Hertz: SG Urges SCOTUS to Deny Cert
Mark Lightner, Esq. - Head of Special Situations Legal Research, CreditSights
Jory M. Eisenberg, CFA, FRM - Senior Analyst, Special Situations, CreditSights
Todd Duvick, CFA - Head of Autos, CreditSights
4 December 2025
Insights into Hertz SCOTUS petition denial, including:
- Solicitor General Recommends Denial: The U.S. Solicitor General filed an amicus brief on December 3, 2025, urging SCOTUS to deny Hertz’s petition for certiorari, supporting the Third Circuit’s decision requiring Hertz to pay contract-rate interest to pre-bankruptcy noteholders.
- $300+ Million Payment Expected: Despite the Hertz SCOTUS petition denial recommendation, the company faces a near-term obligation of approximately $300+ million to noteholders, though analysts believe Hertz maintains sufficient liquidity with ~$2.2 billion in corporate resources to cover this payment.
- Solvent Debtor Exception Upheld: The SG’s brief agrees with the Third Circuit’s outcome that solvent debtors like Hertz must pay post-petition interest at contractual rates, even while disagreeing with certain aspects of the court’s legal reasoning regarding claim impairment.
- Bankruptcy Court Remand Likely: Following the expected SCOTUS denial in late December 2025 or January 2026, the case will return to bankruptcy court to determine the precise amount owed, with disputes centering on an additional $27+ million in interest beyond the agreed $328 million.
- No Financial Distress Anticipated: Hertz retains multiple liquidity levers including a $250 million equity ATM, $500 million incremental debt capacity, and real estate monetization options, ensuring the litigation payment won’t create undue financial strain on operations.
Executive Summary
- The U.S. Solicitor General (SG) filed an amicus brief on December 3, 2025, recommending that SCOTUS deny review of Hertz’s petition for certiorari regarding post-petition interest owed to pre-bankruptcy noteholders.
- Although the SG disagrees with certain parts of the Third Circuit’s reasoning, the brief supports the outcome requiring Hertz to pay contract-rate interest.
- We think the SG’s position is interesting because it disagrees with the approach taken by several prominent lower courts that draw a distinction between “impairment” of creditor rights caused by a reorganization plan itself as opposed to that resulting from the operation of the Bankruptcy Code—for example, when a claim for unmatured interest is disallowed under § 502(b)(2)—which signals this issue may not go away in bankruptcy litigation more generally.
- Given the absence of a circuit split and the SG’s clear recommendation, we maintain our position that it is most likely that SCOTUS will deny cert, which means the case will continue at the bankruptcy court on remand to determine the precise amount owed to noteholders.
- We believe Hertz retains sufficient liquidity to cover the likely $300 mn+ payment, and do not anticipate undue financial strain from the outcome.
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