Hertz also has traditional credit lines, loans and bonds with conditions that can trigger defaults based on missing those lease payments or failing to meet other conditions, such as delivering a timely operating budget and reimbursing funds it has borrowed.
Meaning, in layman's terms, the used vehicle market could be flooded if all Hertz's cars are sold to recoup the debt.
Hertz, including its Dollar, Thrifty, Firefly, Hertz Car Sales, and Donlen subsidiaries, remains open and serving customers, according to a statement from the company.
The Florida-based company, which operates Hertz, Dollar and Thrifty vehicle rentals, held talks with creditors after skipping significant auto lease payments due in April.
Hertz's worldwide operations in Europe, Australia and New Zealand as well as its franchised locations in the U.S. are not affected. Top shareholder Carl Icahn could still swoop in with a last-minute rescue to protect a $1.6 billion investment, now worth about $170 million as of Thursday's close, one of the people said.
After several last-ditch efforts to avoid it - and five days after installing a new CEO - Hertz Global Holdings filed for bankruptcy May 23. Jacobs sold the company, initially called Rent-A-Car Inc., to John D. Hertz in 1923.
That's a pretty significant cash reserve, but the company is drowning in approximately $17 (£13.9 / €15.6) billion in debt.
On May 18, Hertz named operations chief Paul Stone as CEO and announced that Marinello would step down as CEO and from the company's board.
In its first-quarter report filed earlier in May with securities regulators, the company warned that it may not be able to repay or refinance debt and may not have enough cash to keep operating.
Under a Chapter 11 restructuring, creditors will have to settle for less than full repayment.
Lenders granted Hertz an eleventh-hour reprieve from a potential bankruptcy, giving the struggling rental-car company more time to work out a rescue plan after it missed debt payments. The company joins department store chain J.C. Penney, as well as J.Crew and Stage Stores.