ITEM 7.01 REGULATION FD DISCLOSURE.
On May 22, 2020, Hertz Global Holdings, Inc. ("Hertz Global"), The Hertz
Corporation ("THC," and collectively with Hertz Global, "Hertz" or the
"Company") and certain of their direct and indirect subsidiaries in the United
States and Canada (but excluding, without limitation, (i) Hertz International
Limited, Hertz Holdings Netherlands BV ("Hertz Netherlands") and the direct and
indirect subsidiary companies located outside of the United States and Canada
(the "International Subsidiaries") and (ii) Hertz Vehicle Financing LLC, Hertz
Vehicle Financing II LP, Hertz Fleet Lease Funding LP and certain other vehicle
financing subsidiaries) (collectively, the "Debtors") filed voluntary petitions
for relief (collectively, the "Petitions") under chapter 11 of title 11
("Chapter 11") of the United States Code in the United States Bankruptcy Court
for the District of Delaware (the "Bankruptcy Court"), thereby commencing
Chapter 11 cases for the Debtors.
In connection with the commencement of their Chapter 11 cases, the Debtors filed
a number of motions with the Bankruptcy Court. Among these was a motion to
establish certain procedures to protect any potential value of the Company's net
operating loss carryforwards and other tax attributes (the "NOLs," and such
motion, the "NOL Motion"). On May 27, 2020, the Bankruptcy Court entered an
interim order approving the NOL Motion (the "NOL Order") and directing the
Debtors, to, among other things, provide notice of the NOL Order by annexing an
approved notice thereof (the "Notice of NOL Order") to a filing on Form 8-K.
The NOL Order establishes certain procedures (the "Procedures") with respect to
direct and indirect trading and transfers of stock of the Company in order to
protect any potential value of the Company's NOLs for use in connection with the
reorganization. As approved on an interim basis, the Procedures restrict
transactions involving, and require notices of the holdings of and proposed
transactions by, any person or group of persons that is or, as a result of such
a transaction, would become, a Substantial Shareholder of the common stock
issued by the Company (the "Common Stock"). For purposes of the Procedures, a
"Substantial Shareholder" is any person or, in certain cases, group of persons
that beneficially own, directly or indirectly (and/or owns options to acquire)
at least approximately 6.4 million shares of Common Stock (representing
approximately 4.5% of all issued and outstanding shares of Common Stock). Any
prohibited transfer of Common Stock would be null and void from the beginning
and may lead to contempt, compensatory damages, punitive damages, or sanctions
being imposed by the Bankruptcy Court. In addition, the NOL Order establishes
May 22, 2020 as the "Record Date" applicable to certain claims trading activity
that may be governed by additional procedures that the Debtors requested by the
NOL Motion be established by a final order. These additional procedures not yet
approved by the Bankruptcy Court would (i) establish certain future
circumstances under which any person, group of persons, or entity holding, or
which as a result of a proposed transaction may hold, a substantial amount of
certain claims against the Debtors may be required to file notice of its
holdings of such claims and of proposed transactions involving such claims,
which transactions may be restricted, and (ii) describe certain limited
circumstances thereafter under which such person(s) may be required to sell, by
a specified date, all or a portion of any such claims acquired during the
Chapter 11 cases.
The Notice of NOL Order setting forth the Procedures is furnished as Exhibit
99.1 to this current report and is hereby incorporated by reference into this
Item 7.01.
This same information may also be found at
https://restructuring.primeclerk.com/hertz/, the third party website maintained
by Prime Clerk, the Debtors' claims and noticing agent. A direct link to the
Notice of NOL Order is as follows:
https://restructuring.primeclerk.com/hertz/Home-DownloadPDF?id1=NDA1NTg5&id2=0
The information contained in this Item 7.01 and Exhibit 99.1 hereto shall not be
deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and shall not be incorporated by
reference into any filings under the Securities Act of 1933, as amended, or the
Exchange Act, except as may be expressly set forth by specific reference in such
filing.
