Rental Car Giant Hertz Files For Bankruptcy Protection
A decrease in travel amid the coronavirus pandemic has dealt a "sudden and dramatic" blow to the company's revenue.
Car rental company Hertz filed for bankruptcy protection Friday, citing an "abrupt decline in revenue" during the coronavirus pandemic.
Hertz is just the latest high-profile company to feel the financial pain of the COVID-19 crisis: Retailers J.C. Penney, J. Crew, and Neiman Marcus all filed for bankruptcy protection this month. Home-decor chain Pier 1 Imports announced it would be closing for good, with final closing sales beginning Memorial Day weekend.
After many states began to declare stay at home orders in March, car rentals dried up, and Hertz reduced spending, implemented furloughs and laid off 20,000 employees.
In April the company, which includes car-rental brands Dollar, Thrifty and Firefly, missed a payment on its debt, but reached a short-term deal with its creditors. The company was unable to secure a long-term agreement.
The filing excludes Hertz's international operating regions in Europe, Australia and New Zealand, as well as its more than 10,000 franchised locations. The company said it would use more than $1 billion in cash on hand to support its ongoing operations as it proceeds with the bankruptcy process. The company will continue to honor reservations, promotional offers, vouchers and rewards points programs.
"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," said CEO Paul Stone in a statement. "Our loyal customers have made us one of the world's most iconic brands, and we look forward to serving them now and on their future journeys."
Hertz is just the latest high-profile company to feel the financial pain of the COVID-19 crisis: Retailers J.C. Penney, J. Crew, and Neiman Marcus all filed for bankruptcy protection this month. Home-decor chain Pier 1 Imports announced it would be closing for good, with final closing sales beginning Memorial Day weekend.
After many states began to declare stay at home orders in March, car rentals dried up, and Hertz reduced spending, implemented furloughs and laid off 20,000 employees.
In April the company, which includes car-rental brands Dollar, Thrifty and Firefly, missed a payment on its debt, but reached a short-term deal with its creditors. The company was unable to secure a long-term agreement.
The filing excludes Hertz's international operating regions in Europe, Australia and New Zealand, as well as its more than 10,000 franchised locations. The company said it would use more than $1 billion in cash on hand to support its ongoing operations as it proceeds with the bankruptcy process. The company will continue to honor reservations, promotional offers, vouchers and rewards points programs.
"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," said CEO Paul Stone in a statement. "Our loyal customers have made us one of the world's most iconic brands, and we look forward to serving them now and on their future journeys."
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
