Auto Europe, which is in discussions with Affordable Car Hire over a possible merger, has agreed to act as a mediator between Affordable and Avis Budget, which has filed a $2.2 million lawsuit against Affordable in New Jersey.
The court documents claim that Affordable has not met monthly payments since August last year and names Affordable Car Hire, 11 associated companies, and Directors Angela Day and her husband James Moore as defendants. The documents state that Day and Moore had told Avis Budget that “attempting to pay even a significant portion of the funds would render Affordable Car Hire bankrupt”.
Imad Khalidi, Chief Executive, Auto Europe, said: “As a partner with Avis, I want to talk to them to see if I can mediate. I am 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.”
Avis Budget and Affordable agreed the most recent version of a long-standing agreement last year, but the filing says Day and Moore signed personal guarantees on 18th March 2005. Avis Budget claims that this makes the two directors personally liable should Affordable fail to pay monthly invoices within 30 days, as well as for any legal fees.
Avis Budget also claims that the defendants are moving funds into the newly formed AffordableXtras and Affordable Cruising and has requested the court to impose a temporary restraining order to prevent the defendants transferring assets and compelling them to provide customer details.
The legal case is ongoing and no allegations have yet been proven.