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Simply Wheelz to file for bankruptcy protection

Staff writer ▼ | November 6, 2013
Franchise Services Of North America (FSNA) said that its wholly-owned subsidiary Simply Wheelz LLC, which does business as Advantage Rent A Car, has determined to file for U.S. federal bankruptcy protection in the federal bankruptcy courts of the State of Mississippi.
Advantage Rent A CarFranchise Services Of North America (FSNA) said that its wholly-owned subsidiary Simply Wheelz LLC, which does business as Advantage Rent A Car, has determined to file for U.S. federal bankruptcy protection in the federal bankruptcy courts of the State of Mississippi.


Advantage operates from 72 corporate locations in 33 states including airport locations serving 60 of the top 70 airports across the United States. Advantage is the fourth largest independent car rental company in the United States.

FSNA acquired the Advantage business from Hertz Corporation through a series of transactions completed earlier this year. Hertz was required to divest the Advantage business as part of its acquisition of Dollar Thrifty Automotive Group, Inc. pursuant to a decision and order of the Federal Trade Commission made on July 10, 2013. Simply Wheelz acquired approximately 24,000 vehicles from Hertz as part of the acquisition of Advantage pursuant to two fleet leases.

The Master Lease Agreements require Simply Wheelz to bear the residual value risk of the Hertz Leased Fleet. Simply Wheelz, as part of ordinary course fleet management activities, began to sell, at auction, vehicles forming part of the Hertz Leased Fleet commencing in June 2013 and immediately began to experience significant losses on these sales.

As of October 25, 2013, Simply Wheelz had sold 5,295 vehicles through the Manheim auctions for an average loss of approximately $1,633 per vehicle, and a total loss of approximately $8,600,000.


 

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