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ITEM 8.01 OTHER EVENTS.
As previously disclosed, on May 22, 2020, Hertz Netherlands and certain other
International Subsidiaries entered into a limited waiver agreement in respect of
the Issuer Facility Agreement, dated as of September 25, 2018, between, among
others, International Fleet Financing No.2 B.V. as issuer, Hertz Europe Limited
as issuer administrator, Credit Agricole Corporate and Investment Bank as
administrative agent and BNP Paribas Trust Corporation UK Limited as issuer
security trustee, as amended, restated or otherwise modified from time to time
(the "European ABS Waiver") pursuant to which the Waiving Parties (as defined
therein) agreed to waive any default or event of default that could have
resulted from the Chapter 11 cases. The European ABS Waiver will expire on
September 30, 2020 or, if sooner, the date on which Hertz Netherlands or certain
other International Subsidiaries that are party to the European ABS Waiver fail
to comply with certain agreements contained in the European ABS Waiver. The
European ABS Waiver was conditioned on (i) the waiver on similar terms of the
VFN Issuance Facility Agreement, dated as of December 7, 2010, (as amended and
restated from time to time) by and among HA Fleet Pty Limited, as issuer, Hertz
Australia Pty Limited, as administrator, Westpac Banking Corporation as
administrative agent, certain committed note purchasers, certain conduit
investors, certain funding agents for the investor groups and P.T. Limited, as
security trustee, which has been obtained and is in effect, (ii) the waiver on
similar terms of the Vehicle Funding Facilities Agreement dated February 7, 2013
(as amended and restated from time to time) between Hertz (U.K.) Limited, Hertz
Vehicle Financing U.K. Limited and Lombard North Central Plc, which was obtained
on May 27, 2020 and is in effect, and (iii) the waiver on similar terms of the
€225,000,000 aggregate principal amount outstanding of 4.125% Senior Notes due
2021 and the €500,000,000 aggregate principal amount outstanding of 5.500%
Senior Notes due 2023, which was obtained on May 27, 2020 and is in effect. The
conditions to the effectiveness of the European ABS Waiver have been satisfied
and Hertz Netherlands and the International Subsidiaries are not included in the
Chapter 11 cases.
ITEM 9.01 EXHIBITS
(d) Exhibits
Exhibit
Number Title
99.1 Notice of NOL Order
101.1 Pursuant to Rule 406 of Regulation S-T, the cover page to this Current
Report on Form 8-K is formatted in Inline XBRL
104.1 Cover Page Interactive Data File (Embedded within the Inline XBRL
document and included in Exhibit 101.1)
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Current Report on form 8-K contains "forward-looking statements" within the
meaning of federal securities laws. Words such as "expect" and "intend" and
similar expressions identify forward-looking statements, which include but are
not limited to statements related to our liquidity, the expected effects on our
business, financial condition and results of operations due to the spread of the
COVID-19 virus, the bankruptcy process, the Company's ability to obtain approval
from the Bankruptcy Court with respect to motions or other requests made to the
Bankruptcy Court throughout the course of the Chapter 11 cases, the effects of
the Chapter 11 cases, including increased professional costs, on the Company's
liquidity, results of operations and business, the Company's ability to comply
with the continued listing criteria of the New York Stock Exchange (the "NYSE")
and risks arising from the potential suspension of trading of the Company's
common stock on, or delisting from, the NYSE, the effects of Chapter 11 on the
interests of various constituents and the ability to negotiate, develop, confirm
and consummate a plan of reorganization. We caution you that these statements
are not guarantees of future performance and are subject to numerous evolving
risks and uncertainties that we may not be able to accurately predict or assess,
including those in our risk factors that we identify in our most recent annual
report on Form 10-K for the year ended December 31, 2019, as filed with the
Securities and Exchange Commission on February 25, 2020, and quarterly reports
on Form 10-Q filed subsequent thereto. We caution you not to place undue
reliance on our forward-looking statements, which speak only as of the date of
this filing, and we undertake no obligation to update this information.
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