Volkswagen is preparing to take Warren Buffett’s Berkshire Hathaway to court over an insurance-payout dispute tied to the carmaker’s biggest headache: its five-year-old diesel emissions scandal.
Berkshire Hathaway International Insurance Limited, a unit of the sprawling conglomerate, is the lone VW insurance vendor to decline to participate in a €270 million ($318 million) compensation settlement connected to the scandal. The carmaker had purchased directors’ and officers’ (D&O) liability insurance with the Berkshire unit, plus nine others, to provide protection against governance risks.
“The supervisory board has therefore tasked management to prepare legal measures against Berkshire Hathaway,” deputy chairman Jörg Hofmann told Volkswagen investors at Thursday’s virtual annual meeting. On Friday, a spokesperson said the company had nothing more to add beyond Hofmann’s statement.
Uncovered in September 2015 by U.S. Authorities, the VW’s diesel emissions fraud has thus far cost the carmaker roughly €32.2 billion in fines, recalls, compensation and legal costs through the end of March.
Volkswagen has since pivoted hard to become one of the industry’s chief advocates of shifting to zero-emission battery-electric vehicles alongside market leader Tesla. VW now believes it even has a “historic chance” to more than double by 2030 its market share to 10% in the U.S. On its rival’s own home turf, despite many American car buyers still nursing suspicions against the company’s environmental epiphany.
On Thursday, VW shareholders voted overwhelmingly in favor of accepting the €270 million settlement with the other D&O insurance companies, reportedly one of the highest ever reached in a single case.
Providers that signed up to the deal include subsidiaries belonging to Zurich Insurance Group, AIG, Liberty Mutual, Allianz, Munich Re, Axa, Tokio Marine, QBE Insurance Group and Talanx.
A spokesman for VW declined to comment on the extent of financial compensation sought, but according to the information provided to investors, the maximum sum of damages insured by Berkshire Hathaway amounted to €50 million. The Omaha, Neb.-based company did not immediately respond to Coins2Day’s request for comment, nor did its Boston-based insurance unit.
Investors on Thursday also approved clawback settlements with ex-CEO Martin Winterkorn and former Audi boss Rupert Stadler, who agreed to return €11.2 million and €4.1 million, respectively, to their former employer for failing to properly exercise their fiduciary responsibilities.
Both men are currently facing separate criminal charges brought by German prosecutors.
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