Hertz files for Chapter 11 bankruptcy

Car rental giant Hertz has filed for bankruptcy protection in the US and announced plans to furlough or layoff of 20,000 employees, or approximately 50% of its global workforce, as a result of the coronavirus pandemic

The company - which began operating a century ago in Chicago with a dozen Model T Ford cars – earns much of its revenue from car rentals at airports, and has been badly affected by many countries introducing Covid-19 travel restrictions.

In a statement Hertz said: ‘The impact of Covid-19 on travel demand was sudden and dramatic, causing an abrupt decline in the company's revenue and future bookings.’

Hertz's international operations in Europe, Australia and New Zealand as well as its franchised locations in the US are not affected.

However, Hertz Global Holdings and certain of its US and Canadian subsidiaries have filed voluntary petitions for reorganisation under US Chapter 11 bankruptcy laws. 

Paul Stone, Hertz president and CEO, said: ‘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.

‘Today's action will protect the value of our business, allow us to continue our operations and serve our customers, and provide the time to put in place a new, stronger financial foundation to move successfully through this pandemic and to better position us for the future.’

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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