Pomerantz Law Firm Files Class Action Lawsuit Against Avis Budget Group Amid Financial Discrepancies

Pomerantz Law Firm Files Class Action Lawsuit Against Avis Budget Group

Overview of the Class Action
On June 22, 2025, the Pomerantz Law Firm announced the initiation of a class action lawsuit against Avis Budget Group, Inc. (NASDAQ: CAR) and several of its senior officers. This legal action was filed in the United States District Court for the District of New Jersey under the case number 25-cv-03332. The lawsuit targets individuals and entities that purchased or acquired securities of Avis Budget between February 16, 2024, and February 10, 2025, within this specific timeframe known as the “Class Period.” The aim is to recover damages linked to alleged violations of federal securities laws under the Securities Exchange Act of 1934, specifically Sections 10(b) and 20(a).

For investors who purchased Avis Budget securities during the specified period, the deadline to request appointment as Lead Plaintiff is June 24, 2025. More information regarding this class action and the associated complaint is available on Pomerantz's official website.

Avis Budget’s Business Operations
Avis Budget Group operates a substantial car and truck rental business, along with providing mobility solutions through its brands: Avis, Budget, and Zipcar. The company services clients across various regions, including the Americas, Europe, the Middle East, Africa, Asia, and Australasia. As of 2024, Avis Budget’s rental fleet comprised around 695,000 vehicles. The efficiency of fleet management is crucial in maintaining profitability, particularly during periods of market volatility such as following the COVID-19 pandemic.

Fleet Management Practices and Allegations
Proper fleet rotation—essentially replacing older vehicles with newer ones—is a fundamental aspect of Avis Budget's operational strategy. When companies do not manage this rotation effectively, they can either depreciate older vehicles too quickly or risk losing value on a prematurely removed vehicle. Avis Budget’s executives have previously highlighted the importance of strategically managing vehicle procurement and disposal to ensure operational efficiency and reduce costs.

After the COVID-19 pandemic, rental companies faced significant challenges due to a fleet supply shortage. In response, Avis Budget began delaying fleet rotations, leading to the retention of older models for extended durations. This decision was purportedly to flatten the depreciation curve and align fleet purchases with expected returns.

However, by the fourth quarter of 2024, vehicle prices began normalizing and unexpectedly, Avis Budget shifted its strategy to accelerate fleet rotations. This abrupt change reportedly shortened the useful lifespan of many vehicles, leading to a significant drop in their recoverable value. As stated in the Complaint, this alteration in fleet management resulted in billions of dollars in impairment charges and substantial financial losses, which were not disclosed to investors during the Class Period.

Impact on Financial Results
On February 11, 2025, the repercussions of this strategic shift became apparent when Avis Budget reported a massive quarterly loss of $1.96 billion (approximately $55.66 per share), a stark contrast to the $259 million profit reported for the same period in 2024. The company attributed this financial turmoil to the newly implemented fleet rotation strategy, which ultimately resulted in a one-time non-cash impairment charge of $2.3 billion.

The announcement also included major leadership changes within the company, as CEO Joseph A. Ferraro transitioned to an advisory role while Chief Transformation Officer Brian Choi was appointed as the new CEO. Following the news, Avis Budget's stock witnessed a decline of approximately 6.82%, closing at $83.59 per share, highlighting the immediate market reaction to the unfavorable financial news.

Conclusion
The class action filed by Pomerantz Law Firm against Avis Budget Group is a pivotal litigation effort aiming to hold the company accountable for alleged misleading statements and significant operational missteps. With the firm's strong history in securities class actions, this lawsuit reflects a broader scrutiny of corporate practices in the wake of financial mismanagement. Investors who believe they may have been affected are encouraged to seek legal advice and consider their options within this unfolding legal context. Further developments regarding this lawsuit and its implications for Avis Budget Group are expected in the coming months.