In a surprising turn of events, the U.S. Supreme Court has declined to take up a high-stakes bankruptcy dispute involving The Hertz Corporation, leaving lower court rulings intact.

On Monday, the Supreme Court issued an order denying Hertz’s petition for a writ of certiorari in the case of The Hertz Corporation v. Wells Fargo Bank, with Justice Brett Kavanaugh noting he would have accepted the case for review, though the majority of justices disagreed.

Kavanaugh's Stand on Hertz Case

The decision has sparked debate over whether the Court missed an opportunity to clarify murky bankruptcy laws, especially in cases involving solvent debtors like Hertz, Newsweek reported.

Hertz filed for Chapter 11 bankruptcy protection during the COVID-19 pandemic, a time when the travel industry took a brutal hit. After a rebound, the company proposed a reorganization plan to fully pay creditors, including Wells Fargo, the principal on unsecured notes along with interest at the federal judgment rate.

Yet, respondents demanded additional payments worth hundreds of millions, which Hertz argued the Bankruptcy Code does not permit.

The dispute landed before the U.S. Court of Appeals for the Third Circuit, which ruled Hertz must pay $147 million in make-whole premiums and $125 million in post-petition interest. With the Supreme Court’s refusal to hear the case, these lower court rulings stand firm.

Debating Bankruptcy Code Interpretations

Hertz’s legal team, in their petition filed on April 4, 2025, pushed for Supreme Court review to settle confusion among lower courts. They argued:

This Court should grant review now, reaffirm the controlling principles of statutory interpretation that the decision below disregards, and end the confusion in the lower courts on this significant and recurring issue

Wells Fargo’s attorneys, on the other hand, painted Hertz as flush with cash, alleging the company was “so wildly solvent that they distributed more than $1 billion in value to pre-petition equityholders,” per their brief. If true, that’s a bold flex for a company fresh out of bankruptcy, isn’t it? One has to wonder if fairness gets lost when corporate giants play hardball with creditors.

Wells Fargo’s legal team also urged the Supreme Court to deny the petition, arguing the financial stakes alone don’t justify review without a clear circuit conflict. Their stance is that creditors deserve full repayment, a position that sounds reasonable until you dig into whether the law actually supports it. It’s a classic case of principle versus precedent.

Legal Implications of Denial

The U.S. government weighed in as well, siding against Hertz and advising the Court to pass on the case. Their brief argued against review due to the lack of circuit conflict and unique factual circumstances. That’s bureaucrat-speak for “let’s not rock the boat,” which might frustrate those hoping for legal reform.

Now, with the Supreme Court stepping back, businesses and creditors are left navigating a patchwork of interpretations on bankruptcy rules. This isn’t just about Hertz—it’s about whether the Bankruptcy Code gets twisted to favor one side over another based on a company’s financial recovery. That inconsistency is a headache for any free-market advocate.

Justice Kavanaugh’s dissent, though a minority view, signals a concern that the Court is dodging a chance to set a clear standard. His willingness to take the case suggests a belief that judicial oversight is needed when lower courts can’t agree on fundamental principles. It’s a quiet nod to the idea that justice shouldn’t hinge on a company’s balance sheet.

Broader Impact on Business Law

For Hertz, the fight may be over, but the financial sting remains as they’re on the hook for hundreds of millions. Meanwhile, Wells Fargo walks away with a win, bolstered by the Third Circuit’s hefty ruling. It’s hard not to see this as a victory for creditors who can afford to outlast a debtor in court.

What’s troubling here is the precedent—or lack thereof. Without Supreme Court guidance, companies emerging from bankruptcy might face unpredictable demands from creditors, especially when they’ve clawed their way back to solvency. That’s not a recipe for economic stability; it’s a gamble.

Ultimately, this case highlights a deeper issue: the need for laws that don’t bend under the weight of whoever has the deeper pockets. Kavanaugh’s dissent may not change the outcome, but it’s a reminder that even in the highest court, not everyone is content to let ambiguity reign. Let’s hope future cases bring the clarity this one lacked.