Hertz Seeks Lender Leniency or Faces Bankruptcy Within Weeks
- Deutsche Bank, Barclays face difficulty recouping $3 billion
- Carl Icahn is said to face decision on investing more in Hertz
A Hertz rental location in Berkeley, California, U.S.
Photographer: David Paul Morris/BloombergThis article is for subscribers only.
Hertz Global Holdings Inc.’s creditors were offered two bad choices when hammering out a deal to keep it out of bankruptcy: cut the 102-year-old company some slack and hope it recovers, or let it slip into insolvency and try to recoup their investment in sales of its devalued rental fleet.
The holders of Hertz’s asset-backed securities blinked and gave the company until May 22 to pay them about $400 million. Hertz knew its creditors would want to avoid bankruptcy, which could trigger a fire sale of devalued used cars if the ABS trusts that hold the vehicles have to liquidate, according to people familiar with the matter.