Note About Hertz (HTZ) Financial Statements

There is an interesting note in the Hertz (NYSE:HTZ) lawsuit against research firm Audit Intergrity. Hertz claim that AI distributed false and defamatory statements about the rental car company when it put out its list of the probability of bankruptcy at a number of large US companies.

In the complaint, Hertz says “Defendant never had access to Hertz’s underlying financial data from which they could reasonably test the accuracy of Hertz’s financial reports”. It seems odd that such important data was not given to the SEC and shareholders in the form of 10-Qs, 10-Ks, and other public filings. If the data is so important, those who hold stock in Hertz should have it. The accuracy of Hertz financial reports is important

Another accusation in the suit is that the AI “defamatory statements” “have made employees nervous about their job security, pay, and benefits.” According to Bloomberg, Hertz fired 4,000 people on January 16 and has cut 32% of its workforce since August 2006.  That could make workers nervous all by itself.

The Hertz board ought to be mortified that its general counsel Jeffrey Zimmerman and CEO Mark Frissora waste time and money on the legal fight. Pronouncements from research firms and the media usually go away quickly because they are replaced by other stories about other companies in the  daily news cycle. Hertz has made the mistake of keeping the spotlight on something that cannot do it any good.

Douglas A. McIntyre