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Berkshire Hathaway revealed at the call of its Wednesday results that the $ 377 million fee the bank had incurred earlier this year was linked to the ongoing scandal of DC Solar.
We wonder what Bernie Madoff's reaction was in the cell where he served all his life sentences, now that DC Solar's so-called Ponzi scheme claimed his third financial victim, the latter being more severe than the last.
A little less than a month ago, Progressive and Hancock Whitney announced that they had been affected by the so – called ploy of $ 810 million. Progressive announced "tens of millions" of losses. its first-quarter profit of $ 10.1 million.
The most recent development is much, much bigger, as multinational conglomerate Berkshire Hathaway said the company's recently recorded $ 377 million loss was related to DC Solar. The loss arose in the form of an "income tax expense adjustment" once the conglomerate became aware of "allegations of fraudulent revenue behavior" regarding DC Solar. The initial investment of Berkshire Hathaway in the former bankrupt photovoltaic manufacturer and distributor amounted to $ 340 million.
The DC Solar saga has been in existence since December, when the FBI raided the company's headquarters in Benicia, California, as well as the home of the company's general manager. According to one affidavit, the scheme worked as follows:
The company operated primarily through S (a subsidiary of Real Estate Lake Tahoe), which raised capital for the manufacture and sale of solar equipment to tax investors, as well as D (a subsidiary of Real Property Martinez), who rented investment funds in shares affiliated with the company S. The company rHe explained to investors that investing in solar equipment, that is, buying it through the tax investment fund, had very favorable tax consequences, including valuable tax credits and a depreciation.
DC Solar had initially gone bankrupt under Chapter 11, but since March, this chapter has become Chapter 7, which means that, if everything goes as planned, a final liquidation via the sale of assets to creditors .
And if $ 377 million represents an incredible figure, for most of us, the loss is essentially a drop for Berkshire Hathaway. The company's assets total $ 738 billion, with equity investments of $ 191 billion and liquidities of $ 114 billion.
Oh, and for fun, this cash figure, barely $ 114 billion, if put end-to-end around the equator, while dollar bills would come back almost 1,400 times around the Earth . Seriously, it's three feet shorter.
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