Hertz shareholder suit dismissed
A federal judge in Newark has dismissed a shareholder lawsuit against Hertz Global Holdings Inc., saying the plaintiffs, including a union pension fund, failed to prove that the company and two former executives hid financial problems that would later contribute to a sharp drop in the share price.
U.S. District Judge Madeline Cox Arleo on Wednesday dismissed the lawsuit filed in November 2013 by Sheet Metal Workers’ Local 80 Pension Trust Fund and other investors who had acquired shares between May 8 and Sept. 25 of that year. Hertz, which was based in Park Ridge, moved its corporate headquarters to Florida last year.
The complaint alleged the company overvalued a fleet of cars, failed to correct the mistake in a timely fashion, and failed to disclose the potential impact of having too large an inventory of rental cars in a weak market. The plaintiffs also alleged the company did not include in its 2013 earnings guidance the expected effect of federal government’s “sequestration” spending cuts. Hertz’s stock dropped about 16 percent after a Sept. 26, 2013 press release in which Hertz revised its 2013 earnings guidance downward.
— Richard Newman
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