Britannia Radio

Berkshire and Sokol Lawyers Exchange Shots After Accusatory Report Made Public

Published: Thursday, 28 Apr 2011 | Executive Producer

CNBC David Sokol appearing live on CNBC's Squawk Box, March 31, 2011

It was just under a month ago Warren Buffett

was writingthat David Sokol's resignation was

a "total surprise" to him and "Neither Dave nor

I feel his Lubrizol purchases were in any

way unlawful."

Buffett praised Sokol's "extraordinary"

contributions to Berkshire, including

his "resurrection" of NetJets.

Now, of course, the relationship isn't as cordial.

After last night's report from Berkshire's Audit Committee accused Sokol of misleading

Buffett on Lubrizol and possibly breaking the law, lawyers for both sides fired public

statements at each other.

First, Sokol's side, from Dickstein Shapiro partner Barry Wm. Levine:

I am profoundly disappointed that the Audit Committee of Berkshire Hathaway would authorize the issuance of its report to the public without the care and decency to ask even a single question of Mr. Sokol. Mr. Sokol had been associated with the Berkshire Hathaway companies for 11 years. During this time, his indefatigable efforts helped create enormous value for the Berkshire shareholders. He deserved better...

I have known Mr. Sokol and have represented his companies in business litigation since the mid 1980s. I know him to be a man of uncommon rectitude and probity. He would not, and did not, trade improperly, nor did he violate any fair reading of the Berkshire Hathaway policies.

Then, Ron Olson, a partner at Munger Tolles and Olson, fired back:

Mr. Sokol was interviewed at least three times regarding his Lubrizol trading activity and contacts with Citi bankers. In connection with the preparation of the audit committee report, a request for a further interview with Mr. Sokol was made to his attorney. Mr. Sokol was not made available.

Watch for more shots at Sokol this weekend at the Berkshire shareholders meeting.

And remember that Berkshire is threatening to sue Sokol to get his Lubrizol stock profits.

Current Berkshire stock prices:

Class B: [BRK.B 83.30 0.03 (+0.04%) ]

Class A: [BRK.A 124750.00 -55.00 (-0.04%) ]

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