Avis Budget Group Leaders Sued Over Rotation Strategy, Losses

Avis Budget Group directors and top executives failed to disclose the company was speeding up the rotation of its rental car fleets, causing a dramatic financial impact, an investor alleges.

The shift, which followed a Covid-19 pandemic slowdown in vehicle rotation, resulted in about $2.5 billion in impairment and other charges, Andrew Jones says on behalf of the company. He filed his derivative suit Friday in the US District Court for the District of New Jersey.

“Fleet management, primarily fleet rotation, is critical to Avis’s profitability,” balancing usefulness, maintenance costs, and recoverable value, Jones says. The rotations shortened the useful ...