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TheStreet Open House

A Rare Moment of Bad Press for Buffett

Stocks in this article: BRK.B

Berkshire Hathaway denied the allegations in an interview with Bloomberg. Berkshire Hathaway secretary Forrest Krutter told Bloomberg that "Mr. Mart did not alert Mr. Buffett to any unethical, fraudulent or illegal activities... My investigation did not identify any fraudulent, unethical or illegal activities." What's more, Krutter told Bloomberg there was "no evidence or indication" that any death threats were made. The Berkshire Hathaway executive said Mart was fired for reasons unrelated to his allegations of financial misdeeds by Liegl and Forest River.

Mart claims he told Buffett directly about the Forest River financial shenanigans in six separate phone conversations. The Berkshire Hathaway executive refuted that claim as well, telling Bloomberg that Mart spoke to Buffett three times and never told Buffett about the unethical behavior.

Mart was fired early last year after helping to arrange Berkshire's 2005 deal to buy Forest River for about $800 million according to the complaint. Mart said that he was named general manager of the company's financing business after it was bought by Berkshire and then told in 2007 he would succeed Liegl as CEO. Mart said he reported violations to Buffett in six separate phone conversations.

If Berkshire's refutations are accurate, the complaint could amount to no more than the case of a disgruntled executive who worked hard, in his own opinion, to bring Buffett a good investment, and in the end, felt snubbed by Berkshire Hathaway and Buffett.

Mart's complaint says that he helped to arrange Berkshire's 2005 deal to buy Forest River for about $800 million. The court filing states that Mart was named general manager of the Forest River's financing business after the Berkshire acquisition, and that in 2007 he was informed by Berkshire Hathaway that he was in line to succeed Liegl as CEO.

-Reported by Eric Rosenbaum in New York.

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