Key West (Fla.) Police and Firefighters' Pension Fund filed a securities class-action lawsuit against Ryder System Inc., alleging the transportation company made misleading statements that led to substantial losses to investors.
The lawsuit, filed in U.S. District Court in Miami on May 20, alleges that the company "misrepresented Ryder's true financial condition by overstating the residual value of its trucking fleet," according to the filing.
The pension fund alleges the overstatement of the value allowed Ryder to record a smaller depreciation expense on those assets, which artificially inflated Ryder's earnings.
The lawsuit says Ryder had revealed on Oct. 29, 2019, that management concluded that the residual value estimates "likely exceeded the expected future values that would be realized upon the sale of power vehicles in our fleet," the filing said.
Due to this and additional revelations, Ryder's stock price fell to $40.12 per share from $55.12 per share between Oct. 29, 2019, and Feb. 15, according to the filing.
As of Oct. 1, 2018, the Key West Police and Firefighters' Pension Fund had $108 million in assets, according to its most recent actuarial valuation.
Amy Federman, Ryder System spokeswoman, declined to comment. Michael D. Blatchley, Avi Josefson and Hannah Ross at Bernstein Litowitz Berger & Grossmann, attorney for the plaintiffs, could not be immediately reached for comment.