Hertz Global Holdings Inc. agreed to provide some value to shareholders when it comes out of Chapter 11, claiming individual traders who have insisted the company is worth something despite its declaration of bankruptcy.
Hertz on Wednesday proposed in a Chapter 11 exit plan that current shareholders receive orders to buy up to 4% of the restructured business, the first time the company said it was worth enough to distribute some value to its owners.
Shareholder distribution would represent a recovery of 60 to 70 cents per share, a “material return to equity,” Hertz lawyer Thomas Lauria said during a court hearing Wednesday.
If approved by the U.S. Bankruptcy Court in Wilmington, Del, this result would make Hertz a relative rarity in business bankruptcies, in which equities lag behind debt and are more often eliminated. Hertz shares closed at $ 1.74 on Wednesday, down 8.4%, but have risen 36% so far.
The proposed equity distribution is part of a restructuring proposal submitted by Dundon Capital Partners LLC, Centerbridge Partners LP and Warburg Pincus LLC, selected by Hertz earlier this month following a competitive process to fund the exit of the company of chapter 11.