3 ms·
> Most of the cars that Hertz rents out are owned by “special-purpose” subsidiaries of Hertz, from which Hertz then leases them. When Hertz was sliding into ban
by vmception 5y ago
> Most of the cars that Hertz rents out are owned by “special-purpose” subsidiaries of Hertz, from which Hertz then leases them. When Hertz was sliding into bankruptcy in spring 2020, it was because the company had missed lease payments—to put it crudely—to itself. I can barely understand this, yet I will walk into a rental-car office and suffer for it.
I live for this corporate structure.
- noveltyaccount 5y agoWhat's the advantage of this? Portions of your corporation can go bankrupt without submarining the whole enterprise?
- vmception 5y agoThats what they do. It also earns money from leases (tax event), while itself pays a lease to a subsidiary (tax deduction). Who knows how the subsidiary is structured or returns money to shareholders or if it is located in a different jurisdiction with more favorable taxes. Each subsidiary is different. Each vehicle could theoretically be owned by a distinct subsidiary. Distributing vehicles in the best way to shield liability in the specific jurisdiction of operation. I really do wonder how they return money to shareholders. It could just be all about the potential of returning money to shareholders and never doing so.