Hertz Poised to File for Bankruptcy Absent Deal with Creditors

By Paul Riegler on 22 May 2020
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Hertz Global Holdings could be forced to seek bankruptcy court protection if it is unable to come to terms on a deal with its creditors on Friday.

The second largest car rental agency in the world after Avis, Hertz has seen rentals plummet amidst the coronavirus pandemic. It missed some $400 million in lease payments on its fleet in late April and was able to persuade its lenders to give it until end of business Friday to come up with an acceptable payment plan.

Originally known as Rent-a-Car, Inc., the company was founded by Walter Jacobs in Chicago in 1918. It began operations with one dozen Ford Model Ts. In 1923, it was purchased and renamed by John D. Hertz, who owned the Yellow Truck and Coach Manufacturing Company. General Motors acquired Hertz in 1926 and John Hertz reacquired the company in 1953 and there were multiple changes in ownership in the course of the next half century that included United Airlines, Ford.

Hertz did start off the year on a positive note with a 6% increase in revenue in the first two months. The pandemic, however, dealt it “a rapid, sudden, and dramatic” blow, it said.

(Photo: Accura Media Group)

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