Hertz accepts watered-down deal to get out of bankruptcy, with payment in shares

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Hertz Global Holdings Inc. said an improved bankruptcy plan will provide some shareholder value, justifying optimistic traders who insisted the company was worth something despite filing for bankruptcy.

Hertz United States: HTZGQ
said in a bankruptcy exit plan filed on Wednesday that current shareholders would receive warrants to buy up to 4% of the restructured business, the first time the company has said it was worth it to distribute some value to its owners.

The distribution to shareholders would amount to a recovery of 60 to 70 cents per share, a “significant return to equity,” Hertz attorney Thomas Lauria said in a hearing Wednesday.

If approved by the U.S. Bankruptcy Court in Wilmington, Del., This result would make Hertz a relative rarity in corporate bankruptcies, in which equity ranks behind debt and is most often wiped out. As recently as last week, Hertz had insisted that its equity was worthless because the company was not worth enough to cover its debt and no longer had surplus shareholder value.

An expanded version of this report appears on WSJ.com.

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