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Hertz Wins Approval to Offer Potentially Worthless Stock

  • Judge says share sale cheaper than traditional bankruptcy loan
  • Creditors support offering to take advantage of price spike
Photographer: Luke Sharrett/Bloomberg
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Hertz Global Holdings Inc. can go ahead with its plan to raise cash by selling new shares that the bankrupt car-rental company readily concedes could end up worthless.

Judge Mary Walrath ruled during a bankruptcy court hearing Friday that Hertz can proceed with the offering, which the company has said could bring in as much as $1 billion. It’s seeking to take advantage of the recent improbable rally in its shares, which could help Hertz resolve the massive debts that forced it into bankruptcy.