Hertz Shares Could Soon Be ‘Worthless’ Says SEC Filing

Hertz Global Holding Inc. recently filed for bankruptcy and according to an SEC filing, shares could soon be worthless.

The word ‘worthless’ appears five times in the plan outlined in an SEC filing, where the company says it plans to sell up to $500 million in stock.

The document’s sixth paragraph warns that the company is under a “process of a reorganization under chapter 11 of title 11, or Chapter 11, of the United States Code, or Bankruptcy Code, which has caused and may continue to cause our common stock to decrease in value, or may render our common stock worthless.” A variation of that last sentence reappears four more times in the filing.

The company said that eequity holders won’t see a recovery unless those with higher priority, such as the company’s debt holders, are paid in full.

And that, the company said, would only happen if there is an astounding change in the progress of Covid-19 and a significant turnaround in travel trends.

“Although we cannot predict how our common stock will be treated under a plan, we expect that common stock holders would not receive a recovery through any plan unless the holders of more senior claims and interests, such as secured and unsecured indebtedness (which is currently trading at a significant discount), are paid in full, which would require a significant and rapid and currently unanticipated improvement in business conditions to pre-COVID-19 or close to pre-COVID-19 levels,” read the filing.

Hertz had entered bankruptcy protection in late May with nearly $20 billion in debt. The company had been impacted hard by the global restrictions on travel designed to slow the spread of the coronavirus illness.

The struggling company had received a delisting notice from the New York Stock Exchange on May 26th. Hertz has appealed the determination and said its newly issued stock will continue to be listed and trade on the NYSE pending resolution of such appeal. “We cannot provide any assurance as to the ultimate resolution of the appeal,” Hertz said in the filing.

The company had given millions in executive bonuses ahead of the bankruptcy filing.

Disclaimer: We have no position in Hertz Global Holdings Inc. (NYSE: HTZ) and have not been compensated for this article.