#United States #New Jersey #Class Action #Pomerantz Law #Avis Budget

Pomerantz Law Firm Initiates Class Action Against Avis Budget Group

Pomerantz LLP, a well-known law firm specializing in securities class actions, has recently announced the filing of a class action lawsuit against Avis Budget Group, Inc. The suit targets the car rental giant and several of its officers, alleging significant violations of federal securities laws during a specific time frame.

The legal action was lodged in the United States District Court for the District of New Jersey and is focused on the class period between February 16, 2024 and February 10, 2025. The lawsuit seeks to represent all individuals and entities that purchased or acquired Avis Budget securities during this period, aiming to recover damages incurred due to the alleged misconduct of the defendants.

Class Action Details

Investors affected by the situation have until June 24, 2025, to request the Court to appoint them as Lead Plaintiff for the class. More information, including access to the complaint, is available on Pomerantz's official website. Investors interested in the case can reach out to Danielle Peyton, a contact at Pomerantz, for further discussion regarding their potential involvement.

Background on Avis Budget Group

Avis Budget Group operates various brands, including Avis and Zipcar, offering car and truck rentals, car sharing, and additional services across regions such as the Americas, Europe, and Asia. The firm boasts a rental fleet of approximately 695,000 vehicles as of 2024, underscoring its prominent role in the automobile rental market.

Fleet management is essential to Avis Budget's profitability, and it includes strategies for rotating older vehicles out of service at the appropriate times. A delicate balance is necessary; if the rotation is too slow, older vehicles depreciate quickly, leading to higher maintenance costs. Conversely, speedy rotation could result in the disposal of vehicles that still hold value.

In an earnings call discussing the company’s fourth quarter results of 2024, Avis Budget management acknowledged challenges related to fleet rotation. Following the COVID-19 pandemic, the automobile rental industry faced significant supply shortages, forcing companies like Avis Budget to retain vehicles longer than usual. This deceleration was intended to manage costs effectively under the pressure of rising vehicle prices.

As vehicle prices began to stabilize in late 2024, Avis Budget reportedly shifted its strategy to accelerate fleet rotations. The lawsuit suggests that this shift was not disclosed to investors, and it has led to significant financial repercussions for the company.

Allegations Against the Defendants

The complaint alleges that the company's executives made materially false and misleading statements regarding the business's operations. It claims that key details were concealed, including plans to expedite fleet rotation, which inadvertently decreased the value of many vehicles within the Americas segment. This ultimately forced Avis Budget to accept substantial impairment charges, resulting in enormous financial losses.

Avis Budget's financial report for Q4 2024 confirmed a staggering loss of $1.96 billion, significantly contrasting with previous profitability figures. The press release following this announcement disclosed a change in company leadership, with CEO Joseph A. Ferraro transitioning to an advisory role and Brian Choi stepping in as the new CEO.

Following these revelations, Avis Budget's stock price experienced a marked decline, indicating the serious nature of the allegations and the subsequent fallout.

Pomerantz LLP has a long-standing history of advocating for victims of securities fraud and corporate malpractice. Founded over 85 years ago, the firm continues to lead efforts in corporate litigation, embodying the legacy of its founder, Abraham L. Pomerantz.

Investors who believe they may have been affected by these developments are urged to reach out to Pomerantz for more information on how to proceed.

For further inquiries or to discuss potential participation in this class action, individuals can contact Danielle Peyton at Pomerantz. Remember, attending to these issues promptly is crucial as the deadlines for legal action are approaching.