September 20, 2021

Volume XI, Number 263

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September 17, 2021

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Hertz Leaves Bankruptcy, Taps Directors for New Board

With Hertz emerging from a bankruptcy with a positive result for shareholders, we are reminded of the interplay between the equity markets and the bankruptcy alternative.

Some firms facing financial challenges during the pandemic were able to avoid a bankruptcy filing altogether because of their ability to raise the necessary funds through an equity offering. Hertz provides an example of a situation where the bankruptcy filing instead of wiping out the equity enhanced value.

If appropriate disclosures can be made, an equity offering may negate the need for the bankruptcy filing. In any event it is an alternative that should be considered.

"The competition for control of Hertz drove up its value so sharply that it was able to cover its debt in full and supply a handsome payout to shareholders, who are normally wiped out when companies go bankrupt. After the bankruptcy exit, Hertz shares will continue to trade over the counter, though the controlling investors are considering relisting on a stock exchange eventually, people familiar with the matter said."

©1994-2021 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume XI, Number 187
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About this Author

Joel I. Papernik, Securities Attorney, Mintz Levin, Israel Counsel, M&A Lawyer
Member

Joel is a corporate and mergers and acquisitions attorney who is esteemed for his work on life sciences deals. He leads acquisitions of public and private companies across a wide range of industries and assists all types of companies with the intricate processes of offloading enterprises, divisions, and subsidiaries. His capabilities include managing collaborative arrangements, licensing transactions, and other strategic deals for life sciences companies and helping overseas firms set up operations and make acquisitions in the United States. He also serves as counsel to boards of directors...

212-692-6774
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