Hertz dismisses warrants in Delaware

Jonathan Stempel

(Reuters) – Herts Global Holdings on Friday won the firing of a lawsuit by a warrant holder who could have been forced to borrow hundreds of millions of dollars following a string of funding transactions.

Funds related to Discovery Capital Management were equivalent to a change in control in June last year, when Hertz was “recapitalized” by billions of dollars between November 2021 and December 2023, and was equivalent to a change in control, with 100 million yen. He claimed it would be a $87.5 million payment.

The funds hold 11% of the HERTZ warrants, which means a claim of about $1.7 billion if other holders also seek payments based in Florida-based Estero.

However, in Friday’s decision, Delaware Chance Court Judge Eric Davis refused to file a claim against the fund.

He said Hertz’s $3.4 billion share repurchase and $2.2 billion debt issuance were no match for the substantial structural changes in Hertz’s capital structure that “recapitalization” suggests.

Otherwise, the judge said it was “overly comprehensive and could produce absurd outcomes.”

Discovery Fund’s lawyers did not immediately respond to requests for comment. The discovery is based in Norwalk, Connecticut.

Hertz was pleased with this decision.

“As I said in June, this claim is useless and not supported by the terms of warrant language or market practices,” Hertz said in a statement.

Cases include Discovery Global Opportunity Master Fund Ltd et al v Hertz Global Holdings Inc, Delaware Chancery Court, No. It’s 2024-0655.

(Reporting by Jonathan Stempel in New York edited by Marguerita Choy)