Before the pandemic the company had amassed billions of dollars in debt, with the rise of ride-hailing apps leading to a drop in demand for vehicle rentals.
The Estero, Florida-based company, which operates Hertz, Dollar and Thrifty car-rentals, had been in talks with creditors after skipping significant car-lease payments due in April. Hertz's principal global operating regions and franchised locations are not included in the filing, the statement said.
CEO Kathryn Marinello resigned last Saturday, and the company's board of directors named Paul Stone, who previously served as the company's executive vice president and chief retail operations officer for North America, to step in for Marinello. "There's only so long that companies' reserves will carry them".
Hertz traces its roots to 1918, when Walter Jacobs, then a pioneer of renting cars, founded a company allowing customers to temporarily drive one of a dozen Ford Motor Co Model Ts, according to the company's website.
However, there is the possibility that lead shareholder Carl Icahn could rescue the company as he looks to protect his $1.6 billion investment that is now valued at $170 million, sources told Bloomberg.
Deutsche Bank analyst Chris Woronka credited Marinello with reigniting Hertz's revenue growth, writing in a note to investors that it rose 16% in 2018 and 2019 combined.
Car-rental giant Hertz could file for bankruptcy as soon as this weekend after it was unable to reach an agreement with its biggest lenders, The Wall Street Journal reported on Friday. Hertz earlier laid off about 10,000 employees and said there was substantial doubt about its ability to continue as a going concern.
Hertz has until Friday to make about $400 million in lease payments for its fleet of vehicles or extend a forbearance agreement with its creditors, the news outlet reported.
Hertz's board earlier in the day approved the company seeking Chapter 11 protection in a United States bankruptcy court in DE, according to court records.
Hertz joins other large American companies in filing for COVID-19 related bankruptcy actions, including J.C. Penney and Neiman Marcus.