Hertz Global Holdings Inc. filed for bankruptcy protection on Friday (May 22nd) after its business pummelled once the COVID-19 pandemic set in and negotiations with creditors failed.
The car rental company said in a U.S. court filing on Friday that it voluntarily filed for Chapter 11 reorganization.
(Its operating regions in Europe, Australia and New Zealand were not included in the U.S. proceedings).
Much of Hertz's revenue comes from car rental services at airports – a sector of the that has tanked as travel restrictions cripple the demand for rental vehicles.
According to reports, the company had nearly $19 billion USD of debt and around 38,000 employees at end of 2019.
The Chapter 11 filing allows Hertz to continue operating while it figures out how it intends on paying creditors.
All of Hertz’s global businesses (including its Hertz, Dollar, Thrifty, Firefly, Hertz Car Sales, and Donlen subsidiaries) are still open for business.
“Hertz has over a century of industry leadership,” said Hertz President and CEO Paul Stone in a statement, adding that the company started 2020 with a strong outlook.
“With the severity of the COVID-19 impact on our business, and the uncertainty of when travel and the economy will rebound, we need to take further steps to weather a potentially prolonged recovery.”
Hertz was founded in the U.S. in 1918 and operates in around 150 countries.