A putative class action on behalf of Hertz Global Holdings Inc. shareholders has been dismissed after the judge found no support for claims that the company concealed financial problems in order to inflate the price of its stock.
The suit claimed the company covered up an overvaluation of certain cars in its rental fleet and failed to disclose that the company was overfleeting, or maintaining excess car inventory amid a weak market for used cars. The suit, whose lead plaintiff was a labor union pension fund that owned Hertz stock, also claimed that the company’s 2013 earnings guidance failed to consider the expected impact on earnings caused by the sequester, a series of federal budget cuts adopted that year that resulted in a drop in air travel. But U.S. District Judge Madeline Cox Arleo of the District of New Jersey dismissed the suit without prejudice upon finding that the allegations were consistently unsupported.
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