Hertz to File for Bankruptcy, According to Reports

Hertz to File for Bankruptcy, According to Reports

Rental car giant Hertz is preparing to file for bankruptcy as soon as this weekend after failing to reach a "standstill agreement" with top lenders, according to a report in the Wall Street Journal.

The WSJ reports:

The car-rental company is planning to seek chapter 11 protection in the coming days after government restrictions on travel cut down on air and ground traffic, crushing the vehicle-rental market, these people said.

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A bankruptcy would make Hertz one of the highest-profile corporate defaults yet stemming from the coronavirus pandemic’s impact on American travelers. The fallout from Covid-19 has hit the rental-car companies doubly hard because their operations are reliant on two industries—automotive and travel—that have been pummeled.

Hertz, based in Estero, Fla., missed a lease payment last month and convinced creditors to wait until Friday evening before declaring a default. Creditors refused to grant another extension, people familiar with the matter said.

This is the first travel-related bankruptcy. A series of retailers have filed for bankruptcy protection including J.Crew, Neiman Marcus, JC Penney, and Pier 1.