Hertz makes settlement offers to end false arrest lawsuits

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(Bloomberg)-Hertz Corp. offered to settle about three dozen cases filed by renters who say they were wrongfully arrested for car theft, the company said.

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The settlement push comes after Colleen Batcheler took over as general counsel for the rental company. In his first month on the job, Batcheler has made it a priority to end lawsuits from more than 230 customers accusing Hertz of improperly calling the police on his tenants’ behalf, mostly by haggling over late rent.

“We tried to step back and say, ‘How can we move forward in a way that’s fair to our clients and based on individual facts and circumstances,’” Batcheler said in an interview.

Hertz lost a key court battle earlier this month when a federal judge allowed more than 70 customers to sue over false arrests. Until then, Hertz had been successful in forcing nearly all lawsuits to remain under the supervision of a bankruptcy judge in Wilmington, Delaware.

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Batcheler declined to say how much money the company was offering to alleged victims and their families.

Hundreds of customers say in court documents that Hertz filed charges against them and had them wrongfully arrested, often at gunpoint. A small number of these cases allege errors made by Hertz employees caused police to arrest innocent customers suspected of driving stolen cars. Lawyers for the clients say around 100 more claims are being prepared.

Victims will consider the offers before deciding whether to accept them, said attorney Francis Alexander Malofiy, the Philadelphia attorney who has spent years battling Hertz in court.

“Hertz has expressed interest in the settlement in the past, only to reveal that it was not serious about taking care of the full extent of the damages they caused,” Malofiy said in a statement. sent by email.

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Hertz must also agree to withdraw theft reports it filed against about 40 customers who are still being sued, Malofiy said.

The false arrest allegations are an early challenge for Batcheler, who became Hertz’s top lawyer last month, and chief executive Stephen Scherr, who took over in February and promised Hertz would change its practices to protect customers. who did nothing wrong against the false arrests. .

The company will attempt to settle as many cases as possible in the coming months, Batcheler said. Some offers will be higher than what victims asked for in their claims in bankruptcy court. Other deals “will be much cheaper,” the company said in a statement.

Hertz Corp. is the unit of Hertz Global Holdings Inc. that operates the Hertz, Dollar and Thrifty rental brands in regions including Europe, the Americas, Asia, Africa and Australia. The company filed for bankruptcy in 2020 as the Covid-19 pandemic ravaged the economy and halted car rentals.

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Hertz left bankruptcy watch last year, but left behind a shell company to pay off its disputed old debts, including the false arrest claims.

Hertz files thousands of criminal cases against customers each year, according to court documents. The company says the majority involve disputes over vehicles that weren’t returned on time and were likely stolen, and it tries to contact customers via phone, text, email and certified letters regarding cars in delay and recover them by private means, worked for approximately 63 days after the return date before involving the police.

Lawyers for the drivers say all of the cases could cost Hertz more than $700 million. The company said in a quarterly report that it does not expect a significant impact.

(Updates with plaintiffs’ attorney’s response to seventh paragraph.)

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