Berkshire Takeover of Clayton Homes on Hold

Clayton Homes Inc., a mobile-home maker being sold to billionaire investor Warren Buffett, was barred from completing the transaction while an appellate court hears arguments about the fairness of a shareholder vote approving the deal, a lawyer for investors said.

Buffett’s Berkshire Hathaway Inc. said that it had completed its $1.7-billion Clayton Homes takeover. Later in the day, a Tennessee judge ordered the companies not to finish the transaction until an appeals court reviewed a motion to block the closing, said Darren Robbins, a San Diego lawyer representing Clayton Homes shareholders.

The purchase of the mobile-home builder and lender, based near Knoxville, Tenn., would be Buffett’s biggest this year. Unhappy shareholders said Buffett was taking advantage of a 50% slide in the sales of mobile homes since 1998 to grab the company on the cheap.

Clayton Homes officials weren’t available for comment. Berkshire Hathaway Chief Financial Officer Marc Hamburg had no comment.