A rental car company previously owned by Hertz just filed for bankruptcy for the third time since 2008
Advantage Rent A Car, which was founded in 1963 in San Antonio, Texas,on Wednesday. The news comes less than a week after its former parent company Hertz declared bankruptcy, carrying some $19 billion of liabilities.
Along with Hertz, the economic slowdown stemming from the coronavirus pandemic has brought down big names like J.C. Penney and J. Crew. But none of these companies were flourishing before the pandemic — including Advantage, which has a few dozen locations across the US. Wednesday marks the third time since 2008 that Advantage has filed for bankruptcy. For these companies, their problems stem far before 2020. The entangled stories of Hertz and Advantage, the former of which was once America's No. 2 largest car rental company, shows how years of blunders and missteps placed both firms in a tenuous space by the time that the pandemic hit. But, by 2013, Hertz was eyeing a purchase of Dollar Thrifty Automotive Group, which was then the fourth-largest rental car business in the US. Hertz, in one of the many strategic blunders it made in the 2010s, decided to get rid of its stake in Advantage,The acquisition went through, but perhaps not to Hertz's advantage. Dollar Thrifty, also pursued by Avis, ultimately cost Hertz $2.3 billion. After Hertz bought Dollar Thrifty, leadership quickly raised cashA panoply of shoddy financial decision making brought Hertz to its knees. Meanwhile, Advantage filed for bankruptcy again in December 2013 becauseCatalyst, a private equity firm that specializes in distressed debt deals, ultimately took over Advantage in 2014. Hertz paid Canada-based Catalyst $2.75 million to take Advantage off its hands, andSix years later, Advantage's debt has more than ten-folded to $500 million. "The rental car industry is a disaster right now because of the whole travel industry," Michelle Krebs, executive analyst for Autotrader, toldIt's unclear if, after yet another bankruptcy and global recession, if Advantage will soldier on — but history is bizarrely on their side.Read more about the rental car industry's collapse
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