Sokol Knew Lubrizol Board Would Be Told of Berkshire Interest

Tuesday, 12 Apr 2011 09:51 AM

 

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David Sokol, who resigned as a Berkshire Hathaway Inc. manager last month, knew Dec. 17 that Lubrizol Corp. Chief Executive Officer James Hambrick planned to notify his board of directors about Berkshire Hathaway Inc.’s possible interest in acquiring the company.

Sokol, who had inquired about Lubrizol through Citigroup Inc. bankers, was informed of Hambrick’s intention by the same bankers, according to a Lubrizol regulatory filing yesterday.

Berkshire Hathaway CEO Warren Buffett, when announcing the manager’s resignation, said Sokol had invested in Lubrizol before Berkshire’s agreement to purchase the company was announced.

Sokol bought 2,300 shares of Lubrizol on Dec. 14 and sold them on Dec. 21, according to a March 30 statement from Buffett. Sokol then bought 96,060 shares of Lubrizol from Jan. 5 to Jan. 7.

Buffett, 80, said March 14 he would pay $135 a share, or about $9 billion, for Wickliffe, Ohio-based Lubrizol, compared with the closing price of $105.44 on the New York Stock Exchange in the last trading day before the announcement. Sokol’s investment may have given him a profit of about $3 million, according to Buffett’s disclosure and data compiled by Bloomberg.

Buffett said in the statement that Sokol made a “passing remark” about his stake in Lubrizol.

Sokol has said he did nothing wrong.

© Copyright 2014 Bloomberg News. All rights reserved.

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