because of a grand jury investigation.