MIAMI - A group of Neff Corp. investors has filed a class-action lawsuit against the equipment rental industry's sixth-largest company, alleging that a proposed buyout led by Neff president Kevin Fitzgerald is unfair and the result of insider dealing.

The lawsuit was filed Feb. 29 in the Court of Chancery in Delaware, shortly after Neff, No. 6 on last year's RER 100, announced a management-led plan to take the company private at $9 a share. The suit alleges that shareholders "have suffered and will suffer irreparable damage unless [Neff is] ordered to put the company up for auction in order to maximize shareholder value."

Neff has been on the selling block for almost a year without a taker.

As the $189 million buyout is structured, controlling shareholders stand to do better than small investors - many of whom bought Neff shares at its May 1998 initial public offering price of $14. The Mas family, which owns about 60 percent of Neff, would hold 7.1 million shares redeemable at $13 in the future, according to SEC documents. Minority owner GE Capital is also part of the buyout group.

Neff, which has 84 locations, recently reported 1999 revenue of $392 million, a 21 percent increase over 1998. Net income was $4.9 million compared with a net loss of $1.5 million in 1998.

In announcing its 1999 operating results, Neff acknowledged the lawsuits, saying it believes they "are without merit and intends to defend them vigorously."

Neff officials did not return RER inquiries about the buyout, which must still receive board approval.

In a separate legal matter, Neff said it is involved in a dispute with Nortrax, a joint venture between Deere & Co. and Credit Suisse First Boston that acquired its dealership business, Neff Machinery, for $91 million in November. Neff says it is due an additional $8.8 million in post-closing adjustments under the agreement, while Nortrax claims it is due $20.3 million.