Hertz Global Holdings filed for Chapter 11 bankruptcy
protection on Friday, though the car rental company said it would be able to
continue operations as it begins restructuring.
The company had been negotiating with creditors to reduce
payments required under its vehicle operating lease as its revenues plummeted
due to the Covid-19 crisis. It was not able to negotiate long-term agreements
with creditors, nor was it able to access assistance from the US government,
according to Hertz.
"With the severity of the Covid-19 impact on our
business, and the uncertainty of when travel and the economy will rebound, we
need to take further steps to weather a potentially prolonged recovery,"
newly appointed president and CEO Paul Stone said in a statement. "Today's
action will protect the value of our business, allow us to continue our
operations and serve our customers, and provide the time to put in place a new,
stronger financial foundation to move successfully through this pandemic and to
better position us for the future."
Hertz now will file "First Day" motions to enable
it to continue operations. All brands, including Hertz, Dollar and Thrifty,
will continue operations, and current reservations, vouchers and loyalty
programme points will be honoured, according to Hertz. The company currently
has more than US$1 billion in cash available to support continuing operations,
Hertz reported.
Hertz already has been reducing its fleet through vehicle
sales and cancelled orders, consolidating off-airport rental locations and has
laid off or furloughed about half of its global workforce, about 20,000
employees.
The bankruptcy filing includes Hertz and its US and Canadian
subsidiaries. Its franchised locations and operations in Europe, Australia and
New Zealand are not included in the Chapter 11 proceedings.