Wednesday, December 2, 2009

Hertz withdraws suit against rating agency

Otherwise titled, how Hertz behaves like your mother-in-law.

I mentioned briefly here about Hertz filing suit against rating agency Audit Integrity over comments the latter made in a September 2009 report. Based on Hertz's public disclosures, Audit Integrity reported that Hertz was one of twenty possible companies "likely to go bankrupt or suffer severe financial distress."

Hertz wrote Audit Integrity soon after, alleging incomplete conclusions and cc:ing the other nineteen companies. Ultimately, Hertz fought the good fight alone: filing litigation in September in New Jersey state court alleging defamation and trade libel. Audit Integrity stood by its research and report, however. Audit Integrity even issued an October press release accusing Hertz of "blatant attempts to induce nineteen companies to consider filing lawsuits" against Audit Integrity. The rating agency then sent an October letter to the SEC asking for an investigation into Hertz's behavior and possible collusion. How's that for calling a bluff?

Hertz "quietly" withdrew the suit before Thanksgiving. A spokesperson for the company explained that in the first place, Audit Integrity did acknowledge in its September report that Hertz's risk exposure was low. Additionally, Hertz's financial outlook has improved since the September Audit Integrity report.

You can read a full account here.

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