COMPANY |
HyreCar Inc. |
COURT |
United States District Court for the Central District of California |
CASE NUMBER |
21-cv-06918 |
JUDGE |
The Honorable Fred W. Slaughter |
CLASS PERIOD |
May 14, 2021 - August 10, 2021 |
SECURITY TYPE |
All Securities |
Case Background:
The Class Period commences on May 14, 2021. On May 13, 2021, after the market had closed, HyreCar issued a press release which stated that the company had achieved “Record First Quarter 2021 Financial Results” for the quarter ended March 31, 2021. The release stated that HyreCar’s insurance deposits had more than doubled during the quarter to $1.7 million, while the amount of HyreCar’s insurance reserve (which indicates the amount of claims incurred but not yet paid) had declined more than 17% since year end to $1.7 million.
The complaint alleges that throughout the Class Period, the Defendants failed to disclose the following adverse facts, which were known to Defendants or recklessly disregarded by them: (1) HyreCar had materially understated its insurance reserves; (2) HyreCar had systematically failed to pay valid insurance claims incurred prior to the Class Period; (3) HyreCar had incurred significant expenses transitioning to its new third-party insurance claims administrator and processing claims incurred from prior periods; (4) HyreCar had failed to appropriately price risk in its insurance products and was experiencing elevated claims incidence as a result; (5) HyreCar had been forced to dramatically reform its claims underwriting, policies and procedures in response to unacceptably high claims severity and customer complaints; and (6) as a result of the above, HyreCar’s operations and prospects were misrepresented because the company was not on track to meet the financial estimates provided to investors during the Class Period, and such estimates lacked a reasonable basis in fact, including HyreCar’s purported gross margin, EBITDA and net loss trajectories.
Current Status of Case:
On January 9, 2023, Defendants filed an Answer to the Complaint. This action was stayed by the Court on March 8, 2023, in light of HyreCar’s bankruptcy. This action is ongoing.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: Jon Naji, Esq. (484) 270-1453; or via e-mail at info@ktmc.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.