The Hertz bankruptcy has lurched through court since the car rental company declared chapter 11 in May, but it hopes to buy some time to get its house in order by filing a proposed settlement with its lenders late Monday involving a one-time $650 million payment under a new vehicle lease contract, Jalopnik reported. Hertz currently has just under 500,000 vehicle leases on its books. The company was originally eager to cancel the leases and cull its fleet, but lenders were not quite as anxious to lose money. When it first filed for bankruptcy, it owed $400 million in bills from April that it could not pay, with $135 million just in vehicle depreciation alone. Earlier this month, Hertz tried to shed 144,000 vehicles, which would have saved more than $80 million a month, but lenders balked, wanting Hertz to sell the excess fleet gradually to ensure the best price. Now that used car prices have rebounded, lenders might be more willing to play ball. Hertz’s business model was effectively wiped out when the COVID-19 epidemic grounded planes across the country. Fewer travelers meant fewer car rentals. The $650 million solution is also just a temporary one. Should there be no permanent agreement with lenders by January 2021, then Hertz will go back to the drawing board. The company will go before a bankruptcy judge on July 24 to ask for the plan to be approved.
