SOUTH BEND, Ind. (CN) - A former executive at a Berkshire Hathaway subsidiary claims he was wrongfully fired after reporting that the CEO had stolen millions in corporate funds. Berkshire CEO Warren Buffett "took no action to correct the deficiencies," explaining through his assistant that "he just can't get involved in issues like this at subsidiaries," according to the federal lawsuit.
Brad Mart claims he helped convince investment guru Buffett to buy Forest River Inc., an RV manufacturer run by his friend Peter Liegl, in 2005.
Mart claims Buffett did not fully investigate Forest River before Berkshire bought the company for $800 million. Leigl later bragged to the Wall Street Journal, "It was easier to sell my business than to renew my driver's license," according to the complaint.
Leigl made Mart the general manager of Forest River's financial division in 2007 and later asked him to be the next CEO upon his retirement in 2008, the lawsuit claims. Mart says he moved his family to Granger, Ind., for the position and took a $150,000 loss on the sale of his Illinois home.
In the fall of 2008, Mart claims he found out that Liegl had stolen "hundreds of thousands of dollars in cash from factory vending machines owned by Forest River." Liegl also required the company to buy supplies and use airline charter services from other companies he owned, at drastically inflated prices, "pouring millions of dollars into Liegl's pockets over a period of years," the lawsuit states.
Leigl also had Forest River employees perform work at his own companies and kept former Forest River employees on the company's payroll "as compensation for maintaining their confidence," Mart says.
He claims that he discussed Liegl's misconduct in six phone conversations with Buffet, who "took no action to correct the deficiencies." Mart says he also confronted Liegl, who became angry, began "bullying" Mart, defamed him and even threatened his life.
Mart was allegedly demoted from future CEO to president of the company and spent 10 days in the hospital with a "sudden and serious health condition" due to stress.
In November 2009, Mart was allegedly fired for "inappropriate activity." The company's human resources officer chastised him for purportedly undermining Liegl's "authority and credibility," and stated that Mart had breached his "duty of loyalty to Forest River," according to the lawsuit.
Mart says he was sure Berkshire executives would intervene, but Buffett simply sent the message that he "just can't get involved."
Mart demands damages from Berkshire Hathaway, Forest River and Liegl for breach of contract, violation of the Sarbanes-Oxley and Family Medical leave Acts, retaliatory discharge, negligent misrepresentation and defamation.
He is represented by Angelica Schultis of Mishawaka, Ind.
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