FORMERLY PE OWNED
Hertz
Includes Hertz Rent-A-Car
car rental · Estero, FL
- PE Firm
- Clayton, Dubilier & Rice →
- Acquirer
- Clayton, Dubilier & Rice / The Carlyle Group / Merrill Lynch Global PE
- Year Acquired
- 2005
Three PE firms bought Hertz for $15 billion and piled on debt. Years later, Hertz paid $168 million to settle with hundreds of customers it had falsely accused of stealing its own rental cars.
What Happened
- Clayton, Dubilier & Rice, Carlyle, and Merrill Lynch Global PE bought Hertz from Ford for $15 billion in 2005, one of the biggest buyouts of its era
- They financed it by loading the debt onto Hertz itself. The PE owners cashed out by 2013 and left that debt on the company's books.
- Hertz filed for Chapter 11 in May 2020 and came out in July 2021, after years of debt payments left no cushion when travel dried up
- Court records show Hertz files about 3,365 car-theft reports a year against its own paying customers. In December 2022, it paid $168 million to settle with 364 of them who said they'd been wrongly accused, some after returning the car right on schedule.
The Damage Done
- Hertz settled claims from 364 customers who said they were falsely accused of stealing rental cars they'd returned on time, after some were arrested, charged with felonies, or jailed for crimes they hadn't committed
- The 364 customers in the settlement had been wrongly arrested, detained, or had their lives upended before Hertz paid out
- Court records show how it happened: when a card hold failed during a rental extension, Hertz reported the car stolen and never took it back, even after the customer paid and returned it
- For the millions of people who rented from Hertz, the bankruptcy and the false-arrest scandal added up to one thing: a company that treated its own customers like suspects