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Hertz Global Holdings Inc. won court approval for its plan to raise cash by selling new shares that the bankrupt car-rental company concedes could end up being worthless.

Judge Mary Walrath ruled during a bankruptcy court hearing that Hertz can go ahead with the offering, which the company has said could bring in as much as $1 billion. It's seeking to take advantage of the recent improbable rally in its shares to help resolve the debts that forced it into bankruptcy.

Hertz based its request to the court on a nearly tenfold increase in its stock from 56 cents on May 26 to $5.53 on Monday. The stock has slid since then, closing Friday at $2.83. Hertz attorney Tom Lauria said the company will seek to begin the sale as soon as possible before the opportunity slips away.

"We are trying to move very swiftly," he said.

Bankruptcy experts have said the Hertz plan is unusual and possibly unprecedented, with shareholders likely to be wiped out because creditors must be repaid in full before equity investors get anything.

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The company told the Wilmington, Del., court it would warn buyers that "the common stock could ultimately be worthless." No one knows yet whether that will come true, Walrath said during a Zoom hearing watched by more than 200 people.

"It is not clear where the fulcrum security is and what enterprise value" of Hertz will be, Walrath said. Selling stock is an inexpensive way to help finance the bankruptcy case, she said.

A committee of unsecured creditors backs the share sale because it still could bring in about $500 million, without having to pay the high interest rates and fees associated with traditional bankruptcy loans, creditor attorney Thomas Moers Mayer told Walrath.

The New York Stock Exchange staff is starting proceedings to delist Hertz's stock, the company disclosed this week, adding that it has appealed.

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