After a long-standing dispute over payment, car hire company Affordable Car Hire are being sued for the hefty sum of $2.2 million by Avis Budget.
According to court documents which were filed at the District Court of the District of New Jersey, it is claimed that Affordable Car Hire have not met monthly payments since August of last year.
The legal action names Affordable Car Hire and 11 associated companies, along with directors Angela Day and her husband James Moore as defendants in the action.
In the court documents, it states that Day and Moore have told Avis Budget that “attempting to pay even a significant portion of the funds would render Affordable Car Hire bankrupt”, leaving the company owing in excess of 2 million dollars to Avis Budget, a leading global provider of vehicle rental services.
Avid Budget and Affordable Car Hire agreed the most recent version of a long-standing agreement last year, but the filing states that Day and More signed personal guarantees on the 15th of March, 2005. Avis Budget claimed this makes the two directors personally liable should Affordable Car Hire fail to pay their monthly invoices within 30 days, which is is claimed they haven’t done since August 2016, as well as for any legal fees on top of that.
Auto Europe, who are currently in discussion with Affordable Car Hire over a possible merger, have agreed to act as a mediator between both parties during this ongoing legal battle.
Chief executive of Auto Europe Imad Khalidi said: “As a partner with Avis, I want to talk to them to see if I can mediate. I’m trying to help both parties.
“Affordable has an excellent business model and reputation and the UK travel agency business for car hire is very strong.”
The case raised by Avis Budget against Affordable Car Hire also alleges that “alter ego entities” – other firms associated with Affordable Car Hire, are being used to “move funds away” to shield Day and Moore from the aforementioned financial liabilities it is claimed they uphold.
Avid Budget said they have thousands of bookings with Affordable Car hire for which they have not been paid and are demanding the broker provide them with customer details.
The legal case is ongoing and no allegations have yet been proven, but the pending litigation is full of potentially damning claims against Affordable Car Hire, who could be set to cough up a hefty sum of cash should the claims be substantiated as this unfolds.