According to the law firm press release, Hertz, based in Park Ridge, New Jersey, is one of the nation’s largest automobile and equipment rental companies.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s financial performance and future prospects, failing to disclose that: (a) Hertz was losing sales in the all-important airport market, which offers higher rental prices and margins than off-airport, longer-term “replacement car” locations; (b) Hertz had significant undisclosed exposure to the insolvency of Advantage Rent A Car (“Advantage”) subsidiary Simply Wheelz LLC (“Simply Wheelz”), a wholly-owned subsidiary of Hertz that operated its Advantage business; (c) Hertz and Advantage were engaged in a disagreement over the value of the Advantage fleet assets; (d) Hertz was carrying the value of its fleet transferred to Advantage and its subsidiary Simply Wheelz on its books at an artificially inflated level; and (e) as a result of the foregoing, Hertz lacked a reasonable basis for the positive statements about its business, earnings and prospects during the Class Period.
After reporting quarter after quarter of purportedly “record” financial results during the Class Period, which defendants claimed supported the Company’s strong fiscal 2013 guidance, suddenly, on September 26, 2013, Hertz issued a press release entitled “Hertz Revises Full Year 2013 Guidance.” The release made substantial revisions to the guidance the Company had consistently maintained it was on track to reach since February 2013. On this news, the price of Hertz stock fell by more than $4 per share, or 16%, to close at $21.63 per share.
Then, on November 4, 2013, after the close of trading, Hertz issued a press release announcing its third quarter 2013 financial results for the quarter ended September 30, 2013. The release disclosed that on a GAAP basis, Hertz’s net income fell to $214.7 million, or $0.47 per share, from $242.9 million, or $0.55 per share, in the third quarter of 2012, and disclosed for the first time Hertz’s exposure to Simply Wheelz’s insolvency. The next morning, Simply Wheelz announced that it was filing for protection under the federal bankruptcy statutes. On this news, the price of Hertz stock dropped further, falling $2.50 per share, or 10.50%.
On February 20, 2014, there was an Order granting Motion to Appoint Lead Plaintiff, and granting Motion to consolidate Cases.
On May 7, 2014, there was an amended complaint filed by the Plaintiffs.
On June 23, 2014, the Defendants filed a Motion to Dismiss the Plaintiffs' complaint.
On July 22, 2015, the Court issued an Order granting Defendants' motion to dismiss. Plaintiffs were given leave to amend their complaint. Plaintiffs filed an amended complaint on August 21.
Plaintiffs filed a fourth consolidated and amended complaint on March 1, 2016.
On April 27, 2017, the Court granted Defendant's Motions to Dismiss with prejudice and terminated this case. A Notice of Appeal of this decision was filed on May 30. On September 20, 2018, the Court of Appeals issued an Order affirming the District Court's Order of Dismissal.