The only thing we have to add here is that this is FAR  from being an outlier.

Original article posted at Petition.com.

Hertz Drops Predictable Bomb on Shareholders

“Yesterday The Hertz Corporation ($HTZGQ) filed its chapter 11 plan of reorganization and disclosure statement and —SHOCKER— all of the value sits at the senior parts of the capital structure. The proposed plan implies a total enterprise value of approximately $4.846b. Here’s what the proposed recoveries will look like:

• The $1.27b of first lien claims will get paid in full.
• The $350mm of second lien note claims will get paid in full.
• The $3.49b of unsecured funded debt claims will get cash and subscription rights to participate in a rights offering for post-reorg equity — for an estimated total recovery of 70 cents on the dollar.

The payments will be made from a $2.283b direct investment by plan sponsors, Knighthead Capital Management and Centares Opportunities LLC, $1.97b to be raised via the backstopped rights offering, and $1b in exit financing in the form of a secured term loan. The company will also obtain a secured RCF of $1.5b and will emerge from chapter 11 with $850mm of cash on balance sheet.

But wait? What about the equityholders?”

Read the full article here.