Pilot Flying J has been embattled in a lawsuit since mid-April, all of which ended Monday in a settlement of $84.9 million.
The money is payment, with interest to about 5,500 carriers that claim to have been cheated by the trucstop chain out of rebates they were due from fuel purchases. Attorney fees make up $14 million of the settlement sum.
CEO Jimmy Haslam says he was unaware of such an alleged scheme, but promises to make things right with any fleets that feel they were cheated. Pilot Flying J has admitted to no wrongdoing.
“[Haslam] was in and out of meetings. There were some meetings that apparently took place when he was present in the building or when he would walk by and speak to people, but in terms of his knowing or participating in any of this, it absolutely, irrevocably didn’t happen,” said Pilot Flying J attorney Aubrey Harwell.
On April 15, agents from the FBI and IRS raided Pilot Flying J’s Knoxville headquarters and other properties as part of its investigation.
So far, seven Pilot Flying J employees have pleaded guilty to federal charges for their roles, but have yet to be sentenced and several people with the company have been fired or placed on administrative leave.
The settlement terms include:
Guaranteed payment to class members of every penny of unpaid discounts they are owed, plus 6 percent interest. The payments are to be mailed to each recipient within 30 days after the amount owed is finally calculated, or 30 days after the court’s final approval of the settlement, whichever is later. Notice will also be mailed to those class members who are not owed anything, and if they disagree for whatever reason, there are mechanisms in place for them to seek further review. A court-approved independent accounting firm has been retained to review the procedures and protocols that Pilot Flying J’s Internal Audit Department used to calculate settlement payments, and to conduct a statistical sampling of accounts to verify the accuracy of internal audit’s conclusions. The independent accounting firm has already been conducting its review for some time. Class Members can also ask the independent accounting firm to review their particular accounts. If dissatisfied with its findings, class members can hire their own accountants to audit their accounts, and then ask the court to rule on any disputed amounts. The settlement prohibits Pilot Flying J from ever improperly withholding rebates or discounts in the future. Under the settlement, Pilot Flying J will pay 100 percent of unpaid discounts the Class Members are owed, plus 6 percent interest as well as the cost of providing notice of the settlement, the fees and expenses of the Class Administrator, the cost of the internal audit, the fees and expenses of the independent accountant, the plaintiffs’ attorneys’ fees and expenses as approved by the Court and “incentive awards” of $10,000 to the ten class representatives (the named plaintiffs).
Even before Monday’s settlement, Pilot Flying J says it sent cheques to customers who were found to be owed money during the internal audit, plus a four percent interest. Those customers will now receive an additional two percent interest to make up a total of six percent as per the settlement agreement.
Haslam is the owner of the NFL’s Cleveland Browns football team and is the brother to Tennessee Gov. Bill Haslam, who still owns a part of Pilot Flying J, but has not been involved in the business in many years, with his share reportedly managed in a blind trust.
