Hertz Files for Chapter 11 Bankruptcy05/23/2020
Hertz reported $18.8 billion in debt in its first quarter filing.
Photo via Flickr/Atomic Taco
Hertz Global Holdings announced on May 22 that the company and certain of its U.S. and Canadian subsidiaries have filed for Chapter 11 bankruptcy.
All of Hertz's businesses globally, including its Hertz, Dollar, Thrifty, Firefly, Hertz Car Sales, and Donlen subsidiaries, are open and serving customers, the company said in a statement. The company cited $1 billion in cash on hand to support continuing operations. Hertz reported $18.8 billion in debt in its first quarter filing.
Hertz's principal international operating regions including Europe, Australia, and New Zealand are not included in the bankruptcy, nor are Hertz's franchised locations, which are not owned by the company.
All reservations, promotional offers, vouchers, and customer programs, including rewards points, are expected to continue as usual.
“The impact of COVID-19 on travel demand was sudden and dramatic, causing an abrupt decline in the company's revenue and future bookings,” the company said.
Hertz took actions such as furloughing 20,000 North American employees or half of its workforce, and gaining temporary forbearances on lease payments.
“However, uncertainty remains as to when revenue will return and when the used-car market will fully re-open for sales, which necessitated today's action,” according to the statement.
“The financial reorganization will provide Hertz a path toward a more robust financial structure that best positions the company for the future as it navigates what could be a prolonged travel and overall global economic recovery.”
Source: Read Full Article