In a filing with the U.S Bankruptcy Court of the District of Delaware on Monday, Hertz Global Holdings Inc. announced that it has reached a temporary $650 million deal regarding its decision to reduce the size of its leased fleet. Under the deal, which is effective until the end of the year, Hertz will sell off 182,500 leased vehicles out of its entire 492,5000 fleet and keep $900 in proceeds for each vehicle sold. In exchange, Hertz is required to make $650 million in lease payments, or half of what it was originally contracted to do. Previously, Hertz tried to file for chapter 11 reorganization and asked for permission to reject leases for 144,000 vehicles. However, a group of ABS creditors have argued that under Hertz’s master-lease structure, they can’t operate under the assumption that each fleet has multiple leases. SFA submitted an amicus brief on the matter. “Reaching a tentative settlement is likely welcome news to ABS market participants,” said Neil Weidner, a Cadwalader, Wickersham & Taft LLP securitization lawyer representing SFA.

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