Hertz seeks court OK of first-day motions to continue operations

By Caroline Salls

Pittsburgh, May 26 – Hertz Global Holdings, Inc. and the Hertz Corp. (collectively, Hertz) said they are seeking approval from the U.S. Bankruptcy Court for the District of Delaware of a variety of first-day motions containing customary relief intended to assure their ability to continue ordinary course operations, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

As previously reported, Hertz filed Chapter 11 bankruptcy on May 22.

Hertz said in the 8-K that Hertz Netherlands and some other international subsidiaries entered into a limited waiver agreement related to an issuer facility agreement on Friday. The waiving parties have agreed to waive any default that could have resulted from the Chapter 11 filing through Sept. 30.

The company said this waiver is conditioned on the waiver of the VFN issuance facility agreement, which has been obtained and is in effect, the waiver of a vehicle funding facilities agreement, which has not been obtained at this time, and the waiver of the company’s 4 1/8% notes being obtained, which also has not been obtained at this time.

If the conditions to the effectiveness of the waiver are not satisfied and this waiver does not take effect promptly, Hertz said it may be necessary to include Hertz Netherlands and some of the other international subsidiaries that guarantee the relevant underlying debt in the Chapter 11 cases.

On May 19, Hertz entered into a key employee retention letter with about 340 employees, including its current named executive officers under which the employees received a cash retention bonus, the 8-K said.

Specifically, the company said the retention program provided $16.22 million in total cash retention payments to a broad base of key employees at the director level and above.

A total of $700,000 of the retention bonuses went to president and chief executive officer Paul Stone, $600,000 to executive vice president and chief financial officer Jamere Jackson and $189,633 to executive vice president and chief marketing officer Jodi Allen.

In addition, Hertz Global said it adopted an amended and restated severance plan for senior executives on May 22, replacing the previous severance plan in its entirety and reducing severance otherwise payable under the previous plan.

According to court documents, Hertz had $25,842,000,000 in total assets and $24,355,000,000 in total debt as of March 31.

Hertz is an Estero, Fla.-based car rental company. The Chapter 11 case number is 20-11218.

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