Our troubled economy

Hecker's Rent A Car files for bankruptcy protection

  • Article by: DEE DEPASS , Star Tribune
  • Updated: December 8, 2008 - 10:38 PM

Twenty-two of the Advantage locations nationwide are closing; 13 remain open.

Denny Hecker

Photo: Nels Norquist, Special To The Star Tribune

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Denny Hecker's Advantage Rent A Car filed for bankruptcy protection Monday afternoon in Minnesota after shutting down 22 locations at airports around the country, leaving passengers scrambling to find alternatives at affordable prices.

The company said about 440 workers have received layoff notices and about 460 others will remain employed. The company, based in San Antonio, Texas, and its affiliates filed under Chapter 11 of the bankruptcy code, indicating they are trying to restructure rather than liquidate. Officials said they are pursuing options for a sale or merger.

Until the bankruptcy, Advantage and its affiliates had operated at 48 locations in 16 states. The companies' sites at Minneapolis-St. Paul International Airport, Chicago Midway, Denver plus seven other airports and four other locations are still open for business but rental operations in 22 locations in Nevada, Hawaii, California, western Colorado, Dallas-Fort Worth, Chicago O'Hare and elsewhere have closed.

An Advantage employee handling customer service calls said Monday that customers are being referred to Hertz car rental operations. Some are honoring Advantage's prices, while others are not, she said.

However, the company said in a statement released late Monday that it is working with Hertz to take over all pending lease reservations at the affected locations.

The dreary economy has severely affected the travel industry, including car rentals.

"We have been hit with a simultaneous drop in leisure travel, with greatly increased costs and frozen credit markets," said Jon Austin, spokesman for the Hecker Automotive Group. "These factors are affecting many industries and companies and we are not immune from these forces. These painful steps are a recognition of that reality," he said.

Advantage and 14 affiliates filed separate bankruptcy petitions listing liabilities that ranged from $100,000 to $50 million each, and assets that ranged from $0 to $50 million each.

The closings are the latest setback for Denny Hecker, who was hospitalized last week after his car left the road near his home and struck a utility pole. Hecker, who has since been released from the hospital, has been sued recently by General Motors and he recently filed suit against his longtime financing partner, Chrysler, after it cut off credit for 13 of his auto dealerships.

Last month Hecker shut down six dealerships and sold three, including one in California.

Austin said Advantage Rent A Car is consolidating rental locations and trying to stabilize the business under bankruptcy protection. He said the company is seeking to continue paying wages and benefits without interruption to current employees.

Business traveler Bob Covington from Los Angeles said he was shocked when he called to confirm his car rental reservation before traveling from California to Hawaii.

"The woman who answered at the branch I called in the Los Angeles area today said that [the shutdown] happened last Thursday and [added], 'We didn't have any warning. They just shut it all down.' She said cars are being returned to their lease holders," Covington said.

"In Hawaii, the Honolulu branch answered the phone and told me they were out of business when I called last night to reconfirm a reservation. Everything had been handed to Hertz and Dollar," he said. "My Hertz reservation is estimated at $315 -- compared to $180 that I originally had -- plus, neither Hertz nor Dollar can guarantee the reservations because the Honolulu Marathon is in town."

Covington said he booked an Enterprise car at $229. "This is obviously going to hurt a lot of travelers," he said. "The suddenness of this is scary."

The following Advantage locations remain open only for the return of rented vehicles:

• Albuquerque, N.M., airport

• Aspen, Colo., airport

• Austin, Texas, downtown

• Boulder, Colo., University of Colorado

• Burbank, Calif., airport

• Chicago, O'Hare Airport

• Dallas/Fort Worth, airport

• Grand Junction, Colo., airport

• Hayden, Colo., airport

• Honolulu, Hawaii, airport

• Kansas City, Mo., airport

• Las Vegas, Hard Rock Cafe

• Los Angeles, airport

• Maui, Hawaii, airport

• Palm Springs, Calif., airport

• Reno, airport

• Rifle, Colo., airport

• San Antonio, airport

• San Diego (2), airport and Hard Rock Cafe

• Seattle, airport

• Tucson, Ariz., airport

The following locations remain open for normal business:

• Austin, Texas, airport

• Chicago, Midway Airport

• Colorado Springs, airport

• Denver, airport

• El Paso, Texas: Las Cruces, (N.M.) location

• El Paso, airport

• Houston International Airport

• Orlando (4), airport, International Drive, Lake Buena Vista, and Kissimmee

• Phoenix airport

• Salt Lake City airport

Company officials say customers may e-mail them at questions@advantage.com, or call a toll-free hot-line, 888-846-0808.

Dee DePass • 612-673-7725

  • about this series

  • The Star Tribune's coverage of the housing crisis, the credit crunch and their effect on Minnesotans.
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