Hertz gets court approval of $756 million vehicle lease agreement

By Sarah Lizee

Olympia, Wash., Jan. 21 – Hertz Corp. received court approval of a resolution that will allow the company to dispose of at least 121,510 lease vehicles and make a total of $756 million in payments to noteholders under a master lease agreement, according to an order filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

Hertz, in its capacity as servicer, will remit all proceeds from the disposition of vehicles leased under the master lease agreement to the note trustees on a weekly basis. However, for subject vehicles sold between Jan. 1 and Sept. 30, Hertz may keep $900 per vehicle from those proceeds for vehicles sold through its retail channel.

In its capacity as lessee, Hertz will make a total payment of $756 million to the trustees under the master lease agreement in nine installments of $84 million between January and September.

In addition, Hertz will be authorized to dispose of or keep up to 40,000 vehicles under the master lease agreement for use in the ordinary course of its business, either by purchasing those vehicles in accordance with the master agreement terms or agreeing to make base rent payments under the lease agreement.

Hertz is an Estero, Fla.-based car rental company. It filed Chapter 11 bankruptcy on May 22, 2020. The Chapter 11 case number is 20-11218.

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