Hertz Wins Dismissal of Shareholder Lawsuit Claiming Redemption Obligation
Hertz Global Holdings Inc. has successfully dismissed a shareholder lawsuit alleging it was obligated to redeem its common stock warrants following a series of financing transactions.
Delaware Chancery Court Judge Eric Davis ruled that Hertz's repurchase of $3.4 billion in stock and assumption of $2.2 billion in debt between November 2021 and December 2023 did not constitute a "reorganization event" triggering the redemption rights of warrant holders.
The lawsuit claimed that Hertz's actions met the definition of a reorganization event under the terms of the warrants, entitling investors to redeem their securities. However, the court found otherwise, noting that the company's transactions were not a fundamental change in its business or capital structure.