Forbes reports that car rental company The Hertz Corporation filed for bankruptcy on Friday, May 22, 2020. Forbes indicates that Hertz’s financial condition was harmed by the substantial reduction in air travel resulting from the COVID-19 pandemic. Financial distress in the car rental industry is expected to negatively impact the already struggling automotive industry more broadly as car rental companies reduce their number of annual new cars purchased or otherwise shrink the size of their existing fleets. [Forbes; May 23, 2020]

Credit rating agency Fitch released a special report, which shows that leveraged loan defaults in the United States are at a six year high as a result of the fallout from the COVID-19 pandemic. [Fitch; May 22, 2020]

Reporting from Reuters indicates that members of the German cabin crew union are demanding that any bailout package to the Lufthansa include guaranteed job protection for cabin crew union members. Lufthansa, like many airlines, has endured significant financial distress as a result of the COVID-19 pandemic. We discussed Lufthansa’s financial distress and ongoing bailout efforts in an earlier post. [Reuters; May 22, 2020]

Reporting from the Washington Post shows a surge in claims on business interruption insurance policies from restaurants in the fallout from the COVID-19 pandemic. While payment on the business interruption insurance claims could help many restaurants survive the substantial drop in revenue that many have experienced since March of 2020, insurers argue that the majority of policies do not cover business interruption caused by viruses and that payment on such claims could deplete their existing surpluses and threaten their existence. [WaPo; May 19, 2020]